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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Date of Report (Date of earliest event reported)
February 6, 1998
ROSS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation or organization)
0-19092 94-2170198
Commission File Number (I.R.S. Employer Identification Number)
2 Concourse Parkway, Suite 800
Atlanta, Georgia 30328
(Address of principal executive offices)
(770) 351-9600
(Registrant's telephone number, including area code)
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ROSS SYSTEMS, INC.
FORM 8-K
FEBRUARY 11, 1998
ITEM 5. OTHER EVENTS
On February 10, 1998, the Registrant announced that on February 6, 1998,
it closed a private placement of up to $10,000,000 of convertible
subordinated debentures to certain institutional investors (the "Investors")
pursuant to Regulation D promulgated under the Securities Act of 1933, as
amended. The Investors invested $6,000,000 on February 6, 1998 and will
invest $4,000,000 four months after such date upon the fulfillment of certain
conditions.
The material agreements between the Registrant and each Investor have been
filed as exhibits to this Report on Form 8-K, and a copy of the Registrant's
press release announcing the closing of the subordinated debenture financing
with the Investors is set forth on the following page.
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[ LOGO HERE ] P R E S S R E L E A S E
FOR MORE INFORMATION:
Dennis Vohs, Ross Systems, 770/351-9600, Ext. 3058
ROSS SYSTEMS ISSUES SUBORDINATED
CONVERTIBLE DEBENTURES
ATLANTA, GEORGIA, FEBRUARY 10, 1998 - Ross Systems, Inc. (NASDAQ: ROSS), a
leading supplier of business software solutions for the client/server market,
announced today that it had completed an agreement for the issuance of up to
$10,000,000 in subordinated convertible debentures to a group of
institutional investors. Rochon Capital Group, Ltd. acted as placement agent
in the transaction.
"We are pleased to complete the agreements," said Dennis V. Vohs, Ross'
Chairman and CEO. "In addition to improving our balance sheet and, in turn,
increasing prospective customers' confidence in our financial strength, the
financing will also lower our debt service expense."
ROSS SYSTEMS, INC. DEVELOPS, MARKETS AND SUPPORTS A BROAD RANGE OF
CLIENT/SERVER BUSINESS SOLUTIONS, INCLUDING FINANCIALS, MANUFACTURING,
MAINTENANCE, DISTRIBUTION, SUPPLY CHAIN MANAGEMENT, TRANSPORTATION
MANAGEMENT, MATERIALS MANAGEMENT, AND HUMAN RESOURCES APPLICATIONS, AS WELL
AS COMPREHENSIVE APPLICATION DEVELOPMENT PRODUCTS. ROSS SYSTEMS PRODUCTS ARE
AVAILABLE FOR THE FOLLOWING OPEN SYSTEMS ENVIRONMENTS: HEWLETT-PACKARD'S
HP-UX; IBM'S RS/6000; AND DIGITAL'S ALPHA ARCHITECTURE, FUJITSU DS-90 UNIX,
SIEMENS NIXDORF, OPEN VMS, DIGITAL UNIX AND MICROSOFT WINDOWS NT SUPPORT FOR
THE INTEL AND ALPHA CHIPS. MORE THAN 3,000 COMPANIES AROUND THE WORLD USE
BUSINESS SOLUTIONS FROM ROSS SYSTEMS TO RUN THEIR OPERATIONS.
ROSS SYSTEMS EMPLOYS 550 PROFESSIONALS IN OFFICES AROUND THE WORLD TO SERVE
ITS CUSTOMER. CORPORATE HEADQUARTERS ARE LOCATED AT TWO CONCOURSE PARKWAY,
SUITE 800, ATLANTA, GEORGIA 30328. PLEASE VISIT ROSS SYSTEMS WORLD WIDE WEB
SITE AT HTTP://WWW.ROSSINC.COM.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
ROSS SYSTEMS, INC.
Date: February 11, 1998 /s/ STAN F. STOUDENMIRE
------------------------------------------
Stan F. Stoudenmire
Vice President and Chief Financial Officer
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS (in accordance with Item 601 of Regulation S-K)
4.1 Form of Convertible Securities Subscription Agreement
between the Registrant and each Investor.
4.2 Form of Subordinated Debenture Due February 6, 2003 issued
by the Registrant to each Investor.
4.3 Registration Rights Agreement among the Registrant and
each Investor.
99.1 Press Release of the Registrant regarding the closing of a
subordinated debenture financing with the Investors.
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ROSS SYSTEMS, INC.
Report on Form 8-K
dated February 11, 1998
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT NAME
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4.1 Form of Convertible Securities Subscription Agreement between
the Registrant and each Investor
4.2 Form of Subordinated Debenture Due February 6, 2003 issued by
the Registrant to each Investor
4.3 Registration Rights Agreement among the Registrant and each
Investor
99.1 Press Release of the Registrant regarding the closing of a
subordinated debenture financing with the Investors.
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CONVERTIBLE SECURITIES SUBSCRIPTION AGREEMENT
This Convertible Securities Subscription Agreement (the "Agreement")
dated as of February 6, 1998, has been executed by the undersigned (the
"Subscriber") in connection with the sale of Convertible Subordinated
Debentures due February 6, 2003 (the "Debentures"), of Ross Systems, Inc.,
a California corporation (the "Company"), convertible into shares of Common
Stock, no par value (the "Common Stock"), of the Company. The Company is
offering an aggregate amount of up to $10,000,000 of Debentures at an
aggregate price of up to $10,000,000 (the "Financing"). The issuance, sale
and purchase of an aggregate of $6,000,000 of the Debentures shall take place
in the first closing (the "First Closing") and up to an aggregate of
$4,000,000 of the Debentures shall take place upon the satisfaction of
certain conditions (the "Second Closing"). The form of the Debentures,
including the terms on which the Debentures may be converted into Common
Stock, is attached hereto as Exhibit A. The solicitation of this Agreement
and, if accepted by the Company, the offer and sale of Debentures, are being
made in reliance upon the provisions of Regulation D ("Regulation D")
promulgated by the Securities and Exchange Commission ("SEC") under the
United States Securities Act of 1933, as amended (the "Securities Act"). The
Debentures and the Common Stock issuable upon conversion thereof and issuable
in payment of interest thereunder are sometimes collectively referred to in
this Agreement as the "Securities." The Common Stock issuable upon
conversion of and in payment of interest under the Debentures is sometimes
referred to as the "Underlying Stock." In consideration of the mutual
promises, representations, warranties and conditions set forth herein, and
intending to be legally bound hereby, the Company and the Subscriber agree as
follows:
1. AGREEMENT TO SUBSCRIBE; THE SUBSCRIBER
1.1. PURCHASE AND ISSUANCE OF DEBENTURES. Subject to the terms and
conditions of this Agreement, the Subscriber hereby subscribes for
the principal amount of Debentures and at the aggregate purchase
price set forth in Section 14 on the signature page hereto.
Subject to the satisfaction (or waiver) of the conditions thereto
set forth in each of Section 1.4 and 1.5 below (i) at the First
Closing, the Company shall issue and sell to the Subscriber and the
Subscriber shall purchase from the Company the principal amount of
Debentures for the purchase price set forth in Section 14 as the
"First Closing Amount"; and (ii) at the Second Closing, the Company
shall issue and sell to the Subscriber and the Subscriber shall
purchase from the Company the principal amount of Debentures for
the purchase price set forth in Section 14 as the "Second Closing
Amount."
1.2. CLOSING DATES. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Sections 1.4 and 1.5 below, the
date and time of the issuance and sale of the Debentures pursuant
to this Agreement (the "Closing Dates") shall be (i) in the case of
the First Closing, February 6, 1998 (the "First Closing Date") and
(ii) in the case of the Second Closing, five (5) business days
following expiration of the Second Closing Waiting Period (defined
in Section 1.5B below) upon
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satisfaction (or waiver) of the conditions to such closing set
forth in Sections 1.4 and 1.5 below (subject, in each case, to a
two (2) business day grace period at either party's option), or,
in each case, such other mutually agreed upon time.
1.3. THE CLOSINGS. On each Closing Date, the Subscriber shall cause the
purchase price for the Debentures being purchased on that Closing
Date to be delivered to the escrow agent as provided in that Escrow
Agreement attached as Exhibit B hereto (the "Escrow Agreement"),
and the Company shall cause the Debentures subscribed for hereby
with respect to that Closing Date to be executed, issued and
delivered to the escrow agent as provided in the Escrow Agreement.
Upon satisfaction of all relevant closing conditions as set forth
herein, the Escrow Agent shall be instructed to release the
purchase price to the Company and the Debentures to the Subscriber,
all as more particularly described in the Escrow Agreement.
1.4. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO SELL THE
DEBENTURES. The obligation hereunder of the Company to issue
and/or sell the Debentures to the Subscriber is subject to the
satisfaction, at or before each Closing, of each of the conditions
set forth below. These conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole
discretion.
(a) ACCURACY OF THE SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Subscriber shall
be true and correct as of the date when made and in all
material respects as of each Closing Date as though made at
each such time.
(b) PERFORMANCE BY THE SUBSCRIBER. The Subscriber shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with
by the Subscriber at or prior to that Closing.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions
contemplated by this Agreement, and no proceeding shall have
been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated
hereby.
1.5. CONDITIONS PRECEDENT TO THE OBLIGATION OF THE SUBSCRIBER TO
PURCHASE THE DEBENTURES.
1.5A CONDITIONS TO EACH CLOSING. The obligation of the Subscriber
hereunder to acquire and pay for the Debentures is subject to the
satisfaction, at or before each Closing, of each of the following
conditions. Each of these conditions is for
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Subscriber's sole benefit and may be waived by Subscriber at any
time in its sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company shall be
true and correct as of the date when made and in all
material respects as of the Closing Date as though made at
each such time.
(b) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with
by the Company at or prior to the Closing.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which
prohibits or adversely effects any of the transactions
contemplated by this Agreement, and no proceeding shall have
been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated
hereby.
(d) ADVERSE CHANGES. For the period from June 30, 1997 until
the Closing, except as publicly disclosed since June 30,
1997 in Company press releases or Exchange Act filings
issued or made prior to or on the date of the First Closing
as listed on Schedule 1.5(d) ("Prior Public Disclosures"),
no event shall have occurred or be threatened to occur which
has had or is likely to have a Material Adverse Effect on
the Company and its subsidiaries taken as a whole. The
Company shall have received and delivered to the Subscriber
(i) the consent of all applicable lenders to the issuance of
the Debentures, (ii) the Subordination Agreement by and
between the Company and Coast Business Credit in form and
substance as set forth as Schedule 1.5A(d) hereto and (ii)
the waiver of any and all pending events of default (or
pending events which with lapse of time or notice or both
would constitute an event of default) thereunder.
(e) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK.
The trading in the Common Stock shall not have been
suspended by the SEC or the Nasdaq Stock Market; the Common
Stock shall not have been delisted from the Nasdaq Stock
Market; and trading in securities generally on the Nasdaq
shall not have been suspended or limited.
(f) LEGAL OPINION. The Company shall have delivered to the
Subscriber opinions of Wilson, Sonsini, Goodrich & Rosati,
counsel to the Company, in form and substance reasonably
satisfactory to the Subscriber.
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(g) OFFICER'S CERTIFICATE. The Company shall have delivered to
the Subscriber (i) a certificate in form and substance
reasonably satisfactory to the Subscriber, executed by an
executive officer of the Company, to the effect that all the
conditions to the Closing shall have been satisfied; and
(ii) a certificate in form and substance reasonably
satisfactory to the Subscriber, executed by the Secretary of
the Company, providing certified copies of all Board
resolutions authorizing the transactions contemplated by
this Agreement and of the Company's Articles of
Incorporation and By-laws as contemplated by Section 3.7
below.
(h) REGISTRATION RIGHTS AGREEMENT. The Company and the
Subscriber shall have entered into the Registration Rights
Agreement contemplated by Section 5.1.
1.5B OTHER CONDITIONS TO SECOND CLOSING. In addition to the foregoing
conditions precedent to the obligation of the Subscriber to
purchase the Debentures, with respect to the Second Closing, there
shall have elapsed 120 days from the First Closing Date (the
"Second Closing Waiting Period") and each of the following
conditions shall have been satisfied. Each of these conditions is
for Subscriber's sole benefit and may be waived by Subscriber at
the expiration of the Second Closing Waiting Period.
(a) ABSENCE OF NASDAQ DELISTING NOTIFICATION. There shall have
been no notice issued by Nasdaq to the Company during the
Second Closing Waiting Period, which remains outstanding, to
the effect that because of non-compliance with Nasdaq
listing requirements, the Company's Common Stock may be
subject to delisting;
(b) NO EXCESS NET LOSSES. The Company has not experienced a net
loss in respect of each of the Company's second and third
quarters of its 1998 fiscal year in excess of $2,000,000, as
reflected in the Company's Form 10-Qs for each such quarter;
(c) STABLE CLOSING BID PRICE. For the thirty days preceding the
expiration of the Second Closing Waiting Period, the closing
bid price for the Company's Common Stock as reported by the
Bloomberg System is not below $2.00 for any four consecutive
trading days; and
(d) EFFECTIVENESS OF INITIAL REGISTRATION STATEMENT. The
registration statement(s) filed by the Company pursuant to
Section 2 of the Registration Rights Agreement contemplated
by Section 5.1 below and covering the resale of the
Registrable Securities (as defined in the Registration
Rights Agreement) underlying the Debentures issued at the
First Closing shall be effective and no stop order shall
have been issued in respect thereof.
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2. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER
The Subscriber represents and warrants to the Company that:
2.1. NO GOVERNMENT RECOMMENDATION OR APPROVAL. The Subscriber
understands that no United States federal or state agency or
similar agency of any other country, has passed upon or made any
recommendation or endorsement of the Company or the offering of the
Securities.
2.2. INTENT. The Subscriber is purchasing the Securities for its own
account and not with a view towards distribution and the Subscriber
has no present arrangement to sell the Debentures or the Underlying
Stock to or through any person or entity; provided, however, that
by making the representation herein, the Subscriber does not agree
to hold the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in
accordance with federal and state securities laws applicable to
such disposition. The Subscriber understands that the Securities
must be held indefinitely unless such Securities are subsequently
registered under the Securities Act or an exemption from
registration is available. The Subscriber has been advised or is
aware of the provisions of Rule 144 promulgated under the
Securities Act.
2.3. SOPHISTICATED INVESTOR. The Subscriber is an accredited investor
(as defined in Rule 501 of Regulation D promulgated under the
Securities Act ("Regulation D")), and Subscriber has such
experience in business and financial matters that it is capable of
evaluating the merits and risks of an investment in the Securities.
The Subscriber acknowledges that the Securities are speculative and
involve a high degree of risk.
2.4. INDEPENDENT INVESTIGATION. The Subscriber, in making the decision
to purchase the Securities subscribed for hereunder, has relied
upon an investigation made by it and/or its representatives and has
not relied on any information or representations made by third
parties. The Subscriber acknowledges that the Company does not
make any representation or warranty relating to (i) information
contained in any analyst reports or (ii) the financial forecast
prepared by the Company in December 1997 for fiscal year 1998,
which have been provided to the Subscriber by or on behalf of the
Company. Prior to the date hereof, the Subscriber has been
furnished with and has reviewed the Company's latest proxy
statement and Annual Report on Form 10-K sent to the Company's
shareholders and all documents filed by the Company with the
Securities and Exchange Commission (the "SEC") since June 30, 1995
pursuant to sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), excluding
preliminary proxy statement filings (such documents are
collectively referred to in this Agreement as the "Exchange Act
Reports" and the Prior Public Disclosures). Subject to the
foregoing, the Subscriber has had a
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reasonable opportunity to ask questions of and receive answers
from the Company concerning the Company and the Offering and has
received complete and satisfactory answers to all inquiries it
has made with respect to the Company and the Securities. The
Subscriber acknowledges the price and terms of the Securities
offered hereby has been determined by negotiation based in part
on the market price for the Common Stock, and does not
necessarily bear any relationship to the assets, book value or
potential performance of the Company or any other recognized
criteria of value.
2.5. AUTHORITY. This Agreement and the Registration Rights Agreement
have been duly authorized and validly executed and delivered by the
Subscriber and are each a valid and binding agreement enforceable
in accordance with its terms, subject to general principles of
equity and to bankruptcy or other laws affecting the enforcement of
creditors' rights generally.
2.6. NO LEGAL ADVICE FROM COMPANY. The Subscriber acknowledges that it
has had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with its own legal
counsel and investment and tax advisors. Except for any statements
or representations of the Company made in this Agreement and the
legal opinion called for by Section 1.4 hereof, the Subscriber is
relying solely on such counsel and advisors and not on any
statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with
respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
2.7. NO BROKERS. The Subscriber has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's
fees or similar payments by the Company relating to this Agreement
or the transactions contemplated hereby.
2.8. NOT AN AFFILIATE. The Subscriber is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of Securities Act)
of the Company.
2.9. RELIANCE ON REPRESENTATIONS AND WARRANTIES. The Subscriber
understands that the Securities are being offered and sold to it in
reliance on specific provisions of United States federal and state
securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth in
this Agreement in order to determine the applicability of such
provisions.
2.10. NO BROKER-DEALER. The Subscriber is not a registered broker dealer
and is not engaged in the business of being a broker dealer.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to the Subscriber that:
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3.1 COMPANY STATUS. The Company has registered its Common Stock
pursuant to Section 12(b) or 12(g) of the Exchange Act, is in full
compliance with all reporting requirements of the Exchange Act, and
the Company has maintained all requirements for the continued
listing of its Common Stock, and such Common Stock is currently
listed, on the Nasdaq National Market System. The Company is
eligible to use Form S-3 under the Securities Act for secondary
offerings.
3.2 CURRENT PUBLIC INFORMATION. The Exchange Act Reports are the only
filings made by the Company since June 30, 1995 pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act.
3.3. NO DIRECTED SELLING EFFORTS OR GENERAL SOLICITATION IN REGARD TO
THIS TRANSACTION. Neither the Company nor any person acting on its
behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection
with the offer or sale of any of the Securities.
3.4. VALID ISSUANCE OF DEBENTURES AND CAPITAL STOCK. The Company has an
authorized capitalization consisting of 27,000,000 shares of common
stock, no par value, of which 25,000,000 are designated "Common
Stock" and 2,000,000 are designated "Non-Voting Common Stock" and
5,000,000 shares of Preferred Stock, no par value. As of the date
hereof, the Company has issued and outstanding 19,859,808 shares of
Common Stock no shares of Non-Voting Common Stock and 107 shares of
Preferred Stock, designated as Series E Preferred Stock, and there
are no other outstanding shares of capital stock of the Company.
All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and
non-assessable. Except as set forth on SCHEDULE 3.4 hereto, there
are no outstanding warrants, options, convertible securities or
other rights, agreements or arrangements of any character under
which the Company is or may be obligated to issue any equity
securities of any kind, or to transfer any equity securities of any
kind owned by it. Prior to the Closing Date, the authorized
capitalization shall include the Securities; upon issuance of the
Securities, the Securities will be duly and validly issued, fully
paid and non-assessable; the shares of Common Stock issuable upon
conversion of or in payment of interest under the Debentures, when
issued and delivered in accordance with the terms of the
Debentures, will be duly and validly issued, fully paid and
non-assessable; and the holders of outstanding capital stock of the
Company are not and shall not be entitled to preemptive or other
rights afforded by the Company to subscribe for the capital stock
or other securities of the Company as a result of the sale of the
Securities or the issuance of Common Stock pursuant to the terms of
the Debentures. The Company will provide to the Subscriber within
ten (10) days of the Closing Date a SCHEDULE 3.4 setting forth all
agreements pursuant to which the Company has granted to any person
the right to require the Company to register any securities of the
Company under the Securities Act, whether on a demand basis or in
connection with the registration of securities of the Company for
its own account or for the account of any other person (the "Other
Registration
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Rights"). The Company represents and warrants that such Other
Registration Rights (i) do not conflict with the rights granted
to the Subscriber pursuant to the Registration Rights Agreement
between the Company and the Subscriber of even date herewith (the
"Registration Rights Agreement") and (ii) do not provide the
holders of the Other Registration Rights with the right to have
their Company securities registered by the Company under the
Securities Act pursuant to the Registration Rights Agreement.
3.5. ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
incorporated and existing in good standing under the laws of the
State of California and has the requisite corporate power to own
its properties and to carry on its business as now being conducted.
The Company does not have any subsidiaries except as listed in
SCHEDULE 3.5. Except as set forth on Schedule 3.5, each of the
subsidiaries of the Company is a corporation duly organized and
validly existing in good standing under the law of the jurisdiction
in which it is incorporated, and has the requisite corporate power
to own its properties and carry on its business as now being
conducted. Except as set forth on Schedule 3.5, the Company and
each such subsidiary, if any, is duly qualified as a foreign
corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary other than
those in which the failure so to qualify would not have a Material
Adverse Effect. "Material Adverse Effect" means any material
adverse effect on the business, operations, properties, prospects,
or financial condition of the Company and its subsidiaries taken as
a whole and/or any condition or situation which would prohibit or
otherwise adversely interfere with the ability of the Company to
enter into and perform its obligations under this Agreement, the
Debentures and the Registration Rights Agreement.
3.6. AUTHORIZATION; ENFORCEMENT. (i) The Company has the requisite
corporate power and authority to enter into and perform this
Agreement and the Registration Rights Agreement and to issue the
Securities in accordance with the terms hereof and thereof, (ii)
the execution, issuance and delivery of this Agreement, the
Registration Rights Agreement and the Debentures by the Company and
the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate
action, and no further consent or authorization of the Company or
its Board of Directors or stockholders is required, (iii) this
Agreement has been, and on the Closing Date the Registration Rights
Agreement and the Debentures will be, duly executed and delivered
by the Company and (iv) this Agreement constitutes, and upon
execution, issuance and delivery thereof the Registration Rights
Agreement and the Debentures shall be, valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws
relating to, or affecting generally the enforcement of, creditors'
rights and remedies or by other equitable principles of general
application.
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3.7. CORPORATE DOCUMENTS. The Company has furnished or made available
to the Subscriber true and correct copies of the Company's
Certificate of Incorporation as in effect on the date hereof (the
"Certificate of Incorporation"), and the Company's By-Laws, as in
effect on the date hereof (the "By-Laws"), certified in each case
by the Secretary of the Company.
3.8. NO CONFLICTS. The execution, delivery and performance of this
Agreement, including the conversion of the Debentures into the
Common Stock of the Company, the Registration Rights Agreement and
the Debentures by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby do not and will
not (i) result in a violation of the Company's Certificate of
Incorporation or By-Laws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of
its subsidiaries is a party, or result in a violation of any
federal, state, local or foreign law, rule, regulation, order,
judgment or decree (including federal and state securities laws and
regulations) applicable to the Company or any of its subsidiaries
or by which any property or asset of the Company or any of its
subsidiaries is bound or affected (except in the case of this
subparagraph (ii) for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse
Effect); provided that, for purposes of such representation as to
federal, state, local or foreign law, rule or regulation, no
representation is made herein with respect to any of the same
applicable solely to the Subscriber and not to the Company. The
business of the Company and its subsidiaries is not being conducted
in violation of any law, ordinance or regulations of any
governmental entity, except for possible violations which either
singly or in the aggregate do not and will not have a Material
Adverse Effect. The Company is not required under federal, state
or local law, rule or regulation in the United States to obtain any
consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it
to execute, deliver or perform any of its obligations under this
Agreement or the Registration Rights Agreement or issue and sell
the Securities in accordance with the terms hereof and thereof
(other than any SEC, Nasdaq or state securities filings which may
be required to be made by the Company subsequent to the Closing,
and any registration statement which may be filed pursuant hereto);
provided that, for purposes of the representation made in this
sentence, the Company is assuming and relying in part upon the
accuracy of the relevant representations and agreements of the
Subscriber herein.
3.9. EXCHANGE ACT REPORTS. The Company has delivered or made available
to the Subscriber true and complete copies of the Exchange Act
Reports (including, without limitation, proxy information and
solicitation materials). The Company has not provided to the
Subscriber any information which, according to applicable
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law, rule or regulation, should have been disclosed publicly by
the Company but which has not been so disclosed. As of their
respective dates, the Exchange Act Reports complied (and as of
its effective date, the Registration Statement for the Underlying
Stock will comply) in all material respects with the requirements
of the Exchange Act (or in the case of such Registration
Statement, the Securities Act) and the rules and regulations of
the SEC promulgated thereunder and other applicable federal,
state and local laws, rules and regulations, and none of the
Exchange Act Reports contained (and, as of its effective date,
such Registration Statement will not contain) any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the
Company included (or to be included) in the Exchange Act Reports
and the Registration Statement comply as to form in all material
respects with applicable accounting requirements and the
published rules and regulations of the SEC or other applicable
rules and regulations with respect thereto. Such financial
statements have been (or will be) prepared in accordance with
generally accepted accounting principles applied on a consistent
basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or
(ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary
statements) and fairly present (or will fairly present) in all
material respects the consolidated financial position of the
Company as of the dates thereof and the consolidated results of
operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of
the Company to the Subscriber contains any untrue statement of a
material fact or omits to state any material fact necessary in
order to make the statements therein, in light of the
circumstances under which they are or were made, not misleading.
The preceding sentence notwithstanding, the Company does not make
any representation or warranty relating to (i) information
contained in any analyst reports or (ii) the financial forecast
prepared by the Company in December 1997 for fiscal year 1998,
which have been provided to the Subscriber by or on behalf of the
Company.
3.10. NO MATERIAL ADVERSE CHANGE. Since September 30, 1997, the date
through which the most recent Quarterly Report of the Company on
Form 10-Q has been prepared and filed with the SEC, a copy of which
is included in the Exchange Act Reports, except as disclosed in the
Prior Public Disclosures, no Material Adverse Effect has occurred
or exists with respect to the Company and its subsidiaries taken as
a whole.
3.10A NO VIOLATION OF CREDITOR COVENANTS. Except as set forth in
Schedule 3.10A, no event of default has occurred and is continuing
(or event which with lapse of time or notice or both would
constitute such an event) under any of the revolving credit
facilities or other financing arrangements of the Company or its
subsidiaries.
-10-
<PAGE>
3.11. NO UNDISCLOSED LIABILITIES. The Company and its subsidiaries have
no liabilities or obligations not disclosed in the Exchange Act
Reports, other than those incurred in the ordinary course of the
Company's or its subsidiaries' respective businesses since
September 30, 1997 and which, individually or in the aggregate, do
not or would not have a Material Adverse Effect on the Company and
its subsidiaries taken as a whole.
3.12. NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. No event or circumstance
has occurred or exists with respect to the Company or its
subsidiaries or their respective business, properties, prospects,
operations or financial condition, which, under applicable law,
rule or regulation, requires public disclosure or announcement by
the Company but which has not been so publicly announced or
disclosed.
3.13. NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that
would require registration of the Securities under the Securities
Act or cause the offering of the Securities pursuant to this
Agreement to be integrated with any prior offering(s) by the
Company for purposes of the Securities Act or any applicable
shareholder approval provisions, including without limitation,
under the rules and regulations of the Nasdaq National Market
System.
3.14. NO BROKERS. The Company has taken no action which would give rise
to any claim by any person for brokerage commissions, finder's fees
or similar payments by the Subscriber relating to this Agreement or
the transactions contemplated hereby, except for dealings with
Rochon Capital Group, Ltd., whose commissions and fees will be paid
for by the Company.
3.15. EFFECTIVENESS OF SEC FILINGS. The SEC has not issued any stop order
or other order suspending the effectiveness of any registration
involving the Company or its subsidiaries.
3.16. NO MATERIAL LITIGATION PROCEEDINGS. Except as disclosed in the
Exchange Act Reports, neither the Company nor any of its
subsidiaries is a party to or the subject of any litigation,
arbitration or other proceeding which if adversely determined would
singly or in the aggregate have a Material Adverse Effect.
3.17. INTELLECTUAL PROPERTY RIGHTS. To the knowledge of the Company, the
Company and its subsidiaries own or possess adequate rights or
licenses to use all trademarks, trade names, service marks,
patents, patent rights, copyrights, inventions and trade secrets
(collectively "Intellectual Property") necessary to conduct their
respective businesses as now conducted, except to the extent that
the failure to possess such rights or licenses to such Intellectual
Property would not have a Material Adverse Effect. The Company has
no knowledge of any infringement by the Company or its subsidiaries
of any Intellectual Property rights
-11-
<PAGE>
of others, and there is no claim, action or proceeding pending
or, to the Company's knowledge, threatened against, the Company
or any of its subsidiaries regarding any Intellectual Property
used by the Company in its business.
4. COVENANTS OF THE SUBSCRIBER
4.1. RESALES. The Subscriber shall not make any offers or sales of the
Securities other than pursuant to a registration statement under
the Securities Act or pursuant to an exemption from registration
under the Securities Act. Subscriber will comply with applicable
prospectus delivery requirements.
4.2. LOW TRADES. The Subscriber covenants and agrees that it will not,
directly or through any Affiliate, (i) create the lowest reported
sales price on the Nasdaq National Market System for the Common
Stock on any trading day or (ii) offer to sell shares of Common
Stock at a price lower than the then prevailing bid price for the
Common Stock on the Nasdaq National Market System. The Subscriber
will not directly or indirectly engage in any activity that is
intended to reduce the closing bid price for the Common Stock on
the Nasdaq National Market System on any day that is within the
period of thirty (30) trading days immediately prior to a Holder
Conversion Date (as defined in the Debenture) for the Subscriber.
5. COVENANTS OF THE COMPANY
5.1. REGISTRATION RIGHTS. The Company will file and use its best
efforts to cause to become effective, as promptly as possible a
registration statement ("Registration Statement") on Form S-3 under
the Securities Act (or in the event that the Company is ineligible
to use such form, such other form as the Company is eligible to use
under the Securities Act) covering the resale of the Underlying
Stock issuable on conversion of the Debentures issued and sold to
Subscriber on the First Closing Date, in accordance with terms of
the Registration Rights Agreement (the "Registration Rights
Agreement") in the form of Exhibit C hereto, which the Company and
the Subscriber shall enter into on the First Closing Date. The
Company will file promptly after the Second Closing Date and use
its best efforts to cause to become effective, as promptly
thereafter as possible a Registration Statement covering the resale
of the Underlying Stock issuable on conversion of the Debentures to
be issued and sold to Subscriber on the Second Closing Date, all in
accordance with the Registration Rights Agreement.
5.2. RESERVATION OF COMMON STOCK. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, shares of Common
Stock for the purpose of enabling the Company to satisfy any
obligation to issue shares of its Common Stock upon conversion of
the Debentures; provided, however, that the number of shares so
reserved shall at all times be at least two times the number of
shares required to satisfy the conversion of the Debentures then
outstanding. The number of shares so reserved may be reduced by
the number of shares actually delivered pursuant to
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<PAGE>
conversion of Debentures (provided that in no event shall the
number of shares so reserved be less than the number required to
satisfy the remaining conversion rights on the unconverted
Debentures) and the number of shares so reserved shall be
increased to reflect stock splits and stock dividends and
distributions.
5.3. LISTING OF UNDERLYING SHARES. The Company hereby agrees, promptly
following the Closing of the transactions contemplated by this
Agreement, to take such action to cause the Underlying Stock to be
listed on the Nasdaq National Market System as promptly as possible
but no later than the effective date of the Registration Statements
referred to in Section 5.1. The Company further agrees, if the
Company applies to have the Common Stock traded on any other
principal stock exchange or market, it will include in such
application the Underlying Stock and will take such other action as
is necessary to cause the Underlying Stock to be listed on such
other exchange or market as promptly as possible.
5.4. EXCHANGE ACT REGISTRATION. The Company will cause its Common Stock
to continue to be registered under Section 12(g) or 12(b) of the
Exchange Act, will comply in all respects with its reporting and
filing obligations under said Act, and will not take any action or
file any document (whether or not permitted by said Act or the
rules thereunder) to terminate or suspend such registration or to
terminate or suspend its reporting and filing obligations under
said Act. The Company will take all action necessary to continue
the listing and trading of its Common Stock on the Nasdaq National
Market System and will comply in all respects with the Company's
reporting, filing and other obligations under the bylaws or rules
of the Nasdaq National Market System.
5.5. LEGENDS. The Underlying Stock and certificates evidencing the same
shall at all times be free of legends (except as provided in
Section 6.1 below), "stop transfers", "stock transfer restrictions"
or other restrictions, upon the effectiveness of the Registration
Statement.
5.6. CORPORATE EXISTENCE. The Company will take all steps necessary to
preserve and continue the corporate existence of the Company.
5.7. RIGHT OF FIRST REFUSAL. The Company acknowledges that the right of
first refusal granted by it to Rochon Capital Group, Ltd. by
agreement dated January 22, 1998 (the "Rochon Agreement"), has been
extended by Rochon Capital Group, Ltd. to each Subscriber in this
Offering, granting the Subscribers exclusive first rights to
participate as purchasers in any Subsequent Financing (as defined
in the Rochon Agreement) to the extent of each Subscriber's
participation in this Offering. The Company hereby consents to
such participation by the Subscriber in any and all such Subsequent
Financings pursuant to the terms of the Rochon Agreement.
5.8. WITHHOLDING. It is the intent of the Company that the Debentures
be treated as "registered obligations" under Section 871(h)(2)(B)
of the Internal Revenue Code of 1986, as amended (the "Code") and
that the interest payments thereon be
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<PAGE>
treated as "portfolio interest" within the meaning of Section
871(h) of the Code. Assuming no changes in the current law
applicable hereto, so long as the Subscriber (or any transferee
thereof who is a "Holder" under the Debenture) complies with the
requirements for exemption from taxation under the Code
(including any compliance with any documentation requirements
reasonably requested by the Company to establish and support such
exemption) and the interest on the Debentures is not determined
to be other than "portfolio interest", the Company agrees that it
shall not withhold federal income taxes in respect of interest
payments on the Debentures.
5.9. FORM D. The Company agrees to file a Form D with respect to the
Securities as required under Regulation D and to provide a copy
thereof to the Subscriber promptly after such filing.
5.10. FINANCIAL INFORMATION. The Company agrees to send to the
Subscriber for so long as it holds any of the Debentures, (i)
promptly after the filing thereof with the SEC, a copy of the
Company's Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, any Current Reports on Form 8-K and notice of any
registration statements or amendments filed pursuant to the
Securities Act, and (ii) contemporaneously with the making
available or giving thereof of the stockholders of the Company,
copies of any notices, reports and other information made available
or given to the stockholders of the Company generally.
6. LEGENDS; SUBSEQUENT TRANSFER OF SECURITIES; DENOMINATIONS
6.1. LEGEND. The Company will issue one or more Debentures in the name
of the Subscriber and in such denominations to be specified by the
Subscriber prior to (or from time to time subsequent to) Closing.
The Debentures, and any shares of Common Stock issued upon
conversion thereof or in payment of interest thereunder prior the
effectiveness of the Registration Statement, will bear the
following legend (the "Legend"):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS.
Following the effectiveness of the Registration Statement, the Company will
promptly instruct its transfer agent, upon surrender of the Debentures for
conversion and/or Underlying Stock, to remove the Legend from any of the
Underlying Stock. In addition, and if applicable, the Company shall
reissue certificates representing the Underlying Stock without the legend
set forth above at such time as (i) the Holder thereof is permitted to
dispose of such Securities pursuant to Rule 144(k) under the Securities Act
-14-
<PAGE>
or (ii) the Securities are sold to a purchaser or purchasers in a
transaction exempt from registration under the Securities Act, as evidenced
by an opinion of counsel to the transferor delivered to and reasonably
satisfactory to the Company.
6.2. NO OTHER LEGEND OR STOCK TRANSFER INSTRUCTIONS. No legend has been
or shall be placed on the share certificates representing the
Securities and no stock transfer instructions have been or shall be
given to the Company's transfer agent with respect thereto other
than as set forth in this Section 6.
6.3. SUBSCRIBER'S COMPLIANCE. Nothing in this section shall affect in
any way the Subscriber's obligations and agreement to comply with
all applicable securities laws upon resale of the Securities.
6.4. OTHER RESTRICTIONS ON TRANSFER. The Subscriber shall not transfer
the Debentures to any party not constituting an affiliate of
Subscriber without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed.
7. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of
law or choice of law. The Company and Subscriber hereby agree that all
actions or proceedings arising directly or indirectly from or in connection
with this Agreement shall be litigated only in the Supreme Court of the
State of New York or the United States District Court for the Southern
District of New York located in New York County, New York. To the extent
permitted by applicable law, the Company and Subscriber consent to the
jurisdiction and venue of the foregoing courts and consent that any process
or notice of motion or other application to either of said courts or a
judge thereof may be served inside or outside the State of New York or the
Southern District of New York by registered mail, return receipt requested,
directed to such party at its address set forth in this Agreement (and
service so made shall be deemed complete five (5) days after the same has
been posted as aforesaid) or by personal service or in such other manner as
may be permissible under the rules of said courts. The parties hereto
hereby waive any right to a jury trial in connection with any litigation
pursuant to this Agreement.
8. ASSIGNMENT, ENTIRE AGREEMENT; AMENDMENT
8.1. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns,
including any purchasers of the Debentures. Except in connection
with the Company's currently contemplated and shareholder approved
reincorporation in Delaware, the Company shall not assign this
Agreement or any rights or obligations hereunder without the prior
written consent of the holders of two-thirds (2/3) of the
Debentures then outstanding. The Subscriber may assign some or all
of its rights hereunder to affiliates of the Subscriber without the
consent of the Company, and
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<PAGE>
to others with the consent of the Company; provided, however,
that any such assignment shall not release the Subscriber from
its obligations hereunder unless such obligations are assumed by
such assignee and the Company has consented to such assignment
and assumption.
8.2. ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Debentures, the
Registration Rights Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof
and thereof, and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants
except as specifically set forth in this Agreement or therein.
Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge
or termination is sought.
9. PUBLICITY
The Company agrees that it will not disclose, and will not include in any
public announcement, the name of the Subscriber without its express written
consent, unless and until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement. Except as may
be required by law, the Company and the Subscribers shall consult with each
other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the relationship between the
Company and the Subscribers and shall not issue any such press release or
make any such public statement prior to such consultation.
10. NOTICES, ETC.; EXPENSES; INDEMNITY
10.1. NOTICES. Any notice, demand or request required or permitted to be
given by either the Company or any Subscriber pursuant to the terms
of this Agreement shall be in writing and shall be deemed given
when delivered personally or by facsimile, with a hard copy to
follow by two day courier addressed to the parties at the addresses
of the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
Copies of all notices to each Subscriber shall be sent to its
designee or representative.
10.2. COSTS AND EXPENSES. The Company shall be responsible for the
Subscribers' costs and expenses, due and payable at Closing,
(including legal fees and expenses for one counsel for the
Subscribers) incurred in entering into this Agreement and the
transactions contemplated hereby and in conducting a due diligence
examination in connection with the transactions contemplated
hereby, but not to exceed $25,000 in the aggregate for all
Subscribers.
10.3. INDEMNIFICATION. Each party shall indemnify the other against any
loss, cost or damages (including reasonable attorney's fees and
expenses) incurred as a result
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<PAGE>
of such parties' breach of any representation, warranty, covenant
or agreement in this Agreement.
11. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
12. SURVIVAL; SEVERABILITY
The representations, warranties, covenants and agreements of the parties
hereto shall survive the Closing notwithstanding any due diligence
investigation conducted by or on behalf of the Subscriber. In the event
that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided
that no such severability shall be effective if it materially changes the
economic benefit of this Agreement to any party.
13. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this
Agreement.
14. AMOUNT
The undersigned hereby subscribes for U.S. $______________ in principal
amount of Debentures for the First Closing (the "First Closing Amount") and
for U.S. $__________ in principal amount of Debentures for the Second
Closing (the "Second Closing Amount").
Name of the Subscriber:________________________
Address:_______________________________________
Telephone:_____________________________________
Fax:___________________________________________
Date of Subscription: ________________________
Signature:_____________________________________
Name: Title:
Place of Execution:____________________________
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<PAGE>
Place of Organization or Citizenship:__________
Place of Residency
and/or Principal Place of Business:____________
Copies of Notice to be sent to:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
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<PAGE>
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 6th DAY OF
FEBRUARY, 1998.
ROSS SYSTEMS, INC.
By:________________________________________
Print Name:
Its:
Two Concourse Parkway, Suite 800
Atlanta, Georgia 30328
Telephone: 770/351-9600
Fax:
Copies of Notices to be sent to:
___________________________________________
___________________________________________
___________________________________________
___________________________________________
___________________________________________
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<PAGE>
SCHEDULE 1.5 (d)
PRIOR PUBLIC DISCLOSURES
SINCE JUNE 30, 1997
<TABLE>
<CAPTION>
Date Filed Description
- ----------------------- ------------------------------------------------------------------------
<S> <C>
EXCHANGE ACT FILINGS:
August 19, 1997 Form 8-K: Earnings release for the fourth quarter of fiscal 1997
September 29, 1997 Form 10-K: Annual report for the fiscal year ended June 30, 1997
October 8, 1997 Form 14A: Definitive Proxy Statement & Notice of Shareholder Meeting
November 14, 1997 Form 10-Q: Quarterly report for the quarter ended September 30, 1997
January 28, 1998 Form 8-K: Earnings release for the second quarter of fiscal 1998
PRESS RELEASES:
July 1, 1997 Ross Systems, Inc. Announces $500,000 in Contracts
July 1, 1997 Ross Systems, Inc. Announces $2.1 Million in Process
Manufacturing Agreements
July 3, 1997 Ross Systems Appoints Professional Services Vice-President
July 7, 1997 Stan F. Stoudenmire Joins Ross Systems as CFO
July 7, 1997 Ross Systems and Dragoco Sign Key Accord
July 7, 1997 Ross Systems Reports Progress in the Process
Manufacturing Market
July 28, 1997 Ross Systems Announces Increased Demand for
Renaissance CS on Windows NT
August 4, 1997 Ross Systems, Inc. Announces $850,000 in Spanish Agreements
August 5, 1997 Ross Systems Acquires Software Applications for
Enhanced Supply Chain Capabilities
August 7, 1997 Ross Systems, Inc. Announces $1.6 Million Agreement
August 8, 1997 Ross Systems, Inc. Announces $1.4 Million Agreement
August 18, 1997 Ross Systems, Inc. Discusses Fourth Quarter Revenues
August 21, 1997 Ross Systems Announces Year End Results
August 27, 1997 Ross Systems, Inc. Announces $750,000 in New Contracts
August 28, 1997 Ross Systems, Inc. Expands Agreement with Mental Health &
Mental Retardation Authority
September 10, 1997 Ross Systems Announces First Joint Integration of
Renaissance CS and FRx
September 17, 1997 Gorges Quick to Fix Foods - Quick to Implement Ross Systems'
Renaissance CS
September 24, 1997 Ross Systems, Inc. Announces New Agreements
September 29, 1997 Ross Systems, Inc. Names William Goodhew to Board of Directors
</TABLE>
Page 1 of 2
<PAGE>
SCHEDULE 1.5 (d)
PRIOR PUBLIC DISCLOSURES
SINCE JUNE 30, 1997
<TABLE>
<CAPTION>
Date Filed Description
- ----------------------- ------------------------------------------------------------------------
<S> <C>
September 30, 1997 Ross Systems, Inc. Announces $840,000 in New Contracts
October 2, 1997 Ross Systems Announces $1,250,000 in International Agreements
October 2, 1997 Ross Systems Announces New Agreements valued at $830,000
October 23, 1997 Ross Systems Reports 1st Quarter Results
November 20, 1997 Ross Systems Announces New Agreements Valued at $940,000
November 21, 1997 Ross Systems, Inc. Announces $490,000 in New Contracts
December 1, 1997 Ross Systems, Inc. Announces $525,000 in New Contracts
December 2, 1997 Ross Systems, Inc. Announces $400,000 in New Agreements
December 2, 1997 Ross Systems Appoints Ramsay Vice President, Canadian Sales
December 2, 1997 Ross Systems Taps Austin to Head Western U.S. Sales Region
December 9, 1997 Ross Systems, Inc. Selected by Nucor Steel
December 11, 1997 Ross Systems Selected by Eastern Foods
December 11, 1997 Ross Systems, Inc. Selected by Sunnybrook Hospital
December 16, 1997 Nucor Steel Describes New ERP System from Ross Systems as
a Key Business Strategy
December 18, 1997 Geo Specialty Chemicals Completes Rapid ERP Implementation
in Less Than Four Months
December 22, 1997 Ross Systems, Inc. Announces $475,000 in New Contracts
December 22, 1997 Ross Systems Selected by Eurocan Pulp & Paper
December 22, 1997 Ross Systems Announces General Availability of
Renaissance Classic Release 7.0
December 22, 1997 Ross Systems, Inc. Announces New Sales
January 5, 1998 Ross Systems Announces Energy Sector Win
January 5, 1998 Ross Systems Selected by Charter Steel
January 5, 1998 Ross Systems Announces International Agreements
January 5, 1998 Ross Systems Announces $800,000 in Agreements
January 6, 1998 Ross Systems Acquires Business Partner
January 12, 1998 The Power Group Wraps Up Fast-Track Implementation
in Three Months
January 15, 1998 Ross Systems Announces New Win in Georgia
January 26, 1998 Ross Systems Announces 2nd Quarter Results
January 29, 1998 Ross Systems Announces New Agreements
</TABLE>
Page 2 of 2
<PAGE>
SCHEDULE 1.5A(d)
COAST
DEBT SUBORDINATION AGREEMENT
BORROWER: ROSS SYSTEMS, INC.
CREDITOR:
----------------------------
DATE: FEBRUARY 6, 1998
THIS DEBT SUBORDINATION AGREEMENT is executed by the above-named Creditor
("Creditor") in favor of Coast Business Credit, a division of Southern
Pacific Thrift & Loan Association ("Coast"), whose address is 12121 Wilshire
Blvd., Los Angeles, California, with respect to the above-named Borrower
("Borrower"). In order to induce Coast to extend or continue to extend
financing to the Borrower (but without obligation on Coast's part to do so),
the Creditor hereby agrees as follows:
1. SUBORDINATION OF DEBT. Creditor hereby subordinates payment by the
Borrower of and and all indebtedness, liabilities, guarantees and other
obligations of the Borrower to Creditor, now existing or hereafter arising
(collectively, the "Subordinated Debt"), to the payment to Coast, in full in
cash, of all indebtedness, liabilities, guarantees and other obligations of
the Borrower to Coast, now existing or hereafter arising (including without
limitation any interest, charges and other sums accruing after the filing of
a petition by or against Borrower under the Bankruptcy Code) (the "Coast
Debt"). Creditor represents and warrants that the Subordinated Debt includes
without limitation the following:
THAT CERTAIN CONVERTIBLE SUBORDINATED DEBENTURE DUE FEBRUARY 6, 2003 IN THE
ORIGINAL PRINCIPAL AMOUNT OF $_______________, WHICH HAS A PRESENT UNPAID
PRINCIPAL BALANCE OF $_______________ THE "DEBENTURE").
Creditor represents and warrants that it has not transferred or assigned the
Subordinated Debt or given any other subordination agreement in respect
thereof, and that it will not do so without prior written notice to Coast and
without making such transfer or assignment or subordination expressly subject
to this Agreement. Creditor agrees not to ask for, demand, sue for, take or
receive all or any part of the Subordinated Debt nor any security therefor
unless and until all of the Coast Debt has been paid and performed in full,
in cash; provided that, so long as no Event of Default and no event which,
with notice or passage of time or both, would constitute an Event of Default
under any present or future document, instrument or agreement evidencing,
securing or relating to the Coast Debt, both before and after giving effect to
the following payments. Subordinated Creditor may accept payment of the
following amounts on the Subordinated Debt:
PAYMENT OF ACCRUED INTEREST.
Creditor further agrees that upon any distribution of the assets or
readjustment of the indebtedness of the Borrower whether by reason of
liquidation, composition, bankruptcy, arrangement, receivership, assignment
for the benefit of creditors or any other action or proceeding involving the
readjustment of all or any of the Subordinated Debt, or the application of
the assets of the Borrower to the payment or liquidation thereof, Coast shall
be entitled to receive payment in full in cash of all of the Coast Debt prior
to the payment of all or any part of the Subordinated Debt, and in order to
enable Coast to enforce its rights hereunder in any such action or
proceeding, Coast is hereby irrevocably authorized and empowered in its
discretion (but without any obligation on its part) to make and present for
and on behalf of Creditor such proofs of claim against the Borrower on
account of the Subordinated Debt as Coast may deem expedient or proper and to
vote such proofs of claim in any such proceeding and to receive and collect
any and all dividends or other payments or disbursements made thereon in
whatever form the same may be paid or issued and to apply same on account of
the Coast Debt. Creditor further agrees to execute and deliver to Coast such
assignments or other instruments as may be required by Coast in order to
enable Coast to enforce any and all such claims and to collect any and all
dividends or other payments or disbursements which may be made at any time on
account of all and any of the Subordinated Debt. Creditor shall endorse all
notes and other written evidence of the Subordinated Debt with a statement
that they are subordinated to the Coast Debt pursuant to the terms of this
Agreement, in such form as Coast shall require, and Creditor will exhibit the
originals of such notes and other written evidence of the Subordinated Debt
to Coast so that Coast can confirm that such endorsement has been made, but
this Subordination Agreement shall be fully effective, even if no such
endorsement is made.
-1-
<PAGE>
COAST BUSINESS CREDIT SUBORDINATION AGREEMENT
- ------------------------------------------------------------------------------
2. MODIFICATIONS TO COAST DEBT; WAIVERS. Until Coast have received payment
in full of all Coast Debt, the Creditor agrees that, in addition to any other
rights that Coast may have at law or in equity, Coast may at any time, and
from time to time, without the Creditor's consent and without notice to the
Creditor, renew, extend or increase any of the Coast Debt or that of any other
person at any time directly or indirectly liable for the payment of any Coast
Debt, accept partial payments of the Coast Debt, settle, release (by operation
of law or otherwise), compound, compromise, collect or liquidate any of the
Coast Debt, make loans or advances to the Borrower secured in whole or in part
by the any present or future assets securing any or all of the Coast Debt
(the "Collateral") or refrain from making any loans or advances to the
Borrower, change, waive, alter or vary the interest charge on, or any other
terms or provisions of the Coast Debt or any present or future instrument,
document or agreement between Coast and the Borrower, release, exchange, fail
to perfect, delay the perfection of, fail to resort to, or realize upon any
Collateral, and take any other action or omit to take any other action with
respect to the Coast Debt or the Collateral as Coast deems necessary or
advisable in Coast's sole discretion. The Creditor waives any right to
require Coast to marshal any assets in favor of the Creditor or against or in
payment of any or all of the Coast Debt. Creditor further waives any defense
arising by reason of any claim or defense based upon an election of remedies
by Coast which in any manner impairs, affects, reduces, releases, destroys
and/or extinguishes the Creditor's subrogation rights, rights to proceed
against the Borrower for reimbursement, and/or any other rights of the
Creditor. In the event of any financing of the Borrower by Coast during any
bankruptcy, arrangement, or reorganization of the Borrower, the Creditor
agrees that the term "Coast Debt" shall include without limitation all
indebtedness, liabilities and obligations incurred in any such proceeding,
and the Subordinated Debt shall continue to remain subordinate to the Coast
Debt, and the Creditor agrees to take such actions and execute such documents
in such proceedings as may be required in order to continue such subordination.
3. DEFAULT.*
*THE CREDITOR SHALL PROMPTLY GIVE COAST WRITTEN NOTICE OF ANY DEFAULT OR
EVENT OF DEFAULT UNDER ANY DOCUMENT, INSTRUMENT OR AGREEMENT EVIDENCING,
SECURING OR RELATING TO ANY OF THE SUBORDINATED DEBT. UNLESS WITHIN TEN (10)
DAYS OF SUCH NOTICE COAST GIVES CREDITOR A WRITTEN NOTICE TO THE CONTRARY
SIGNED BY COAST, CREDITOR MAY PROCEED TO ENFORCE THE FOLLOWING AND ONLY THE
FOLLOWING RIGHTS UNDER THE DEBENTURE: (i) THE RIGHT TO CONVERT THE DEBENTURE
INTO COMMON STOCK OF THE BORROWER; (ii) THE RIGHT TO PARTICIPATE IN A
PARAGRAPH 5 TRANSACTION (AS DEFINED IN THE DEBENTURE), (iii) THE RIGHT TO
OBTAIN AN ADJUSTMENT TO ITS CONVERSION RIGHTS AS PROVIDED IN THE DEBENTURE,
(iv) THE RIGHT TO REQUIRE SHAREHOLDER APPROVAL AS REQUIRED UNDER PARAGRAPH
14(b) OF THE DEBENTURE, AND (v) THE RIGHT TO OBTAIN REPLACEMENT DEBENTURES AS
PROVIDED IN THE DEBENTURE; PROVIDED THAT NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY, THE RIGHTS IN CLAUSES (i) THROUGH (v) ABOVE SHALL NOT INCLUDE
ANY RIGHT TO HAVE ANY DEBENTURE REDEEMED OR TO ACCEPT ANY PAYMENT WITH
RESPECT TO ANY DEBENTURE. EXCEPT AS EXPRESSLY PERMITTED BY THE FOREGOING
SENTENCE, UNTIL THE COAST DEBT HAS BEEN PAID AND PERFORMED IN FULL, THE
CREDITOR SHALL NOT EXERCISE ANY RIGHTS OR REMEDIES WITH RESPECT TO THE
SUBORDINATED DEBT, JUDICIALLY OR NON-JUDICIALLY, OR ATTEMPT TO DO ANY OF THE
FOREGOING.
4. NO COMMITMENT. It is understood and agreed that this Agreement shall in
no way be construed as a commitment or agreement by Coast to continue
financing arrangements with the Borrower and that Coast may terminate such
arrangements at any time, in accordance with Coast's agreements with the
Borrower.
5. NO CONTEST. Creditor agrees not to contest the validity, perfection,
priority or enforceability of Coast' security interest in the Collateral or
the Coast Debt.
6. FINANCIAL CONDITION OF BORROWER. The Creditor is presently informed of
the financial condition of the Borrower and of all other circumstances which
a diligent inquiry would reveal and which bear upon the risk of non-payment
of the Coast Debt and the Subordinated Debt. The Creditor covenants that it
will continue to keep itself informed as to the Borrower's financial
condition and all other circumstances which bear upon the risk of non-payment
of the Coast Debt and the Subordinated Debt. The Creditor waives any right to
require Coast to disclose to it any information which Coast may now or
hereafter acquire concerning the Borrower.
7. REVIVOR. If, after payment of the Coast Debt, the Borrower thereafter
becomes liable to Coast on account of the Coast Debt, as a result of any
payment made on the Coast Debt for any reason being returned by Coast or
being reversed, set aside, or recovered by the Borrower or any trustee or
assignee for the Borrower, this Agreement shall thereupon in all respects
become effective with respect to such subsequent or reinstated Coast Debt,
without the necessity of any further act or agreement between Coast and the
Creditor.
8. GENERAL. The Creditor agrees, upon Coast's request, to execute all
such documents and instruments and take all such actions as Coast shall deem
necessary or advisable in order to carry out the purposes of this Agreement.
The word "indebtedness" is used in this agreement in its most comprehensive
sense and includes without limitation any and all present and future loans,
advances, credit, debts, obligations, liabilities, representations,
warranties, and guarantees, of any kind and nature, absolute or contingent,
liquidated or unliquidated, and individual or joint. Creditor represents and
warrants that it has not heretofore
-2-
<PAGE>
COAST BUSINESS CREDIT SUBORDINATION AGREEMENT
- ------------------------------------------------------------------------------
transferred or assigned the Subordinated Debt, and that it will not do so
without prior written notice to Coast and without making such transfer or
assignment expressly subject to this Agreement. This Agreement is solely for
the benefit of Coast and Coast's successors and assigns, and neither the
Borrower nor any other person shall have any right, benefit, priority or
interest under, or because of the existence of, this Agreement. All of
Coast's rights and remedies hereunder and under applicable law are cumulative
and not exclusive. This Agreement sets forth in full the terms of agreement
between the parties with respect to the subject matter hereof, and may not be
modified or amended, nor may any rights hereunder be waived, except in a
writing signed by Coast and the Creditor. The Creditor agrees to reimburse
Coast, upon demand, for all costs and expenses (including reasonable
attorneys' fees) incurred by Coast in enforcing this Agreement against
Creditor, whether or not suit be brought. In the event of any litigation
between the parties based upon or arising out of this Agreement, the
prevailing party shall be entitled to recover all of its costs and expenses
(including without limitation attorneys fees) from the non-prevailing party.
This Agreement shall be construed in accordance with, and governed by, the
laws of the State of California. As a material part of the consideration to
the parties for entering into this Agreement, each party (i) agrees that all
actions and proceedings based upon, arising out of or relating in any way
directly or indirectly to, this Agreement shall be litigated exclusively in
courts located within Los Angeles County, California, (ii) consents to the
jurisdiction of any such court and consents to the service of process in any
such action or proceeding by personal delivery, first-class mail, or any
other method permitted by law, and (iii) waives any and all rights to
transfer or change the venue of any such action or proceeding to any court
located outside Los Angeles County, California. This Agreement shall be
binding upon the Creditor and its successors and assigns and shall inure to
the benefit of Coast and Coast's successors and assigns.
9. MUTUAL WAIVER OF JURY TRIAL. Creditor and Coast each hereby waive the
right to trial by jury in any action or proceeding based upon, arising out
of, or in any way relating to: (i) this Agreement; or (ii) any other present
or future instrument or agreement between Creditor and Coast; or (iii) any
conduct, acts or omissions of Creditor or Coast or any of their directors,
officers, employees, agents, attorneys or any other persons affiliated with
Creditor or Coast; in each of the foregoing cases, whether sounding in
contract or tort or otherwise.
"CREDITOR."
- --------------------------------------------
By:
CONSENT AND AGREEMENT OF BORROWER
The undersigned Borrower hereby approves of, agrees to and consents to all
of the terms and provisions of the foregoing Subordination Agreement and
agrees to be bound thereby and further agrees that any default or event of
default by the Borrower under any present or future instrument or agreement
between the Borrower and the Creditor shall constitute an immediate default
and event of default under all present and future instruments and agreements
between the Borrower and Coast. Borrower further agrees that, at any time and
from time to time, the foregoing Agreement may be altered, modified or
amended by Coast and the Creditor without notice to or the consent of
Borrower.
BORROWER:
ROSS SYSTEMS, INC.
By
-------------------------------
President or Vice President
ACCEPTED:
COAST:
COAST BUSINESS CREDIT
By
---------------------------
Title
------------------------
- -1
-3-
<PAGE>
SCHEDULE 3.4
OUTSTANDING STOCK, WARRANTS, OPTIONS, CONVERTIBLE SECURITIES,
OTHER CAPITAL STOCK ITEMS,
AND OTHER REGISTRATION RIGHTS
AS OF FEBRUARY 6, 1998
1. Outstanding shares of common stock 19,859,808
2. Outstanding redeemable preferred stock:
Series E - held by Fletcher International Ltd.
convertible into 283,872 shares of common stock 107
3. Outstanding common stock warrants:
Price - fixed at $5.576 per share 400,000
Price - variable at $3.447 per share on 12/31/97 640,000
4. Outstanding options to purchase common stock issued under
the Company's stock option plans (as of 12/31/97) 1,714,169
5. Shares available to be granted under the Company's
current stock option plan (900,000 shares authorized) 669,350
6. Shares available to be issued to the Company's employees
under the Company's Employee Stock Purchase Plan 88,317
7. The Company has an obligation to issue additional shares of
its Common Stock (the "Adjusted Shares") pursuant to
its acquisition of Bizware Corporation 156,732
8. The Company has an obligation to register 50% of the shares
of Common Stock issued pursuant to its acquisition of
Bizware Corporation (including 50% of the Adjusted Shares) 351,450
<PAGE>
SCHEDULE 3.5
LIST OF SUBSIDIARIES
AS OF FEBRUARY 6, 1998
Ross Systems, Inc. (Ross Systems, Inc. is currently not in good standing in
the Commonwealth of Massachusetts)
Ross Systems Computer Software B.V.
Ross Systems Nederland B.V. (Netherlands office)
Ross Systems Europe N.V. (Belgium office)
Ross Systems France S.A. (France office)
Ross Systems Deutschland GmbH (Germany office)
Ross Data Canada, Ltd. (Toronto office)
Ross Systems Iberica (Spain/Portugal office)
Ross Systems Servicios Integrados (Spanish entity)
Ross Systems (UK), Ltd. (UK offices)
Pioneer Computer Systems, Ltd. (dormant company)
Pioneer Software International, Ltd. (dormant company)
Ross Systems, Ltd. (dormant company)
Virtual Discorp (Domestic International Sales Corporation - for tax
purposes)
Ross Systems Sales Corporation (Foreign Sales Corporation - for tax
purposes)
Cardinal Data Corporation (dormant company)
(This entity is currently not in good standing in the
Commonwealth of Massachusetts. The Company is in the process of
dissolving this dormant entity)
Pioneer Software, Inc. (dormant company)
Bizware Corporation
<PAGE>
SCHEDULE 3.10A
VIOLATION OF CREDITOR COVENANTS
FEBRUARY 6, 1998
NONE
<PAGE>
PURSUANT TO A DEBT SUBORDINATION AGREEMENT DATED FEBRUARY 6, 1998, IN FAVOR
OF COAST BUSINESS CREDIT, THIS DEBENTURE IS SUBORDINATED TO THE COAST DEBT
(AS DEFINED IN THE DEBT SUBORDINATION AGREEMENT).
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
No. _________ $____________
ROSS SYSTEMS, INC.
CONVERTIBLE SUBORDINATED DEBENTURE DUE FEBRUARY 6, 2003
THIS DEBENTURE ("Debenture") is one of a duly authorized issue of
Debentures of Ross Systems, Inc., a corporation duly organized and existing
under the laws of the State of California (the "Company"), designated as its
Convertible Subordinated Debentures Due February 6, 2003 (the
"Debentures").
FOR VALUE RECEIVED, the Company promises to pay to
_______________________________________ the holder hereof, or its order (the
"Holder"), the principal sum of _______________________________________
United States Dollars (U.S. $____________) on February 6, 2003 (subject
to extension as provided herein, the "Maturity Date") and to pay interest on
the principal sum outstanding under this Debenture ("Outstanding Principal
Amount"), at the rate of 4% per annum for the period commencing on the date
of issuance and ending on the date six months therefrom, and at the rate of
6% per annum thereafter, in all cases due and payable semi-annually in
arrears on the last day of June and December of each year (each an "Interest
Payment Date"), with the first such payment due on June 30, 1998. Interest
shall be calculated based on a 360-day year of twelve 30-day months. Accrual
of interest shall commence on the most recent date on which interest has been
paid, or if no interest has been paid, on the first business day to occur
after the date hereof and shall continue until the following Interest Payment
Date. The interest so payable will be paid to the person in whose name this
Debenture (or one or more predecessor Debentures) is registered on the
records of the Company regarding registration and transfer of the Debentures
(the "Debenture Register") at the close of business on the record date for
interest payable on such Interest Payment Date; provided, however, that the
Company's obligation to a transferee of this Debenture arises only if such
transfer, sale or other disposition is made in accordance with the terms and
conditions of the Convertible Securities Subscription Agreement dated as of
February 6, 1998 between the Company and the Subscriber named therein
(the "Subscription
<PAGE>
Agreement"). The principal of this Debenture is payable in such coin or
currency of the United States of America as of the time of payment is legal
tender for payment of public and private debts, at the address last appearing
on the Debenture Registrar of the Company as designated in writing by the
Holder hereof from time to time. The interest on this Debenture for each
Interest Payment Date shall be payable in shares of the Company's Common
Stock, no par value ("Common Stock"), valued at the average of the two lowest
closing bid prices for the Common Stock as reported by the Bloomberg Service
for the thirty (30) trading days immediately preceding the Interest Payment
Date ("PIK Interest"). The Company shall deliver to the Holder within five
(5) business days after the applicable Interest Payment Date a statement in
the form of Exhibit 2 hereto ("PIK Statement"). The Company shall cause such
shares of Common Stock representing the PIK Interest to be issued and
delivered within 10 calendar days following the applicable Interest Payment
Date. The record date for any interest payment shall be the tenth (10th) day
prior to the applicable Interest Payment Date. Payments shall be sent by
overnight courier or two-day courier to such Holder at the last address
appearing on the Debenture Register for such payments. Except as otherwise
provided herein, the Outstanding Principal Amount and interest due hereunder
shall bear interest, from and after the occurrence and during the continuance
of a default hereunder, at the rate equal to the lower of twenty percent
(20%) per annum or the highest rate permitted by applicable law to be charged
on commercial loans. In the event the Company pays any interest on the
Debenture and it is determined that such interest was paid at a rate in
excess of the legal maximum rate, then that portion of the interest payment
representing an amount in excess of the legal maximum rate shall be deemed a
payment of principal and shall be applied against the principal of the
Debenture.
This Debenture is subject to the following additional provisions:
1. EXCHANGE. The Debentures in minimum principal amount of $50,000,
are exchangeable for an equal aggregate principal amount of Debentures of
different denominations, as requested by the Holder surrendering the same. No
service charge will be made for such registration or transfer or exchange.
2. [Intentionally Omitted]
3. TRANSFERS. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged in the United States only in compliance with the Securities Act of
1933, as amended (the "Act"), and applicable state securities laws. Prior to
due presentment for transfer of this Debenture, the Company may treat the
person in whose name this Debenture is duly registered on the Company's
Debenture Register as the owner hereof for the purpose of receiving payment
as herein provided and all other purposes, whether or not this Debenture be
overdue, and the Company shall not be affected by notice to the contrary.
-2-
<PAGE>
4. DEFINITIONS. For purposes hereof the following definitions shall
apply:
"CLOSING DATE" shall mean the date of original issuance of the
Debenture and "FIRST CLOSING DATE" shall have the meaning ascribed thereto
under the Subscription Agreement.
"COMMON STOCK" shall mean the Common Stock, no par value, of the
Company.
"CONVERSION DATE MARKET PRICE" shall mean, unless otherwise
specified herein, an amount that is equal to the lesser of (a) the Maximum
Conversion Price or (b) 101% of the average of the two lowest closing bid
prices of the Common Stock as reported by the Bloomberg Service for the
thirty (30) trading days immediately preceding the Holder Conversion Date,
subject to adjustment from time to time as set forth in Paragraph 8 hereof
and/or in the Subscription Agreement and/or Registration Rights Agreement (as
defined in the Subscription Agreement).
"CONVERSION DEFAULT" shall have the meaning set forth in Paragraph
10(b).
"CONVERSION NOTICE" shall have the meaning set forth in Paragraph
6(c).
"CONVERSION RATE" shall have the meaning set forth in Paragraph 6(b).
"HOLDER CONVERSION DATE" shall have the meaning set forth in
Paragraph 6(c).
"MARKET PRICE FOR SHARES OF COMMON STOCK" shall mean the price of
one share of Common Stock determined as follows:
(i) If the Common Stock is listed on Nasdaq, the closing bid
price as reported by the Bloomberg Service on the date of valuation;
(ii) If the Common Stock is listed on a national securities
exchange, the lowest reported sales price on such exchange on the date of
valuation;
(iii) If neither (i) nor (ii) apply but the Common Stock is
quoted in the over-the-counter market on the pink sheets or bulletin board,
the lesser of (A) the lowest sales price or (B) the mean between the last
reported "bid" and "asked" prices thereof on the date of valuation; and
(iv) If neither clause (i), (ii) or (iii) above applies, the
market value as determined by a nationally recognized investment banking firm
or other nationally recognized financial advisor retained by the Company for
such purpose, taking into consideration, among other factors, the earnings
history, book value and prospects for the Company, and the prices at which
shares of Common Stock recently have been traded. Such determination shall
be conclusive and binding on all persons.
-3-
<PAGE>
"MAXIMUM CONVERSION PRICE" shall mean (i) for the period commencing
on the date of original issuance of the Debenture and ending December 31,
1998, the amount of $7.00; provided, however, that in the event that during
the period expiring ninety (90) days following the Closing, the Company
offers, sells, contracts to sell or otherwise issues or agrees to issue any
securities of the Company, convertible or otherwise, in a private placement
financing transaction (other than pursuant to any existing plans or
obligations of the Company as set forth on Schedule 3.4 attached to the
Convertible Securities Subscription Agreement between the Company and the
Holder), with a maximum conversion price per share of Common Stock of, or in
the case of a Common Stock offering a purchase price per share equal to, an
amount less than $7.00, then the "Maximum Conversion Price" for such period
ending December 31, 1998 shall mean such lower conversion price or offer
price per share; and provided further, that in the event of any stock split,
subdivision, combination, reorganization, exchange, substitution or
reclassification, such Maximum Conversion Price shall be equitably and
appropriately adjusted to reflect such change; and (ii) for the period
commencing January 1, 1999, 115% of the average closing bid price of the
Common Stock as reported by the Bloomberg Service over the 1998 calendar year.
"PARAGRAPH 5 TRANSACTION" shall mean a merger, consolidation, or
other transaction referred to in Paragraph 5.
"POST-DEFAULT CONVERSION" shall have the meaning set forth in
Paragraph 10(b).
"THE REGISTRATION RIGHTS AGREEMENT" shall have the meaning set forth
in the Subscription Agreement.
"SUBSCRIPTION AGREEMENT" shall have the meaning set forth on page 1
of this Debenture.
"UNDERLYING SHARES" shall mean (unless otherwise indicated where
used) the Common Stock issuable upon conversion of the Debentures and the
Common Stock issued as PIK Interest.
5. PARAGRAPH 5 TRANSACTIONS. If at any time (i) there occurs any
consolidation or merger of the Company with or into any other corporation or
other entity or person (whether or not the Company is the surviving
corporation) or there occurs any other corporate reorganization or
transaction or series of related transactions, and as a result thereof the
shareholders of the Company pursuant to such merger, consolidation,
reorganization or other transaction own in the aggregate less than 50% of the
voting power and common equity of the ultimate parent corporation or other
entity surviving or resulting from such merger, consolidation, reorganization
or other transaction, (ii) the Company transfers all or substantially all of
the Company's assets to another corporation or other entity or person or
(iii) the Company shall fix a record date for the declaration of a material
special distribution or dividend, whether payable in cash, securities or
assets (other than shares of Common Stock) (a "Paragraph 5 Transaction"),
then subject to the Company's prior redemption rights as provided in
Paragraph
-4-
<PAGE>
5A below, the Holder of this Debenture, at its option, (a) may participate in
any such transaction as a class with common stockholders on the same basis as
if the Outstanding Principal Amount of this Debenture had been converted one
day prior to the announcement of such transaction, provided that in the event
of a transaction described in clause (i) or (ii) of this Paragraph 5, the
Holder elects to convert (which election may be made contingent on the
consummation of such transaction); or (b) may require that the Company redeem
this Debenture at a redemption price equal to 115% of the then Outstanding
Principal Amount of the Debenture, plus accrued but unpaid interest on the
Debenture. Notice of the Holder's election under this Paragraph 5 shall be
given not less than five (5) days prior to the effective date of such
transaction.
5A. REDEMPTION AT THE OPTION OF THE COMPANY. This Debenture may not be
redeemed or prepaid by the Company at its option except in accordance with
the terms of this Section 5A.
(a) (i) At any time during the period ending 180 days after the First
Closing Date ("Initial Redemption Period"), the Company may, at its option
and for any reason, redeem any part of this Debenture which is then
outstanding, in whole but not in part, for cash at a redemption price equal
to (x) during the first 90 days of the Initial Redemption Period, 104% of the
then Outstanding Principal Amount of the Debenture, plus accrued but unpaid
interest on the Debenture, and (y) during the period from day 91 of the
Initial Redemption Period through the end of the Initial Redemption Period,
108% of the then Outstanding Principal Amount of the Debenture, plus accrued
but unpaid interest on the Debenture; provided that the Company shall have
funds legally available for such redemption and that the notice provisions of
paragraph 5A(b)(i) have been complied with.
(ii) If at any time during the period commencing 181 days after the
First Closing Date and ending, to the extent the Debenture remains
outstanding, on the last day prior to the Maturity Date ("Special Redemption
Period"), there may occur a transaction described in clause (i) of Paragraph
5, the Company shall have the right to redeem any part of this Debenture
which shall remain outstanding on the effective date of such Paragraph 5(i)
transaction for cash at a redemption price equal to 120% of the then
Outstanding Principal Amount of the Debenture, plus accrued but unpaid
interest on the Debenture; provided that the Company shall have funds legally
available for such redemption, that the notice provisions of paragraph
5A(b)(ii) have been complied with, and that the Holder may elect to convert
all or any part of this Debenture prior to such redemption date at a
conversion date market price equal to the lesser of (x) the Maximum
Conversion Price or (y) 101% of the average of the two lowest closing bid
prices of the Common Stock as reported by the Bloomberg Service for the sixty
(60) trading days immediately preceding the date of the public announcement
by the Company of such Paragraph 5(i) transaction, which conversion may, at
the Holder's option, be conditioned upon the effectiveness of the Paragraph
5(i) transaction.
(b) (i) Notice of the Company's intention to redeem this Debenture
during the Initial Redemption Period pursuant to paragraph 5A(a)(i) above,
shall be given not less than twenty (20) days prior to the date of redemption
of this Debenture by personal delivery or by
-5-
<PAGE>
facsimile, followed by two-day courier to the Holder of this Debenture at the
address of the Holder provided for such notices. Each such notice shall
state: (I) a redemption date not less than twenty (20) days following the
date of mailing of the notice; (II) the place or places where this Debenture
is to be surrendered for payment of the redemption price; (III) that interest
on this Debenture will cease to accrue on such redemption date; and (IV) that
the Holder may elect to convert such Debenture prior to such redemption date
to the extent otherwise convertible.
(ii) Notice of the Company's intention to redeem this Debenture
during the Special Redemption Period pursuant to paragraph 5A(a)(ii) above,
shall be given not less than sixty (60) days prior to the date of redemption
of this Debenture by personal delivery or by facsimile, followed by two-day
courier to the Holder of this Debenture at this address of the Holder
provided for such notices. Such notice shall state: (I) the circumstances
giving rise to the Company's redemption; (II) a redemption date not less than
sixty (60) days following the date of mailing of the notice, which sixty (60)
day period shall be extended by that number of days following the date of
mailing the notice during which a Blocking Notice is in effect pursuant to
Section 5A of the Registration Rights Agreement; (III) whether such
redemption is conditioned on the effectiveness of the Paragraph 5(i)
transaction giving rise to the redemption right; (IV) the place or places
where and the date on which this Debenture is to be surrendered for payment
of the redemption price; (V) that interest on the Debenture will cease to
accrue on such redemption date; and (VI) that the Holder may elect to convert
such Debenture on or prior to such redemption date pursuant to the special
conversion terms specified in paragraph 5A(a)(ii), above.
(c) Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Company in providing
money for the payment of the redemption price) interest on the Debenture so
called for redemption shall cease to accrue. Upon surrender in accordance
with such redemption notice of this Debenture, this Debenture shall be
redeemed by the Company at the redemption price.
6. CONVERSION AT THE OPTION OF THE HOLDER. The Holder of this
Debenture shall have the following conversion rights.
(a) HOLDER'S RIGHT TO CONVERT. This Debenture shall be convertible
at any time on or after one hundred twenty (120) days after the First Closing
Date (unless previously redeemed), in whole or in part, at the option of the
Holder hereof, into fully paid, validly issued and nonassessable shares of
Common Stock. If this Debenture is converted in part, the remaining portion
of this Debenture not so converted shall remain entitled to the conversion
and other rights provided herein.
-6-
<PAGE>
(b) CONVERSION PRICE FOR HOLDER CONVERTED SHARES. The Outstanding
Principal Amount of this Debenture that is converted into shares of Common
Stock at the option of the Holder shall be convertible into the number of
shares of Common Stock which results from application of the following
formula:
P+I
----------------------------
Conversion Date Market Price
P = Outstanding Principal Amount of this Debenture submitted for conversion
I = accrued but unpaid interest on P as of the Holder Conversion Date
The number of shares of Common Stock into which each $1,000
principal amount of this Debenture hereto may be converted pursuant to this
paragraph hereof is hereafter referred to as the "Conversion Rate."
(c) MECHANICS OF CONVERSION. In order to convert this Debenture
(in whole or in part) into full shares of Common Stock, the Holder shall
surrender this Debenture, duly endorsed, by either overnight courier or 2-day
courier, to the principal office of the Company, and shall give written
notice in the form of Exhibit 1 hereto (the "Conversion Notice") by facsimile
(with the original of such notice forwarded with the foregoing courier) to
the Company at such office that the Holder elects to convert the Outstanding
Principal Amount (plus accrued but unpaid interest) specified therein, which
such notice and election shall be irrevocable by the Holder, subject to the
conditional conversion rights afforded the Holder in paragraph 5A above and
subject to the second paragraph of this paragraph 6(c), PROVIDED, HOWEVER,
that the Company shall not be obligated to issue certificates evidencing the
shares of the Common Stock issuable upon such conversion unless either the
Debenture evidencing the Outstanding Principal Amount is delivered to the
Company as provided above, or the Holder notifies the Company that such
Debenture(s) have been lost, stolen or destroyed and promptly executes an
agreement reasonably satisfactory to the Company to indemnify the Company
from any loss incurred by it in connection with such Debentures.
The Company shall use its best efforts to issue and deliver
within three (3) business days after delivery to the Company of such
Debenture(s), or after receipt of such agreement and indemnification, to the
Holder of such Debenture(s) at the address of the Holder, or to its designee,
a certificate or certificates for the number of shares of Common Stock to
which the Holder shall be entitled as aforesaid, together with a calculation
of the Conversion Rate and a Debenture or Debentures for the principal amount
of Debentures not submitted for conversion. In addition to any other
remedies which may be available to the Holder, in the event the Company fails
to effect a delivery of such shares of Common Stock within five (5) business
days after delivery to the Company of such Debentures for conversion, the
Holder will be entitled to revoke the relevant Notice of Conversion by
delivering a notice to such effect to the
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Company whereupon the Company and the Holder shall each be restored to their
respective positions immediately prior to delivery of such Notice of
Conversion. Unless otherwise specified in this Debenture, the effective date
of conversion (the "Holder Conversion Date") shall be deemed to be the date
on which the Company receives by facsimile the Conversion Notice, and the
person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
7. CONVERSION UPON MATURITY. At the Maturity Date, the Outstanding
Principal Amount of Debentures outstanding (plus all accrued and unpaid
interest) at such time shall be automatically converted into shares of Common
Stock of the Company in accordance with the terms of this Debenture, the
Subscription Agreement and the Registration Rights Agreement, without notice.
The Company shall use its best efforts to issue and deliver within three (3)
business days after delivery to the Company of this Debenture, or after
receipt of the agreement and indemnification described in paragraph 6(c)
above, to the Holder of the Debenture at the address of the Holder, or to its
designee, a certificate or certificates for the number of shares of Common
Stock to which the Holder shall be entitled hereunder, together with a
calculation of the Conversion Rate. The person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on the Maturity Date. The Maturity Date shall be a "Holder
Conversion Date" for purposes of this Debenture.
8. STOCK SPLITS; DIVIDENDS; ADJUSTMENTS; REORGANIZATIONS.
(a) STOCK SPLITS AND COMBINATIONS. The Company shall not effect
any stock split, subdivision or combination with an effective date within
thirty (30) trading days of the Maturity Date.
(b) CERTAIN DIVIDENDS AND DISTRIBUTIONS. The Company shall not
make, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, with an effective date within thirty (30) trading
days of the Maturity Date.
(c) ADJUSTMENT FOR DIVIDENDS AND DISTRIBUTIONS. If at any time not
prohibited by paragraph 8(a) or (b), the number of outstanding shares of
Common Stock is changed by a stock split, subdivision, combination or stock
dividend or other distribution payable in additional shares of Common Stock,
and if the record date for such change occurs during a period that is used to
determine the number of shares of Common Stock into which the Debenture is
converted, then and in each such event the formulae set forth herein for
conversion shall be equitably adjusted to reflect such change in number of
shares. In the event the Company at any time or from time to time after the
Closing Date makes, or fixes a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable
in securities of the Company other than shares of Common Stock, then and in
each such event provision shall be made so that the Holders of Debentures
shall receive upon conversion thereof pursuant to Paragraph 6 hereof, in
addition to the number of shares of Common Stock
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<PAGE>
receivable thereupon, the amount of such other securities of the Company to
which a Holder on the relevant record or payment date, as applicable, of the
number of shares of Common Stock so receivable upon conversion would have
been entitled, plus any dividends or other distributions which would have
been received with respect to such securities had such Holder thereafter,
during the period from the date of such event to and including the Holder
Conversion Date, retained such securities, subject to all other adjustments
called for during such period under this Paragraph 8 with respect to the
rights of the Holders of the Debentures. For purposes of this Paragraph
8(c), the number of shares of Common Stock so receivable upon conversion by
the Holder shall be deemed to be that number which the Holder would have
received upon conversion of the entire Outstanding Principal Amount (plus
accrued and unpaid interest) hereof if the Holder Conversion Date had been
the day preceding the date upon which the Company announced the making of
such dividend or other distribution.
(d) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. In
the event that at any time or from time to time after the Closing Date, the
Common Stock issuable upon the conversion of the Debentures is changed into
the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or reorganization
provided for elsewhere in this Paragraph 8 or a merger or consolidation,
provided for in Paragraph 5), then and in each such event each Holder of
Debentures shall have the right thereafter to convert such Debenture into the
kind of stock receivable upon such recapitalization, reclassification or
other change by holders of shares of Common Stock, all subject to further
adjustment as provided herein. In such event, the formulae set forth herein
for conversion and redemption shall be equitably adjusted to reflect such
change in number of shares or, if shares of a new class of stock are issued,
to reflect the market price of the class or classes of stock (applying the
same factors used in determining the Market Price for Shares of Common Stock)
issued in connection with the above described transaction.
(e) REORGANIZATIONS. If at any time or from time to time after the
Closing Date there is a capital reorganization of the Common Stock (other
than a recapitalization, subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Paragraph 8) then, as a
part of such reorganization, provision shall be made so that the Holders of
the Debentures shall thereafter be entitled to receive upon conversion of the
Debentures the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock deliverable upon
conversion would have been entitled on such capital reorganization. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this Paragraph 8 with respect to the rights of the Holders of
the Debentures after the reorganization to the end that the provisions of
this Paragraph 8 shall be applicable after that event and be as nearly
equivalent as may be practicable, including, by way of illustration and not
limitation, by equitably adjusting the formulae set forth herein for
conversion and redemption to reflect the market price of the securities or
property (applying the same factors used in determining the Market Price for
Shares of Common Stock) issued in connection with the above described
transaction.
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(f) In the event of a dispute between a Holder of Debentures and
the Company with respect to any of the adjustments required pursuant to the
provisions of this Paragraph 8, then the Debentures shall be converted in a
manner consistent with the Schedule of Computations delivered as set forth in
paragraph (g) below. Such Holder of Debentures shall then be entitled,
within 60 days of receipt of the Schedule of Computations, to submit such
dispute to the American Arbitration Association for resolution according to
then applicable rules thereof, which determination shall be final and
binding. If it shall be determined that a Holder of Debentures should have
received additional shares of Common Stock upon such conversion (the
"Undelivered Shares") then, within three trading days of receipt of written
notice of such determination, the Company shall issue to such holder that
number of additional shares of Common Stock as shall have a value, based upon
the then Market Price for Shares of Common Stock, as shall equal the
Undelivered Shares times the Market Price for Shares of Common Stock on the
date of conversion. The cost of such proceeding shall be shared 50% by the
Holder or Holders of Debentures involved in such dispute and 50% by the
Company, except that the prevailing party, as determined by the arbitrator
presiding over the arbitration, shall be entitled to recover reasonable
attorney's fees, in addition to other costs and expenses and any other
available remedy.
(g) The Company shall notify, in writing, the Holders of the
Debentures of all adjustments pursuant to this Paragraph 8 within three (3)
trading days of the occurrence thereof and such notice shall be accompanied
by a Schedule of Computations of such adjustments. If so requested by a
Holder of this Debenture, the Company shall provide to such Holder within ten
(10) trading days of its request therefor a certificate of concurrence to the
Schedule of Computations by the independent public accountants of the Company.
9. FRACTIONAL SHARES. No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issuable hereunder.
The number of shares of Common Stock that are issuable upon any conversion
shall be rounded up or down to the nearest whole share.
10. RESERVATION OF STOCK ISSUABLE UPON CONVERSION.
(a) RESERVATION REQUIREMENT. The Company shall reserve and keep
available at all times, free of preemptive rights shares of Common Stock for
the purpose of enabling the Company to satisfy any obligation to issue shares
of its Common Stock upon conversion of all of the Debentures pursuant hereto.
(b) DEFAULT. If the Company does not have a sufficient number of
shares of Common Stock available to satisfy the Company's obligations to a
Holder of Debentures upon receipt of a Conversion Notice or is otherwise
unable to issue such shares of Common Stock in accordance with the terms of
this Agreement and such condition shall remain unremedied for a period of
thirty (30) days after the Company's receipt of a Conversion Notice (a
"CONVERSION DEFAULT"), then from and after the fifth (5th) day following a
Conversion Default (which for all purposes shall be deemed to have occurred
upon the expiration of the applicable cure period following the Company's
receipt of the applicable Conversion Notice), each Holder
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of the Debentures shall have the right to demand from the Company immediate
redemption of the Debentures in cash at a redemption price per Debenture
equal to 120% of the then Outstanding Principal Amount of the Debenture
(including Debentures for which a Conversion Notice has not yet been sent),
plus accrued but unpaid interest on the Debenture. Within three days of the
occurrence of a Conversion Default, the Company shall notify each Holder in
writing of such occurrence. No notice of redemption may be delivered by a
Holder subsequent to receipt by such Holder of notice from the Company (sent
by overnight or 2-day courier with a copy sent by facsimile) of availability
of sufficient shares of Common Stock to perfect conversion (a "POST-DEFAULT
CONVERSION") of all the Debentures; PROVIDED FURTHER that such right to
demand redemption shall be reinstated if the Company shall thereafter fail to
perfect such Post-Default Conversion by delivery of Common Stock certificates
in accordance with the applicable provisions of Paragraph 6(b) hereof and
payment of all accrued and unpaid interest in cash with respect thereto
within five business days of delivery of the notice of Post-Default
Conversion. In addition to the foregoing, upon a Conversion Default, the
rate of interest on all of the Debentures (including Debentures for which a
Conversion Notice has not yet been sent), shall, to the maximum extent
allowed by applicable law, be permanently increased by two percent (2%) per
annum (i.e., from 6% to 8%) commencing on the first day of the thirty (30)
day period (or part thereof) following a Conversion Default; an additional
two percent (2%) per annum commencing on the first day of each of the second
and third such thirty (30) day periods (or part thereof); and an additional
one percent (1%) per annum on the first day of each consecutive thirty (30)
day period (or part thereof) thereafter until such securities have been duly
converted or redeemed as herein provided; provided that in no event shall the
rate of interest exceed the lower of 20% or the highest rate permitted by
applicable law to be charged on commercial loans. Any such interest which is
not paid when due shall, to the maximum extent permitted by law, accrue
interest until paid at the rate from time to time applicable to interest on
the Debentures as to which the Conversion Default has occurred. In the event
the Company pays any interest on the Debentures and it is determined that
such interest was paid at a rate in excess of the legal maximum rate, then
that portion of the interest payment representing an amount in excess of the
legal maximum rate shall be deemed a payment of principal and shall be
applied against the principal of the Debenture.
11. NO REISSUANCE OF DEBENTURES. No Debentures acquired by the Company
by reason of redemption, purchase, conversion or otherwise shall be reissued,
and all such Debentures shall be retired. No additional Debentures shall be
authorized or issued without the consent of at least 66 2/3% in interest of
the Holders of Debentures outstanding immediately prior thereto.
12. NO IMPAIRMENT. The Company shall not intentionally take any action
which would impair the rights and privileges of the Debentures set forth
herein or the Holders thereof.
13. HOLDER'S RIGHTS IF SHARES ARE DELISTED OR IF TRADING IN COMMON
STOCK IS SUSPENDED. In the event that at any time on or after the date
hereof, and prior to the Maturity Date, trading in the shares of the
Company's Common Stock is suspended on the Nasdaq
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National Market (and the Company's Common Stock does not contemporaneously
commence trading on a national securities exchange system) for a period of
five consecutive trading days, other than as a result of the suspension of
trading in securities in general, or if such Shares are delisted from the
Nasdaq National Market then, at a Holder's option, the Company shall redeem
such Holder's Debentures at a redemption date designated by such Holder, and
at the redemption price equal to 120% of the then Outstanding Principal
Amount of this Debenture, plus accrued but unpaid interest on this Debenture.
14. LIMITATIONS ON HOLDER'S RIGHT TO CONVERT. (a) Notwithstanding
anything to the contrary contained herein, each Conversion Notice shall
contain a representation that, after giving effect to the shares of the
Company's Common Stock to be issued pursuant to such conversion notice, the
total number of shares of the Company's Common Stock deemed beneficially
owned by the Holder (excluding shares that might otherwise be deemed
beneficially owned by reason of the conversion right in the Debentures owned
by the Holder), together with all shares of the Company's Common Stock deemed
beneficially owned by the Holder's "affiliates" as defined in Rule 144 of the
Act, will not exceed 4.9% of the total issued and outstanding shares of the
Company's Common Stock.
(b) In the event that upon presentation of a Conversion Notice, the
Company would be obligated to issue an amount of shares of Common Stock
which, when aggregated with all shares of Common Stock issued on conversion
of all Debentures, would exceed 19.99% of the number of shares of Common
Stock outstanding on the First Closing Date (such amount to be
proportionately and equitably adjusted from time to time in the event of
stock dividends, subdivisions, combinations, reclassifications, capital
reorganizations and similar events relating to the Common Stock) (the
"Exchange Cap"), and such issuance would constitute a breach of the Company's
obligations under the rules or regulations of Nasdaq as they apply to the
Company, or any other principal securities exchange or market upon which the
Common Stock is or becomes traded (the "Cap Regulations"), the Company shall
not be obligated to issue any such shares of Common Stock in excess of the
Exchange Cap. Instead, the Company shall immediately give notice of these
facts to all Holders of outstanding Debentures and shall within twenty (20)
days of the Conversion Notice, commence taking all steps reasonably necessary
to be in a position to issue shares on conversion in accordance with this
Debenture without violating the Cap Regulations, which steps shall include
(but not be limited to) (i) the immediate preparation of all necessary proxy
solicitation materials for a meeting of the shareholders; (ii) best efforts
to obtain a waiver from the Cap Regulations for the issuances hereunder; and
(iii) the filing of such preliminary proxy solicitation materials with the
Securities and Exchange Commission within such twenty (20) day period. If
within ninety (90) days of such Conversion Notice, the Company still may not
issue such shares without violating the Cap Regulations, the Holder may elect
to require the Company to redeem the Debenture by providing the Company
written notice which shall require redemption within twenty (20) days at a
redemption price equal to 115% of the Outstanding Principal Amount which, if
converted, would result in the issuance of shares of Common Stock exceeding
the Exchange Cap. The Exchange Cap shall be allocated among all outstanding
Debentures pro rata based on the total Outstanding Principal Amount of all
Debentures then outstanding.
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15. REGISTRATION SUSPENSION. In the event that at any time or from
time to time any registration statement with respect to the Common Stock
issuable upon conversion of this Debenture is suspended or trading in the
Common Stock on the Nasdaq National Market System is suspended for a period
of time ("Blackout Period"), the Maturity Date hereunder shall be extended
for a period equal to 1.5 times the number of days in such Blackout Period.
Furthermore, additional provisions pertaining to the suspension of
effectiveness of such registration statement set forth in Paragraph 5A of the
Registration Rights Agreement shall be applicable in the event of a Blackout
Period, and are specifically incorporated by reference herein.
16. OBLIGATIONS ABSOLUTE. No provision of this Debenture, other than
conversion as provided herein, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Debenture at the time, place and rate, and in the manner,
herein prescribed.
17. WAIVERS OF DEMAND, ETC. The Company hereby expressly waives demand
and presentment for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, notice of acceleration or intent to accelerate,
bringing of suit and diligence in taking any action to collect amounts called
for hereunder and will be directly and primarily liable for the payment of
all sums owing and to be owing hereon, regardless of and without any notice,
diligence, act or omission as or with respect to the collection of any amount
called for hereunder.
18. REPLACEMENT DEBENTURES. In the event that any Holder notifies the
Company that its Debenture(s) have been lost, stolen or destroyed, the
Company will issue replacement Debenture(s) identical in all respects to the
original Debenture(s) (except for registration number and Outstanding
Principal Amount, if different than that shown on the original Debenture(s)),
provided that the Holder executes and delivers to the Company an agreement
reasonably satisfactory to the Company to indemnify the Company from any loss
incurred by it in connection with such Debenture(s).
19. PAYMENT OF EXPENSES. The Company agrees to pay all reasonable
debts and expenses, including reasonable attorneys' fees, which may be
incurred by the Holder in enforcing the provisions of this Debenture and/or
collecting any amount due under this Debenture, the Subscription Agreement or
the Registration Rights Agreement (as defined in the Subscription Agreement).
20. DEFAULTS. The following shall constitute "Events of Default":
(a) The Company refuses at any time to honor any Conversion Notice
issued in accordance with the terms of Paragraph 6 hereof; or
(b) The Company shall default in the payment of (i) interest on
this Debenture, and such default shall continue for three (3) business days
after the due date thereof, or (ii) the Outstanding Principal Amount of this
Debenture; or (iii) the redemption price on the applicable redemption date as
herein provided; or
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(c) Any of the representations or warranties made by the Company
herein, in the Subscription Agreement, or in any certificate or financial or
other statements heretofore or hereafter furnished by or on behalf of the
Company in connection with the execution and delivery of this Debenture or
the Subscription Agreement shall be false or misleading in any material
respect at the time made and such condition (to the extent capable of being
cured) shall continue uncured for a period of ten (10) business days after
notice from the Holder of such condition; or
(d) The Company shall fail to perform or observe in any material
respect any covenant or agreement in the Subscription Agreement, or any other
covenant, term, provision, condition, agreement or obligation of the Company
under this Debenture and such failure shall continue uncured for a period of
ten (10) business days after notice from the Holder of such failure; or
(e) The Company shall (1) become insolvent; (2) admit in writing
its inability to pay its debts generally as they mature; (3) make an
assignment for the benefit of creditors or commence proceedings for its
dissolution; or (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for it or for a substantial part of its property or
business; or
(f) A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or
(g) Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume custody or control of
the whole or any substantial portion of the properties or assets of the
Company and shall not be dismissed within sixty (60) days thereafter; or
(h) Any money judgment (including any arbitration award, but only
if reduced to a judgment), writ or warrant of attachment, or similar process
in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate shall
be entered or filed against the Company or any of its properties or other
assets and shall remain unpaid, unvacated, unbonded or unstayed for a period
of sixty (60) days or in any event later than ten (10) days prior to the date
of any proposed sale thereunder; or
(i) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings, or relief under any bankruptcy law or any
law for the relief of debt shall be instituted by or against the Company and,
if instituted against the Company, shall not be dismissed within sixty (60)
days after such institution or the Company shall by any action or answer
approve of, consent to, or acquiesce in any such proceedings or admit to any
material allegations of, or default in answering a petition filed in any such
proceeding.
Unless an Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default)
at the option of and (except in the case
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of clause (i) above) on notice by the Holder and in the Holder's sole
discretion, the Holder may by notice to the Company declare the Debenture
immediately due and payable, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived, anything herein or in
any other instruments contained to the contrary notwithstanding, and the
Holder may immediately, and without expiration of any period of grace,
enforce any and all of the Holder's rights and remedies provided herein or
any other rights or remedies afforded by law. In such event, the Debenture
shall be redeemed at a redemption price equal to 120% of the Outstanding
Principal Amount of the Debenture, plus accrued but unpaid interest on the
Debenture. In the event of a Default hereunder, the Company agrees to use
commercially reasonable efforts to satisfy its senior lender (Coast Business
Credit) to enable Holder to exercise all its rights and remedies hereunder.
21. SAVINGS CLAUSE. In case any provision of this Debenture is held by
a court of competent jurisdiction to be excessive in scope or otherwise
invalid or unenforceable, such provision shall be adjusted rather than
voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of
this Debenture will not in any way be affected or impaired thereby.
22. ENTIRE AGREEMENT. This Debenture and the agreements referred to in
this Debenture constitute the full and entire understanding and agreement
between the Company and the Holder with respect to the subject hereof.
Neither this Debenture nor any term hereof may be amended, waived, discharged
or terminated other than by a written instrument signed by the Company and
the Holder.
23. ASSIGNMENT, ETC. The Holder may, subject to compliance with the
Subscription Agreement and to applicable Federal and state securities laws,
transfer or assign this Debenture or any interest herein and may mortgage,
encumber or transfer any of its rights or interest in and to this Debenture
or any part hereof and, without limitation, each assignee, transferee and
mortgagee (which may include any affiliate of the Holder) shall have the
right to transfer or assign its interest. Each such assignment shall be in
the minimum principal amount of $50,000, or shall be all of the Holder's
interest in the Debenture. Each such assignee, transferee and mortgagee
shall have all of the rights of the Holder under this Debenture. The Company
agrees that, subject to compliance with the Subscription Agreement, after
receipt by the Company of written notice of assignment from the Holder or
from the Holder's assignee, all principal, interest and other amounts which
are then and thereafter become due under this Debenture shall be paid to such
assignee at the place of payment designated in such notice. This Debenture
shall be binding upon the Company and its successors and shall inure to the
benefit of the Holder and its successors and assigns.
24. NO WAIVER. No failure on the part of the Holder to exercise, and
no delay in exercising any right, remedy or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise by the Holder of
any right, remedy or power hereunder preclude any other or future exercise of
any other right, remedy or power. Each and every right, remedy or power
hereby granted to the Holder or allowed it by law or other agreement shall be
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cumulative and not exclusive of any other, and may be exercised by the Holder
from time to time.
25. MISCELLANEOUS. Unless otherwise provided herein, any notice or
other communication to a party hereunder shall be sufficiently given if in
writing and personally delivered or sent by facsimile to said party, followed
by two-day courier service, at its address set forth herein or such other
address as either may designate for itself in such notice to the other and
communications shall be deemed to have been received when delivered
personally or, if sent by facsimile, then when actually received by the party
to whom it is addressed. Whenever the sense of this Debenture requires,
words in the singular shall be deemed to include the plural and words in the
plural shall be deemed to include the singular. If more than one Company is
named herein, the liability of each shall be joint and several. Paragraph
headings are for convenience only and shall not affect the meaning of this
document.
26. CHOICE OF LAW AND VENUE; WAIVER OF JURY TRIAL. THIS DEBENTURE
SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW. The Company hereby agrees
that all actions or proceedings arising directly or indirectly from or in
connection with this Debenture shall, at the Holder's sole option, be
litigated only in the Supreme Court of the State of New York or the United
States District Court for the Southern District of New York located in New
York County, New York. To the extent permitted by applicable law, the
Company consents to the jurisdiction and venue of the foregoing courts and
consents that any process or notice of motion or other application to either
of said courts or a judge thereof may be served inside or outside the State
of New York or the Southern District of New York by registered mail, return
receipt requested, directed to the Company at its address set forth in this
Debenture (and service so made shall be deemed complete five (5) days after
the same has been posted as aforesaid) or by personal service or in such
other manner as may be permissible under the rules of said courts. The
parties hereto hereby waive any right to a jury trial in connection with any
litigation pursuant to this Debenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
DATED: FEBRUARY 6, 1998
ROSS SYSTEMS, INC.
By:__________________________________
Print Name:__________________________
Print Title:_________________________
ATTEST
____________________________
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EXHIBIT 1
(To be Executed by Registered Holder
in order to Convert Debenture)
CONVERSION NOTICE
FOR
CONVERTIBLE DEBENTURE DUE FEBRUARY 6, 2003
The undersigned, as Holder of the Convertible Debenture Due February 6,
2003 of Ross Systems, Inc. (the "Company"), No. ___________ , in the
outstanding principal amount of U.S. $______________ (the "Debenture"),
hereby irrevocably elects to convert U.S. $__________ of the outstanding
principal amount of the Debenture into shares of Common Stock, no par value
(the "Common Stock"), of the Company according to the conditions of the
Debenture, as of the date written below. The undersigned hereby requests
that share certificates for the Common Stock to be issued to the undersigned
pursuant to this Conversion Notice be issued in the name of, and delivered
to, the undersigned or its designee as indicated below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto. No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any.
The undersigned represents that, after giving effect to the shares of the
Company's Common Stock to be issued pursuant to such conversion notice, the
total number of shares of the Company's Common Stock deemed beneficially
owned by the undersigned, together with all shares of the Company's Common
Stock deemed beneficially owned by the undersigned's "affiliates" as defined
in Rule 144 of the Act, will not exceed 4.9% of the total issued and
outstanding shares of the Company's Common Stock.
Conversion Information: NAME OF HOLDER:
By:________________________________
Print Name:
Print Title:
Print Address of Holder:
___________________________________
___________________________________
Issue Common Stock to:_____________
at:________________________________
Date of Conversion
___________________________________
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Applicable Conversion Rate
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EXHIBIT 2
PIK STATEMENT
Date:____________
To: [Name of Holder of Debenture] ("Holder")
RE: CONVERTIBLE DEBENTURE DUE FEBRUARY 6, 2003 ("DEBENTURE") OF ROSS
SYSTEMS, INC. (THE "COMPANY") NO. _____, IN THE FACE PRINCIPAL AMOUNT OF
US$______________.
In payment of interest on the Debenture, for the Interest Payment
Date indicated below, the Company hereby certifies to the Holder that the
average of the two lowest closing bid prices for shares of the Company's
common stock, no par value ("Common Stock"), as reported by the Bloomberg
Service for the thirty (30) trading days immediately preceding the Interest
Payment Date indicated below was $______. The Company further represents and
warrants to the Holder that _____ shares of Common Stock will be issued by
the Company's transfer agent to and in the name of the Holder and delivered
to the Holder within three (3) business days of the date hereof. Capitalized
terms used in this PIK Statement and not otherwise defined shall have the
meaning ascribed thereto in the Debenture.
Interest Payment Date:_________________
Outstanding Principal Amount on
which interest is being paid: US$____________
PIK Interest: US$____________
IN WITNESS WHEREOF, this PIK Statement has been duly executed and
delivered on the date first written above.
ROSS SYSTEMS, INC.
By:________________________________
Print Name:
Print Title:
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Registration Rights Agreement"),
entered into as of February 6, 1998, between the Subscribers named in that
Convertible Securities Subscription Agreement of even date herewith
(collectively, the "Purchasers"), and ROSS SYSTEMS, INC., a California
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to a Convertible Securities Subscription Agreement,
dated as of February 6, 1998 (the "Agreement"), by and between the Company
and the Purchasers, the Company has agreed to sell and the Purchasers have
agreed to purchase up to an aggregate of U.S.$10,000,000 of the Company's
Convertible Subordinated Debentures due February 6, 2003 (the "Debentures")
convertible into shares of the Company's Common Stock, no par value (the
"Shares") in two closings subject to the terms and conditions of the
Agreement;
WHEREAS, pursuant to the terms of, and in partial consideration for,
Purchasers' purchase of the Debentures, the Company has agreed to provide the
Purchasers with certain registration rights with respect to the Shares
issuable upon conversion of the Debentures as set forth in this Registration
Rights Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the
Agreement and this Registration Rights Agreement, the Company and the
Purchasers agree as follows:
1. CERTAIN DEFINITIONS. Terms capitalized herein and not otherwise
defined shall have the meanings ascribed to them in the Agreement. As used
in this Agreement, the following terms shall have the following respective
meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Registrable Securities" shall mean any Shares or other securities
issued or issuable to Purchaser or any Holder upon the conversion or exchange
of or pursuant to the payment of interest under any Debentures or Shares and
any shares of capital stock issued or issuable with respect to the Shares as
a result of any stock split, stock dividend, recapitalization, exchange,
combination, merger, consolidation, distribution or similar event.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement by the Commission.
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"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with Purchasers' exercise of their registration rights
under this Agreement, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, reasonable fees and disbursements of
counsel to all Holders for a "due diligence" examination of the Company and
review of the Registration Statements and related documents, and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company). With respect to the "due diligence"
examination of the Company, the Registration Expenses shall include only fees
and disbursements for one (1) designated counsel for all the Holders of
Debentures (subject to a maximum amount of $20,000).
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holder not included within "Registration
Expenses".
"Holder" shall include any Purchaser and any transferee or assignee of
Debentures, Shares or Registrable Securities which have not been sold to the
public to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 10 of this Agreement.
"Registration Statement," "Initial Registration Statement" and "Second
Closing Registration Statement" shall have the meaning set forth in Section
2(a) herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. REGISTRATION REQUIREMENTS. The Company shall use its diligent best
efforts to effect the registration of the Registrable Securities contemplated
by the Agreement (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
would permit or facilitate the sale or distribution of all the Registrable
Securities by the Holders in the manner (including manner of sale) and in all
states reasonably requested by the Holders for purposes of maximizing the
proceeds realizable by the Holders from such sale or distribution. Such best
efforts by the Company shall include without limitation the following:
(a) The Company shall, as soon as practicable after the date hereof
but in no event later than thirty (30) days after the date hereof, file (i) a
registration statement with the Commission pursuant to Rule 415 under the
Securities Act on Form S-3 under the Securities Act (or in the event that the
Company in ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act) ("Registration Statement") covering
the resale of all of the Registrable Securities underlying the Debentures
issued and sold to the Purchasers on the First Closing Date (the "Initial
Registration Statement"); (ii) such blue sky filings as shall have been
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requested by the Holder; and (iii) any required filings with the National
Association of Securities Dealers, Inc. or exchange or market where the
Shares are traded. The Company shall, as soon as practicable after the
Second Closing Date, but in no event later than thirty (30) days after the
Second Closing Date, file (i) a Registration Statement covering the resale of
all of the Registrable Securities underlying the Debentures issued in the
Second Closing Date (the "Second Closing Registration Statement"); (ii) such
blue sky filings as shall have been requested by the Holder; and (iii) any
required filings with the National Association of Securities Dealers, Inc. or
exchange or market where the Shares are traded. No securities other than
the Registrable Securities shall be included in any Registration Statement.
The Company shall use its best efforts to have such Registration Statements
and other filings declared effective as promptly as practicable, and until
such Registration Statements are declared effective the Company undertakes to
file no other registration statements covering any securities other than the
Registrable Securities (except registration statements on Form S-8 and
registration statements relating to Other Registration Rights).
(b) (i) If the Company fails to file the Initial Registration
Statement and the Second Closing Registration Statement complying with
the requirements of this Registration Rights Agreement within thirty
(30) days from the First Closing Date and Second Closing Date,
respectively, or if such Registration Statement has not become effective
within one hundred twenty (120) days from such Closing Date, the Holder
shall have, in addition to and without limiting any other rights it may
have at law, in equity or under the Debentures, the Agreement or this
Registration Rights Agreement (including the right to specific
performance), the right to receive, as liquidated damages, the payments
as provided in subparagraph (ii) of this section.
(ii) If after one hundred twenty (120) days from the First
Closing Date the Initial Registration Statement has not been declared
effective by the Commission, or if after one hundred twenty (120) days
from the Second Closing Date the Second Closing Date Registration
Statement has not been declared effective by the Commission, then the
Company shall pay to the Purchaser an amount equal to 2% of the
Outstanding Principal Amount (as defined in the Debenture) of the
related Debentures, in cash, for each 30-day period after such 120-day
period that such Registration Statement is not effective. In addition
to the foregoing, if after 210 days from the First Closing Date the
Initial Registration Statement has not been declared effective by the
Commission, or if after 210 days from the Second Closing Date the Second
Closing Registration Statement has not been declared effective by the
Commission, then upon demand of such Holder, the Company shall redeem
all the Debentures acquired by the Holder on the First Closing Date or
the Second Closing Date, as applicable, which are held by such Holder at
a redemption price equal to 120% of the Outstanding Principal Amount of
such Debentures plus accrued interest thereon, together with all other
payments due under this paragraph and under the Debenture and the
Agreement.
(c) If the Holder intends to distribute the Registrable Securities
covered by its request by means of an underwriting, the Holder shall so
advise the Company. The Holder
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will have the right to select the investment bankers for such underwriting
subject to such investment bankers being reasonably satisfactory to the
Company.
(d) The Company shall enter into such customary agreements
(including a customary underwriting agreement with the underwriter or
underwriters, if any) and take all such other reasonable actions in
connection therewith in order to expedite or facilitate the disposition of
such Registrable Securities and in such connection, whether or not an
underwriting agreement is entered into and whether or not the Registrable
Securities are to be sold in an underwritten offering:
(i) make such representations and warranties to the Holder
and the underwriter or underwriters, if any, in form, substance and
scope as are customarily made by issuers to underwriters in secondary
underwritten offerings;
(ii) cause to be delivered to the sellers of Registrable
Securities and the underwriter or underwriters, if any, opinions of
counsel to the Company, dated the effective date (or in the case of an
underwritten offering, dated the date of delivery of any Registrable
Securities sold pursuant thereto) of each Registration Statement (which
counsel, and opinions (in form, scope and substance), shall be
reasonably satisfactory to the managing underwriter or underwriters, if
any, and the appointed representative or counsel of the Holder),
addressed to the Holder and each underwriter, if any, covering the
matters customarily covered in opinions requested in secondary
underwritten offerings and, in the case of an underwritten offering,
such other matters as may be reasonably requested by the Holder;
(iii) cause to be delivered, immediately prior to the
effectiveness of each Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable
Securities sold pursuant thereto), a "comfort" letter from the Company's
independent certified public accountants addressed to the Holder and
each underwriter, if any, stating that such accountants are independent
public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder, and otherwise in
customary form and covering such financial and accounting matters as are
customarily covered by letters of the independent certified public
accountants delivered in connection with secondary underwritten public
offerings;
(iv) if an underwriting agreement is entered into, the same
shall set forth in full the indemnification and contribution provisions
and procedures of sections 6 and 7 with respect to all parties to be
indemnified pursuant to such sections; and
(v) the Company shall deliver such documents and certificates
as may be reasonably requested by the Holder or the managing underwriter
or underwriters, if any, to evidence compliance with clause (i) above
and with any customary conditions contained in the underwriting
agreement, if any, or other agreement entered into by the Company;
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the foregoing in this paragraph 2(d) shall be done at each closing under such
underwriting or similar agreement or as and to the extent required
thereunder; provided, however, the foregoing in paragraph 2(d) shall not be
required on more than two (2) occasions.
(e) The Company shall make available for inspection by a
representative or representatives of the Holder, any underwriter
participating in any disposition pursuant to a Registration Statement, and
any attorney or accountant retained by such Holder or underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with such
Registration Statement. The Holder will agree to keep all non-public
information supplied to it confidential until such information is included in
a Registration Statement.
3. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance with
registration pursuant to this Agreement shall be borne by the Company, and
all Selling Expenses shall be borne by the Holder.
4. REGISTRATION ON FORM S-3. The Company shall use its best efforts
to qualify for registration on Form S-3 or any comparable or successor form
or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act. The
foregoing is not intended to require the Company to pay dividends in order to
use Form S-3.
5. REGISTRATION PROCEDURES. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep the Holder
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense, the Company will use its best efforts to:
(a) Keep such registration effective for the period ending
thirty-six (36) months after the initial date of effectiveness of such
Registration Statement, as extended pursuant to Section 5A hereof, or until
the Holder has completed the distribution of the Shares issuable upon
conversion of the Debentures, whichever first occurs.
(b) Furnish such number of prospectuses, and amendments and
supplements thereto, and other documents incident thereto as the Holder from
time to time may reasonably request.
(c) Prepare and file with the Commission such amendments and
post-effective amendments to a Registration Statement as may be necessary to
keep such Registration Statement effective for the applicable period; cause
the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all Registrable
Securities covered by such Registration Statement during the applicable
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement or supplement to such
Prospectus;
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(d) Notify each Holder of Registrable Securities included in a
Registration Statement, their counsel and the managing underwriters, if any,
promptly, and confirm such notice (a "Notice") in writing, (1) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (2) of any request by the
Commission for amendments or supplements to a Registration Statement or
related Prospectus or for additional information, (3) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purposes, (4) if at
any time the representations and warranties of the Company contained in
agreements contemplated by Section 2 (d) cease to be true and correct, (5) of
the receipt by the Company of any notification with respect to the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (6) of the happening of any event as a result of which the
Prospectus included in a Registration Statement (as then in effect) contains
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus or any preliminary Prospectus, in light of the
circumstances under which they were made) not misleading and (7) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate or that there exist circumstances
not yet disclosed to the public which make further sales under such
Registration Statement inadvisable pending such disclosure and post-effective
amendment;
(e) Upon the occurrence of any event contemplated by Section
5(d)(2)-(7) and immediately upon the expiration of any Blocking Period (as
defined in Section 5A), prepare, if the occurrence of such event or period
requires such preparation, a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(f) Make every reasonable effort to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement
and, if such an order or suspension is issued, to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement, or the
lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment;
(g) Insure that all Registrable Securities subject to the
Registration Statement shall at all times be registered or qualified for
offer and sale under the securities or blue sky laws of such jurisdictions as
any Holder or underwriter reasonably requests in writing; use its best
efforts to keep each such registration or qualification effective, including
through new filings or amendments or renewals, during the period such
Registration Statement is required to be kept effective and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; PROVIDED, HOWEVER, that the Company will not be
required to qualify to do business or take any
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action that would subject it to taxation or general service of process in any
jurisdiction where it is not then so qualified or subject;
(h) Use its best efforts to cause the Registrable Securities
covered by a Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities in accordance with
the chosen method or methods of distribution;
(i) Cause all Registrable Securities included in such Registration
Statement to be listed, by the date of first sale of Registrable Securities
pursuant to such Registration Statement, on the principal securities exchange
or automated interdealer system on which the same type of securities of the
Company are then listed or traded;
(j) Make generally available to its security holders as soon as
practicable, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder) covering a twelve month period beginning not later than the first
day of the Company's fiscal quarter next following the effective date of the
Registration Statement.
5A. SUSPENSIONS OF EFFECTIVENESS. The Company may suspend dispositions
under a Registration Statement and notify the Holder that it may not sell the
Registrable Securities pursuant to any Registration Statement or Prospectus
(a "Blocking Notice") if the Company's management determines in its
reasonable good faith judgment that the Company's obligation to ensure that
such Registration Statement and Prospectus are current and complete would
require the Company to take actions that might reasonably be expected to have
a materially adverse detrimental effect on the Company and its stockholders;
PROVIDED that such suspension pursuant to a Blocking Notice or the Notice
described below or as a result of the circumstances described in 5(d)(2)-(7)
may not exceed sixty (60) days (whether or not consecutive) in any twelve
(12) month period. The Holder agrees by acquisition of the Registrable
Securities that, upon receipt of a Blocking Notice or "Notice" from the
Company of the existence of any fact of the kind described in the following
sentence, such Holder shall not dispose of, sell or offer for sale the
Registrable Securities pursuant to the Registration Statement until such
Holder receives (i) copies of the supplemented or amended Prospectus, or
until counsel for the Company shall have determined that such disclosure is
not required due to subsequent events, (ii) notice in writing (the "Advice")
from the Company that the use of the Prospectus may be resumed and (iii)
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. Pursuant to the immediately preceding sentence,
the Company may provide such Notice to the Holder upon the determination by
the Company of the existence of any fact or the happening or any event that
makes any statement of a material fact made in the Registration Statement,
the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue in any material respect, or that
requires the making of any additions to or changes in the Registration
Statement or the Prospectus, in order to make the statements therein not
misleading in any material respect. If so directed by the Company in
connection with any such Notice, each Holder will
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deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities that was current immediately prior to
the time of receipt of such notice. In the event the Company shall give any
such Blocking Notice or Notice, the time regarding the effectiveness of such
Registration Statement set forth in Section 5(a) and the maturity date of the
Debenture shall be extended by one and one-half (1-1/2) times the number of
days during the period from and including the date of the giving of such
Blocking Notice or Notice to and including the date when the Holder shall
have received the copies of the supplemented or amended Prospectus, the
Advice and any additional or supplemental filings that are incorporated by
reference in the Prospectus. Delivery of a Blocking Notice or Notice and the
related suspension of any Registration Statement shall not constitute a
default under this Agreement and shall not create any obligation to pay
liquidated damages under Section 2 hereof. However, if the Holder's ability
to sell under the Registration Statement is suspended for more than the 60
day period described above (an "Excess Blocking Period"), then the rate of
interest on all of the Debentures shall, to the maximum extent permitted by
law, be permanently increased by two percent (2%) (I.E., from 6% to 8%)
commencing on the first day of the thirty (30) day period (or part thereof)
following the beginning of an Excess Blocking Period; if the Excess Blocking
Period continues beyond 90 days, then the rate of interest on all of the
Debentures shall, to the maximum extent permitted by law, be permanently
increased an additional two percent (2%) commencing on the 91st day; if the
Excess Blocking Period continues beyond 120 days, then the rate of interest
on all of the Debentures shall, to the maximum extent permitted by law, be
permanently increased an additional two percent (2%) commencing on the 121st
day; and if the Excess Blocking Period continues beyond 150 days, then the
rate of interest on all of the Debentures shall, to the maximum extent
permitted by law, be permanently increased an additional one (1%) percent on
the first day of each consecutive thirty (30) day period (or part thereof)
thereafter until the Excess Blocking Period terminates. In addition, if the
Excess Blocking Period continues for more than an aggregate of 120 days in
any 360-day period, then at Holder's option, the Company shall redeem
Holder's Debentures at a redemption price equal to 120% of the Outstanding
Principal Amount of the Debentures plus accrued interest thereon to the date
of redemption, together with all payments due under this paragraph and under
the Debenture and the Agreement.
6. INDEMNIFICATION.
(a) COMPANY INDEMNITY. The Company will indemnify the Holder, each
of its officers, directors and partners, and each person controlling Holder,
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each
underwriter, if any, and each person who controls, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder,
any underwriter, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in a Registration
Statement, any post-effective amendment thereto or any prospectus, offering
circular or other document (including any related notification or the like)
incident to any such registration, qualification or compliance, or based on
any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or any
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violation or alleged violation by the Company of the Securities Act or any
state securities law or in either case, any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or
compliance, and will reimburse the Holder, each of its officers, directors
and partners, and each person controlling such Holder, each such underwriter
and each person who controls any such underwriter, for any legal and any
other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that
the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission (or alleged untrue statement or omission) that
is made in reliance upon and in conformity with written information furnished
to the Company by Holder or the underwriter and stated to be specifically for
use therein. In addition to any other information furnished in writing to
the Company by the Holder, the information in the Registration Statement
concerning the Holder under the captions "Selling Shareholders" (or any
similarly captioned section containing the information required pursuant to
Item 507 of Regulation S-K promulgated pursuant to the Securities Act) and
"Plan of Distribution" (or any similarly captioned section containing
information required pursuant to Item 508 of Regulation S-K) shall be deemed
information furnished in writing to the Company by the Holder to the extent
it conforms to information actually supplied in writing by the Holder. The
indemnity agreement contained in this Section 6(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company (which consent
will not be unreasonably withheld).
(b) HOLDER INDEMNITY. The Holder will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors, officers, partners, and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person
who controls the Company or such underwriter within the meaning of Section 15
of the Securities Act and the rules and regulations thereunder, each other
Holder (if any), and each of their officers, directors and partners, and each
person controlling such other Holder against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statement therein
not misleading, and will reimburse the Company and such other Holders and
their directors, officers and partners, underwriters or control persons for
any legal or any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information
furnished to the Company by Holder and stated to be specifically for use
therein, and provided that no Holder shall be liable under this indemnity for
an amount in excess of the proceeds received by the Holder from the sale of
the Registrable Securities pursuant to such registration statement. In
addition to any other information furnished in writing to the Company by the
Holder, the information in the Registration Statement concerning the Holder
under the captions "Selling Shareholders" (or any similarly captioned section
containing the information
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required pursuant to Item 507 of Regulation S-K promulgated pursuant to the
Securities Act) and "Plan of Distribution" (or any similarly captioned
section containing information required pursuant to Item 508 of Regulation
S-K) shall be deemed information furnished in writing to the Company by the
Holder to the extent it conforms to information actually supplied in writing
by the Holder. The indemnity agreement contained in this Section 6(b) shall
not apply to amounts paid in settlement of any such claims, losses, damages
or liabilities if such settlement is effected without the consent of Holder
(which consent shall not be unreasonably withheld).
(c) PROCEDURE. Each party entitled to indemnification under this
Article (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of
any such claim in any litigation resulting therefrom, provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or
any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at such party's expense,
and provided further that the failure of any Indemnified Party to give notice
as provided herein shall not relieve the Indemnifying Party of its
obligations under this Article except to the extent that the Indemnifying
Party is materially and adversely affected by such failure to provide notice.
The indemnifying party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any local
counsel) at any time for such indemnified party, provided, however, that if
separate firm(s) of attorneys are required due to a conflict of interest,
then the indemnifying party shall be liable for the reasonable fees and
expenses of each such separate firm. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as
an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
7. CONTRIBUTION. If the indemnification provided for in Section 6
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of
the exceptions provided therein), then each such Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims,
damages or liabilities (i) as between the Company and the Holder on the one
hand and the underwriters on the other, in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Holder on
the one hand or underwriters, as the case may be, on the other from the
offering of the Registrable Securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the Company on
the one hand and of the Holder or underwriters, as the case may be, on the
other in connection
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with the statements or omissions which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company on the one hand and the Holder
on the other, in such proportion as is appropriate to reflect the relative
fault of the Company and of the Holder in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Holder or the underwriters, as the case may be, on the other shall be deemed
to be in the same proportion as the proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company from the initial sale of the Registrable Securities
by the Company to the Holder pursuant to this Registration Rights Agreement
bear to the proceeds received by the Holder from the sale of Registrable
Securities pursuant to the registration statement or the total underwriting
discounts and commissions received by the underwriters as set forth in the
table on the cover page of the prospectus, as the case may be. The relative
fault of the Company on the one hand and of the Holder or underwriters, as
the case may be, on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, by the Holder or by the underwriters.
In no event shall the obligation of any Indemnifying Party to contribute
under this Section 7 exceed the amount that such Indemnifying Party would
have been obligated to pay by way of indemnification if the indemnification
provided for under Section 6(a) or 6(b) hereof had been available under the
circumstances.
The Company and the Holder agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by PRO RATA
allocation (even if the Holder or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraphs. The amount paid or payable by an Indemnified Party as
a result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this section, no
Holder or underwriter shall be required to contribute any amount in excess of
the amount by which (i) in the case of the Holder, the total price at which
the shares of Common Stock offered by such Holder and distributed to the
public, or offered to the public, exceed the amount paid by such Holder for
the underlying debentures converted into such shares of Common Stock, (ii) in
the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that the Holder
or underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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8. SURVIVAL. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company
referred to in Section 2(e)(i) shall remain operative and in full force and
effect regardless of (i) any termination of the Agreement or any underwriting
agreement, (ii) any investigation made by or on behalf of any Indemnified
Party or by or on behalf of the Company and (iii) the consummation of the
sale or successive resales of the Registrable Securities.
9. INFORMATION BY HOLDER. The Holder shall promptly furnish to the
Company such information regarding such Holder and the distribution proposed
by such Holder as the Company may reasonably request in writing and as shall
be reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. All information provided to the
Company by Holder shall be accurate and complete in all material respects and
Holder shall promptly notify the Company if any such information becomes
incorrect or incomplete. If the Holder does not timely provide all such
reasonably requested information, the Holder shall not be entitled to the
liquidated damages contemplated by paragraph 2(b)(ii) to the extent that such
delay in the Registration Statement becoming effective is caused by such
failure to timely provide information unless such Holder shall be able to
demonstrate to the Company's satisfaction that such failure to timely provide
did not proportionately contribute to the event giving rise to the indemnity
obligation.
10. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights granted
to Purchasers by the Company under this Registration Rights Agreement to
cause the Company to register Registrable Securities, may be furnished or
assigned to a transferee or assignee of any of not less than $100,000 in
Outstanding Principal Amount of Debentures, provided that the Company is
given written notice by Holder at the time of or within a reasonable time
after said transfer or assignment, stating the name and address of said
transferee or assignee and identifying the securities with respect to which
such registration rights are being transferred or assigned, and provided
further that the transferee or assignee of such rights is not deemed by the
board of directors of the Company, in its reasonable judgment, to be a
competitor of the Company; and provided further that the transferee or
assignee of such rights agrees to be bound by this Registration Rights
Agreement.
11. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Registration Rights Agreement contains
the entire understanding and agreement of the parties, and may not be
modified or terminated except by a written agreement signed by both parties.
(b) NOTICES. Any notice or other communication given or permitted
under this Agreement shall be in writing and shall be deemed to have been
duly given if personally delivered or sent by facsimile or next-day or
two-day courier service (a) if to Purchaser, at its address set forth on the
signature page hereto, (b) if to the Company, at its address set forth on the
signature page hereto, and (c) if to a Holder other than Purchaser, at the
address thereof furnished by like notice to the Company, or (d) to any such
addresses at such other address or addresses as shall be so furnished to the
other parties by like notice.
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(c) GENDER OF TERMS. All terms used herein shall be deemed to
include the feminine and the neuter, and the singular and the plural, as the
context requires.
(d) GOVERNING LAW; CONSENT OF JURISDICTION; WAIVER OF JURY TRIAL.
This Registration Rights Agreement and the validity and performance of the
terms hereof shall be governed by and construed in accordance with the laws
of the State of New York without regard to principles of conflicts of law or
choice of law, except to the extent that the law of California regulates the
Company's issuance of securities. The parties hereto hereby agree that all
actions or proceedings arising directly or indirectly from or in connection
with this Registration Rights Agreement shall be litigated only in the
Supreme Court of the State of New York or the United States District Court
for the Southern District of New York located in New York County, New York.
To the extent permitted by applicable law, the parties hereto consent to the
jurisdiction and venue of the foregoing courts and consent that any process
or notice of motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the Southern
District of New York by registered mail, return receipt requested, directed
to the such party at its address set forth in this Registration Rights
Agreement (and service so made shall be deemed complete five (5) days after
the same has been posted as aforesaid) or by personal service or in such
other manner as may be permissible under the rules of said courts. The
parties hereto hereby waive any right to a jury trial in connection with any
litigation pursuant to this Registration Rights Agreement.
(e) TITLES. The titles used in this Registration Rights Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Registration Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be duly executed as of the date first above
written.
PURCHASER: COMPANY:
___________________________________ ROSS SYSTEMS, INC.,
Address____________________________ a California Corporation
___________________________________ Address______________________________
___________________________________ _____________________________________
_____________________________________
By:________________________________ By:__________________________________
Printed Name: Title:
Title:
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With Copies of Notices to: With Copies of Notices to:
___________________________________ _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
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Exhibit 99.1
[ LOGO HERE ] P R E S S R E L E A S E
FOR MORE INFORMATION:
Dennis Vohs, Ross Systems, 770/351-9600, Ext. 3058
ROSS SYSTEMS ISSUES SUBORDINATED
CONVERTIBLE DEBENTURES
ATLANTA, GEORGIA, FEBRUARY 10, 1998 - Ross Systems, Inc. (NASDAQ: ROSS), a
leading supplier of business software solutions for the client/server market,
announced today that it had completed an agreement for the issuance of up to
$10,000,000 in subordinated convertible debentures to a group of
institutional investors. Rochon Capital Group, Ltd. acted as placement agent
in the transaction.
"We are pleased to complete the agreements," said Dennis V. Vohs, Ross'
Chairman and CEO. "In addition to improving our balance sheet and, in turn,
increasing prospective customers' confidence in our financial strength, the
financing will also lower our debt service expense."
ROSS SYSTEMS, INC. DEVELOPS, MARKETS AND SUPPORTS A BROAD RANGE OF
CLIENT/SERVER BUSINESS SOLUTIONS, INCLUDING FINANCIALS, MANUFACTURING,
MAINTENANCE, DISTRIBUTION, SUPPLY CHAIN MANAGEMENT, TRANSPORTATION
MANAGEMENT, MATERIALS MANAGEMENT, AND HUMAN RESOURCES APPLICATIONS, AS WELL
AS COMPREHENSIVE APPLICATION DEVELOPMENT PRODUCTS. ROSS SYSTEMS PRODUCTS ARE
AVAILABLE FOR THE FOLLOWING OPEN SYSTEMS ENVIRONMENTS: HEWLETT-PACKARD'S
HP-UX; IBM'S RS/6000; AND DIGITAL'S ALPHA ARCHITECTURE, FUJITSU DS-90 UNIX,
SIEMENS NIXDORF, OPEN VMS, DIGITAL UNIX AND MICROSOFT WINDOWS NT SUPPORT FOR
THE INTEL AND ALPHA CHIPS. MORE THAN 3,000 COMPANIES AROUND THE WORLD USE
BUSINESS SOLUTIONS FROM ROSS SYSTEMS TO RUN THEIR OPERATIONS.
ROSS SYSTEMS EMPLOYS 550 PROFESSIONALS IN OFFICES AROUND THE WORLD TO SERVE
ITS CUSTOMER. CORPORATE HEADQUARTERS ARE LOCATED AT TWO CONCOURSE PARKWAY,
SUITE 800, ATLANTA, GEORGIA 30328. PLEASE VISIT ROSS SYSTEMS WORLD WIDE WEB
SITE AT HTTP://WWW.ROSSINC.COM.
