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EXHIBIT 4.4
THE SECURITY EVIDENCED HEREBY IS NON-TRANSFERABLE
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED IN ANY WAY
PLATINUM SOFTWARE CORPORATION
Effective as of
September 26, 1994
$15,000,000 Principal Amount Irvine, California
AMENDED AND RESTATED 8% CONVERTIBLE, EXCHANGEABLE
SUBORDINATED SECURITY
FOR VALUE RECEIVED, PLATINUM SOFTWARE CORPORATION, a Delaware corporation
(the "Company") hereby promises to redeem or exchange for the benefit of Milberg
Weiss Bershad Hynes & Lerach, as escrow agent for the benefit of the Settlement
Class (as defined in that certain Stipulation of Partial Settlement, dated as of
May 31, 1994, in regard to In re Platinum Software Securities Litigation,
SACV-94-70-AHS) ("Holder"), in the manner set forth below, the principal amount
of Fifteen Million Dollars ($15,000,000) (the "Principal Amount") or such part
thereof that has not been redeemed or exchanged, and to pay interest from the
date hereof on the whole amount of said Principal Amount that has not been
redeemed or exchanged at the rate of eight percent (8%) per annum. Interest on
this 8% Convertible, Exchangeable Subordinated Security (the "Security") shall
be computed on the basis of a 365-day year.
1. Redemption and Exchange; Method of Redemption and Exchange
The Company, at its option at any time, may (i) redeem all or a portion of
the Principal Amount of the Security that has not been previously redeemed or
exchanged, plus accrued interest on such amount, for cash, (ii) exchange all or
a portion of the Principal Amount of the Security that has not been previously
redeemed or exchanged, plus accrued interest on such amount, for shares of
Common Stock, $.001 par value, of the Company (the "Common Stock") valued as set
forth below, or (iii) redeem and exchange all or a portion of the Principal
Amount of the Security that has not been previously redeemed or exchanged, plus
accrued interest on such amount, for a combination of cash and Common Stock
valued as set forth below (a "Voluntary Redemption or Exchange").
Notwithstanding the foregoing, the Company shall redeem or exchange in the
manner set forth in the preceding sentence (a "Mandatory Redemption or
Exchange") $7,500,000 in Principal Amount (or such lesser Principal Amount),
plus accrued interest on such amount, such that the aggregate Principal Amount
redeemed or exchanged on or prior to September 20, 1996 equals at least
$7,500,000, and $7,500,000 in Principal Amount (or such lesser Principal
Amount), plus accrued interest on such amount, such that the aggregate Principal
Amount redeemed or exchanged on or prior to February 28, 1997 equals at least
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$15,000,000 for cash or Common Stock, or a combination of cash and Common Stock.
Each of the foregoing dates shall be deemed a "Mandatory Redemption/Exchange
Date." In the event there shall be less than $7,500,000 Principal Amount
remaining on a given Mandatory Redemption/Exchange Date, the Company shall
redeem or exchange the entire remaining Principal Amount and accrued interest
thereon as set forth above. Upon the redemption or exchange of the entire
Principal Amount then outstanding and accrued interest thereon, the Company's
obligations hereunder shall cease to be of further effect. In the event the
Company determines to exchange a portion of the Principal Amount and accrued
interest on such amount for shares of Common Stock, the Company shall deliver
shares of Common Stock that have a Market Value (as defined below) equal to such
portion of the Principal Amount and accrued interest thereon. Upon an election
by the Company to exchange a portion of the Principal Amount and accrued
interest thereon for shares of Common Stock, the Company shall notify the Escrow
Agent in writing of the number of shares to be issued. The Escrow Agent shall
provide written instructions to the Company (or its transfer agent) within seven
(7) business days after receipt of such notice which instructions shall include
the following: (i) the name and address of each class member who is to receive
shares; (ii) the number of shares to be issued to each class member; and (iii)
the social security number or taxpayer identification number of each class
member. If the Escrow Agent fails to provide the information specified above
within the time period specified above, the Company may issue the shares to the
Escrow Agent in full satisfaction of its obligation to issue the shares
specified in the notice to the Escrow Agent. "Market Value" shall mean the
aggregate dollar value of shares of Common Stock based on the average of the
closing per share sale price for the Common Stock as reported on the Nasdaq
National Market, or such other securities exchange upon which the shares are
listed, for the last twenty (20) trading days prior to the Mandatory
Redemption/Exchange Date or Voluntary Redemption/Exchange Date (as defined
below), excluding the five (5) highest and five (5) lowest sales prices,
appropriately adjusted to take into account any stock dividends, combinations or
splits with respect to such shares. In the absence of one or more quotations,
the Company shall be entitled to determine the sale price of its Common Stock on
the basis of such quotations as it deems appropriate or as may be determined in
good faith by the Board of Directors. On a Mandatory Redemption/Exchange Date or
a Voluntary Redemption/Exchange Date, the Principal Amount and accrued interest
thereon to be paid shall be paid in cash or Company check or exchanged for
shares of Common Stock valued as set forth above.
2. Notice of Voluntary Redemption or Exchange
In the event the Company elects to effect a Voluntary Redemption or
Exchange, the Company shall mail a Notice of Voluntary Redemption or Exchange
(the "Notice") by first-class mail, postage prepaid to the Holder at least five
(5) days before the date specified for redemption or exchange (the "Voluntary
Redemption/Exchange Date"). The Notice shall identify the Principal Amount to be
redeemed or exchanged and state the Voluntary Redemption/Exchange Date and a
method of payment with cash or Common Stock valued as set forth above. As soon
as reasonably practical thereafter, the Company shall provide written notice to
the Escrow Agent which contains the number of shares to be issued and sufficient
detail to illustrate the application of the formula for determining Market Value
as provided in Section 1 above. The Company may elect to effect a Voluntary
Redemption or Exchange only if the election and the computation period for
determining the Market Value of the common stock falls outside of a "Black Out
Period." A Black Out Period is defined as the period beginning fifteen (15) days
before the end
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of a fiscal quarter and ending forty-eight (48) hours after the announcement of
earnings by the Company for the quarter.
3. Subordination
The Company, for itself, its successors and assigns, covenants and agrees,
and Holder, and successor holders of this Security, by its acceptance hereof
likewise covenants and agrees, that the payment of the Principal Amount and
accrued interest thereon shall be subordinated in right of payment and
otherwise, to the extent and in the manner hereinafter set forth, to the prior
payment in full of all Senior Debt (as hereinafter defined) at any time
outstanding. The provisions of this Section 3 shall constitute a continuing
representation to all persons who, in reliance upon such provisions, become the
holders of or continue to hold Senior Debt or have any right or beneficial
interest relating thereto, and such provisions are made for the benefit of the
holders of Senior Debt, and such holders are hereby made obligees hereunder the
same as if their names were written herein as such, and they or any of them may
proceed to enforce such provisions against the Company or against the holder of
the Security or any other person entitled to amounts hereunder without the
necessity of joining the Company as a party.
No direct or indirect payment shall be made by or on behalf of the Company
of principal of, interest on, or other amounts arising under or in connection
with this Security (a "Payment Blockage") if, at the time of such payment (i)
there exists a default in the payment of all or any portion of principal of or
interest on any Senior Debt, and (ii) such default shall not have been cured or
waived, or the benefits of this sentence waived, by or on behalf of the holders
of such Senior Debt (a "Payment Default").
Upon the occurrence of a default on Senior Debt (other than a Payment
Default) that occurs and is continuing that permits the holders of such Senior
Debt (or their trustee(s) or representative(s)) to accelerate its maturity and
receipt by the Company from the trustee(s) or representative(s) of the holders
of a majority of the aggregate principal amount of all Senior Debt of written
notice of such occurrence and the imposition of a Payment Blockage Period (as
defined below) hereunder, then the Company shall not make any direct or indirect
payment of principal of, or interest on, or other amounts arising under or in
connection with this Security for a period (the "Payment Blockage Period")
commencing on the earlier of the date of receipt by the Company of such notice
and ending on the earlier of (subject to any blockage of payments that may then
be in effect under the preceding paragraph of this Section ) (x) the date 179
days after such date, (y) the date such default shall have been cured or waived
in writing or shall have ceased to exist or such Senior Debt shall have been
discharged, or (z) the date such Payment Blockage Period shall have been
terminated by written notice to the Company from the trustee(s) or
representative(s) of the holders of a majority of the aggregate principal amount
of all Senior Debt. Notwithstanding any other provision of this Agreement, only
one Payment Blockage Period may be commenced within any consecutive 365-day
period, and no event of default with respect to any Senior Debt which existed or
was continuing on the date of the commencement of any Payment Blockage Period
with respect to such Senior Debt shall be, or can be made, the basis for the
commencement of a second Payment Blockage Period whether or not within a period
of 365 consecutive days unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days. In no event will a
Payment Blockage Period extend beyond 179 days.
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Holder and each successor holder of this Security agrees as follows:
(a) All payments or distributions upon or with respect to this Security
which are received by the holders of this Security contrary to the
subordination provisions of this Security shall be received in trust for the
benefit of the holders of the Senior Debt entitled thereto, shall be
segregated from other funds and property held by the holders of this
Security and shall be forthwith paid over to the holders of the Senior Debt
entitled thereto in the same form as so received (with any necessary
endorsement) to be applied (in the case of cash) to or held as collateral
(in the case of non-cash property or securities) for the payment or
prepayment of the Senior Debt in accordance with the terms of any agreements
governing the Senior Debt.
(b) The trustee(s) or representative(s) of the holders of a majority of
the aggregate principal amount of all Senior Debt are hereby authorized to
demand specific performance of the subordination provisions set forth in
Section 3 of this Security, whether or not the Company shall have complied
with any of the provisions hereof applicable to it, at any time, and the
holders of this Security hereby irrevocably waive any defense based on the
adequate remedy at law which might be asserted as a bar to such remedy of
specific performance, it being understood that such waiver by the holders of
this Security of any defense based on the adequacy of a remedy at law shall
not be deemed to be a waiver by them of any other defense available to them
at law or in equity with respect to such remedy of specific performance or
otherwise.
(c) The holders of this Security hereby acknowledge and confirm, and
agree not to contest, that the Senior Debt, and any guarantees thereof by
any subsidiary of the Company, constitutes the legal, valid, binding and
enforceable obligations of the Company and such subsidiaries, are not
subject to claims of fraudulent transfer or conveyance, equitable
subordination or any similar defense or limitation, and are secured or are
to be secured by security interests in various assets of the Company and
such subsidiaries,which security interests in favor of the holders of the
Senior Debt (or collateral agents acting on their behalf) are legal, valid,
enforceable and perfected to the extent contemplated by any related
agreements.
(d) The subordination provisions of this Security shall continue in
effect and be reinstated if at any time payment or performance of the Senior
Debt is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any holder of the Senior Debt, whether
as a voidable preference, fraudulent conveyance or otherwise, all as if such
payment or performance had not been made.
The term "Senior Debt" shall mean (i) the principal, premium or
interest (including interest as provided in the agreement governing such Senior
Debt accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company, whether or not a claim for post-filing
interest is allowed in such proceeding) and all other obligations (including
fees, indemnities and expenses) in respect of any indebtedness of the Company
for borrowed money or letters of credit from banks, insurance companies, pension
funds, savings and loans, equipment lessors, or other financial or institutional
lenders or venture capital firms, whether outstanding on the date hereof or
hereafter created, incurred or assumed or for which the Company is or hereafter
becomes obligated, whether short-term or long-term, whether secured or
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unsecured, and whether or not contingent (including all indebtedness evidenced
by notes, bonds, debentures or other securities sold by the Company for money),
as the same may be amended, extended, supplemented, restated or otherwise
modified (including any modification which provides for any increase in the
amount of indebtedness), (ii) guarantees by the Company of indebtedness for
borrowed money of any bank, insurance company, pension fund, savings and loan
institution, equipment lessors or other financial or institutional lender or
venture capital firm, unless in any such case, by the terms of the instrument
creating, governing or evidencing such indebtedness, it is provided that such
indebtedness is not senior or superior in right of payment to this Security.
The Holder and any successor of the Holder agrees that it will execute and
deliver any other documents evidencing the subordination of this Security to
Senior Debt that may be reasonably requested by the Company or the holders of
Senior Debt.
4. Transfer
The Security or any right or beneficial interest thereto shall not be
transferable. More particularly (but without limiting the generality of the
foregoing), the Security or any right or beneficial interest thereto may not be
assigned, transferred (except as provided herein), pledged or hypothecated in
any way, shall not be assignable by operation of law and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the Security or any right or
beneficial interest thereto contrary to the provisions hereof and the levy of
any execution, attachment or similar process upon the Security or any right or
beneficial interest thereto shall be null and void and without effect.
5. Default
If any of the following events (hereafter called "Events of Default") shall
occur:
(a) If the Company shall default in the redemption or exchange of any
Principal Amount and accrued interest thereon as required under this
Security when the same shall be required to be redeemed or exchanged, and
shall not cure such default within thirty (30) days of such default; or
(b) If the Company shall make a general assignment for the benefit of
creditors; or
(c) If the Company shall file a voluntary petition in bankruptcy, or
shall be adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present or any future
Federal Bankruptcy Act or other applicable federal, state or other statute,
law or regulation, or shall file any answer admitting the material
allegation of a petition filed against the Company in such proceeding, or
shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of the Company of all or any substantial part of the
properties of the Company, or the Company shall commence the winding up or
the dissolution or liquidation of the Company; or
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(d) If, within sixty (60) days after a court of competent jurisdiction
shall have entered an order, judgment or decree approving any complaint or
petition against the Company seeking reorganization, dissolution or similar
relief under the present or any future Federal Bankruptcy Act or other
applicable federal, state or other statute, law or regulation, such order,
judgment or decree shall not have been dismissed or stayed pending appeal,
or if, within sixty (60) days after the appointment, without the consent or
acquiescence of the Company, of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company,
such appointment shall not have been vacated or stayed pending appeal, or
if, within sixty (60) days after the expiration of any such stay, shall not
have been vacated;
then, and in each and every such case, the Holder of this Security may by notice
in writing to the Company require the aggregate outstanding Principal Amount and
accrued interest thereon under this Security to be forthwith redeemed or
exchanged and thereupon the balance shall become so redeemable or exchangeable,
without presentation, protest or further demand or notice of any kind, all of
which are hereby expressly waived. Upon such declaration, the Company may elect,
at its sole option, to pay in cash or exchange such outstanding balance for
shares of Common Stock in the manner set forth in Section 1.
6. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Security or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, the holder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Security.
7. Governing law
THE SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF CALIFORNIA, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN
THE STATE OF CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
8. Notices
Any notices and other communications required or permitted in this Security
shall be effective if in writing and delivered personally or sent by telecopier,
Federal Express, or registered or certified air mail, postage prepaid, addressed
as follows:
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(a) If to Company, addressed to:
Platinum Software Corporation
195 Technology Drive
Irvine, California 92718
Attention: Chief Financial Officer and Legal Department
Fax Number: (714) 453-4091
with copies to:
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660-6441
Attention: K. C. Schaaf, Esq.
Fax Number: (714) 725-4100
and
O'Melveny & Myers
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660-6429
Attention: Phillip R. Kaplan, Esq.
Fax Number: (714) 669-6994
(b) If to the Escrow Agent, addressed to:
Milberg Weiss Bershad Hynes and Lerach
600 West Broadway
1800 One American Plaza
San Diego, California 92101-3356
Attention: Keith F. Park, Esq.
Fax Number: (619) 231-7423
Unless otherwise specified herein, such notices or other communications
shall be deemed effective (a) on the date delivered, if delivered personally,
(b) one (1) business day after being sent by Federal Express, if sent by Federal
Express, (c) one (1) business day after being delivered, if delivered by
telecopier, and (d) three (3) business days after being sent, if sent by
registered or certified air mail. Each of the parties hereto shall be entitled
to specify a different address by giving notice as aforesaid to each of the
other parties hereto.
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9. This Amended and Restated 8% Convertible, Exchangeable Subordinated Security
supersedes and replaces that certain 8% Convertible, Exchangeable Subordinated
Security of the Company in favor of the Escrow Agent in the principal amount of
Fifteen Million United States Dollars ($15,000,000) dated as of September 26,
1994.
Dated: May 8, 1996
PLATINUM SOFTWARE CORPORATION
By: /s/ MICHAEL J. SIMMONS
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Michael J. Simmons,
Chief Financial Officer
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