REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (the "Agreement") dated this 27th day of
June, 1997, is by and between ALTRIS SOFTWARE, INC., a California corporation
(the "Company"), and SIRROM CAPITAL CORPORATION d/b/a Tandem Capital, a
Tennessee corporation (the "Holder"). Capitalized terms not otherwise defined
shall have the meanings assigned by Section 11.
W I T N E S S E T H:
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WHEREAS, the Company and the Holder have entered into a certain Convertible
Preferred Stock Purchase Agreement (the "Preferred Stock Purchase Agreement") of
even date herewith that provides for, among other things, the Company to grant
to Holder certain registration rights with respect to shares of the Company's
common stock, no par value (the "Common Stock"), as set forth herein; and
WHEREAS, the Company and the Holder have also entered into a certain
Debenture Purchase Agreement (the "Debenture Purchase Agreement") of even date
herewith that provides for, among other things, the Company to grant to Holder
certain registration rights with respect to shares of the Common Stock, also as
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Demand Registration.
1.1 DEMAND RIGHTS. If the holders of at least 25% of the Registrable
Securities outstanding ("Initiating Holders") request in writing (a "Demand
Request") that the Company register an offering of Registrable Securities under
the Securities Act of 1933, by underwriters selected by the Initiating Holders
and reasonably acceptable to the Company, with anticipated gross offering
proceeds of at least $1,000,000, the Company shall:
(i) promptly give Notice of the Demand Request to all other
holders of Registrable Securities; and
(ii) use its best efforts to effect the registration and sale of
such Registrable Securities, together with all other Registrable Securities
specified in any written request received by the Company (provided such
notice is received by the Company within 20 days after the date of the
Notice of Demand Request), in accordance with the intended method of
disposition thereof, and in accordance with the procedures set forth in
Section 6.
1.2 NUMBER OF DEMAND REGISTRATIONS. Initiating Holders shall be
entitled to request three registrations of Registrable Securities in which the
Company shall pay all
Registration Expenses in connection with each such registration request. A
registration shall not count towards the maximum of three registration requests
held by the Holder hereunder unless the registration statement for such
requested registration has become effective and an offering closed in which all
Registrable Securities requested to be included in such registration by the
Initiating Holders shall have been sold. Provided, however, that the Company in
any event shall pay all Registration Expenses in connection with any requested
registration whether or not the registration statement becomes effective (unless
the failure to become effective is such as to require the Initiating Holders to
pay all Registration Expenses for such aborted or withdrawn registration
pursuant to Section 4 below, in which case (i) such Initiating Holders shall
reimburse the Company for all such Registration Expenses incurred and paid by
the Company in connection with such registration, and (ii) such withdrawn
request shall not count as a requested registration hereunder). Further
provided, that if (i) the Initiating Holders withdraw from or abort more than
one registration in any consecutive 12-month period, and (ii) the Initiating
Holders are required to pay Registration Expenses pursuant to Section 4 for more
than one such withdrawn or aborted registration, only one such registration
shall not be counted.
1.3 OTHER SECURITIES AND PRIORITY. The registration statement filed
pursuant to the Demand Request may, subject to the prior written consent of the
Initiating Holders, include other securities of the Company, provided that all
Registrable Securities for which the Initiating Holders have requested
registration shall be covered by such registration statement and sold in such
offering before any such other securities are included and sold.
1.4 LIMITATIONS. The Company shall not be obligated to effect, or to
take any action to effect, any demand registration:
(i) in any jurisdiction in which the Company would be required
to execute a general consent to service of process, unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act;
(ii) during the period beginning 15 days prior to the Company's
good faith estimate of the date of filing of, and ending 180 days after the
effective date of, a Company-initiated registration, provided that the
Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective; or
(iii) if the Initiating Holders propose to dispose of shares of
Registrable Securities which may be immediately registered on Form S-3
pursuant to a request made under Section 3 hereof.
1.5 DEFERRAL OF REGISTRATION. If (i) in the good faith judgment of
the Board of Directors of the Company, the filing of a registration statement as
soon as practicable after receipt of the Demand Request would be materially
detrimental to the Company because there exist BONA FIDE financing, acquisition,
or other activities of the Company, and the Board of Directors of the Company
concludes, as a result, that it is essential to defer the filing of such
registration statement at such time, and (ii) the Company shall furnish to the
Initiating Holders a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the
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Company, it would be materially detrimental to the Company for such registration
statement to be filed in the near future and that it is essential to defer the
filing of such registration statement, then the Company may defer such filing
for a period of not more than 90 days after receipt of the Demand Request of the
Initiating Holders, provided that the Company shall not defer its obligations in
this manner for more than an aggregate of 90 days in any twelve-month period,
and provided further that the Initiating Holders shall be entitled to withdraw
the request for registration and, if such request is withdrawn, such
registration shall not count as a requested registration hereunder and the
Company shall pay all Registration Expenses incurred in connection with such
withdrawn registration request.
1.6 UNDERWRITING. The right of any other holders of Registrable
Securities to join in a request for registration shall be conditioned upon such
holders' participation in such registration on the same terms as the Initiating
Holders (unless otherwise agreed by a majority in interest of the Initiating
Holders).
1.7 INCLUSION OF OTHER SECURITIES. In any demand registration, if the
Company shall request inclusion of securities to be sold for its own account, or
if other persons entitled to incidental registrations shall request inclusion in
such registration, the Initiating Holders shall offer to include such securities
in the underwriting and may condition such offer on the acceptance by the
Company or such other persons of the provisions of this Agreement. The Company
and all such other persons proposing to distribute securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriters selected by a majority in interest of the Initiating Holders
and reasonably acceptable to the Company.
2. PIGGYBACK REGISTRATION.
2.1 NOTICE AND PROCEDURES. If the Company proposes to register any
of its Common Stock either for its own account or for the account of other
security holders (other than holders of Registrable Securities), the Company
will:
(i) promptly give written notice thereof to each holder of
Registrable Securities; and
(ii) use its best efforts to include in such registration and in
any underwriting involved therein, all Registrable Securities specified in
any written request from holders of Registrable Securities received by the
Company within 15 days after such notice.
2.2 LIMITATIONS. The provisions of this Section 2 shall not apply to
any registration relating solely to employee benefit plans (as defined under
Rule 405 of the Securities Act), or a registration relating solely to securities
issued in connection with an acquisition or merger, or a registration on any
registration form that does not permit secondary sales.
2.3 UNDERWRITING. The right of any holder of Registrable Securities
to participate in a piggyback registration shall be conditioned upon such
holder's agreement to enter
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into an underwriting agreement in customary form with the underwriters selected
by the Company.
2.4 UNDERWRITERS' CUTBACK. Notwithstanding any other provision of
this Section 2, if the underwriters of any piggyback registration advise the
Company of the need for an Underwriters' Cutback, the underwriters may (subject
to the limitations set forth below) limit the number of Registrable Securities
to be included in the registration and sold; provided, however, that Registrable
Securities shall be included in any over allotment option granted to the
underwriters before inclusion of any shares to be sold by the Company. The
Company shall advise all holders of securities requesting registration of the
Underwriters' Cutback, and the number of shares of securities that are entitled
to be included in the registration and underwriting shall be allocated first to
the Company for securities being sold for its own account and thereafter as set
forth in Section 9.
2.5 OTHER PROVISIONS. If holders of Registrable Securities request
participation in a piggyback registration, the provisions of Section 1.4 shall
apply to such registration, and if the registration is for an underwritten
offering, the provisions of Sections 1.6 and 1.7 shall also apply to such
registration.
3. REGISTRATION ON FORM S-3. After the Company has qualified for the use
of Form S-3, and for so long as the Company continues to be so qualified, in
addition to the rights contained in the foregoing provisions of this Agreement,
the holders of the Registrable Securities shall have the right to request
registrations on Form S-3 or any comparable or successor form. Each such
request shall be in writing and shall state the anticipated number of shares of
Registrable Securities to be disposed of, the anticipated gross proceeds of the
offering, and the intended methods of disposition of such shares by such
holders, including whether sales are to be made on a delayed or continuous basis
pursuant to Rule 415. The Company shall not be obligated to effect any
registration pursuant to this Section 3 if (i) the holders of Registrable
Securities, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other shares of Common Stock (if any) on Form S-3 at an
aggregate price to the public of less than $500,000, or (ii) the Company shall
delay or defer registration in accordance with Section 1.4(ii) or Section 1.5,
or (iii) the Company will be required to obtain an audit (other than for its
normal year-end audit) for such registration to become effective. The Company
shall only be required to effect two registrations of Registrable Securities
pursuant to this Section 3 in each calendar year, provided, however, that if the
offering is to be effected on a continuous or delayed basis pursuant to Rule 415
(or any successor rule), and the registration statement is kept effective for a
period in excess of 180 days, then the Company shall not be required to effect
another registration in that calendar year.
4. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Agreement, shall be borne by the Company; provided, however, that a holder of
Registrable Securities shall bear the Registration Expenses for any registration
process begun pursuant to Section 1 and subsequently withdrawn by such holder,
unless such withdrawal is based upon (i) material adverse information relating
to the Company that is different from the information known or available (upon
request from the
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Company or otherwise) to the Initiating Holders at the time of the request for
registration under Section 1, or (ii) material adverse changes in the financial
markets which result in a significant decline in the public market price for the
Company's Common Stock of at least 20 percent from the date of the request to
the date of such withdrawal. All Selling Expenses relating to securities
registered pursuant to this Agreement shall be borne by the holders of such
securities PRO RATA on the basis of the number of shares of securities so
registered on their behalf.
5. HOLDBACK AGREEMENTS.
5.1 BY HOLDERS. If requested in writing by the Company and the
managing underwriter of an underwritten registered public offering by the
Company of its Common Stock, the holders of Registrable Securities shall agree
not to sell or otherwise transfer or dispose of any Common Stock of the Company
held by such holders (other than those included in the registration statement)
for a period not to exceed 180 days following the effective date of a
registration statement of the Company filed under the Securities Act, provided
that all officers and directors of the Company, all other holders of the
Registrable Securities, and all other holders of rights to registration of any
other security of the Company enter into similar agreements identical in terms
to that of the holders of Registrable Securities.
5.2 BY COMPANY. In connection with any underwritten registration,
the Company (i) shall not effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the 90-day period
after the effective date of any underwritten registration pursuant to this
Agreement, and (ii) shall use its reasonable best efforts to cause each holder
of at least two percent (on a fully-diluted basis) of its Common Stock, or any
securities convertible into or exchangeable or exercisable for Common stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering or pursuant to stock options granted under
a stock option plan primarily for employees, officers or directors) to agree not
to effect any public sale or distribution (including sales pursuant to Rule 144)
of any such securities during such period.
6. REGISTRATION PROCEDURES. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will use its best efforts to
effect the registration and sale of Registrable Securities in accordance with
the intended method of disposition thereof, and pursuant thereto the Company
shall as expeditiously as possible:
(i) prepare and file a registration statement with respect
to such offering of Registrable Securities, and use its best efforts to
cause such registration statement to become effective,
(ii) notify each holder of Registrable Securities of the
effectiveness of each registration statement hereunder and prepare and file
with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
for a period of not less than 180 days and comply with the
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provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition the sellers thereof set
forth in such registration statement;
(iii) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as such
seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other
acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller;
(v) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of which
the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make there
statements therein not misleading, and, at the request of any such seller,
the Company shall prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements
therein not misleading;
(vi) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company
are then listed and, if not so listed, to be listed on the NASD automated
quotation system and, if listed on the NASD automated quotation system, use
its best efforts to secure designation of all such Registrable Securities
covered by such registration statement as a NASDAQ "national market system
security" within the meaning of Rule 11a2-1 of the Securities and Exchange
Commission or, failing that, to secure NASDAQ authorization for such
Registrable Securities and, without limiting the generality of the
foregoing, to arrange for a least two market makers to register as such
with respect to such Registrable Securities with the NASD;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registrations statement;
(viii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions
as the holders of a majority of the Registrable Securities being sold or
the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities (including
effecting a stock split or combination of shares);
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(ix) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or
other agent retained by any such seller or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement, provided that any recipient of such records,
documents or information executes such confidentiality agreement as the
Company reasonably requests;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission,
and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months beginning with the first day of the Company's first full calendar
quarter after the effective date of the registration statement, which
earning statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(xi) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an
underwriter or controlling person of the Company, to participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, which
(i) with respect to matters relating to such holder of Registrable
Securities, should be included in the reasonable judgment of such holder and
its counsel, and (ii) with respect to matters relating to the Company,
should be included in the reasonable judgment of such holder, subject in the
case of clause (ii) to the approval of the Company and any managing
underwriter of the offering (which approval shall not be unreasonably
withheld);
(xii) use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the sellers thereof to consummate the disposition of
such Registrable Securities; and
(xiii) in connection with any underwritten registration,
obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the holders of a majority of
the Registrable Securities being sold reasonably request (provided that
such Registrable Securities constitute at least 10% of the securities
covered by such registration statement).
7. INDEMNIFICATION.
7.1 BY COMPANY. The Company shall indemnify each holder of
Registrable Securities, each of its officers, directors, employees, agents, and
Affiliates, and each underwriter, and each of its officers, directors,
employees, agents, and Affiliates, against all expenses, claims,
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losses, damages, and liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus (including any
related registration statement, notification, or the like) incident to any
registration under this Agreement, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, and will reimburse such persons for any
legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such claim, loss, damage, liability
or action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such holder or underwriter and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the prior written consent of the Company (which consent shall not be
unreasonably withheld).
7.2 BY HOLDERS. In connection with the registration or sale of
shares of Registrable Securities pursuant to this Agreement, each holder whose
Registrable Securities are included in such registration being effected under
this Agreement, shall indemnify the Company, and each of its directors,
officers, employees, agents, and Affiliates, and each underwriter, and each of
its directors, officers, employees, agents, and Affiliates, against all claims
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement or prospectus, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Company and such directors, officers, partners, underwriters, or
control person for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such clam, loss, damage,
liability, or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus, in reliance upon
and in conformity with written information furnished to the Company by such
holder of the Registrable Securities, and stated to be specifically for use
therein; provided, however, that the obligations of such holder hereunder shall
not apply to amounts paid in settlement of any such claims, losses, damages, or
liabilities if such settlement is effected without the prior written consent of
such holder, which consent shall not be unreasonably withheld; and provided that
in no event shall any indemnity under this Section 7.2 exceed the net amount of
proceeds from the offering received by such holder.
7.3 PROCEDURE. Each party entitled to indemnification under this
Section (the "Indemnified Party") shall give notice to the party or parties
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
such claim or any litigation resulting
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therefrom, shall be reasonably acceptable to the Indemnified Party. Failure
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this section to the extent such failure is not
prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement that does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
7.4 CONTRIBUTION. If the indemnification provided for in this
Section is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
7.5 CONFLICTING PROVISIONS. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in any
underwriting agreement entered into in connection with a registration are in
conflict with the foregoing provisions, the provisions of the underwriting
agreement shall control.
8. INFORMATION BY HOLDER. Each holder of Registrable Securities shall
furnish to the Company in writing such information regarding such holder and the
distribution proposed by such holder as the Company or underwriters may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification, or compliance referred to in this
Agreement.
9. ALLOCATION OF REGISTRATION OPPORTUNITIES. In any circumstance in
which all of the Registrable Securities and other outstanding shares of Common
Stock of the Company (the "Other Shares") requested and entitled to be included
in a demand registration cannot be so included as a result of limitations on the
aggregate number of shares of Registrable Securities and Other Shares that may
be so included, or in case of an Underwriters' Cutback, the number of shares of
Registrable Securities and Other Shares that may be so included shall be
allocated among the holders of Registrable Securities and other selling
stockholders PRO RATA on the basis of the number of shares of Registrable
Securities and Other Shares held by such holders and other selling stockholders.
If any holder of Registrable Securities or other selling stockholder does not
request inclusion of the maximum number of shares of Registrable Securities and
Other Shares
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allocated to him pursuant to this procedure, the remaining portion of his
allocation shall be reallocated among those requesting holders of Registrable
Securities and other selling stockholders whose allocations did not satisfy
their requests PRO RATA on the basis of the number of shares of Registrable
Securities and Other Shares held by such holders and other selling stockholders,
and this procedure shall be repeated until all of the shares of Registrable
Securities and Other Shares which may be included in the registration on behalf
of the holders of Registrable Securities and other selling stockholders have
been so allocated. Provided, however, the Company shall not limit the number of
Registrable Securities to be included in a registration pursuant to this
Agreement in order to include shares held by stockholders with no registration
rights or to include in that registration shares of stock issued to employees,
officers, directors, or consultants pursuant to any Company stock option plan,
and in such case all Registrable Securities covered by the registration shall be
sold before any such other securities are sold.
10. SURVIVAL OF RIGHTS. The right of any holder of Registrable Securities
to request registration or inclusion in any registration pursuant to this
Agreement shall terminate on the earlier of (i) such date as all shares of
Registrable Securities held or entitled to be held upon conversion by Holder
shall equal less than 25% of the outstanding Registrable Securities, or (ii)
seven years from the date hereof.
11. DEFINITIONS. As used herein,
"Holder" means any Person who holds Registrable Securities and any holder
of Registrable Securities to whom the registration rights conferred by this
Agreement have been transferred in compliance herewith.
"Initiating Holders" means holders of the Registrable Securities who in the
aggregate hold not less than 25 percent of the outstanding Registrable
Securities.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, sole proprietorship, trust or other entity, business
association or organization.
"Register," "registered" and "registration" refers to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act of 1933 and applicable rules and regulations thereunder, and such
other actions as may be required to cause such registration statement to become
effective or with respect to registration, qualification or compliance under
applicable state securities laws.
"Registration Expenses" means all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, fees and
disbursements of custodians, fees and disbursements of counsel for the Company
and its independent certified public accountants, blue sky fees and expenses,
and reasonable fees and disbursements of one counsel chosen by the holders of a
majority of the Registrable Securities included in such registration, but shall
not include Selling Expenses.
"Registrable Securities" means shares of the Company's Common Stock issued
or issuable (i) upon conversion of the Convertible Preferred Stock, (ii) upon
exercise of the Contingent
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Warrants under the Preferred Stock Purchase Agreement, (iii) upon exercise of
the Initial Warrants and the Additional Warrants under the Debenture Purchase
Agreement and (iv) as a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the shares referred to in clause (i), (ii)
or (iii); provided, however, that shares shall cease to be Registrable
Securities if and when (x) they are sold pursuant to Rule 144 under the
Securities Act or a registration statement under the Securities Act or (y) such
shares are eligible for resale pursuant to Rule 144 under the Securities Act
without regard to any volume limitations thereunder.
"Rule 144" means Rule 144 as promulgated by the SEC under the Securities
Act, as such Rule may be amended from time to time, or any similar successor
rule that may be promulgated by the SEC.
"Rule 145" means Rule 145 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
"Security" has the same meaning as in Section 2(1) of the Securities of
1933, as amended.
"Selling Expenses" means all underwriting discounts, selling commissions
and stock transfer taxes applicable to the sale of Registrable Securities, and
fees and disbursements of counsel for any stockholder (other than the fees and
disbursements of one counsel for the holders of Registrable Securities, as
selling stockholders, included in Registration Expenses).
"Underwriters' Cutback" means a reduction in the number of shares to be
included in any underwritten offering as the result of receipt of written notice
from the representative(s) of the underwriters to the effect that the number of
shares requested to be included in such registration exceeds the number which,
in the representative's judgment, can be sold in an orderly manner in such
offering within a price range acceptable to either the Company (in a primary
registration) or the majority of the holders initially requesting such
registration (in a secondary registration).
12. NOTICE OF TRANSFER. The registration rights granted to the Holder
hereunder may be transferred to any transferee of 300,000 shares (adjusted
appropriately for stock splits, stock dividends and the like) of Registrable
Securities; provided, however, that the registration rights of the Holder may be
transferred to a wholly-owned subsidiary of the Holder without regard to the
number of shares transferred; and provided, further, that registration rights
may not be transferred to any proposed transferee deemed to be a competitor of
the Company by its Board of Directors. Each such permitted transferee must
agree in a written instrument provided to the Company to be bound hereby and
shall thereupon be deemed to be a "Holder" for purposes hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be executed by their duly authorized officers as of the date first
above written.
ALTRIS SOFTWARE, INC.
By:/s/ Xxxxx X. Xxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxx
Vice President
SIRROM CAPITAL CORPORATION
d/b/a TANDEM CAPITAL
By:/s/ Xxxx X. Xxxxxxxx
------------------------------
Xxxx X. Xxxxxxxx
Chief Financial Officer
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