<PAGE> 1
Page 1 of 11 pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
ELITE INFORMATION GROUP, INC.
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
28659M
(CUSIP Number)
Steven O. Todd
10800 Sikes Place, Suite 300
Charlotte, North Carolina 28277
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 14, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
This statement contains 11 pages.
The exhibit index is on page 10.
<PAGE> 2
Page 2 of 11 pages
SCHEDULE 13D/A
- ----------------------------------------------------- ------------------
CUSIP NO. 28659M PAGE 2 OF 11 PAGES
- ----------------------------------------------------- ------------------
- -------------- -----------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PAR Investment Partners, L.P.
- -------------- -----------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)_____
(b)__x__
- -------------- -----------------------------------------------------------------
3 SEC USE ONLY
- -------------- -----------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- -------------- -----------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(3) [ ]
- -------------- -----------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
- -------------- -----------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
1,220,300
---------- ----------------------------------------------
8 SHARED VOTING POWER
None
---------- ----------------------------------------------
9 SOLE DISPOSITIVE POWER
1,220,300
---------- ----------------------------------------------
10 SHARED DISPOSITIVE POWER
None
- -------------- -----------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,220,300 shares of Common Stock
- -------------- -----------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- -------------- -----------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.5%
- -------------- -----------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- -------------- -----------------------------------------------------------------
<PAGE> 3
Page 3 of 11 pages
SCHEDULE 13D/A
- ----------------------------------------------------- ------------------
CUSIP NO. 28659M PAGE 3 OF 11 PAGES
- ----------------------------------------------------- ------------------
- ------------ -------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PAR Group, L.P.
- ------------ -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)_____
(b)__X__
- ------------ -------------------------------------------------------------------
3 SEC USE ONLY
- ------------ -------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------ -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(3) [ ]
- ------------ -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
- ------------ -------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
1,220,300
--------- -----------------------------------------------
8 SHARED VOTING POWER
0
--------- -----------------------------------------------
9 SOLE DISPOSITIVE POWER
1,220,300
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ------------ -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,220,300 shares of Common Stock
- ------------ -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------ -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.5%
- ------------ -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
- ------------ -------------------------------------------------------------------
<PAGE> 4
Page 4 of 11 pages
SCHEDULE 13D/A
- ----------------------------------------------------- ------------------
CUSIP NO. 28659M PAGE 4 OF 11 PAGES
- ----------------------------------------------------- ------------------
- ------------ -------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PAR Capital Management, Inc.
- ------------ -------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)_____
(b)__X__
- ------------ -------------------------------------------------------------------
3 SEC USE ONLY
- ------------ -------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- ------------ -------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(3) [ ]
- ------------ -------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
- ------------ -------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
1,220,300
--------- -----------------------------------------------
8 SHARED VOTING POWER
0
--------- -----------------------------------------------
9 SOLE DISPOSITIVE POWER
1,220,300
--------- -----------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ------------ -------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,220,300 shares of Common Stock
- ------------ -------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- ------------ -------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.5%
- ------------ -------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------ -------------------------------------------------------------------
<PAGE> 5
Page 5 of 11 pages
Item 1. Security and Issuer.
This statement on Schedule 13D (this "Statement") is filed with respect
to shares of Common Stock, $.01 par value per share ("Common Stock"), of Elite
Information Group, Inc., a Delaware corporation (the "Issuer"). The address of
the principal executive offices of the Issuer is 5100 Goldleaf Circle, Suite
100, Los Angeles, CA 90056.
Item 2. Identity and Background.
(a),(b), and (c). The persons filing this Statement are PAR Investment
Partners, L.P. ("PIP"), PAR Group, L.P. ("PAR Group"), and PAR Capital
Management, Inc. ("PAR Capital").
PIP is a Delaware limited partnership. Its principal business is that
of a private investment partnership engaging in the purchase and sale of
securities for its own account and its address is Suite 1600, One Financial
Center, Boston, MA 02111.
The sole general partner of PIP is PAR Group, a Delaware limited
partnership. The principal business of PAR Group is that of a private investment
partnership engaging in the purchase and sale of securities for its own account
and its address is Suite 1600, One Financial Center, Boston, MA 02111.
The sole general partner of PAR Group is PAR Capital, a Delaware S
corporation. The principal business of PAR Capital is to act as the general
partner of PAR Group. Its offices are located at Suite 1600, One Financial
Center, Boston, MA 02111.
Paul A. Reeder, III is the President and sole director of PAR Capital.
He may be deemed to be a controlling shareholder of PAR Capital. Frederick S.
Downs, Jr. is a vice president of PAR Capital. He may be deemed to be a
controlling shareholder of PAR Capital. Arthur G. Epker is a vice president of
PAR Capital. He may be deemed to be a controlling shareholder of PAR Capital.
The business address of Paul A. Reeder, III, Frederick S. Downs, Jr. and Arthur
G. Epker, III is Suite 1600, One Financial Center, Boston, MA 02111.
(d) and (e). During the last five years, PIP, PAR Group and PAR Capital
have not (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction as a result of
which they were or are subject to a judgment, decree, or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws, or finding any violations with respect to such laws.
During the last five years, Paul A. Reeder, III, Frederick S. Downs,
Jr., and Arthur G. Epker, III have not (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which they were or are subject to a judgment,
decree, or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws, or finding
any violations with respect to such laws.
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Page 6 of 11 pages
(f) Paul A. Reeder, III, Frederick S. Downs, Jr., and Arthur G. Epker,
III are all citizens of the United States.
Item 3. Source and Amount of Funds or Other Consideration.
The information set forth under Item 4 of this Statement is
incorporated by reference herein. No funds were used in connection with the
execution of the Stockholders Agreement as described herein.
Item 4. Purpose of Transaction.
On December 14, 1999, the Issuer, Solution 6 Holdings, Limited, a New
South Wales, Australia corporation ("Solution 6") and EIG Acquisition Group,
Inc., a Delaware corporation and an indirect wholly owned subsidiary of Solution
6 ("Purchaser"), entered into an Agreement and Plan of Merger providing for the
making of a cash tender offer (the "Offer") by Purchaser to purchase all of the
issued and outstanding shares of Common Stock of the Issuer at a price per share
of $11.00 (the "Offer Price"), and for the merger of Issuer and Purchaser (the
"Merger Agreement"). To induce Solution 6 and Purchaser to enter into the Merger
Agreement, on December 14, 1999, PIP ("Filing Persons") entered into a
Stockholders Agreement (the "Stockholders Agreement") with Solution 6,
Purchaser, and certain other stockholders of Issuer, whereby the Filing Persons
agreed (1) to tender at the Offer Price any of the shares of Common Stock owned
by such Filing Persons in the Offer, if so directed by Purchaser, (2) to sell to
Purchaser at the Offer Price all of the shares of Common Stock owned by the
Filing Persons that were not tendered in the Offer immediately following the
expiration of the Offer, and (3) to grant to Purchaser an irrevocable option
exercisable upon the occurrence of certain specified events, to purchase at the
Offer Price any or all of the shares of Common Stock owned by the Filing Persons
and any and all options owned by such Filing Persons to purchase shares of
Common Stock.
In addition, under the Stockholders Agreement, the Filing Persons
agreed to irrevocably grant to certain representatives of Solution 6, the proxy
of the Filing Persons, and to irrevocably appoint such representatives as the
attorney-in-fact for the Filing Persons to vote the shares of Common Stock of
the Filing Persons in favor of the Merger Agreement and the transactions
contemplated thereby, and against any alternative transaction.
The Merger Agreement contemplates that upon acceptance for payment of,
and payment by Purchaser for, any shares of Common Stock of the Issuer pursuant
to the Offer, Purchaser shall be entitled to designate such number of directors
on the Board of Directors of the Issuer as will give Purchaser, subject to
compliance with Section 14(f) of the Securities Exchange Act of 1934,
representation on the Board of Directors of the Issuer proportional to the
percentage ownership of the Purchaser of shares of Common Stock of the Issuer;
provided, however, that until such time as a merger of Issuer and Purchaser is
effective as contemplated by the Merger Agreement, there shall remain at least
two directors on the Board of Directors of the Issuer who were directors on the
Board of Directors of the Issuer prior to execution of the Merger Agreement. The
Merger Agreement also contemplates that, subject to the approval of the
shareholders of the Issuer if required, the Purchaser shall merge with and into
the Issuer, with the Issuer to be the surviving corporation. At such time as the
merger is effective, the certificate of incorporation and the bylaws of the
surviving corporation would be amended to read in their entirety the same as the
certificate of incorporation and the bylaws, respectively, of the Purchaser
<PAGE> 7
Page 7 of 11 pages
in effect immediately prior to the merger; provided that the name of the
surviving corporation shall continue to be Elite Information Group, Inc.
The Shareholders Agreement is filed as Exhibit 1 hereto and is
incorporated by reference herein.
Except as discussed above and elsewhere in this Statement, none of the
Filing Persons has any present plan or proposal that relates to or that could
result in any of the following:
(a) The acquisition by any person of additional securities of the
Issuer or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or
of any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend
policy of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's articles of incorporation, bylaws or
instruments corresponding thereto or other actions that may impede the
acquisition of control of the Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As of the date of this Statement, PIP beneficially owns and PAR
Group and PAR Capital may be deemed to beneficially own 1,220,300 shares of
Common Stock of the Issuer, representing approximately 14.5% of the number of
shares of Common Stock of the Issuer currently outstanding. The number of shares
of Common Stock of Issuer believed to be outstanding as of December 13, 1999 (as
stated in the Merger Agreement) is 8,409,380. The total amount of funds used in
purchasing the 1,220,300 shares of Common Stock was $10,760,262.20.
<PAGE> 8
Page 8 of 11 pages
To the best of knowledge of PIP, PAR Group, and PAR Capital, none of
PIP, PAR Group or PAR Capital, nor any officer or director of PIP, PAR Group or
PAR Capital beneficially owns any other shares of Common Stock of the Issuer.
(b) PIP, PAR Group and PAR Capital have sole voting and dispositive
power with respect to the 1,220,300 shares of Common Stock of the Issuer.
(c) The information set forth in Item 4 is incorporated by reference
herein.
(d) The information set forth in Item 4 is incorporated by reference
herein.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The information set forth in Item 4 is incorporated by reference
herein.
Item 7. Material to be Filed as Exhibits.
The Stockholders Agreement dated December 14, 1999 by and between
Solution 6, Purchaser, and certain stockholders of Issuer is filed as Exhibit 1
hereto.
<PAGE> 9
Page 9 of 11 pages
SIGNATURE
After due inquiry, to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
Dated: December 17, 1999
PAR INVESTMENT PARTNERS, L.P.
By: PAR GROUP, L.P., its general partner
By: PAR CAPITAL MANAGEMENT, INC,
its general partner
/s/ Arthur G. Epker III
----------------------------------------
Arthur G. Epker, III, Vice President
PAR GROUP, L.P.
By: PAR CAPITAL MANAGEMENT, INC.
its general partner
/s/ Arthur G. Epker III
----------------------------------------
Arthur G. Epker, III, Vice President
PAR CAPITAL MANAGEMENT, INC.
/s/ Arthur G. Epker III
----------------------------------------
Arthur G. Epker, III, Vice President
<PAGE> 10
Page 10 of 11 pages
EXHIBIT INDEX
Sequentially-
Exhibit No. Exhibit Numbered Page
---------- ------- -------------
1 Shareholders Agreement 11
dated December 14, 1999
<PAGE> 11
Page 11 of 11 pages
EXHIBIT 1
<PAGE> 12
STOCKHOLDERS AGREEMENT
This Stockholders Agreement, dated as of December 14, 1999, is by and among
Solution 6 Holdings, Limited, a New South Wales, Australia corporation
("Parent"), EIG Acquisition Corp., a Delaware corporation and an indirect
wholly-owned subsidiary of Parent ("Purchaser"), and the persons listed on
Schedule A hereto (each a "Stockholder" and, collectively, the "Stockholders").
WHEREAS, concurrently with the execution of this Agreement, Parent,
Purchaser and Elite Information Group, Inc., a Delaware corporation (the
"Company"), are entering into an Agreement and Plan of Merger, dated as of the
date hereof (as the same may be amended or supplemented, the "Merger Agreement";
terms used but not defined herein have the meanings set forth in the Merger
Agreement), providing for the making of a cash tender offer (as such offer may
be amended from time to time as permitted under the Merger Agreement, the
"Offer") by Purchaser for shares of Common Stock, par value $.01 per share, of
the Company (the "Common Stock") and the merger of the Company and Purchaser
(the "Merger");
WHEREAS, each Stockholder is the beneficial owner of the shares of Common
Stock set forth opposite such Stockholder's name on Schedule A hereto; such
shares of Common Stock, as such shares may be adjusted by stock dividend, stock
split, recapitalization, combination or exchange of shares, merger,
consolidation, reorganization or other change or transaction of or by the
Company, together with shares of Common Stock that may be acquired after the
date hereof by such Stockholder, including shares of Common Stock issuable upon
the exercise of options to purchase Common Stock (as the same may be adjusted as
aforesaid), being collectively referred to herein as the "Shares" of such
Stockholder;
WHEREAS, pursuant to the Merger Agreement, the Company has irrevocably
approved the granting of the options to purchase Common Stock granted herein by
the Stockholders and the purchase of such Common Stock by the Purchaser upon
exercise of such options for purposes of Section 203 of Delaware General
Corporation Law and has irrevocably excepted such grants and purchases from the
definition of "acquiring person" and/or "triggering event" and terms of similar
import contained in the Company's Rights Plan; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that the Stockholders enter into
this Agreement;
NOW, THEREFORE, to induce Parent and Purchaser to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. Agreement to Sell; Tender.
(a) Subject to Section 8 below, as promptly as practicable following the
expiration of the Offer (but in no event later than 10:00 a.m., New York City
time, on the Business Day immediately after such expiration), each Stockholder
hereby severally and not jointly agrees to sell to Purchaser, and Purchaser
agrees to purchase, all the Shares owned by such Stockholder not tendered
pursuant to Section 1(b) at a price per Share equal to the price per Share paid
by Purchaser in the Offer (the "Offer Price"). The obligations of each
Stockholder to sell its Shares pursuant to this Section 1(a) is conditioned upon
Purchaser purchasing shares of Common Stock pursuant to the Offer.
(b) In addition, each Stockholder hereby severally and not jointly agrees
that if such Stockholder is directed to tender the Shares it owns as of the date
hereof and any Shares it may acquire prior to the expiration of the Offer by
Purchaser pursuant to the following sentence, it shall promptly tender all such
Shares in the Offer, and it shall not withdraw any Shares so tendered(it being
understood that the obligation contained in this sentence is unconditional,
subject to Section 8 below). In the event that Purchaser wishes to direct a
Stockholder to tender its Shares, Purchaser shall give written notice to such
Stockholder to such effect and specifying the number (if less than all) of such
Stockholder's Shares. Section 1(a) above shall be deemed satisfied upon
completion of the purchase of such Shares in the Offer.
1
<PAGE> 13
(c) In addition, each Stockholder hereby severally and not jointly grants
to Purchaser an irrevocable option (as to each Stockholder, the "Option") to
purchase any of or all the Shares owned by such Stockholder and any of or all
the Shares for which any stock options owned by such Stockholder are then
exercisable on the date the Option is exercised by the Purchaser (on any date,
the "Vested Options") in each case at a price per Share equal to the Offer Price
(less, in the case of Vested Options, the applicable exercise price). The Option
may be exercised at any time and from time to time after the occurrence of an
Exercise Event (as defined below) and on or prior to thirty (30) days following
the occurrence of an Exercise Event. In the event that Purchaser wishes to
exercise the Option as to a Stockholder, Purchaser shall give written notice(the
date of such notice being called the "Notice Date") to such Stockholder and to
the Company specifying the number (if less than all) of such Stockholder's
Shares, including shares of Common Stock underlying Vested Options, and a place,
time and date not later than 10 Business Days from the Notice Date for the
closing of such purchase.
As used herein, an "Exercise Event" means the occurrence of any of the
following events:
(i) at any time prior to termination of the Merger Agreement, any
corporation, partnership, individual, trust, unincorporated association, or
other entity or "person" (as defined in Section 13 (d) (3) of the Exchange
Act), other than purchaser or any of its "affiliates" (as defined in the
Exchange Act) (a "Third Party"), shall have:
(A) commenced or announced an intention to commence a tender offer or
exchange offer for any shares, the consummation of which would result in
"beneficial ownership" (as defined in the Exchange Act) by such Third Party
(together with all such Third Party's affiliates and "associates" (as
defined in the Exchange Act)) of 50% or more of the then outstanding voting
equity of the Company (either on a primary or a fully diluted basis);
(B) acquired beneficial ownership of shares that, when aggregated with
any shares already owned by such Third Party, its affiliates and
associates, would result in the aggregate beneficial ownership by such
Third Party, its affiliates and associates of 10% or more of the then
outstanding voting equity of the Company (either on a primary or a fully
diluted basis); provided, however, that "Third Party" for purposes of this
clause (B) does not include any corporation, partnership, person, other
entity or group that beneficially owns more than 10% of the outstanding
voting equity of the Company (either on a primary or a fully diluted basis)
as of the date hereof and that does not, after the date hereof, increase
such ownership percentage by more than an additional 1% of the outstanding
voting equity of the Company (either on a primary or a fully diluted
basis);
(C) acquired assets constituting 10% or more of the total assets or
earning power of the Company taken as a whole;
(D) entered into an agreement with the Company that contemplates the
acquisition of (x) assets constituting 10% or more of the total assets or
earning power of the Company taken as a whole or (y) beneficial ownership
of 10% or more of the outstanding voting equity of the Company; or
(ii) any event has occurred that would allow the Company or Parent to
terminate the Merger Agreement under circumstances in which Parent may be
or become entitled to a Termination Fee.
2. Representations and Warranties of the Stockholders. Each Stockholder
hereby severally represents and warrants to Parent and Purchaser as
follows:
(a) Such Stockholder has all requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
If such Stockholder is not an individual, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by such Stockholder. This
Agreement has been duly executed and delivered by such Stockholder and
constitutes a valid and binding obligation of the Stockholder enforceable
against such Stockholder in accordance with its terms, except as the same may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar Laws relating to creditors' rights generally
2
<PAGE> 14
and (b) legal principles of general applicability governing the application and
availability of equitable remedies. Except for the expiration or termination of
any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), neither the execution, delivery or
performance of this Agreement by such Stockholder nor the consummation by such
Stockholder of the transactions contemplated hereby will (i) require any filing
with, or permit, authorization, consent or approval of, any Governmental
Authority, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default under, or give rise to
any right of termination, amendment, cancellation or acceleration under, or
result in the creation of any Lien upon any of the properties or assets of such
Stockholder under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, permit, concession, franchise, contract,
agreement or other instrument or obligation (a "Contract") to which such
Stockholder is a party or by which such Stockholder or any of such Stockholder's
properties or assets, including such Stockholder's Shares, may be bound or (iii)
violate any Order (as defined in the Merger Agreement) or any Law applicable to
such Stockholder or any of such Stockholder's properties or assets, including
such Stockholder's Shares, other than, in the case of clause (ii) above, such
items that, individually or in the aggregate, have not and could not reasonably
be expected to have a material adverse effect on the ability of such Stockholder
to perform its obligations under this Agreement.
(b) Such Stockholder's Shares and the certificates representing such Shares
are now, and at all times during the term hereof will be, held by such
Stockholder, or by a nominee or custodian for the benefit of such Stockholder,
and such Stockholder is the legal and beneficial owner of and has good and
marketable title to such Shares, free and clear of any Liens, proxies, voting
trusts or agreements, understandings or arrangements, except for any such Liens
or proxies arising hereunder and Liens described on Schedule B attached hereto.
Notwithstanding anything in this Agreement to the contrary, the obligations of
the Stockholder listed in Schedule B under this Agreement are subject to the
matters set forth on Schedule B attached hereto.
(c) No broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of such Stockholder.
(d) Such Stockholder understands and acknowledges that Parent is entering
into, and causing Purchaser to enter into, the Merger Agreement in reliance upon
such Stockholder's execution and delivery of this Agreement.
3.Representations and Warranties of Parent and the Purchaser. Parent and
the Purchaser hereby represent and warrant to the Stockholders as
follows:
(a) Each of Parent and such Purchaser has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and such Purchaser and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and such Purchaser. This Agreement has
been duly executed and delivered by Parent and such Purchaser and constitutes a
valid and binding obligation of Parent and Purchaser enforceable in accordance
with its terms, except as the same may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar Laws relating
to creditors' rights generally and (ii) legal principles of general
applicability governing the application and availability of equitable remedies.
(b) The Shares will be acquired in compliance with, and such Purchaser will
not offer to sell or otherwise dispose of any Shares so acquired by it in
violation of the registration requirements of, the Securities Act of 1933, as
amended.
4.Covenants of the Stockholders. Each Stockholder severally agrees as
follows:
(a) Such Stockholder shall not, except as contemplated by the terms of this
Agreement, (i) sell, transfer, pledge, assign or otherwise dispose of, or enter
into any Contract, option or other arrangement (including any profit sharing
arrangement) or understanding with respect to the sale, transfer, pledge,
assignment or other disposition of, the Shares to any person other than
Purchaser or Purchaser's designee,
3
<PAGE> 15
(ii) enter into any voting arrangement, whether by proxy, voting agreement,
voting trust, power-of-attorney or otherwise, with respect to the Shares or
(iii) take any other action that would in any way restrict, limit or interfere
with the performance of its obligations hereunder or the transactions
contemplated hereby.
(b) Subject to Section 10 below, until the Merger is consummated or the
Merger Agreement is terminated, such Stockholder shall not, nor shall such
Stockholder permit any investment banker, financial adviser, attorney,
accountant or other representative or agent of such Stockholder to, directly or
indirectly (i) solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed or reasonably likely to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding any Acquisition
Proposal. Without limiting the foregoing, it is understood that any violation of
the restrictions set forth in the preceding sentence by an investment banker,
financial advisor, attorney, accountant or other representative or agent of such
Stockholder shall be deemed to be a violation of this Section 4(b) by such
Stockholder.
(c) At any meeting of stockholders of the Company called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval (including by written
consent) with respect to the Merger and the Merger Agreement is sought, such
Stockholder shall vote (or cause to be voted) such Stockholder's Shares in favor
of the Merger, the adoption by the Company of the Merger Agreement and the
approval of the other Transactions (as defined in the Merger Agreement). At any
meeting of stockholders of the Company or at any adjournment thereof or in any
other circumstances upon which the Stockholder's vote, consent or other approval
is sought, the Stockholder shall vote (or cause to be voted) the Stockholder's
Shares against (i) any merger agreement or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale of substantial
assets, reorganization, recapitalization, dissolution, liquidation or winding up
of or by the Company or any other Acquisition Proposal (collectively,
"Alternative Transactions") or (ii) any amendment of the Company's certificate
of incorporation or bylaws or other proposal or transaction involving the
Company or any of its subsidiaries, which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent or nullify the Offer,
the Merger, the Merger Agreement or any of the other Transactions (collectively,
"Frustrating Transactions").
5. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably grants to, and appoints, Chris
Tyler and Thomas A. Montgomery and any other individual who shall hereafter be
designated by Parent, and each of them, such Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote such Stockholder's Shares, or grant a
consent or approval in respect of such Shares, at any meeting of stockholders of
the Company or at any adjournment thereof or in any other circumstances upon
which their vote, consent or other approval is sought, in favor of the Merger,
the adoption by the Company of the Merger Agreement and the approval of the
terms thereof and each of the other transactions contemplated by the Merger
Agreement and against any alternative Transaction or Frustrating Transaction.
(b) Each Stockholder represents that any proxies heretofore given in
respect of such Stockholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) Each Stockholder hereby affirms that the irrevocable proxy set forth in
this Section 5 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of such Stockholder under this Agreement. Such Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked, subject to Section 8 below. Such Stockholder
hereby ratifies and confirms all that such irrevocable proxy may lawfully do or
cause to be done by virtue hereof. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of the General
Corporation Law of the State of Delaware. Such irrevocable proxy shall be valid
until the termination of this Agreement pursuant to Section 8 below.
4
<PAGE> 16
6. Further Assurances. Each Stockholder will, from time-to-time, execute
and deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements, consents and other instruments as Parent
or Purchaser may reasonably request for the purpose of effectively carrying out
the transactions contemplated by this Agreement and to vest the power to vote
such Stockholder's Shares as contemplated by Section 5. Parent and Purchaser
jointly and severally agree to use reasonable efforts to take, or cause to be
taken, all actions necessary to comply promptly with all legal requirements that
may be imposed with respect to the transactions contemplated by this Agreement
(including any applicable legal requirements of the HSR Act).
7. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties without the prior
written consent of the other parties, except that Purchaser may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to an Affiliate of Parent, but no such assignment shall relieve
Purchaser of any of its obligations under this Agreement. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by, the parties and their respective successors and assigns.
Each Stockholder agrees that this Agreement and the obligations of such
Stockholder hereunder shall attach to such Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of such
Shares shall pass, whether by operation of law or otherwise, including such
Stockholder's heirs, guardians, administrators or successors.
8. Termination. This Agreement shall terminate upon the earlier of (i) the
Effective Time or (ii) the termination of the Merger Agreement in accordance
with its terms, except that, Section 1(c) shall survive any such termination to
the extent provided herein.
9. Stop Transfer. The Company agrees with, and covenants to, Parent and
Purchaser that the Company shall not register the transfer of any certificate
representing any Stockholder's Shares unless such transfer is made in accordance
with the terms of this Agreement.
10. Stockholder Capacity. No person executing this Agreement makes any
agreement or understanding herein in his or her capacity as a director or
officer of the Company or any subsidiary of the Company. Each Stockholder signs
solely in his or her capacity as the beneficial owner of such Stockholder's
Shares and nothing herein shall limit or affect any actions taken by a
Stockholder in its capacity as an officer or director of the Company or any
subsidiary of the Company to the extent specifically permitted by, or
specifically permitted in the Merger Agreement.
11. Performance by Purchaser. Parent covenants and agrees for the benefit
of the Stockholders that it shall cause Purchaser to perform in full each
obligation of Purchaser set forth in this Agreement.
12. Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in the
State of Delaware or in any Delaware state court, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (I) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of Delaware or any
Delaware state court in the event any dispute arises out of this Agreement or
any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court located in the state
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the courts of the State of Delaware or of the United
States of America located in the State of Delaware, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
5
<PAGE> 17
13. General Provisions.
(a) All costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
expense.
(b) This Agreement may not be amended except by an instrument in writing
signed by each of the parties hereto; provided, however, that this Agreement may
be amended without the written agreement of the parties hereto to add additional
persons as "Stockholders" hereunder by execution by such persons of a signature
page hereto, in which event Parent shall amend Schedule A to reflect such
addition.
(c) All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally, telecopied (which is confirmed),
sent by overnight courier (providing proof of delivery) or mailed by registered
or certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
if to Parent or Purchaser:
Solution 6 Holdings Limited
Town Hall House
Level 21, 456 Kent Street
Sydney, New South Wales,
Australia 2000
Attention: Thomas A. Montgomery
Telecopier No.: 011-612-9278-0702
with a copy to:
Jackson Walker L.L.P.
901 Main Street
Dallas, Texas 75202
Attention: Richard F. Dahlson
Telecopy No: (214) 953-6187
if to a Stockholder:
to the address set forth under the name
of such Stockholder on Schedule A hereto
with a copy to:
Robinson Bradshaw & Hinson P.A.
101 North Tyson Street, Suite 1900
Charlotte, North Carolina 28246
Attention: Patrick S. Bryant
Telecopier No.: (704) 378-4000
(d) When a reference is made in this Agreement to a Section, such reference
shall be to a Section of this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". Words in the singular
include the plural, and words in the plural include the singular.
(e) This Agreement may be executed in multiple counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
(f) This Agreement (including the documents and instruments referred to
herein) (i) constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the
6
<PAGE> 18
parties with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
(g) This Agreement shall be governed by, and construed in accordance with,
the Laws of the State of Delaware, regardless of the Laws that might otherwise
govern under applicable principles of conflict of Law.
(h) Except as otherwise required by Law, court process or the rules of a
national securities exchange or the Nasdaq National Market or as contemplated or
provided in the Merger Agreement, for so long as this Agreement is in effect, no
Stockholder shall issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by this
Agreement or the Merger Agreement without the consent of Parent, which consent
shall not be unreasonably withheld.
7
<PAGE> 19
IN WITNESS WHEREOF, each of Parent and Purchaser has caused this Agreement
to be signed by its officer or director there unto duly authorized and each
Stockholder has signed this Agreement, all as of the date first written above.
SOLUTION 6 HOLDINGS, LIMITED
By:
/s/ THOMAS A. MONTGOMERY
------------------------------------
Name: Thomas A. Montgomery
------------------------------------
Title: CFO
------------------------------------
EIG ACQUISITION CORP.
By:
/s/ THOMAS A. MONTGOMERY
------------------------------------
Name: Thomas A. Montgomery
------------------------------------
Title: CFO
------------------------------------
STOCKHOLDERS:
See attached signature pages
ACKNOWLEDGED AND AGREED TO AS TO
SECTION 9:
ELITE INFORMATION GROUP, INC.
By:
/s/ CHRISTOPHER K. POOLE
------------------------------------
Name: Christopher K. Poole
------------------------------------
Title: CEO
------------------------------------
8
<PAGE> 20
SIGNATURE PAGE
TO
STOCKHOLDERS AGREEMENT
This Signature Page to the Stockholders Agreement, dated as of December 14,
1999 (the "Agreement"), by and among Solution 6 Holdings, Limited, a New South
Wales, Australia corporation, EIG Acquisition Corp., a Delaware corporation, and
certain other persons, is hereby executed by the undersigned as a "Stockholder"
thereunder as of the date first set forth above.
------------------------------------
Printed Name: Alan Rich
PAR Investment Partners, L.P.
By: PAR Group, L.P. General Partner
By: PAR Capital Management,
Inc.,
General Partner
By:
/s/ ARTHUR G. EPKER III
--------------------------------
Name: Arthur G. Epker III
--------------------------------
Title: Vice President, PAR
Capital
Management, Inc.
--------------------------------
/s/ CHRISTOPHER K. POOLE
------------------------------------
Printed Name: Christopher K. Poole
------------------------------------
/s/ WILLIAM G. SEYMOUR
------------------------------------
Printed Name: William G. Seymour
------------------------------------
/s/ BARRY EMERSON
------------------------------------
Printed Name: Barry Emerson
------------------------------------
/s/ David A. Finley
------------------------------------
Printed Name: David A. Finley
------------------------------------
------------------------------------
Printed Name: Roger Noall
------------------------------------
9
<PAGE> 21
SCHEDULE A
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
COMMON NUMBER OF
NAME AND ADDRESS STOCK OPTIONS
- ---------------- --------- ---------
<S> <C> <C>
Christopher K. Poole........................................ 5,000 195,000
Chairman & CEO
Elite Information Group, Inc.
5100 W. Goldleaf Cr. #100
Los Angeles, CA 90056
Business Phone: (323) 642-5270
Arthur G. Epker III, Vice President......................... 1,220,300 5,000
PAR Capital Management
One Financial Center #1600
Boston, MA 02111
Business Phone: (617) 526-8992
Barry Emerson............................................... -- 25,000
Chief Financing Officer
Elite Information Group, Inc.
5100 W. Goldleaf Cr. #100
Los Angeles, CA 90056
Business Phone: (323) 642-5270
Alan Rich, Chairman......................................... -- 5,000
Elite Information Systems, Inc.
9430 Kirkside Road
Los Angeles, CA 90035
Business Phone: (323) 642-5300
William G. Seymour.......................................... 436,622 3,000
PriMax Properties
1115 East Morehead Street
Charlotte, NC 28204-2814
Business Phone: (704) 344-8200 x11
David A. Finley, President.................................. 2,000 81,666
Investment Management Partners II, Inc.
21 Bedford Center Road
Bedford Hills, NY 10507
Business Phone: (914) 242-6215
Roger Noall................................................. 20,000 3,000
KeyCorp
127 Public Square
Cleveland, OH 44114-1306
Business Phone: (216) 689-5651
</TABLE>
<PAGE> 22
SCHEDULE B
EXCEPTIONS
1. Some or all of the Shares held by William G. Seymour are pledged to Bank
of America as security for loans. The obligations of William G. Seymour under
this Agreement with respect to such Shares are subject to the rights of Bank of
America as pledgee of such Shares. William G. Seymour agrees to use commercially
reasonable efforts to cause Bank of America to permit him to perform his
obligations hereunder with respect to such pledged Shares, including the tender
or sale thereof. Nothing in this Agreement shall require William G. Seymour to
breach his obligations to Bank of America with respect to such pledged Shares.
