Document:

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                                                                    EXHIBIT 10.2

                              FIRST AMENDMENT TO

                         LOAN AND SECURITY AGREEMENT
                         ---------------------------

               FIRST AMENDMENT dated as of December 23, 1999 (this "Amendment")
                                                                    ---------
to the LOAN AND SECURITY AGREEMENT dated as of August 11, 1999 (the "Loan
                                                                     ----
Agreement") by and among SYSTEM SOFTWARE ASSOCIATES, INC., a Delaware
---------
corporation (the "Borrower"), SYSTEM SOFTWARE ASSOCIATES LIMITED, a corporation
                  --------
organized under the laws of England and Wales, SSA-ACCLAIM LIMITED, a
corporation organized under the laws of England and Wales, SSA SOFTWRIGHT
LIMITED, a corporation organized under the laws of England and Wales, SSA CANADA
CORPORATION, a corporation organized under the laws of Canada (together with the
Borrower, each an "Obligor" and collectively the "Obligors"), each of the
                   -------                        --------
financial institutions signatories hereto (such financial institutions, together
with their respective successors and assigns, each a "Lender" and collectively,
                                                      ------
the "Lenders"), and FOOTHILL CAPITAL CORPORATION, a California corporation, as
     -------
agent for the Lenders (in such capacity, the "Agent").
                                              -----

               WHEREAS, the Obligors have requested the Lender Group to amend
certain terms of the Loan Agreement, and the Lender Group is willing to amend
the Loan Agreement subject to the terms and conditions of this Amendment.

               NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, agreements and conditions hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

               1. Capitalized Terms. All capitalized terms used in this
                  -----------------
Amendment (including, without limitation, in the recitals hereto) and not
otherwise defined shall have their respective meanings set forth in the Loan
Agreement.

               2. Definitions. (a) The definition of "Commitment" in Section 1.1
                  -----------
of the Loan Agreement is hereby amended in its entirety to read as follows:

                  "Commitment" means, with respect to each Lender, its Revolving
                   ----------
               Credit Commitment, Term Loan A Sub-Commitment, Letter of Credit
               Sub-Commitment, Term Loan B Commitment, Term Loan C Commitment,
               Term Loan D Commitment or Total Commitment, as the context
               requires and, with respect to all Lenders, their Revolving Credit
               Commitments, Term Loan A Sub-Commitments, Letter of Credit Sub-
               Commitments, Term Loan B Commitments, Term Loan C Commitments,
               Term Loan D Commitment, or Total Commitments, as the context
               requires, in each case as such Dollar amounts are set forth
               beside such Lender's name under the applicable heading on
               Schedule C-1 attached hereto or on the signature page of the
               ------------
               Assignment and Acceptance pursuant to which

                                      -1-
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          such Lender became a Lender hereunder in accordance with the
          provisions of Section 14.1."
                        ------------

               (c)  The definition of the new term "First Amendment" is hereby
added to Section 1.1 of the Loan Agreement to read as follows:

               "`First Amendment' means that certain First Amendment to Loan and
                 ---------------
          Security Agreement, dated as of December 23, 1999, by and among the
          Obligors and the Lender Group."

               (d)  The definition of the new term "First Amendment Effective
Date" is hereby added to Section 1.1 of the Loan Agreement to read as follows:

               "`First Amendment Effective Date' means the date that the First
                 ------------------------------
          Amendment initially became effective its terms."

               (e)  The definition of "Obligations" in Section 1.1 of the Loan
Agreement is hereby amended by (i) deleting the first parenthetical clause
therein and inserting "(including the Term Loan A, the Term Loan B, the Term
Loan C and the Term Loan D)" in lieu thereof and (ii) deleting the second
parenthetical clause therein and inserting "(including the Term Loan A PIK
Amount, the Term Loan B PIK Amount, the Term Loan C PIK Amount and the Term Loan
D PIK Amount)" in lieu thereof.

               (f)  The definition of "Permitted Preferred Stock" in Section
1.1 of the Loan Agreement is hereby amended in its entirety to read as follows:

               "`Permitted Preferred Stock' means, as of any date of
                 -------------------------
determination, the issued and outstanding shares of the Series A Preferred
Stock, par value $.01, of SSA."

               (g)  The definition of "Pro Rata Share" in Section 1.1 of the
Loan Agreement is hereby amended by (i) redesignating clause (e) thereof as new
clause (f) thereof, and (ii) adding a new clause subsection (e) thereto to read
as follows:

               "(e) with respect to a Lender's obligation to make the Term Loan
          D and receive payments of interest (including the Term Loan D PIK
          Amount), fees, and principal with respect thereto, the percentage
          obtained by dividing (i) such Lender's Term Loan D Commitment, by (ii)
          the aggregate amount of all Lender's Term Loan D Commitments, and".

               (h)  The definition of "Term Loan A PIK Amount" in Section 1.1 of
the Loan Agreement is hereby amended by inserting the following phrase", plus
the amount of any fee payable by Borrower pursuant to the terms of this
Agreement by being paid-in-kind by being added to the unpaid principal balance
of Term Loan A" immediately following the phrase "in accordance with Section
2.6(a)(ii)" appearing in said definition.

                                      -2-

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          (i)  The definition of "Term Loan B PIK Amount" in Section 1.1 of the
Loan Agreement is hereby amended by inserting the following phrase", plus the
amount of any fee payable by Borrower pursuant to the terms of this Agreement by
being paid-in-kind by being added to the unpaid principal balance of Term Loan
B" immediately following the phrase "in accordance with Section 2.6(a)(iii)"
appearing in said definition.

          (j)  The definition of "Term Loan C PIK Amount" in Section 1.1 of the
Loan Agreement is hereby amended by inserting the following phrase", plus the
amount of any fee payable by Borrower pursuant to the terms of this Agreement by
being paid-in-kind by being added to the unpaid principal balance of Term Loan
C" immediately following the phrase "in accordance with Section 2.6(a)(iv)"
appearing in said definition.

          (k)  The definition of the new term "Term Loan D" is hereby added to
Section 1.1 of the Loan Agreement to read as follows:

          "Term Loan D' has the meaning set forth in Section 2.2(d)."
           -----------

          (l)  The definition of the new term "Term Loan D Amount" is hereby
added to Section 1.1 of the Loan Agreement to read as follows:

          "Term Loan D Amount' means, as of any date of determination, the
           ------------------
     outstanding principal amount of the Term Loan D, plus the then extant Term
     Loan D PIK Amount."

          (m)  The definition of the new term "Term Loan D PIK Amount" is hereby
added to Section 1.1 of the Loan Agreement to read as follows:

          "Term Loan D PIK Amount' means as of any date of determination, the
           ----------------------
     amount of all interest accrued with respect to the Term Loan D that has
     been paid-in-kind by being added to the balance thereof in accordance with
     Section 2.6(a)(v), plus the amount of any fee payable by Borrower pursuant
     -----------------
     to the terms of this Agreement by being paid-in-kind by being added to the
     unpaid principal balance of Term Loan D."

          (n)  The definition of the new term "Term Loan D Commitment" is hereby
added to Section 1.1 of the Loan Agreement to read as follows:

          "Term Loan D Commitment' means, for each Lender, (a) prior to the
           ----------------------
     funding of Term Loan D, the Dollar amount of the obligation of such Lender
     to make its portion of Term Loan D, as such amount is set forth opposite
     the name of such Lender under the caption Term Loan D Commitment on
     Schedule C-1, and (b) thereafter, such Lender's Pro Rata Share of the then
     ------------
     outstanding Term Loan D Amount."

                                      -3-
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                    (o)  The definition of the new term "Total Commitment" is
hereby added to Section 1.1 of the Loan Agreement to read as follows:

                    "'Total Commitment' means, for each Lender, the sum of such
                     ----------------
               Lender's Revolving Credit Commitment, such Lender's Term Loan B
               Commitment, such Lender's Term Loan C Commitment, and such
               Lender's Term Loan D Commitment, as such amount is set forth
               opposite the name of such Lender under the caption Total
               Commitment on Schedule C-1."
                             ------------

               3.   Term Loans. (a) Section 2.2(a) of the Loan Agreement is
                    ----------
hereby amended in its entirety to read as follows:

                    "(a) Subject to the terms and conditions of this Agreement,
each Lender with a Term Loan A Sub-Commitment agrees, severally and not
jointly, to make a term loan on the Closing Date (collectively, the "Term Loan
A") to Borrower in the original principal amount equal to its Pro Rata Share of
$15,000,000. The unpaid principal balance, including all accrued and unpaid
interest, of the Term Loan A Amount shall be due and payable upon the earliest
of (a) the Maturity Date, or (b) the termination of this Agreement, whether by
its terms, by prepayment, by acceleration, or by mutual agreement. The unpaid
principal balance of the Term Loan A Amount may be prepaid, in whole or in part
at any time during the term of this Agreement upon 30 days prior written notice
by Borrower to Agent without premium or penalty, except as expressly set forth
in Section 3.6. All amounts outstanding under Term Loan A, including, the Term
   -----------
Loan A PIK Amount, shall constitute Obligations."

                    (b)  Section 2.2(b)(iii) of the Loan Agreement is hereby
amended in its entirety as follows:

                    "(iii) In the event that 116.66% of Borrower's Collections
               with respect to Accounts for the immediately preceding 90 days,
               and, on and after the UK Sub Closing Date, 116.66% of UK Sub's
               Collections with respect to UK Sub Accounts for the immediately
               preceding 90 days, and, on and after the Canadian Sub Closing
               Date, 116.66% of Canadian Sub's Collections with respect Canadian
               Sub Accounts for the immediately preceding 90 days, are less than
               the aggregate amount of the Term Loan A Amount, Term Loan B
               Amount, Term Loan C Amount, and the Term Loan D Amount and, in
               the event that the Revolver Usage is zero (-0-), and the Term
               Loan A Amount has been repaid in full in cash, then Borrower
               shall either (a) deliver to Agent in pledge cash collateral in an
               amount equal to any such deficiency, or (b) make a prepayment in
               respect of the Term Loan B Amount, the Term Loan C Amount and the
               Term Loan D Amount (such prepayment to be applied, first, to the
               Term Loan B Amount and, second, to the Term Loan C Amount and,
               after the Term Loan C Amount has been paid in full, to the Term
               Loan D Amount) in an amount equal to any such deficiency. All
               amounts outstanding under Term Loan B and the Term Loan B PIK
               Amount shall constitute Obligations."

                                      -4-
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          (c)  Section 2.2(c)(iii) of the Loan Agreement is hereby amended in
its entirety as follows:

               "(iii) In the event that 116.66% of Borrower's Collections with
          respect to Accounts for the immediately preceding 90 days, and, on and
          after the UK Sub Closing Date, 116.66% of UK Sub's Collections with
          respect to UK Sub Accounts for the immediately preceding 90 days, and,
          on and after the Canadian Sub Closing Date, 116.66% of Canadian Sub's
          Collections with respect Canadian Sub Accounts for the immediately
          preceding 90 days, are less than the aggregate amount of the Term Loan
          A Amount, the Term Loan B Amount, the Term Loan C Amount, and the Term
          Loan D Amount and, in the event that the Revolver Usage is zero (-0-),
          and the Term Loan A Amount has been repaid in full in cash, then
          Borrower shall either (a) deliver to Agent in pledge cash collateral
          in an amount equal to any such deficiency, or (b) make a prepayment in
          respect of the Term Loan B Amount, the Term Loan C Amount and the Term
          Loan D Amount (such prepayment to be applied, first, to the Term Loan
          B Amount and, second, to the Term Loan C Amount and, after the Term
          Loan C Amount has been paid in full, to the Term Loan D Amount) in an
          amount equal to any such deficiency. The provisions of this Section
          2.2(c) shall not be deemed to restrict the ability of the Term Loan C
          Lender to convert the Term Loan C Amount at any time prior to the date
          of any such prepayment. All amounts outstanding under Term Loan C and
          the Term Loan C PIK Amount shall constitute Obligations."

               (d)  Section 2.2 of the Loan Agreement is hereby amended by
adding the following new paragraph (d) thereto to read as follows:

               "(d)  (i)  Subject to the terms and conditions of this Agreement,
          each Lender with a Term Loan D Commitment agrees, severally and not
          jointly, to make a term loan on the First Amendment Effective Date
          (collectively, the "Term Loan D") to Borrower in the original
          principal amount equal to its Pro Rata Share of $6,000,000. The
          outstanding unpaid principal balance and all accrued and unpaid
          interest under the Term Loan D Amount shall be due and payable upon
          the earliest of (a) the Maturity Date, or (b) the termination of this
          Agreement, whether by its terms, by prepayment, by acceleration, or by
          mutual agreement.

               (ii)  So long as no Event of Default has occurred and is
          continuing or would result therefrom, the unpaid principal balance of
          the Term Loan D Amount may be prepaid, without payment of any premium
          or penalty, in whole or in part at any time during the term of this
          Agreement upon 30 days prior written notice by Borrower to Agent (a
          copy of which notice Agent shall provide promptly upon its receipt to
          each Lender with a Term Loan D Commitment); provided, however, that,
                                                      --------  -------
          without the prior written consent of the Required Lenders, no such
          prepayment of the Term D Amount shall be made unless, immediately
          after giving effect thereto, Excess Availability is not less than
          $7,500,000.

                                      -5-

<PAGE>

               (iii) In the event that 116.66% of Borrower's Collections with
          respect to Accounts for the immediately preceding 90 days, and, on and
          after the UK Sub Closing Date, 116.66% of UK Sub's Collections with
          respect to UK Sub Accounts for the immediately preceding 90 days, and,
          on and after the Canadian Sub Closing Date, 116.66% of Canadian Sub's
          Collections with respect Canadian Sub Accounts for the immediately
          preceding 90 days, are less than the aggregate amount of the Term Loan
          A Amount, the Term Loan B Amount, the term Loan C Amount and the Term
          Loan D Amount and, in the event that the Revolver Usage is zero (-0-),
          and the Term Loan A Amount has been repaid in full in cash, then
          Borrower shall either (a) deliver to Agent in pledge cash collateral
          in an amount equal to any such deficiency, or (b) make a prepayment in
          respect of the Term Loan B Amount, the Term Loan C Amount and the Term
          Loan D Amount (such prepayment to be applied, first, to the Term Loan
          B Amount and, second, to the Term Loan C Amount, and after the Term
          Loan C Amount has been paid in full, to the Term Loan D Amount) in an
          amount equal to any such deficiency. All amounts outstanding under
          Term Loan D and the Term Loan D PIK Amount shall constitute
          Obligations."

          4.   Payments.  (a) Clause "second" of Section 2.4(b)(i) of the Loan
               --------
Agreement is hereby amended in its entirety to read as follows:

               "second, to pay any fees (including any fees payable in kind by
          being added to the Term Loan A Amount, Term Loan B Amount, Term Loan C
          Amount, or Term Loan D Amount pursuant to the terms of this Agreement)
          or Lender Group Expenses then due under the Loan Documents to Lenders,
          in respect of their Pro Rata Share thereof,"

               (b) Clause "fifth" of Section 2.4(b)(i) of the Loan Agreement is
hereby amended in its entirety to read as follows:

               "fifth, so long as no Event of Default has occurred and is
          continuing or, if an Event of Default has occurred and is continuing
          and Agent agrees in its sole discretion, ratably to pay cash interest
          due in respect of the Term Loan B, the Term Loan C and the Term Loan D
          until paid in full (if an Event of Default has occurred and is
          continuing and Agent has not so agreed, the priority of such amounts
          is deferred to item "tenth" below),".

               (c) Clause "tenth" of Section 2.4(b)(i) of the Loan Agreement is
hereby amended in its entirety to read as follows:

               "tenth, if an Event of Default has occurred and is continuing, to
pay cash interest due in respect of Term Loan B (other than the Term Loan B PIK
Amount), Term Loan C (other than the Term Loan C PIK Amount) and Term Loan D
(other than the Term Loan D PIK Amount), on a ratable basis, until paid in
full,".

                                      -6-

<PAGE>

               (d)  Clause "eleventh" of Section 2.4(b)(i) of the Loan Agreement
is hereby amended in its entirety to read as follows:

               "eleventh, if an Event of Default has occurred and is continuing,
          to pay in cash the Term Loan B PIK Amount, the Term Loan C PIK Amount
          and the Term Loan D PIK Amount, on a ratable basis, until paid in
          full, and then to pay the principal of Term Loan B, Term Loan C and
          Term Loan D, on a ratable basis, until paid in full,".

               (e)  Section 2.4(b)(ii) of the Loan Agreement is hereby amended
in its entirety to read as follows:

               "(ii) In each instance, so long as no Event of Default has
          occurred and is continuing, Section 2.4(b)(i) shall not be deemed to
          apply to any payment by Borrower specified by Borrower to Agent to be
          for the payment of Obligations relating to the Term Loan A Amount, the
          Term Loan B Amount, the Term Loan C Amount, or the Term Loan D Amount
          then due and payable under any provision of this Agreement or the
          prepayment of all or part of the principal of Term Loan A Amount, the
          Term Loan B Amount, the Term Loan C Amount, or the Term Loan D Amount
          in accordance with the terms and conditions of Section 2.2."

          5.   Interest Rates and Payments. (a) Section 2.6(a)(i) of the Loan
               ---------------------------
Agreement is hereby amended by deleting the parenthetical clause therein and
substituting in lieu thereof a new parenthetical clause to read as follows:

               "(except for undrawn Letters of Credit, the Term Loan A Amount,
          the Term Loan B Amount, the Term Loan C Amount, and Term Loan D
          Amount)".

               (b)  Section 2.6(a) of the Loan Agreement is hereby amended by
(i) deleting the period at the end of clause (iv) thereto, substituting in lieu
thereof a comma and inserting the word "and" after such comma, and (ii) adding
the following new clause (v) thereto to read as follows:

               "(v) the Term Loan D Amount (inclusive of any Term Loan D PIK
          Amount) shall bear interest on the amount thereof outstanding from
          time to time at a per annum rate of 15 percentage points; provided,
                                                                    --------
          however, that, so long as no Event of Default has occurred and is
          -------
          continuing, that portion of such interest equal to 2.50% per annum
          (i.e., all interest under this clause (v) in excess of 12.50% per
          annum) shall, in the absence of an election by Borrower to pay such
          interest in cash, be paid-in-kind by being added to the principal
          balance of the Term Loan D Amount (inclusive of any Term Loan D PIK
          Amount theretofore so added); provided, further, however, that
                                        --------  -------  -------
          Borrower may, on or prior to the date that is 5 Business Days prior to
          the due date thereof, elect to pay all accrued and unpaid interest
          under this Section 2.6(a)(v) in cash."

                                      -7-
<PAGE>

               (c)  Section 2.6(d) of the Loan Agreement is hereby amended in
its entirety to read as follows:

               "(d) Payments. Interest and Letter of Credit fees payable
          hereunder shall be due and payable, in arrears, on the first day of
          each month during the term hereof. Borrower hereby authorizes Agent,
          without prior notice to Borrower, to charge such interest, Letter of
          Credit fees, all Lender Group Expenses (as and when incurred), the
          charges, commissions, fees, and costs provided for in Section 2.12(e)
          (as and when accrued or incurred), the fees, premiums and charges
          provided for in Section 2.11 (as and when accrued or incurred), and
          all installments or other payments due in respect of the Term Loan A
          Amount, the Term Loan B Amount, the Term Loan C Amount, the Term Loan
          D Amount, or under any Loan Document to Borrower's Loan Account, which
          amounts from and after their due date shall accrue interest at the
          rate then applicable to Advances hereunder (or, in the case of the
          Term Loan A Amount, the Term Loan B Amount, the Term Loan C Amount, or
          the Term Loan D Amount, at the rate then applicable thereto). Any
          interest not paid when due shall be compounded and shall thereafter
          accrue interest at the rate then applicable to Advances hereunder (or,
          in the case of interest in respect of the Term Loan A Amount, the Term
          Loan B Amount, the Term Loan C Amount, or the Term Loan D Amount, at
          the rate then applicable thereto)."

          6.   Designated Account. The first sentence of Section 2.9 of the Loan
               ------------------
Agreement is hereby amended in its entirety to read as follows:

               "Agent is authorized to make the Advances, the Term Loan A, the
          Term Loan B, the Term Loan C, the Term Loan D, and issue Letters of
          Credit under this Agreement based upon telephonic or other
          instructions received from anyone purporting to be an Authorized
          Person, or without instructions if pursuant to Section 2.6(d)."

          7.   Maintenance of Loan Account. The first sentence of Section 2.10
               ---------------------------
of the Loan Agreement is hereby amended in its entirety to read as follows:

               "Agent shall maintain an account on its books in the name of
          Borrower (the "Loan Account") on which Borrower will be charged with
          the Term Loan A Amount, the Term Loan B Amount, the Term Loan C
          Amount, the Term Loan D Amount, and all Advances made by Agent, Swing
          Lender, or the Lenders to Borrower or for Borrower's account,
          including, accrued interest, Lender Group Expenses, and any other
          payment Obligations."

          8.   Fees. (a) Section 2.11 of the Loan Agreement is hereby amended by
               ----
inserting a new clause (b) immediately following clause (a) of such Section to
read as follows:

               "(b) Facility Usage Fee. (i) For the ratable benefit of the
          Lenders with a Revolving Credit Commitment or a Term Loan A Sub-
          Commitment, a fee, due

                                      -8-
<PAGE>

          and payable in arrears on the first day of each month for so long as
          any Obligations are outstanding, equal to 0.50% times an amount equal
          to the sum of: (A) the Revolver Usage plus (B) the Term Loan A Amount,
          in each case, as of the last day of the immediately preceding month,
          such fee to be paid-in-kind by being added to the Term Loan A Amount.

               (ii)   For the ratable benefit of the Lenders with a Term Loan B
          Commitment, a fee, due and payable in arrears on the first day of each
          month for so long as any Obligations are outstanding, equal to 0.50%
          times an amount equal to the Term Loan B Amount as of the last day of
          the immediately preceding month, such fee to be paid-in-kind by being
          added to the Term Loan B Amount.

               (iii)  For the ratable benefit of the Lenders with a Term Loan C
          Commitment, a fee, due and payable in arrears on the first day of each
          month for so long as any Obligations are outstanding, equal to 0.50%
          times an amount equal to the Term Loan C Amount as of the last day of
          the immediately preceding month, such fee to be paid-in-kind by being
          added to the Term Loan C Amount.

               (b)    Section 2.11 of the Loan Agreement is hereby amended by
inserting a new clause (c) immediately following clause (b) of such Section to
read as follows:

               "(c)   Maturity Fee. For the ratable benefit of the Lenders with
          a Revolving Credit Commitment, a fee, due and payable on the Maturity
          Date, equal to $900,000 if all Obligations are paid in full on or
          after the Maturity Date, provided that, for the avoidance of doubt,
          such fee shall not be due and payable if the Borrower shall have paid
          to the Agent (for the ratable benefit of the Lenders with a Revolving
          Credit Commitment) the Applicable Prepayment Premium in accordance
          with Section 3.6."
               -----------

          9.   Conditions Subsequent to the Initial Extension of Credit. Section
               --------------------------------------------------------
3.2 of the Loan Agreement is hereby amended by inserting a new clause (e)
immediately following clause (d) of such Section to read as follows:

               "(e) On or before March 31, 2000, Agent shall have received a
copy of a letter of intent relative to a strategic transaction involving the
Borrower which is acceptable to the Agent in its reasonable discretion; the
letter of intent shall be in form and substance reasonably satisfactory to
Agent, duly executed by each of the parties thereto, and certified by the
Secretary of Borrower as being a true, correct, and complete copy thereof."

          10.  Term. Section 3.4 of the Loan Agreement is hereby amended by
               ----
deleting the reference to "August 31, 2002" set forth therein and inserting
"June 30, 2000" in lieu thereof.

                                      -9-
<PAGE>

          11.  Grants of Security Interests. (a) Section 4.1(a) of the Loan
               ----------------------------
Agreement is hereby amended by deleting the three parenthetical clauses therein
and substituting in lieu thereof three new parenthetical clauses each of which
to read as follows:

               "(other than in respect of the Term Loan B Amount, the Term Loan
          C Amount and the Term Loan D Amount)".

               (b)  Section 4.1(b) of the Loan Agreement is hereby amended in
its entirety to read as follows:

               "Each of Borrower, UK Sub, and Canadian Sub hereby grants to
          Agent, for the benefit of the Lender Group continuing security
          interests in all currently existing and hereafter acquired or arising
          Collateral, UK Sub Collateral, and Canadian Sub Collateral in order to
          secure prompt repayment of any and all of its Obligations in respect
          of the Term Loan B Amount, the Term Loan C Amount and the Term Loan D
          Amount (the "Agent's Term Loan Liens"). The Agent's Term Loan Liens in
          and to the Collateral, UK Sub Collateral, and Canadian Sub Collateral
          shall attach to all Collateral, UK Sub Collateral, and Canadian Sub
          Collateral without further act on the part of the Lender Group or any
          Obligor. Anything contained in this Agreement or any other Loan
          Document to the contrary notwithstanding, except for Permitted
          Dispositions, no Obligor has authority, express or implied, to dispose
          of any item or portion of the Collateral, UK Sub Collateral, or
          Canadian Sub Collateral. Subject to Section 2.4(b), the secured claims
          of the Lender Group with respect to the Obligations in respect of the
          Term Loan B Amount, the Term Loan C Amount and the Term Loan D Amount
          secured by the Collateral, UK Sub Collateral, and Canadian Sub
          Collateral shall be of equal priority, and ratable according to the
          respective Obligations in respect of the Term Loan B Amount, the Term
          Loan C Amount and the Term Loan D Amount due each member of the Lender
          Group."

          12.  Use of Proceeds. Section 7.17 of the Loan Agreement is hereby
               ---------------
amended in its entirety to read as follows:

               "Use the proceeds of the Advances, Term Loan A, Term Loan B, Term
          Loan C, and Term Loan D for any purpose other than (a) on the Closing
          Date, (i) to repay in full the outstanding principal, accrued
          interest, and accrued fees and expenses owing to Existing Lender, and
          (ii) to pay transactional fees, costs, and expenses incurred in
          connection with this Agreement, and (b) thereafter, consistent with
          the terms and conditions hereof, for its lawful and permitted
          corporate purposes."

                                     -10-
<PAGE>

     13.  Minimum Revenue. Section 7.20(b) of the Loan Agreement is hereby
          ---------------
amended by deleting the reference to "$45,000,000" contained therein and
substituting in lieu thereof a reference to "$38,000,000".

     14.  Amendments and Waivers. Section 15.1(c) of the Loan Agreement is
          ----------------------
hereby amended in its entirety to read as follows:

          "(c) reduce the principal of, or the rate of interest specified herein
     on any Advance, Term Loan A Amount, Term Loan B Amount, Term Loan C Amount,
     Term Loan D Amount, or any fees or other amounts payable hereunder or under
     any other Loan Document;".

     15.  Authorization of Agent. (a) Section 16.1(a) of the Loan Agreement is
          ----------------------
hereby amended in its entirety to read as follows:

          "(a) maintain, in accordance with its customary business practices,
     ledgers and records reflecting the status of the Advances, the Term Loan A
     Amount, the Term Loan B Amount, the Term Loan C Amount, the Term Loan D
     Amount, the other Obligations, the Collateral, the UK Sub Collateral, the
     Canadian Sub Collateral, Collections, and related matters;".

          (b) Section 16.1(c) of the Loan Agreement is hereby amended in its
entirety to read as follows:

          "(c) make Advances, the Term Loan A, the Term Loan B, the Term Loan C,
     and the Term Loan D, for itself or on behalf of Lenders as provided in the
     Loan Documents;".

          (c) Section 16.1(f) of the Loan Agreement is hereby amended in its
 entirety to read as follows:

          "(f) perform, exercise, and enforce any and all other rights and
     remedies of Lender Group with respect to the Obligors, the Advances, the
     Term Loan A, the Term Loan B, the Term Loan C, the Term Loan D, the other
     Obligations, the Collateral, UK Sub Collateral, Canadian Sub Collateral,
     the Collections, or otherwise related to any of same as provided in the
     Loan Documents; and".

     16.  Schedules. Schedule C-1 is hereby amended as set forth in
          ---------
Annex I attached hereto. Paragraph 1 of Schedule 5.8 of the Loan Agreement is
hereby amended in its entirety as set forth in Annex II attached hereto.

     17.  Borrowing Base Calculation. The Agent and the Lenders hereby
          --------------------------
agree that, notwithstanding the provisions of Section 6.2 of the Loan Agreement,
each Specified Obligor may provide the Agent, with copies to each Lender, on any
Business Day with a calculation of the Borrowing Base as of such day.

                                     -11-

<PAGE>

          18.  Waivers of Existing Events of Default. Upon the effectiveness of
               -------------------------------------
this Amendment, the Required Lenders hereby waive any Event of Default existing
solely as a result of (each a "Specified Event of Default", and collectively,
the "Specified Events of Default"): (i) the Obligors' failure to comply with the
financial covenant set forth in Section 7.20(a) of the Loan Agreement for the
fiscal quarter ending October 31, 1999; (ii) the Event of Default resulting from
the occurrence of the "Event of Default" under the Stock Purchase Agreement
arising from Borrower's failure to comply with the financial covenant set
forth in Section 7.4.1 of the Stock Purchase Agreement for the fiscal quarter
ending October 31, 1999; and (iii) the Event of Default that shall occur as a
result of Borrower's failure to comply with the financial covenant set forth in
Section 7.20(a) of the Loan Agreement for the fiscal quarter ending January 31,
2000. Such waiver is specific in time and in intent and does not constitute, nor
should it be construed as constituting, except to the extent expressly set forth
herein, a waiver or modification of any term of, or right, power, or privilege
under, the Loan Agreement, the other Loan Documents, or any agreement, contract,
indenture, document, or instrument mentioned therein. Such waiver does not
preclude any exercise of any right, power, or privilege under any Loan Document,
based upon any Events of Default other than the Specified Events of Default.

          19.  Agreements and Consents. (a) Anything contained in Sections 7.14
               -----------------------
[Affiliates], 7.23[Preferred Stock] and 7.27[Amendment to Certain Documents] of
the Loan Agreement to the contrary notwithstanding, the Required Lenders hereby
consent to (i) the amendment of the certificate of designations and rights
relative to the Permitted Preferred Stock for the sole purpose of allowing
Borrower to authorize and issue additional shares of Permitted Preferred Stock
to be used exclusively by Borrower to make regularly scheduled dividend payments
in respect of such previously issued Permitted Preferred Stock, (ii) the
amendment to the Amended and Restated Securities Purchase Agreement between the
Borrower and H&Q SSA Investors, L.P. for the sole purpose of conforming such
agreement to reflect certain changes to the Loan Agreement contained in this
Amendment, and (iii) the deferral of the payment date from November 30, 1999 to
December 17, 1999 of the regularly scheduled dividends payable on such date in
respect of the previously issued Permitted Preferred Stock.

               (b)  The Required Lenders hereby agree that for the period
commencing upon the effectiveness of this Amendment through the date upon which
Borrower files its Form 10-K with the SEC for fiscal year 1999, Section 5.24 of
the Loan Agreement shall be of no force and effect.

          20.  Conditions.  This Amendment shall become effective only upon
               ----------
satisfaction in full of the following conditions precedent (the first date upon
which all such conditions have been satisfied being herein called the "Amendment
                                                                       ---------
Effective Date"):
--------------
               (a)  Representations and Warranties; No Event of Default.   The
                    ---------------------------------------------------
representations and warranties contained herein, in Section 5 of the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Agent and the Lenders pursuant hereto on or prior to the
Amendment Effective Date shall be correct on and as of the Amendment Effective
Date as though made on and as of such date (except to the extent that such
representations and warranties expressly relate solely to an earlier date in
which case such

                                     -12-
<PAGE>

representations and warranties shall be true and correct on and as of such
date); and no Default or Event of Default shall have occurred and be continuing
on the Amendment Effective Date or would result from this Amendment becoming
effective in accordance with its terms, unless any such Event of Default has
previously been waived in accordance with Section 15 of the Loan Agreement.

               (b)  Delivery of Documents. The Agent shall have received on or
                    ---------------------
before the Amendment Effective Date the following, each in form and substance
satisfactory to the Agent and, unless indicated otherwise, dated the Amendment
Effective Date:

                    (i)    counterparts of this Agreement, duly executed by the
          Obligors and the Lenders, and of the reaffirmation and consent
          attached hereto as Exhibit A-1, duly executed by an authorized officer
          of each Guarantor;

                    (ii)   Agent shall have reimbursed the Borrower the $125,000
          fee previously paid by the Borrower to the Agent for the account of
          the Lenders;

                    (iii)  Borrower shall have paid to the Agent a fee of
          $125,000, such fee shall be paid-in-kind to each of the Lenders in
          proportion to the respective Lender's Pro Rata Share of the
          outstanding principal amount of the Obligations; such fee shall be
          paid to the Lenders with a Revolving Credit Commitment or which hold
          Term Loan A by being added to the Term Loan A Amount, to the Lenders
          which hold Term Loan B by being added to the Term Loan B Amount, and
          to the Lenders which hold Term Loan C by being added to the Term Loan
          C Amount;

                    (iv)   Borrower shall have paid to the Agent a fee of
          $300,000, for the sole and separate account of the Lenders with a Term
          Loan A Sub-Commitment, such fee to be paid-in-kind by being added to
          the principal balance of the Term Loan A Amount;

                    (v)    a copy of the amendment to the certificate of
          designations and rights relative to the Permitted Preferred Stock
          certified by the Secretary of Borrower as being a true, correct and
          complete copy thereof; and

                    (vi)   such other agreements, instruments, approvals,
          opinions and other documents as the Agent may reasonably request.

               (c)  Term Loan D Fee.  The Obligors shall pay to the Agent a
                    ---------------
non-refundable Term Loan D fee in the amount of $1,000,000, which fee shall be
for the sole and separate account of the Lenders with a Term Loan D Commitment
and shall be fully earned on the Amendment Effective Date.

               (d)  Proceedings. All proceedings in connection with the
                    -----------
transactions contemplated by this Amendment, and all documents incidental
thereto, shall be satisfactory to the Agent and its special counsel, and the
Agent and such special counsel shall have received all

                                     -13-

<PAGE>

such information and such counterpart originals or certified copies of
documents, and such other agreements, instruments, approvals, opinions and other
documents, as the Agent or such special counsel may reasonably request.

          21.  Representations and Warranties. Each of the Obligors warrant as
               ------------------------------
follows:

               (a)  Except as previously disclosed in writing to the Agent: (i)
the representations and warranties herein, in the Loan Agreement and in each
other Loan Document and certificate or other writing delivered to the Lenders on
or prior to the Amendment Effective Date shall be correct and accurate on and as
of the Amendment Effective Date as though made on and as of such date; and (ii)
no Default or Event of Default shall have occurred and be continuing on the
Amendment Effective Date or would result from this Amendment becoming effective
in accordance with its terms.

               (b)  Each of the Obligors (i) is a corporation, duly organized,
validly existing and in good standing under the laws of its state of
organization, (ii) has all requisite power and authority to execute, deliver and
perform this Amendment, and to perform the Loan Agreement, as amended hereby,
and (iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary.

               (c)  The execution, delivery and performance by each Obligor of
this Amendment, and the performance by each such Obligor of the Loan Agreement,
as amended hereby, (i) have been duly authorized by all necessary action, (ii)
do not and will not contravene such Borrower's charter or by-laws, any
applicable law or any contractual restriction binding on or otherwise affecting
it or any of its properties, (iii) do not and will not result in or require the
creation of any lien or other encumbrance (other than pursuant to any Loan
Documents) upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.

               (d)  No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or agency or other
regulatory body is required in connection with the due execution, delivery and
performance by any Obligor of this Amendment, or for the performance of the Loan
Agreement, as amended hereby.

               (e)  This Amendment, the Loan Agreement, as amended hereby, and
each other Loan Document to which any Obligor, is a party is a legal, valid and
binding obligation of such Obligor, enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by or
subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally.

                                     -14-

<PAGE>

     22. Release by Borrowers. (a) Definition of "Related Parties" and "Claims".
         --------------------      -------------------------------------------
For purposes of this Section 22, "Related Parties" and "Claims" shall be defined
as follows:

     "Related Parties" means, with respect to a party released, such party's
      ---------------
      parents, subsidiaries, affiliates, successors, predecessors, assigns,
      officers, directors, employees, agents, representatives, attorneys,
      accountants and shareholders, if any.

     "Claims" means any and all claims, losses, debts, liabilities, demands,
      ------
     obligations, promises, acts, omissions, agreements, costs and expenses,
     damages, injuries, suits, actions and causes of action, including without
     limitation any and all rights of setoff, recoupment or counterclaim, of any
     kind or nature whatsoever, in law or in equity, known or unknown, suspected
     or unsuspected, contingent or fixed.

     (b) Release by Obligors. Excluding only continuing obligations of the
         -------------------
Lenders and the Agent under the express terms and provisions of the Loan
Agreement, the Loan Documents and this Amendment, each Obligor hereby releases,
acquits, and forever discharges the Lenders and the Agent, and each of them, as
well as their respective Related Parties, of and from any and all Claims arising
out of, related to or in any way connected with any action or failure to act,
prior to execution of this Amendment, in response to or in connection with any
events or circumstances arising under or otherwise related to the Loan Agreement
and the Loan Documents or any Defaults or Events of Default occurring under the
Loan Agreement.

     23. Continued Effectiveness of the Loan Agreement. (a) Except as otherwise
         ---------------------------------------------
expressly provided herein, the Loan Agreement and the other Loan Documents are,
and shall continue to be, in full force and effect and are hereby ratified and
confirmed in all respects, except that on and after the Amendment Effective
Date (i) all references in the Loan Agreement to "this Agreement", "hereto",
"hereof", "hereunder" or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended by this Amendment and (ii) all
references in the other Loan Documents to the "Loan Agreement", "thereto",
"thereof", "thereunder", or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended by this Amendment.

         (b) The Obligors hereby acknowledge and agree that this Amendment
constitutes a "Loan Document" under the Loan Agreement. Accordingly, it shall be
an Event of Default under the Loan Agreement if (i) any representation or
warranty made by the Obligors under or in connection with this Amendment shall
have been untrue, false or misleading in any material respect when made, or (ii)
the Obligors shall fail to perform or observe any term, covenant or agreement
contained in this Amendment.

     24. Costs and Expenses. The Obligors shall pay all out-of-pocket costs and
         -----------------
expenses of the Lender Group (including, without limitation, the reasonable fees
and service charges of counsel to any member of the Lender Group) in connection
with this Amendment.

     25. Miscellaneous. (a) This Amendment may be executed in any number of
         -------------
counterparts and by different parties hereto in separate counterparts, each of
which shall be

                                     -15-

<PAGE>

deemed to be an original, but all of which taken together shall constitute one
and the same agreement.

          (b)  Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

          (c)  This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.

     25.  THE OBLIGORS, LENDERS AND THE AGENT EACH HEREBY IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AMENDMENT OR THE ACTIONS OF THE LENDER GROUP IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF.

               [Remainder of this page intentionally left blank]

                                     -16-

<PAGE>

           IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.

                              SYSTEM SOFTWARE ASSOCIATES, INC., a Delaware
                              corporation

                              By: /s/ Joseph J. Skadra
                                  ---------------------------------
                                  Name: Joseph J. Skadra
                                  Title: Vice President,
                                         Finance and Controller

                              SYSTEM SOFTWARE ASSOCIATES LIMITED, a
                              corporation organized under the laws of
                              England and Wales

                              By: /s/ Joseph J. Skadra
                                  ---------------------------------
                                  Name: Joseph J. Skadra
                                  Title:

                              SSA-ACCLAIM LIMITED, a corporation organized
                              under the laws of England and Wales

                              By: /s/ Joseph J. Skadra
                                  ---------------------------------
                                  Name: Joseph J. Skadra
                                  Title:

                              SSA SOFTWRIGHT LIMITED, a corporation
                              organized under the laws of England and Wales

                              By: /s/ Joseph J. Skadra
                                  ---------------------------------
                                  Name: Joseph J. Skadra
                                  Title:

                              SSA CANADA CORPORATION, a corporation
                              organized under the laws of Canada

                              By: /s/ Joseph J. Skadra
                                  ---------------------------------
                                  Name: Joseph J Skadra
                                  Title:

                                     -17-
<PAGE>

                                        FOOTHILL CAPITAL CORPORATION
                                        as Agent and as a Lender

                                        By: /s/ Erik R. Sawyer
                                           ----------------------------------
                                           Name: Erik R. Sawyer
                                           Title: Vice President

                                        ABLECO FINANCE LLC,
                                        as a Lender

                                        By:  /s/ Kevin Genda
                                            __________________________________
                                            Name: Kevin Genda
                                            Title: SVP & Chief Credit Officer

                                        A2 FUNDING LP,
                                        as a Lender

                                        By: A2 Fund Management LLC,
                                            its General Partner

                                        By: /s/ Alexander J. Ornstein
                                           -----------------------------------
                                           Name: Alexander J. Ornstein
                                           Title: VP

                                     -18-

<PAGE>

                                    ANNEX I

                                 Schedule C-1
                                 ------------

                                  Commitments
         [after giving effect to Assignment and Acceptance Agreements
                    executed on and after the Closing Date]

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
   Lender     Revolving     (Letter of         (Term Loan A      Term Loan B        Term Loan C        Term Loan D        Total
               Credit       Credit Sub-            Sub-          Commitment         Commitment         Commitment       Commitment
             Commitment     Commitment         Commitment
------------------------------------------------------------------------------------------------------------------------------------
<S>          <C>            <C>               <C>                <C>                <C>                <C>              <C>
Foothill     $30,000,000    ($5,000,000)      ($15,000,000)          -0-                -0-                -0-          $30,000,000
Capital
Corporation
------------------------------------------------------------------------------------------------------------------------------------
Ableco           -0-            -0-                -0-           $5,500,000             -0-            $3,000,000       $ 8,500,000
Finance LLC
------------------------------------------------------------------------------------------------------------------------------------
A2 Funding       -0-            -0-                -0-           $3,000,000         $2,500,000         $3,000,000       $ 8,500,000
LP
------------------------------------------------------------------------------------------------------------------------------------
                 -0-            -0-                -0-               -0-                -0-                -0-               -0-
------------------------------------------------------------------------------------------------------------------------------------
All Lenders  $30,000,000    ($5,000,000)      ($15,000,000)      $8,500,000         $2,500,000         $6,000,000       $47,000,000
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                  Exhibit A-1
                                  -----------

                           REAFFIRMATION AND CONSENT

     All capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in that certain First Amendment to Loan and
Security Agreement, dated as of December 23, 1999 (the "Amendment"). The
undersigned hereby (a) represents and warrants to the Lender Group that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its corporate powers, have been duly authorized by all necessary
corporate action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or governmental authority, or of the terms of its charter or bylaws, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected; (b) consents to the amendment of the Loan
Agreement by the Amendment; (c) acknowledges and reaffirms its obligations owing
to the Lender Group under the Guaranty and any other Loan Documents to which it
is a party; and (d) agrees that each of the Guaranty and any other Loan
Documents to which it is a party is and shall remain in full force and effect.
Although the undersigned has been informed of the matters set forth herein and
has acknowledged and agreed to same, it understands that the Lender Group has no
obligations to inform it of such matters in the future or to seek its
acknowledgement or agreement to future amendments, and nothing herein shall
create such a duty. Delivery of an executed counterpart of this Reaffirmation
and Consent by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by
telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of New York, as more fully set forth in Section 20 of
the Guaranty.

                            SYSTEM SOFTWARE ASSOCIATES LIMITED, a
                            corporation organized under the laws of England and
                            Wales

                            By: /s/ Joseph Skadra
                               -----------------------------
                               Name: Joseph J. Skadra
                               Title:
<PAGE>

                                    SSA-ACCLAIM LIMITED, a corporation organized
                                    under the laws of England and Wales

                                    By: /s/ Joseph J. Skadra
                                       -------------------------------
                                       Name: Joseph J. Skadra
                                       Title:

                                    SSA SOFTWRIGHT LIMITED, a corporation
                                    organized under the laws of England and
                                    Wales

                                    By: /s/ Joseph J. Skadra
                                       -------------------------------
                                       Name: Joseph J. Skadra
                                       Title:

                                    SSA CANADA CORPORATION,
                                    a corporation organized under the laws of
                                    Canada

                                    By: /s/ Joseph J. Skadra
                                       -------------------------------
                                       Name: Joseph J. Skadra
                                       Title:

                                    SYSTEM SOFTWARE ASSOCIATES IBERICA
                                    S.A., a corporation organized under the
                                    laws of Spain

                                    By: /s/ Joseph J. Skadra
                                       -------------------------------
                                       Name: Joseph J. Skadra
                                       Title:

                                    SSA SYSTEM SOFTWARE ASSOCIATES GnbH, a
                                    corporation organized under the laws of
                                    Germany

                                    By: /s/ Joseph J. Skadra
                                       -------------------------------
                                       Name: Joseph J. Skadra
                                       Title:

<PAGE>

                              SSA ITALIA SPA, a corporation organized under
                              the laws of Italy

                              By:         /s/ Joseph J. Skadra
                                 -------------------------------------
                                 Name: Joseph J. Skadra
                                 Title:

                              SSA BENELUX B.V., a corporation organized under
                              the laws of the Netherlands

                              By:         /s/ Joseph J. Skadra
                                 -------------------------------------
                                 Name: Joseph J. Skadra
                                 Title:

                              SYSTEM SOFTWARE ASSOCIATES ASIA
                              PACIFIC PTE LTD, a corporation organized under
                              the laws of Singapore

                              By:         /s/ Joseph J. Skadra
                                 -------------------------------------
                                 Name: Joseph J. Skadra
                                 Title:

                              SSA PACIFIC PTY LIMITED, a corporation
                              organized under the laws of Australia

                              By:         /s/ Joseph J. Skadra
                                 -------------------------------------
                                 Name: Joseph J. Skadra
                                 Title:

                              SSA PACIFIC (NZ) LIMITED, a corporation
                              organized under the laws of New Zealand

                              By:         /s/ Joseph J. Skadra
                                 -------------------------------------
                                 Name: Joseph J. Skadra
                                 Title:
<PAGE>

                                     SYSTEM SOFTWARE ASSOCIATES DO
                                     BRASIL LTDA., a corporation organized
                                     under the laws of Brazil

                                     By: /s/ Joseph J. Skadra
                                        -------------------------------
                                        Name: Joseph J. Skadra
                                        Title:

                                     SYSTEM SOFTWARE ASSOCIATES INC. de
                                     MEXICO, S.A. de C.V., a corporation
                                     organized under the laws of Mexico

                                     By: /s/ Joseph J. Skadra
                                        -------------------------------
                                        Name: Joseph J. Skadra
                                        Title:

                                     SSA JAPAN CORPORATION, a Delaware
                                     corporation

                                     By: /s/ Joseph J. Skadra
                                        -------------------------------
                                        Name: Joseph J. Skadra
                                        Title:

                                     SSA PACIFIC RIM CORPORATION,
                                     a Delaware corporation

                                     By: /s/ Joseph J. Skadra
                                        -------------------------------
                                        Name: Joseph J. Skadra
                                        Title:

                                     SYSTEM SOFTWARE ASSOCIATES (JAPAN)
                                     LLC, a Delaware limited liability company

                                     By: /s/ Joseph J. Skadra
                                        -------------------------------
                                        Name: Joseph J. Skadra
                                        Title:

<PAGE>

                                   ANNEX II

                                 Schedule 5.8
                                 ------------

                               (Capitalization)

Paragraph 1 of Schedule 5.8 of the Loan Agreement is hereby amended and restated
to read as follows:

     1.   The authorized capital stock of Borrower, System Software Associates,
Inc., consists of the following:

          Preferred Stock, $0.01 par value per share, issuable in series by the
Board of Directors, 100,000 shares authorized, of which 15,000 shares have been
designated as Series A Preferred Stock. There are currently 10,300 shares of
Series A Preferred Stock issued and outstanding. Each outstanding share of
Series A Preferred Stock is currently convertible into 20.1 shares of Common
Stock pursuant to the terms of the Series A Preferred Stock.

          Common Stock, $0.0033 par value per share, 62,500,000 shares
authorized, of which 11,955,000 shares are concurrently issued and outstanding.<PAGE>

                                                                    EXHIBIT 10.3

                             AMENDMENT NUMBER ONE
                             --------------------

             TO AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
             -----------------------------------------------------

          THIS AMENDMENT NUMBER ONE TO AMENDED AND RESTATED SECURITIES PURCHASE
AGREEMENT (this "Amendment") dated as of August 11, 1999, is entered into
between SYSTEM SOFTWARE ASSOCIATES, INC., a Delaware corporation ("Issuer"), and
H&Q SSA INVESTORS, L.P. ("Investor"), in light of the following

                                   RECITALS
                                   --------

          A.   Issuer and Investor are parties to that certain Amended and
Restated Securities Purchase Agreement, dated as of September 8, 1997 (as
amended from time to time, the "SPA").

          B.   Issuer has requested that Investor amend the SPA to, among other
things, permit Issuer to enter into a revolving and term loan credit facility in
an amount equal to $41,000,000, all as set forth in this Amendment.

          C.   Investor is willing to amend the SPA under the terms and
conditions set forth in this Amendment.

          NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

     1.   Definitions. Capitalized terms not otherwise defined herein shall have
          -----------
the meaning ascribed thereto in the SPA.

     2.   Amendments to the SPA. Upon the effectiveness of this Amendment, the
          ---------------------
parties agree to amend the SPA as follows:

          (a)       The following defined terms hereby are added to Section 1.1
in the proper alphanumerical order:

               "Accounts" means all currently existing and hereafter arising
     accounts, contract rights, and all other forms of obligations owing to the
     Company arising out of the sale or lease of goods or software or the
     rendition of services by the Company, irrespective of whether earned by
     performance, and any and all credit insurance, guaranties, or security
     therefor.

               "EBITDA" means, with respect to any fiscal period, the Company's
     consolidated earnings (excluding extraordinary gains) before all interest
     expense, taxes, and depreciation and amortization expense for such period,
     determined in accordance with GAAP; provided, however, for purposes of
     determining compliance

                                      -1-
<PAGE>

     with Section 7.4.1, for the fiscal quarter ending October 31, 1999, EBITDA
     shall not include any charges resulting from any conversion option granted
     in the Credit Agreement.

          "Foothill Credit Agreement" means that certain Loan and Security
     Agreement, dated on or about the date hereof, among the Company, certain
     subsidiaries of the Company, the financial institutions identified therein
     as "Lenders," and Foothill Capital Corporation, as agent for the Lenders.

          "Recurring Service and Maintenance Revenues" means, with respect to
     any period, the total revenues of the Company, determined on a consolidated
     basis, for such period that are derived from services and on-going support
     as reflected in the Company's financial statements in accordance with
     historical practices.

          "Redemption Price" shall mean the Company Redemption Price or the
     Holder Redemption Price, as the context requires.

         (b)   The following defined terms contained in Section 1.1 of the SPA
hereby are amended and restated in its entirety as follows:

          "Credit Agreement" means one or more agreements for one or more credit
     facilities to be entered into by the Company in an aggregate amount not in
     excess of $45,000,000 (including any refinancings, refundings, renewals, or
     extensions of such facilities); the Foothill Credit Agreement shall be
     deemed a Credit Agreement for purposes of this Agreement.

          "Senior Credit Documents" means, collectively, the Credit Agreement
     and the related security agreements, guarantees, pledge agreements, notes
     and the other documents executed in connection therewith, as they may be
     modified or amended from time to time.

          (c)  Section 7.1 of the SPA hereby is amended and restated in its
entirety to read as follows:

               7.1  Payment of Dividends. Subject to Section 10A hereof, and
                    --------------------
     subject to the restrictions in the Credit Agreement, the Company will duly
     and punctually pay the dividends and redemption amount, if any, on the
     Preferred Stock in accordance with the terms thereof and of this Agreement,
     in each case when due under the terms of this Agreement and the other
     Preferred Stock Documents.

          (d)  The last sentence of Section 7.3.4 of the SPA hereby is amended
and restated in its entirety to read as follows:

          "Without the prior written consent of the Required Preferred Holders,
     no material Contractual Obligation, excluding the Senior Credit Documents,
     but including the Public Securities, shall be amended, modified, waived or
     terminated in any manner that would have in any material respect an adverse
     effect on the rights of the Preferred Holders under

                                       2
<PAGE>

     the Preferred Stock Documents, as holders of securities that are junior in
     right of payment to the Public Securities."

          (e)   Section 7.4.1 of the SPA hereby is amended and restated in its
entirety to read as follows:

             7.4.1.  EBITDA.  The Company shall maintain EBITDA for each of the
                     ------
     following periods of not less than the amount shown below for the period
     corresponding thereto:

             -----------------------------------
               Quarterly Period       EBITDA
             -----------------------------------
               fiscal quarter       $ 3,150,000
               ended 10/31/1999
             -----------------------------------
               fiscal quarter       $ 8,280,000
               ended 1/31/2000
             -----------------------------------
               fiscal quarter       $ 8,280,000
               ended 4/30/2000
             -----------------------------------
               fiscal quarter       $ 8,280,000
               ended 7/31/2000
             -----------------------------------
               fiscal quarter       $ 8,280,000
               ended 10/31/2000
             -----------------------------------
               fiscal quarter       $10,350,000
               ended 1/31/2001
               and each fiscal
               quarter thereafter
             -----------------------------------

          (f)   Section 7.4.2 of the SPA hereby is amended and restated in its
entirety to read as follows:

                7.4.2 Minimum Revenues.  The Company shall maintain minimum
     Recurring Service and Maintenance Revenues for each fiscal quarter ending
     on or after October 31, 1999 of not less than $40,500,000.

          (g)   Section 7.5.1 of the SPA hereby is amended and restated in its
entirety to read as follows:

              7.5.1  Indebtedness in respect of (i) the Series A Preferred, (ii)
     the Public Securities, and (iii) the Credit Agreement.

          (h)   Section 7.5.8 of the SPA hereby is amended and restated in its
entirety to read as follows:

              7.5.8  To the extent permitted by Section 7.7.6, Indebtedness in
     respect of Capitalized Lease Obligations or secured by purchase money
     security interests; provided, however, that the aggregate principal amount
                         --------  -------
     of Indebtedness permitted by this Section 7.5.8 shall not exceed $5,300,000
     outstanding at any time;

                                       3
<PAGE>

          (i)    Section 7.6 of the SPA hereby is amended and restated in its
entirety to read as follows:

            7.6  Guarantees; Letters of Credit. Except as provided for under the
                 -----------------------------
     Senior Credit Documents, neither the Company nor any of its Subsidiaries
     shall become or remain liable with respect to any Guarantee, including
     reimbursement obligations, whether contingent or matured, under letters of
     credit or other financial guarantees by third parties (or become
     contractually committed to do so).

          (j)   Section 7.7 of the SPA hereby is amended and restated in its
entirety to read as follows:

            7.7 Liens. Except as provided for under the Senior Credit Documents,
                -----
     neither the Company nor any of its Subsidiaries shall create, incur, or
     enter into, or suffer to be created or incurred or to exist, any Lien (or
     become contractually committed to do so), except the following:

          (k)   Section 7.8.2 of the SPA hereby is amended and restated in its
entirety to read as follows:

          7.8.2 Investments of the Company in Wholly Owned Subsidiaries;
     provided, however, that (i) no such Investment shall involve the transfer
     --------  -------
     by the Company of any material assets other than cash or Common Stock, and
     (ii) Investments by the Company in those Wholly Owned Subsidiaries
     organized or incorporated outside the United States (excluding those Wholly
     Owned Subsidiaries organized or incorporated in the United Kingdom or
     Canada) made pursuant to this Section 7.8.2 shall not exceed $1,100,000 per
     month.

          (l)   Section 7.8.6 of the SPA hereby is amended and restated in its
entirety to read as follows:

          7.8.6 [Intentionally Omitted]

          (m)   The SPA hereby is amended to add a new Section 7.8.7 to the SPA
in the proper alphanumerical order:

          7.8.7 Investments permitted under the Senior Credit Documents.

          (n)  Clause (b) of Section 7.10.1 of the SPA hereby is amended and
restated in its entirety to read as follows:

            (b) tangible assets in the ordinary course of the Company's
business;

          (o)   Section 7.11 of the SPA hereby is amended and restated in its
entirety to read as follows:

          7.11  Voluntary Prepayments of Other Indebtedness.  Neither the
                -------------------------------------------
     Company nor any of its Subsidiaries shall make any voluntary prepayment of
     principal of or interest on

                                       4
<PAGE>

     any Indebtedness (other than as permitted or required pursuant to the
     Senior Credit Documents and the Public Securities) or make any voluntary
     redemptions or repurchases of Indebtedness (other than pursuant to the
     Senior Credit Documents and the Public Securities).

          (p)  Section 9.4 of the SPA hereby is amended by deleting the
parenthetical in the first clause of the first sentence "(other than that
contained in Section 7.19)".

          (q)  The SPA hereby is amended to add a new Section 9A in the proper
alphanumerical order:

               9A     REMEDIES.

               9A.1.  Upon the occurrence and during the continuation of an
     Event of Default, and at all times subject to Section 10A, the Purchaser
     may, at its option, either exercise (i) its rights pursuant to Section 4A
     of the Certificate of Designations, or (ii) any right, power, or remedy
     permitted by law or in equity. No remedy conferred in this Agreement upon
     Purchaser or any other holder of any Preferred Stock is intended to be
     exclusive of any other remedy, and each and every such remedy shall be
     cumulative and shall be in addition to every other remedy conferred herein
     or now or hereafter existing at law or in equity or by statute or
     otherwise.

          (r)  Section 10A.2 of the SPA hereby is amended and restated in its
entirety to read as follows:

               10A.2.  During the period referred to in Section 10A.8, the
     Company shall not make or agree to make, and the Purchaser, and any
     successor holder of the Preferred Stock, will not, demand, sue for, take,
     or retain, any direct or indirect payment (in cash, property, securities,
     by set-off or otherwise) on account of any indebtedness, liabilities, and
     other obligations of the Company to the Purchaser in respect of or arising
     under this Agreement or the Preferred Stock; provided, however, that the
                                                  --------  -------
     Company may pay and the Purchaser may demand, sue for, take and retain any
     payments of dividends and the Redemption Price, including, without
     limitation, under the terms and conditions of the Preferred Stock made or
     due prior to the date on which the Purchaser shall have received written
     notice (by registered mail, overnight courier or confirmed facsimile) of
     any Subordination Event (as hereinafter defined). Nothing in this Article
     10A shall be deemed to prevent the accrual of dividends on outstanding
     shares of Preferred Stock, contemplated by the provisions of this Agreement
     or the Certificate of Designations. Nothing in this Article 10A shall be
     deemed to prevent the Purchaser from demanding or suing for any payments on
     account of the Preferred Stock after the earlier of (i) the date on which
     the Senior Indebtedness has been paid in full in cash or (ii) either (y) in
     the case of a Payment Default (as hereinafter defined), the date on which
     the payment blockage under clause (i) below is terminated, or (z) in the
     case of a Non-Payment Default (as hereinafter defined), the date on which
     the payment blockage under clause (ii) below is terminated.

                                       5
<PAGE>

          The preceding paragraph notwithstanding, (i) upon the occurrence and
     during the continuation of an event of default resulting from a payment
     default under the Credit Agreement (a "Payment Default"), and until either
     (y) such event of default is cured or waived or (z) all Obligations (as
     such term is defined in the Credit Agreement) have been paid in full in
     cash and the Credit Agreement has been irrevocably terminated, the Company
     shall not make, and Purchaser, and any successor holder of the Preferred
     Stock, shall not accept or receive any payments or distributions by or on
     behalf of the Company, directly or indirectly, of assets of the Company of
     any kind or character, whether in cash, property, or securities, including
     on account of the purchase, redemption, or other acquisition of the
     Preferred Stock, as a result of any collection, sale or other disposition
     of collateral, or by setoff, exchange, or in any other manner for or on
     account any indebtedness, liabilities, and other obligations of the Company
     to the Purchaser in respect of or arising under this Agreement or the
     Preferred Stock,

          (ii)   upon the occurrence and during the continuation of an event of
     default under the Credit Agreement other than a payment default described
     in the immediately preceding clause (i) (a "Non-Payment Default"), and
     until the earliest of (x) the date such event of default is cured or
     waived, (y) the date all Obligations (as such term is defined in the Credit
     Agreement) have been paid in full in cash and the Credit Agreement
     irrevocably terminated, or (z) the date that is 270 days after the date on
     which Purchaser received notice of such event of default, the Company shall
     not make, and Purchaser, and any successor holder of Preferred Stock, shall
     not accept or receive any payments or distributions by or on behalf of the
     Company on account of the Preferred Stock, and

          (iii)  if at the time of receipt by the Purchaser of any payment on
     account of the Preferred Stock (w) any Senior Indebtedness incurred in
     respect of the Credit Agreement shall have reached final maturity (whether
     by acceleration or otherwise), (x) the holders of such Senior Indebtedness
     shall have previously commenced proceedings to enforce payment of such
     Senior Indebtedness, (y) such proceedings shall be continuing and (z) prior
     to the Purchaser's receipt of such payment, the holders of such Senior
     Indebtedness shall have notified the Purchaser of the commencement of such
     proceedings, then no such payment shall be made on account of the Preferred
     Stock until the Senior Indebtedness described in clause (w) is paid in full
     in cash. In the event that any payment or distribution is received by the
     Purchaser despite the application of clauses (i), (ii), and (iii) of this
     Section 10A.2, it shall pay over to the applicable holder of the Senior
     Indebtedness an amount equal to the lesser of (A) the outstanding amount of
     such Senior Indebtedness and (B) the amount of such payment.

          (s)  Section 10A.3 of the SPA hereby is amended and restated in its
entirety to read as follows:

                                       6
<PAGE>

          10A.3.  In the event of the occurrence of an event of default under
     any agreement that includes the Company's obligation to pay Senior
     Indebtedness of the Company, the failure to repay any Senior Indebtedness
     upon the final maturity thereof, the failure to pay any Senior Indebtedness
     incurred in respect of the Credit Agreement on the stated due date thereof
     including upon the final maturity thereof (whether by its terms, by
     prepayment, by acceleration or by mutual agreement), or otherwise upon any
     payment or distribution, whether of cash, securities, or other property, to
     creditors of the Company in a total or partial liquidation, reorganization
     or dissolution of the Company, whether voluntary or involuntary, or in a
     bankruptcy, reorganization, insolvency, receivership, assignment for the
     benefit of creditors, marshaling of assets, or similar proceeding relating
     to the Company or its property (in each case the existence of such an event
     being referred to herein as a "Subordination Event"), then except as set
     forth in the proviso set forth in the first sentence of Section 10A.2, all
     Senior Indebtedness (including any interest thereon accruing after the
     occurrence of any such event irrespective of whether or not allowed as a
     claim) shall first be paid in full in cash before any payment or
     distribution, whether in cash, securities or other property, shall be made
     to the Purchaser on account of the Preferred Stock.  Any payment or
     distribution, whether in cash, securities, or other property, which would
     otherwise (but for these subordination provisions) be payable or
     deliverable in respect of the Preferred Stock shall be paid or delivered
     directly to the holder of the Senior Indebtedness until all Senior
     Indebtedness (including any interest thereon accruing after the occurrence
     of any such event) shall have been paid in full.

          (t)  Section 10A.4 of the SPA hereby is amended and restated in its
entirety to read as follows:

          10A.4.  Upon the occurrence and during the continuation of an Event of
     Default other than any of the Events of Default specified in Section 9.6 or
     9.7, the Purchaser will not declare any redemption on the Preferred Stock
     until the earliest of (x) the final maturity of any Senior Indebtedness,
     (y) the acceleration of the maturity of any Senior Indebtedness or (z)
     either (A) 180 days after the occurrence of an Event of Default (other than
     an Event of Default under Section 9.4) shall have occurred and provided
     that the representative of the Senior Indebtedness has received notice of
     such Event of Default, or (B) 270 days after an Event of Default under
     Section 9.4 or Section 9.2 shall have occurred and provided that the
     representative of the Senior Indebtedness has received notice of such Event
     of Default; provided, however, that in all cases in which more than one
     Event of Default is outstanding at one time, the applicable period for
     purposes of this clause (z) shall be the shortest period possible.  The
     foregoing sentence notwithstanding, upon the occurrence and during the
     continuation of an event of default resulting from a Payment Default under
     the Credit Agreement and until either (A) such event of default is cured or
     waived or (B) all Obligations (as such term is defined in the Credit
     Agreement) have been paid in full in cash and the Credit Agreement has been
     irrevocably terminated, the Purchaser will not declare any redemption on
     the Preferred Stock.

                                       7
<PAGE>

          (u)  Section 10A.8 of the SPA hereby is amended and restated in its
entirety to read as follows:

          10A.8.  As long as any Senior Indebtedness is outstanding, the
     Purchaser shall not commence, or join with any creditor other than the
     holder of Senior Indebtedness in commencing, any proceeding referred to in
     Section 10A.2 (which shall be deemed to include an involuntary bankruptcy
     proceeding against the Company) until the date on which the Senior
     Indebtedness has been paid in full in cash.

          (v)  Section 10A.10 of the SPA hereby is amended and restated in its
entirety to read as follows:

          10A.10.  [Intentionally Omitted]

     3.  Representations and Warranties. The Company hereby represents and
         ------------------------------
warrants to Investor that (a) the execution, delivery, and performance of this
Amendment is within the Company's corporate powers, have been duly authorized by
all necessary corporate action, and are not in contravention of any law, rule,
or regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which any
of its properties may be bound or affected, and (b) this Amendment and the SPA,
constitute the Company's legal, valid, and binding obligation, enforceable
against the Company in accordance with its terms, (c) this Amendment has been
duly executed and delivered by the Company.

     4.  Choice of Law.  The validity of this Amendment, its construction,
         -------------
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the laws of the
State of Delaware.

     5.  Counterparts; Telefacsimile Execution. This Amendment may be executed
         -------------------------------------
in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telefacsimile shall be effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.

     6.  Effect on SPA.  The SPA, as amended hereby, shall be and remain in full
         -------------
force and effect in accordance with its respective terms and hereby is ratified
and confirmed in all respects. The execution, delivery, and performance of this
Amendment shall not operate as a waiver of or, except as expressly set forth
herein, as an amendment of, any right, power, or remedy of Investor under the
SPA, as in effect prior to the date hereof.

     7.  Miscellaneous.
         -------------

                                       8
<PAGE>

          (a)  Upon and after the effectiveness of this Amendment, each
reference in the SPA to "this Agreement", "hereunder", "herein", "hereof" or
words of like import referring to the SPA shall mean and be a reference to the
SPA as modified and amended hereby.

          (b)  The SPA is and shall continue to be in full force and effect and
is hereby in all respects ratified and confirmed and shall constitute the legal,
valid, binding and enforceable obligations of the Company to Investor.

                 [Remainder of page intentionally left blank]

                                       9
<PAGE>

          IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.

                              SYSTEM SOFTWARE ASSOCIATES, INC.,

                              By /s/ Joseph J. Skadra
                                 ---------------------------

                              Name: Joseph J. Skadra
                                   --------------------------

                              Title: Vice President, Finance and Controller
                                     --------------------------------------

                              H&Q SSA INVESTORS, L.P.,

                              By /s/ Douglas P. Smith
                                 ---------------------------

                              Name: /s/ Douglas P. Smith
                                   -------------------------

                              Title: MANAGING DIRECTOR
                                    ------------------------

                                      S-1

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