EXHIBIT 10.4
RELEASE AGREEMENT
This RELEASE AGREEMENT (this "Agreement") is made and entered into by and
between ALTRIS SOFTWARE, INC. ("Altris"), a California corporation, and FINOVA
MEZZANINE CAPITAL INC. f/k/a SIRROM CAPITAL CORPORATION d/b/a TANDEM CAPITAL
("Finova"), a Tennessee corporation.
RECITALS
WHEREAS Altris and Finova previously entered into a Convertible Preferred Stock
Purchase Agreement dated June 27, 1997 (the "Convertible Preferred Stock
Purchase Agreement") and a Debenture Purchase Agreement dated June 27, 1997 (the
"Debenture Purchase Agreement"), pursuant to which (a) Finova purchased shares
of the Series D Convertible Preferred Stock of Altris for an aggregate purchase
price of $3,000,000, (b) Finova purchased a 11.5% Subordinated Debenture of
Altris in the principal amount of $3,000,000, and (c) Altris issued certain
Stock Purchase Warrants and agreed to issue certain additional contingent Stock
Purchase Warrants;
WHEREAS Altris made certain representations and warranties in connection with
the Convertible Preferred Stock Purchase Agreement and the Debenture Purchase
Agreement and the transactions contemplated thereby;
WHEREAS Altris thereafter restated its financial statements for the year ended
December 31, 1996, and its quarterly financial statements for each of the first
three quarters in the years ended December 31, 1996 and December 31, 1997
(collectively, the "Restatements") and amended certain reports previously filed
by Altris with the Securities and Exchange Commission (the "SEC Reports"),
including but not limited to its Annual Report on Form 10-K for 1996 and its
Quarterly Reports on Form 10-Q for each of the first three quarters of 1996 and
1997 (the "SEC Report Amendments");
WHEREAS Altris and Finova have entered into a First Amendment to Convertible
Preferred Stock Purchase Agreement dated as of May 7, 1999 and a Second
Amendment to Debenture Purchase Agreement dated as of May 7, 1999 (collectively,
the "Consent Agreements"), pursuant to which Altris agreed to exchange shares of
Series E Convertible Preferred Stock for Finova's Series D Convertible Preferred
Stock, and to amend the 11.5% subordinated Debenture and the Stock Purchase
Warrants issued or to be issued under the Convertible Preferred Stock Purchase
Agreement and the Debenture Purchase Agreement in consideration for Finova's
consent to certain transactions and Finova's release of any and all claims that
it has or may have, had or may have had, or may ever have in the future, arising
out of, resulting from, or relating to the Restatements or the SEC Report
Amendments;
NOW, THEREFORE, in consideration of the covenants and agreements contained in
this Agreement and in the Consent Agreements, Altris and Finova agree as
follows:
1. Finova, on behalf of itself and all of its parents, subsidiaries, affiliates,
licensees, divisions, predecessors, successors, assigns, shareholders,
directors, officers, employees, agents, administrators, representatives,
servants, heirs, executors, beneficiaries, and attorneys, absolutely and forever
releases and discharges Altris and all of its past and current parents,
subsidiaries, affiliates, licensees, divisions, predecessors, successors,
assigns, shareholders, directors, officers,
employees, agents, administrators, representatives, servants, heirs, executors,
beneficiaries, and attorneys from any and all actions, claims, demands,
obligations, interests, financial or property losses, damages, debts,
liabilities, accounts, costs, attorneys' fees, expenses, liens, and causes of
action of every kind and nature whatsoever (whether known or unknown, suspected
or unsuspected) that Finova now has or may have, had or may have had, or at any
time in the future may have against any released person or entity arising out
of, resulting from, or relating to the Restatements or the SEC Report
Amendments, including but not limited to (a) any inaccuracy or misrepresentation
in, or any omission from, the financial statements as originally prepared by
Altris or the SEC Reports as originally filed with the Securities and Exchange
Commission, certain of which may have been presented to Finova and may have been
the subject of representations, warranties or covenants of Altris to Finova and
(b) any failure to timely file with the Securities and Exchange Commission or
deliver to Finova financial statements or reports for the periods covered by the
SEC Reports or the Restatements or the year ended December 31, 1997 or the
quarter ended March 31, 1998.
2. The release identified in Paragraph 1 of this Agreement extends to all claims
of every nature and kind whatsoever, known or unknown, suspected or unsuspected,
existing, claimed to exist, or that may hereafter arise out of or result from,
be connected with, pertain to, or relate in any way to the Restatements or the
SEC Report Amendments, and Finova waives the provisions of Section 1542 of the
California Civil Code, 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.
3. Finova acknowledges that it may discover facts different from or in addition
to those that it now knows or believes to be true with respect to the claims
released in Paragraph 1 of this Agreement, and Finova agrees that this Agreement
and the release contained in this Agreement are and will remain in effect in all
respects notwithstanding any such different or additional facts, or the
discovery of them.
4. It is expressly understood and agreed that this Agreement does not in any way
constitute an admission on the part of Altris of any unlawful or wrongful
conduct or of any liability. This Agreement may not be used for any evidentiary
or similar purpose, or be referenced in any way, in any litigation, arbitration
or other similar proceeding, except in the case of a dispute concerning this
Agreement or its enforcement.
5. Finova represents that it has not assigned to any person or entity all or any
portion of any of the claims released in this Agreement.
6. Finova and Altris acknowledge and warrant that they have been represented by
independent counsel of their own choice throughout all of the negotiations that
preceded the execution of this Agreement, have read all of this Agreement and
had it explained to them by their attorneys, and fully understand all of the
terms used in this Agreement and their significance.
7. This Agreement contains the entire Agreement and
understanding between Altris and Finova concerning the release of the claims
released in paragraph 1 above, and supersedes and replaces all prior
negotiations, proposed agreements, and agreements, written and oral, concerning
their respective rights and obligations relating to any of the claims released
in this
Agreement. Altris and Finova, and each of them, acknowledge that no party to
this Agreement, nor any agent or attorney of any party, has made any promise,
representation, or warranty whatsoever, express or implied, not contained in
this Agreement or in the Consent Agreement to induce either party to execute
this Agreement. Altris and Finova, and each of them, further acknowledge that
they are not executing this Agreement in reliance on any promise,
representation, or warranty not contained in this Agreement or in the Consent
Agreement. This Agreement may be amended only by a written agreement executed by
each of the parties to this Agreement. No breach of any provision of this
Agreement can be waived unless that waiver is in writing and signed by the party
to be bound.
8. This Agreement is made and entered into in the State of California and is in
all respects to be interpreted, enforced and governed by the laws of the State
of California. The parties agree that this Agreement is to be construed as a
whole according to its fair meaning and is not to be construed for or against
any of the parties to this Agreement.
9. This Agreement may be executed in several counterparts, each of which will
constitute an original as against any party who signed it, and all of which will
constitute one and the same document. Altris and Finova further expressly agree
that this Agreement is binding on and will inure to the benefit of their heirs,
successors and assigns. The signatories to this Agreement further represent and
warrant that they have authority and approval to execute this Agreement on
behalf of the party they are identified as representing.
EXECUTED at ________, _________, this ____ day of _____________, 1999.
ALTRIS SOFTWARE, INC.
By:______________________________________
EXECUTED at _________, _______, this ____ day of __________, 1999.
FINOVA MEZZANINE CAPITAL INC. f/k/a SIRROM CAPITAL CORPORATION d/b/a TANDEM
CORPORATION
By_______________________________________