EXHIBIT 10.1
FIRST AMENDMENT TO CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT
This First Amendment to Convertible Preferred Stock Purchase
Agreement ("Amendment") is made and entered into as of the 7th day of May, 1999,
by and between ALTRIS SOFTWARE, INC. (the "Company"), a California corporation,
and FINOVA MEZZANINE CAPITAL INC. f/k/a Sirrom Capital Corporation d/b/a Tandem
Capital (the "Purchaser"), a Tennessee corporation.
W I T N E S S E T H:
WHEREAS, the Purchaser and the Company have previously executed that
Convertible Preferred Stock Purchase Agreement dated June 27, 1997 (the
"Purchase Agreement"; capitalized terms used herein that are not otherwise
defined shall have the meaning set forth in the Purchaser Agreement);
WHEREAS, the Purchaser and the Company wish to amend the Purchase
Agreement and to evidence the consent of the Purchaser to certain actions
proposed by the Company;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are acknowledged, it is agreed as follows:
1. The Purchaser hereby consents to the Company and its affiliates
entering into certain transactions (the "Spescom Transactions") proposed by the
Company to be closed, in all material respects, as described in (i) that
Agreement (the "Restructuring Agreement") among Spescom Limited, Spescom CIT
(Pty) Limited, Altris Software, Inc., Altris Software Limited, Altris
International Limited and Altris Group PLC (draft 5/4/99), (ii) that
Shareholders Agreement among Spescom Electronics Limited, Altris Software, Inc.
and Altris Software Limited (draft 5/4/99), and (iii) that Agreement between
Altris Software, Inc. and Altris Software Limited (draft 5/4/99). Such consent
is given, and any contrary provision waived, under the Operative Documents, the
"Operative Documents" as such term is defined in the Debenture Purchase
Agreement dated June 27, 1999 between the Purchaser and the Company, as amended
by the First Amendment dated November 1, 1998, and by the Second Amendment of
even date herewith, and the Security Agreement dated January 22, 1997 between
the Purchaser and the Company. In accordance with Section 4.1.3 of the
Restructuring Agreement, the Purchaser further hereby (a) confirms that it has
no lien or encumbrance on any of the assets of Altris Software Limited, Altris
Group PLC or Altris International Limited and (b) consents to the pledge in
favor of Spescom Limited by Altris Group PLC of its 40% shareholdings to be held
by
it after giving effect to the Spescom Transactions in order to secure the
obligations of the Company and Altris Group PLC to the purchaser.
2. The Purchase Agreement is hereby amended by deleting the
Conversion Price of "$6.00" and inserting in its place the figure "$1.90" in
line 11 of Section 1.1 and in line 2 of Section 7.1.
3. The Purchase Agreement is hereby amending the table in Section
1.4 to provide an exercise price for the issuance dates scheduled for the third
and fourth anniversaries of the Closing Date equal to One and 90/100 Dollars
($1.90). Exhibit A-3 to the Purchase Agreement is hereby similarly modified in
Section 2 thereof.
4. The Company hereby represents and warrants to the Purchaser that
all of the representations made in Section 2 of the Purchase Agreement are true
and correct as of the date hereof, except as otherwise disclosed in the
Company's Annual Report or Form 10-K for the year ended December 31, 1998 and as
modified or supplemented by Schedule 4-2 attached hereto and incorporated herein
by this reference and except for such non-material matters that have occurred
since the date of the Purchase Agreement in the ordinary course of business.
5. The Company warrants and represents that its execution, delivery
and performance hereof and of all documents required herein have been duly
authorized by all necessary corporate action and do not (i) violate or conflict
with the Company's corporate charter or bylaws, (ii) violate any applicable law
or regulation, (iii) violate any order, writ, judgment or decree by which the
Company or any of its assets are bound, or (iv) violate, constitute a breach of,
or occasion any rights or remedies under any other loan agreement, lease,
indenture or other agreement by which the Company or any of its assets are
bound.
6. As modified and amended hereby, the Operative Documents shall
remain in full force and effect. The Company warrants and represents that (a)
the Operative Documents are valid, binding and enforceable against the Company
according to their terms, subject to principles of equity and laws applicable to
the rights of creditors generally, including bankruptcy laws, (b) the security
interests previously granted in the Operative Documents remain perfected and
continue to secure the Obligations with the priority required by the Operative
Documents, and (c) no default or Event of Default presently exists under the
Operative Documents and no condition presently exists which, with the giving of
notice, the passing of time, or both, would cause such a default or Event of
Default. The Company further acknowledges that the Company's obligations
evidenced by the Operative Documents are not subject to any counterclaim,
defense or right of setoff, and the Company hereby releases the Purchaser and
its officers, directors, agents and attorneys from any claim, known or unknown,
that the Company may have against any or all of them as of the execution of this
Amendment. In this regard, the Company acknowledges that the Company is familiar
with Section 1542 of the Civil Code of the State of California, which provides
as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.
The Company hereby waives and relinquishes all rights and benefits which it has
or may have under any provision of applicable law that is to the same effect as
the above Section 1542.
Notwithstanding the foregoing, this release shall not affect the future
obligations of the Purchaser set forth in the Operative Documents.
7. Concurrently with the execution of this Amendment, the Company
shall pay all of the fees and expenses of the Purchaser and its counsel in
connection with this Amendment and all previously billed fees and expenses that
remain unpaid.
8. Concurrently with the execution of this Amendment, the Company
shall deliver to the Purchaser the following executed documents:
(a) This Agreement.
(b) Second Amendment to Debenture Purchase Agreement.
(c) Certified copy of resolutions of the Company's Board of
Directors authorizing the execution, delivery and performance of
this Agreement and all related documents.
(d) Opinion letter issued by the Company's outside counsel,
addressing such customary matters as the Purchaser may reasonably
require.
(e) Closing Statement evidencing the payment by the Company of all
expenses due from Purchaser.
9. (a) The Purchaser represents and warrants to the Company that the
Purchaser is the holder of record and beneficially of 3,000 shares of the
Company's Series D Convertible Preferred Stock, free and clear of any liens,
charges, security interests or encumbrances. Immediately following the closing
of the Spescom Transactions, the Company shall cause to be filed with the
Secretary of State of the State of California the Certificate of Determination
of Series E Convertible Preferred Stock substantially in the form attached
hereto as Exhibit A. Immediately following the filing of such Certificate of
Determination of Series E Convertible Preferred Stock, and in any event on or
before May 21, 1999, the Company shall issue 3,000 shares of Series E
Convertible Preferred Stock to the Purchaser in exchange for the 3,000 shares of
the Company's Series D Convertible Preferred Stock owned of record and
beneficially by the Purchaser, and the Purchaser shall surrender for
cancellation the stock certificate representing the 3,000 shares of Series D
Convertible Preferred Stock held by the
Purchaser upon receipt of the stock certificate representing the 3,000 shares of
Series E Convertible Preferred Stock to be issued in exchange therefor. The
Company shall deliver to the Purchaser with such new shares an opinion letter
issued by the Company's outside counsel confirming such customary matters with
respect to the new shares as the Purchaser may require. The Purchaser hereby
represents and warrants to the Company that all of the representations made in
Section 3 of the Purchase Agreement are true and correct, as of the date hereof
and are hereby made in connection with the issuance to Purchaser of the
Company's Series E Convertible Preferred Stock in consideration for its shares
of the Company's Series D Convertible Preferred Stock.
(b) In connection with the issuance to Purchaser of the Series E
Convertible Preferred Stock and shares of the Company's common stock, no par
value, issuable upon conversion thereof pursuant to the Purchase Agreement and
this Amendment, the Purchaser further represents and warrants to the Company
that the Purchaser has a preexisting business relationship with the Company, and
by reason of the Purchaser's business or financial experience or the business or
financial experience of its professional advisors, which advisors are
unaffiliated with and are not compensated by the Company or any affiliate or
selling agent of the Company, directly or indirectly, the Purchaser has the
capacity to protect its own interests in connection with the transaction.
(c) Wherever appropriate to make such definitions consistent with
the exchange of Series D Convertible Preferred Stock for Series E Convertible
Preferred Stock, the definition in the Purchase Agreement of "Convertible
Preferred Stock" shall be deemed to include the shares of Series E Convertible
Preferred Stock exchanged for the Purchaser's shares of Series D Convertible
Preferred Stock and the definition of "Certificate of Determination" shall be
deemed to include the Certificate of Determination for the Series E Convertible
Preferred Stock.
10. Concurrently with the execution and delivery of this Agreement,
the Purchaser and the Company shall execute and deliver the Release Agreement in
the form of Exhibit B attached hereto.
11. This Amendment shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of California.
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Executed as of the date stated above.
ALTRIS SOFTWARE, INC.
By:______________________________________
Title:___________________________________
FINOVA MEZZANINE CAPITAL INC.
formerly known as
Sirrom Capital Corporation and
formerly doing business as Tandem Capital
By:______________________________________
Title:___________________________________