System Software Associates (SSA) has settled the lawsuit filed against it by Bain Capital for breaking a funding contract it signed with the investment company in July.
The applications supplier had agreed to sell $47 million in junior subordinated notes and detachable stock purchase warrants to a private investment group, which included Bain Capital, Pritzker?s Royal Eagle and the JMI Equity Fund III (see Newswire 16 July 1997).
But, only a month later, it decided to engage a new investment bank to replace the two previously proposed refinancing deals, with only one that it claimed offered it better terms (see Newswire 22 August 1997).
SSA now has to pay Bain a $3 million severance fee and $650,000 in expenses, but made a $3.25 million provision for the hit in its fourth quarter figures, released on 10 December last year. The rest of the charge will be taken in the company?s fiscal first quarter.
It has also agreed to provide Bain with an an additional 300,000 warrants to purchase SSA stock, priced at $9.69 per share.
Separately, SSA has also decided to retain Hambrecht & Quist as its long-term financial advisors and investment bank, and under the terms of the deal, to provide Hambrecht with 1.3 million warrants to purchase SSA stock at $9.69 per share.
The applications house has also made two appointments into newly created roles. Walter Koenigseder, former head of Informix' Emea region, becomes area vice president of SSA?s European operations, reporting to Richard Morgan-Evans, SSA?s Emea president.
William Stuek, former general manager of IBM?s north American operations, has also been appointed as president and chief operating officer, reporting to Roger Covey, chief executive.
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