THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY APPLICABLE STATE SECURITIES LAW AND MAY
NOT BE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (ii) IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY,
REGISTRATION UNDER THE SECURITIES ACT OR SUCH APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED IN CONNECTION WITH SUCH TRANSFER.
ALTRIS SOFTWARE, INC.
11.5% SUBORDINATED DEBENTURE DUE JUNE 27, 2002
No. R-1 Nashville, Tennessee
$3,000,000.00 June 27, 1997
FOR VALUE RECEIVED, Altris Software, Inc., a California corporation (the
"Company"), promises to pay to the order of Sirrom Capital Corporation, a
Tennessee corporation ("Purchaser"), pursuant to the Debenture Purchase
Agreement (as hereinafter defined) at such place as Purchaser may from time to
time designate in writing, in lawful money of the United States of America and
in immediately available funds, by automatic debit, the principal sum of Three
Million Dollars ($3,000,000.00) and any accrued but unpaid interest thereon.
This Debenture is referred to in and is executed and delivered pursuant to,
a Debenture Purchase Agreement dated of even date herewith between the Company
and Purchaser (the "Debenture Purchase Agreement"), to which reference is hereby
made for a statement of the terms and conditions under which this Debenture may
be repaid and accelerated. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Debenture Purchase Agreement.
Interest shall accrue from the date of issue of this Debenture at the rate
of 11.5% per annum, payable quarterly by automatic debit on the first day of
each March, June, September and December, commencing September 1, 1997, and at
maturity, to mature on June 27, 2002.
Interest shall be computed on the basis of a 360-day year and the actual
number of days elapsed.
Any principal payment due under this Debenture not paid when due, whether
at stated maturity, by notice of repayment, by acceleration or otherwise, and
any accrued but unpaid interest shall, to the extent permitted by applicable
law, thereafter bear interest (compounded monthly and payable upon demand) at an
annual rate of 14% in respect of
such principal and such unpaid interest until such unpaid amounts have been paid
in full (whether before or after judgment).
This Debenture may be prepaid at any time without payment of penalty or
premium. All payments made hereunder shall be applied first to interest and
then to outstanding principal.
If payment hereunder becomes due and payable on a Saturday, Sunday, or
legal holiday, under the laws of the State of Tennessee, the due date thereof
shall be extended to the next succeeding business day.
Demand, presentment, protest, diligence, notice of dishonor, and any other
formality are hereby expressly waived by the Company and any endorser or
guarantor.
If there is any default under this Debenture, and this Debenture is placed
in the hands of an attorney for collection, or is collected through any court,
including any bankruptcy court, the Company promises to pay to the order of the
holder hereof such holder's reasonable attorneys' fees and court costs actually
incurred in collecting or attempting to collect or securing or attempting to
secure this Debenture or enforcing the holder's rights with respect to the
Collateral, to the extent allowed by the laws of the State of Tennessee or any
state in which any Collateral is situated.
THIS DEBENTURE HAS BEEN DELIVERED IN, AND SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF, THE STATE OF CALIFORNIA APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICTS OF
LAW PROVISIONS THEREOF.
The holder of this Debenture may, with or without notice to any party, and
without affecting the obligations of any maker, surety, guarantor, endorser,
accommodation party, or any other party to this Debenture (i) extend the time
for payment of either principal or interest from time to time, (ii) release or
discharge any one or more parties liable on this Debenture, (iii) suspend the
right to enforce this Debenture with respect to any persons, (iv) change,
exchange, or release any property in which the holder has any interest securing
this Debenture, (v) justifiably or otherwise, impair any of the Collateral or
suspend the right to enforce against any such Collateral, and (vi) at any time
it deems it necessary or proper, call for and, should it be made available,
accept, as additional security, the signature or signatures of additional
parties or a security interest in property of any kind or description or both.
This Debenture is subordinated to certain other indebtedness of the Company
to the extent and with the effect set forth in the Debenture Purchase Agreement.
This Debenture is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the Company at
9339 Carroll Park Drive, San Diego, California 92121, or such other address as
the Company shall have advised the
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holder of the Debenture in writing, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of this Debenture
or its attorney duly authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Debenture shall be made only to
or upon the order in writing of the registered holder thereof.
Any provision herein, or in the Debenture Purchase Agreement, or any other
document executed or delivered in connection herewith or therewith, or in any
other agreement or commitment, whether written or oral, expressed or implied, to
the contrary notwithstanding, neither the Purchaser nor any holder hereof shall
in any event be entitled to receive or collect, nor shall any amounts received
hereunder be credited, so that Purchaser or any holder hereof shall be paid, as
interest, a sum greater than the maximum amount permitted by applicable law to
be charged to the person primarily obligated to pay this Debenture at the time
in question. If any construction of this Debenture or the Debenture Purchase
Agreement, or any and all other papers, agreements or commitments, indicate a
different right given to Purchaser or any holder hereof to ask for, demand, or
receive any larger sum as interest, such is a mistake in calculation or wording
which this clause shall override and control, it being the intention of the
parties that this Debenture, the Debenture Purchase Agreement, and all other
documents executed or delivered in connection herewith shall in all ways comply
with applicable law and proper adjustments shall automatically be made
accordingly. In the event that Purchaser or any holder hereof ever receives,
collects, or applies as interest, any sum in excess of the maximum amount
permitted by applicable law, if any, such excess amount shall be applied to the
reduction of the unpaid principal balance of this Debenture, and if this
Debenture is paid in full, any remaining excess shall be paid to the Company.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the maximum amount permitted by applicable law, if any, the
Company and any holder hereof shall, to the maximum extent permitted under
applicable law: (a) characterize any non-principal payment as an expense or fee
rather than as interest, and (b) "spread" the total amount of interest
throughout the entire term of this Debenture.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be executed in
its corporate name by the undersigned officer, thereunto duly authorized.
ALTRIS SOFTWARE, INC.
By:/s/ Roger H. Erickson
-------------------------------
Roger H. Erickson
Vice President, U.S. Operations
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