EXHIBIT 10.1
 
                                    EXECUTION COPY
 
SECURED PROMISSORY NOTE
 
Up to $1,500,000 January 31, 2008
 
FOR VALUE RECEIVED, Enterprise Informatics Inc., a California corporation
(“Borrower”), promises to pay to the order of ERP2 Holdings, LLC, a Delaware
limited liability company (“Lender”), on January 31, 2010 (the “Maturity Date”),
or such earlier date as the indebtedness evidenced hereby shall become due and
payable pursuant to the terms hereof, the principal sum of up to ONE MILLION
FIVE HUNDRED THOUSAND DOLLARS ($1,500,000), pursuant to the terms hereof, in
lawful money of the United States of America, in immediately available funds and
at the office of the Lender as indicated from time to time in writing to the
Borrower, together with interest thereon at the rate and in the amounts set
forth herein (including interest capitalized from time to time as additional
principal hereunder and interest accrued on such additional principal).
 
1.
Definitions.  The following terms shall have the meanings ascribed to them
below:

 
(a)              “Additional Loan” has the meaning ascribed to such term in
Section 3(b).
 
(b)             “Additional Warrant” shall have the meaning ascribed to such
term in Section 7(p).
 
(c)              “Affiliate” means, as to any person, any other person (i) that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such person; (ii) who is a
director or officer (A) of such person; (B) of any subsidiary of such person; or
(C) of any person described in clause (i) above with respect to such person; or
(iii) which, directly or indirectly through one or more intermediaries, is the
beneficial or record owner (as defined in Rule 13d-3 of the Exchange Act, as is
in effect on the date hereof) of 10% or more of any class of the outstanding
voting stock, securities or other equity or ownership interests of such person;
provided that notwithstanding anything else herein to the contrary, the Lender
shall be deemed not to be an Affiliate of the Borrower or any subsidiary.  For
purposes of this definition, the term “control” (and the correlative terms,
“controlled by” and “under common control with”) shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies, whether through ownership of securities or other
interests, by contract or otherwise.
 
(d)              “Affiliate Transaction” has the meaning ascribed to such term
in Section 7(j).
 
 
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(e)              “Asset Sale” means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, a
sale/leaseback transaction) other than any sale, lease, conveyance or other
disposition involving assets or rights (or a series of related sales, leases,
conveyances or other dispositions) having a fair market value less than $20,000
individually and $100,000 in the aggregate during the period from the date
hereof until the Repayment Date (which fair market value shall in each case be
determined as of the date of such disposition), and other than sales,
conveyances or transfers of inventory in the ordinary course of business
consistent with past practices and, in the case of sales, transfers or
conveyances of source code for Software (as defined in the Security Agreements),
with the prior written consent of the Lender (which shall not be unreasonably
withheld) ; and (ii) the issuance or sale by the Borrower or any of the
subsidiaries of the Borrower of Equity Interests of any of the Borrower’s
subsidiaries.  Notwithstanding the foregoing, the following items shall not be
deemed to be Asset Sales: (i) a transfer of assets by the Borrower to a
subsidiary or by a subsidiary to the Borrower or to another subsidiary; (ii) an
issuance or sale of Equity Interests by a subsidiary to the Borrower or to
another subsidiary; (iii) a sale or other disposition of property or equipment
that has become worn out, obsolete or otherwise unsuitable for its purpose; (iv)
a disposition of Cash Equivalents; (v) transactions consummated in compliance
with Section 7(i) or Restricted Payments made in accordance with Section 7(m);
and (vi) the exercise of rights (including foreclosure) in respect of any Lien
permitted by Section 7(f).
 
(f)              “Board of Directors” means the board of directors of the
Borrower.
 
(g)              “Borrower Actions” means all actions required to be completed
by the Borrower in order to effectuate a 1000-to-1 reverse split of the Common
Stock and the deregistration of the Common Stock under the Exchange Act, in each
case, in accordance with applicable law.
 
(h)              “Capital Lease” means, for any person, a lease of any interest
in any kind of property (whether real, personal or mixed) or asset by such
person as lessee that is, should be or should have been recorded as a “capital
lease” on the balance sheet of such person in accordance with GAAP.
 
(i)              “Cash Equivalents” means (i) Dollars, including demand deposit
accounts, (ii) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in support
thereof) having maturities of not more than 6 months from the date of
acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of 6 months or less from the date of acquisition, bankers’
acceptances with maturities not exceeding 6 months and overnight bank deposits,
in each case with any domestic commercial bank having capital and surplus in
excess of $500,000,000, (iv) repurchase obligations with a term of not more than
7 days for underlying securities of the types described in clauses (ii) and
(iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper having the
highest rating obtainable from Moody’s Investors Service, Inc. or Standard &
Poor’s Ratings Group and in each case maturing within 6 months after the date of
acquisition and (vi) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (i) - (v) of this
definition.
 
 
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(j)              “Claim” means any civil, criminal or administrative suit,
claim, proceeding, investigation, or request for relief (whether under law or
equity) brought by or before any court, tribunal, administrative agency,
governmental authority or regulatory or self-regulatory entity.
 
(k)              “Code” means the Uniform Commercial Code in effect in the State
of New York; provided, that in the event that, by reason of mandatory provisions
of law, any or all of the attachment, perfection or priority of, or remedies
with respect to the Lender’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “Code” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
 
(l)              “Collateral” has the meaning ascribed to such term in Section 3
of the Security Agreement.
 
(m)             “Common Stock” has the meaning ascribed to such term in Section
8(f).
 
(n)              “Consulting Agreements” has the meaning ascribed to such term
in Section 10.
 
(o)              “Default” means any event that, with the giving of notice or
the lapse of time or both would constitute an Event of Default.
 
(p)              “Dollars” or “$” means lawful money of the United States.
 
(q)              “EBITDA” means, with respect to any person for any fiscal
period, an amount equal to (a) consolidated net income of such person for such
period, minus (b) the sum of (i) income tax credits, (ii) interest income, (iii)
gain from extraordinary items for such period, (iv) any aggregate net gain (but
not any aggregate net loss) during such period arising from the sale, exchange
or other disposition of capital assets by such person (including any fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets and all securities), and (v) any other non-cash
gains which have been added in determining consolidated net income, in each case
to the extent included in the calculation of consolidated net income of such
person for such period in accordance with GAAP, but without duplication, plus
(c) the sum of (i) any provision for income taxes, (ii) Interest Expense, (iii)
fees paid by the Borrower pursuant to the Consulting Agreements (not to exceed
$60,000 in any fiscal quarter); (iv) the closing fee paid by the Borrower paid
pursuant to Section 11 (not to exceed $75,000); (v) the aggregate amount of
legal fees, transfer agent fees, and printing and mailing costs, in each case,
that are paid by Borrower in connection with Borrower’s entry into or
performance of the Transaction Documents (including without limitation
Borrower’s completion of the Borrower Actions) (not to exceed $200,000); (vi)
depreciation and amortization for such period and (vii) any non-cash expenses or
charges, including the amount of any deduction to consolidated net income as the
result of (A) any grant to any officer, director, employee or consultant of such
person of any stock, stock option or other stock-based award pursuant to any
equity incentive plan approved by such person’s board of directors (including
without limitation, with respect to the Borrower, the 2007 Stock Incentive Plan)
or (B) any grant or issuance of any warrant or other right to acquire Equity
Interests or any Equity Interests convertible into or exchangeable for other
Equity Interests, including without limitation the Existing Warrants and the
Additional Warrants, in each case to the extent included in the calculation of
consolidated net income of such person for such period in accordance with GAAP,
but without duplication.  For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a person: (1) the
income (or deficit) of any other person accrued prior to the date it became a
subsidiary of, or was merged or consolidated into, such person or any of such
person’s subsidiaries; (2) the income (or deficit) of any other person (other
than a subsidiary) in which such person has an ownership interest, except to the
extent any such income has actually been received by such person in the form of
cash dividends or distributions; (3) any restoration to income of any
contingency reserve, except to the extent that provision for such reserve was
made out of income accrued during such period; (4) any write-up of any asset;
(5) any net gain from the collection of the proceeds of life insurance policies;
(6) any net gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of such person; (7) in the case
of a successor to such person by consolidation or merger or as a transferee of
its assets, any earnings of such successor prior to such consolidation, merger
or transfer of assets; and (8) any deferred credit representing the excess of
equity in any subsidiary of such person at the date of acquisition of such
subsidiary over the cost to such person of the investment in such subsidiary.
 
 
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(r)              “Equity Interest” means, (i) with respect to any person that is
a corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate stock,
including each class of common stock and preferred stock of such person and all
options, warrants or other rights to purchase or acquire any of the foregoing;
and (ii) with respect to any person that is not a corporation, any and all
partnership, membership or other equity interests of such person, and all
options, warrants or other rights to purchase or acquire any of the foregoing.
 
(s)              “Event of Default” has the meaning ascribed to such term in
Section 8.
 
(t)              “Exchange Act” shall mean the Securities Exchange Act of 1934,
as amended.
 
(u)              “Existing Warrant” means the Warrant to Purchase Common Stock
dated as of January 14, 2008 issued by the Borrower to the Lender.
 
(v)              “GAAP” means generally accepted accounting principles in the
United States in effect from time to time as applied by nationally recognized
accounting firms.
 
(w)              “Hedge Agreement” means any and all transactions, agreements or
documents now existing or hereafter entered into by the Borrower which provide
for an interest rate, credit, commodity or equity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or
similar transactions, for the purpose of hedging exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.
 
(x)              “Indebtedness” of any person means, without duplication, (i)
all obligations of such person for borrowed money; (ii) all obligations of such
person evidenced by bonds, debentures, notes or other similar instruments and
all reimbursement or other obligations in respect of letters of credit, bankers
acceptances, interest rate swaps, hedges, derivatives or other financial
products; (iii) all obligations of such person as a lessee under Capital Leases;
(iv) all obligations or liabilities of others secured by a Lien on any asset of
such person, irrespective of whether such obligation or liability is assumed;
(v) all obligations of such person to pay the deferred purchase price of assets
(other than (1) trade payables incurred in the ordinary course of business and
(2) unearned compensation; (vi) all net payment obligations of such person owing
under Hedge Agreements; and (vii) any obligations of such person guaranteeing or
intended to guarantee (whether directly or indirectly guaranteed, endorsed,
co-made, discounted, or sold with recourse) any obligation of any other person
that constitutes Indebtedness of such other person under any of clauses (i)
through (vi) above.
 
 
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(y)              “Initial Loan” shall have the meaning ascribed to such term in
Section 3(a).
 
(z)              “Intellectual Property” shall mean all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including know-how,
copyrights, copyright licenses, patents, patent licenses, technology licenses,
trademarks and trademark licenses, and all rights to sue at law or in equity for
any infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
 
(aa)              “Interest Expense” means, with respect to any person for any
fiscal period, interest expense (whether cash or non-cash) of such person
determined in accordance with GAAP for the relevant period ended on such date,
including, in any event, interest expense with respect to any Indebtedness of
such person.
 
(bb)              “Investment” means, (i) any direct or indirect purchase or
other acquisition by the Borrower or any subsidiary of any Equity Interest, or
other ownership interest in, any other person, and (ii) any direct or indirect
loan, advance or capital contribution by the Borrower or any subsidiary to any
other person, including all indebtedness and accounts receivable from that other
person that are not current assets or did not arise from sales to that other
person in the ordinary course of business.
 
(cc)              “Lien” means any mortgage or deed of trust, pledge,
hypothecation, assignment, security deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
 
(dd)              “Loan Documents” means this Note, the Old Notes, the Security
Documents and any certificates, instruments, agreements or other documents
executed in connection herewith or therewith.
 
(ee)              “Net Cash Proceeds,” with respect to any issuance or sale of
Equity Interests or Indebtedness, means the cash proceeds of such issuance or
sale net of all reasonable and customary attorneys’ fees, accountants’ fees,
underwriters’ or placement agents’ fees, discounts or commissions and brokerage,
consultant and other fees actually incurred in connection with such issuance or
sale and net of taxes actually paid as a result thereof.
 
 
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(ff)              “Obligation” means all principal of and interest (including
all interest that accrues after the commencement of any case or proceeding by or
against Lender in bankruptcy, whether or not allowed in such case or proceeding)
on this Note, and any penalties, fees, charges, expenses, indemnification
payments, reimbursements and any other sum chargeable to the Borrower under this
Note or any of the other Loan Documents.
 
(gg)              “Old Notes” has the meaning ascribed to such term in Section
8(b).
 
(hh)              “Original Pledge Agreement” means the Pledge Agreement, dated
as of March 15, 2002, between the Borrower, Spescom Ltd. and Solomon Ward
Seidenwurm & Smith, LLP.
 
(ii)               “Original Security Agreement” means the Security Agreement,
dated as of March 15, 2002, between the Borrower and Spescom Ltd.
 
(jj)              “Permitted Liens” means the following: (i) Liens granted to
secure payment of the Obligations (including pursuant to the Old Notes); (ii)
Liens imposed by law for taxes (other than payroll taxes), assessments or
charges of any governmental authority for claims not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP to the satisfaction of the Lender, in its sole discretion;
(iii) (A) statutory Liens of landlords; and (B) other Liens imposed by law or
that arise by operation of law in the ordinary course of business from the date
of creation thereof, in each case only for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP to the satisfaction of the Lender, in its sole discretion;
(iv) Liens (A) incurred or deposits made in the ordinary course of business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers' compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases,
contracts (other than for the repayment of Indebtedness), statutory obligations
and other similar obligations; or (B) arising as a result of progress payments
under government contracts; (v) purchase money Liens in connection with the
purchase by the grantor of such Lien of equipment in the normal course of
business; (vi) Liens subordinated in all respects to the Lien securing payment
of the Obligations on terms and conditions and pursuant to an agreement in form
and substance satisfactory to the Lender in its sole discretion; (vii) Liens to
secure the financing of insurance premiums for insurance policies obtained
pursuant to and in compliance with Section 7(g), provided, that such Liens are
limited to the proceeds (including loss payments) of the insurance policies so
financed, un-earned premiums on and dividends under such insurance policies, and
the Borrower’s interest under any state insurance guarantee funds that may arise
relating to such insurance policies; (viii) to the extent constituting a Lien,
the transfer of technology licenses (including without limitation in connection
with implementation of any source code escrow agreement in customary form into
which Borrower enters for the benefit of any licensee of the Borrower’s
Intellectual Property) in the ordinary course of business of the Borrower; (ix)
Liens and Capital Leases existing on the date hereof; and (x) precautionary UCC
financing statements filed in connection with operating leases for amounts which
do not, individually or in the aggregate, exceed $100,000 in the aggregate.
 
 
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(kk)              “Repayment Date” means the date on which all Obligations are
irrevocably repaid in full, in Dollars, to the Holder.
 
(ll)               “Restricted Payment” means, with respect to the Borrower or
any subsidiary: (i) the declaration or payment of any dividend or the incurrence
of any liability to make any other payment or distribution of cash or other
property or assets in respect of any Equity Interest of such person, other than
a payment or distribution (A) of Equity Interests in connection with the
exercise of any warrant, option or other right to acquire Equity Interests
permitted under or issued pursuant to any Transaction Document, (B) of Equity
Interests in respect of the outstanding shares of the Series F Convertible
Preferred Stock of the Borrower (the “Series F Preferred Stock”), (C) of Equity
Interests in connection with the 1000-to-1 reverse stock split contemplated
hereby and (D) as a dividend or otherwise, made by a direct or indirect wholly
owned subsidiary of Borrower to its immediate parent entity;  (ii) any payment
on account of the purchase, redemption, defeasance, sinking fund or other
retirement of any Equity Interest of such person or any other payment or
distribution made in respect thereof, either directly or indirectly, other than
a payment made in Equity Interests (A) in connection with the exercise of any
warrant, option or other right to acquire Equity Interests permitted under or
issued pursuant to any Transaction Document, (B) in respect of the outstanding
shares of Series F Preferred Stock and (C) in connection with the 1000-to-1
reverse stock split contemplated hereby; (iii) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire any Equity Interest of such person
now or hereafter outstanding, other than a payment made in Equity Interests (A)
in connection with the exercise of any warrant, option or other right to acquire
Equity Interests permitted under or issued pursuant to any Transaction Document,
(B) in respect of the outstanding shares of Series F Preferred Stock and (C) in
connection with the 1000-to-1 reverse stock split contemplated hereby; (iv) any
payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any Equity Interests of
such person or of a claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission; (v) any
payment, loan, contribution, or other transfer of funds or other property to any
stockholder of such person, except as otherwise permitted hereunder or under the
other Transaction Documents, and other than payment of compensation in the
ordinary course of business to stockholders who are employees or directors of
such person; and (vi) any payment of management fees (or other fees of a similar
nature) or out-of-pocket expenses in connection therewith by such person to any
stockholder, other than a payment to employees or directors of the Borrower or
subsidiaries for their services, or otherwise permitted under any Transaction
Document (including without limitation the Consulting Agreements).
 
(mm)              “Securities Act” means the Securities Act of 1933, as amended.
 
 
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(nn)              “Security Agreements” has the meaning ascribed to such term in
Section 4.
 
(oo)              “Security Documents” means the Security Agreements and the UCC
financing statements required to be filed and all other security documents
hereafter delivered to the Lender in connection with granting a Lien on any of
the assets of the Borrower or a subsidiary to secure the Obligations.
 
(pp)              “Service Date Anniversary” has the meaning ascribed to such
term in Section 8(h).
 
(qq)              “Term Sheet” means the Summary of Terms, dated as of January
14, 2008, by and between the Borrower and the Lender.
 
(rr)              “Transaction Documents” means this Note, the other Loan
Documents, the Term Sheet, the Consulting Agreements, the Existing Warrant and
the Additional Warrant.
 
2.
Interest.  The unpaid principal amount of indebtedness under this Secured
Promissory Note (the “Note”) shall bear interest at a rate equal to ten percent
(10%) per annum, plus, upon the occurrence and continuation of an Event of
Default (as herein defined), an additional three percent (3%) per
annum.  Interest shall be compounded annually and be due and payable in arrears
(a) on the last calendar day of March, June, September and December of each
calendar year, in cash, or, at the option of the Borrower, in kind, capitalized
as additional principal hereunder (and treated in all respects as principal
hereunder, including without limitation with respect to the accrual of
interest), and (b) on the date that any principal amount of the indebtedness
hereunder is repaid, to the extent accrued and unpaid on the principal amount so
repaid.  Interest shall be computed for the actual number of days elapsed on the
basis of a year consisting of 365 or 366 days, as applicable.

 
3.
Grid.

 
(a)              Initial Loan.  On the date hereof, subject to fulfillment of
all obligations of the Borrower set forth herein, Lender shall pay to the
Borrower $300,000 by wire transfer of immediately available funds to an account
specified by the Borrower, which amount shall become principal hereunder upon
receipt of such funds by the Borrower (the “Initial Loan”).
 
(b)              Additional Loan.  On the first business day following the date
that all Borrower Actions shall have been consummated, subject to fulfillment of
all obligations of the Borrower set forth herein, the Lender shall pay to the
Borrower $1,200,000 by wire transfer of immediately available funds to an
account specified by the Borrower, which amount shall become principal hereunder
upon receipt of such funds by the Borrower. (the “Additional Loan”).
 
(c)              Grid.  Lender shall be entitled to mark, from time to time, the
Grid attached hereto as Schedule A, to reflect any payment of, or addition to,
the principal amount of the indebtedness evidenced hereby (including without
limitation in respect of capitalized payments of interest);provided, that the
failure by Lender to so mark such Grid shall not affect the obligation of
Borrower hereunder to pay principal of the indebtedness evidenced hereby,
interest thereon, or additional principal added in payment of capitalized
interest (or interest on such additional principal), which obligations shall
remain in full force and effect and be fully binding on Borrower.
 
 
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4.
Security Interest.  This Note and repayment of the indebtedness evidenced hereby
is secured by the Amended and Restated Security Agreement, dated as of January
31, 2008, between the Lender and the Borrower (the “Security Agreement”), and
the Amended and Restated Pledge Agreement, dated as of January 31, 2008, between
the Lender and the Borrower (the “Pledge Agreement” and, together with the
Security Agreement, each a “Security Agreement” and, together, the “Security
Agreements”).

 
5.
Representations and Warranties of Borrower.  The Borrower hereby represents and
warrants to the Lender, on the date hereof and on the date of the Additional
Loan, as follows:

 
(a)              Organization; Authority.  Borrower is duly organized and
validly existing under the laws of the jurisdiction of its
organization.  Borrower has all the requisite power and authority to execute,
deliver and perform the transactions contemplated by this Note.  This Note
constitutes the legal, valid and binding obligations of Borrower and is
enforceable against it in accordance with the terms hereof.
 
(b)              Consents; Conflicts.  Except for the filing of the financing
statements and any other documents necessary to effect the Liens contemplated by
this Note, the execution and delivery of this Note by Borrower as contemplated
hereby will not (i) require any consent, authorization, or approval of, or
filing with, any governmental entity or third party, or (ii) result in any
violation of, be in conflict with or constitute a default under, the charter or
by-laws of Borrower, or any law, statute, regulation, ordinance, judgment,
decree or order, or any material contract, agreement, or instrument to which
Borrower is a party, or by which it is bound.
 
(c)              Collateral.  Except for the liens granted to the Lender
pursuant to this Note and the Security Documents, Borrower is, and as to
Collateral acquired after the date hereof, Borrower shall and will be at the
time of acquisition, the owner and holder, or has valid rights as a lessee or
licensee of, or the power to transfer or pledge with respect to, all Collateral
free and clear of any claim, security interest, encumbrance, lien, charge, or
other right, title or interest of any person, other than Permitted Liens, has
rights in or the power to transfer each other item of Collateral in which a Lien
is granted by it hereunder, free and clear of any and all Liens, other than
Permitted Liens.  Except for the Original Security Agreement, the Original
Pledge Agreement, and any financing statement or public notice filed thereunder
or in connection therewith, no security agreement, financing statement, or other
public notice with respect to all or any part of the Collateral that is
effective to perfect a lien or security interest on the Collateral is on file or
of record in any government or public office against Borrower, and Borrower has
not filed or consented to the filing of any such statement or notice.
 
 
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6.
Representations and Warranties of Lender.  The Lender hereby represents and
warrants to the Borrower, on the date hereof and on the date of the Additional
Loan, as follows:

 
(a)              Investment Intent; Lender Status:  The Lender:
 
(i)            is acquiring the Note as a principal for investment purposes
only, for its own account, and not as nominee or agent for any other person, and
not with a view to resale or distribution of any part thereof in violation of
the Securities Act;
 
(ii)           is an “accredited investor”, within the meaning of Rule 501 of
Regulation D under the Securities Act;
 
(iii)            has such knowledge, sophistication and experience in financial
and business matters as to be capable of evaluating the merits and risks of its
purchase of the Note and investments in securities presenting an investment
decision like that involved in the purchase of the Note; and
 
(iv)           can bear the economic risk of a total loss of its investment in
the Note.
 
(b)              Restricted Securities.  The Lender understands that the Note is
characterized as a “restricted security” as defined under Rule 144(a)(3) under
the Securities Act and that under such laws and applicable regulations such Note
may not be resold unless registered pursuant to the Securities Act, or an
exemption from registration is available therefrom.  The Lender will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take pledge of)
the Note except in compliance with the Securities Act, applicable state
securities laws and the respective rules and regulations promulgated thereunder.
 
7.
Covenants.

 
(a)              Compliance with Laws.  The Borrower shall comply in all
material respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities.
 
(b)              Maintenance of Existence; Lines of Business.  The Borrower
shall preserve, renew and keep in full force and effect its corporate existence
and its rights, privileges, franchises, and licenses necessary in the normal
conduct of its business except where the failure to preserve any such rights,
privileges, franchises or licenses would not reasonably be expected to have a
material adverse effect on the Borrower.  
 
(c)              Financial Statements; Reporting.  (i) The Borrower shall
furnish to the Lender, within 45 days of the close of each of the first three
quarters of each fiscal year, its consolidated balance sheets as at the close of
such quarter and its income statement and statement of changes in financial
position for such quarter, prepared in accordance with GAAP, applied on a basis
consistent with that used in preparing its audited financial statements for
prior years, certified by its chief financial officer as fairly presenting the
financial condition of the Borrower and its subsidiaries as at the close of that
quarter and the results of its operations for such quarter, subject to changes
resulting from audit and normal year-end adjustments and the absence of
footnotes.
 
(ii) The Borrower shall furnish to the Lender, within 90 days of the close of
each fiscal year, commencing with the fiscal year ending September 30, 2008, its
consolidated balance sheets as at the close of such fiscal year and its income
statement and statement of changes in financial position for such fiscal year,
prepared in accordance with GAAP, applied on a basis consistent with that used
in preparing its audited financial statements for prior years, certified by a
firm of independent accountants selected by it and acceptable to the Lender as
fairly presenting the financial condition of the Borrower and its subsidiaries
as at the close of such fiscal year and the results of its operations for such
fiscal year.  Either (a) such certification shall include or be accompanied by a
statement that, during the examination by that firm of those financial
statements, that firm observed or discovered no Default or Event of Default (or
a detailed description of any Default or Event of Default so observed or
discovered) or (b) the Borrower shall furnish to the Lender, within 90 days of
the close of the applicable fiscal year, a statement, certified by the chief
financial officer of the Borrower, that, during such fiscal year, no Default,
Event of Default or event that is reasonably likely to result in a Default or
Event of Default has occurred (or a detailed description of any such Default,
Event of Default or event that occurred during such fiscal year).
 
(iii) The Borrower shall furnish to the Lender from time to time such other
statements and information as the Lender may reasonably request.
 
 
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(d)              Books and Records; Inspection Rights.  The Borrower shall keep
proper books and records in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities.  The
Borrower shall permit the Lender and representatives of the Lender to inspect
its property and records at any reasonable times, and to make copies of such
records as the Lender (or its representative) shall desire.
 
(e)              Notices of Default.  The Borrower shall promptly notify the
Lender of each Default or Event of Default, and each other event that has or
could reasonably be expected to have a materially adverse effect on its ability
to perform its obligations under this Note or the Security Documents, together
with a detailed description of such Default, Event of Default or other event,
and all actions taken or to be taken in response thereto.
 
(f)              Liens and Encumbrances.  The Borrower shall not create or
permit to be created or exist any Lien on any of its property now owned or
hereafter acquired, other than Permitted Liens.
 
(g)              Insurance.  The Borrower shall maintain, with financially sound
and reputable insurance companies, insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
 
(h)              Consolidations, Mergers.  The Borrower shall not, directly or
indirectly, by operation of law or otherwise, merge with or consolidate with
another person, liquidate, windup or dissolve itself, or sell, transfer or lease
or otherwise dispose of all or any substantial part of its assets or acquire by
purchase or otherwise the business or assets of, or stock of, another person;
except (i) that any subsidiary may merge into or consolidate with any other
subsidiary; and (ii) any subsidiary may merge with or consolidate into the
Borrower; provided that the Borrower is the surviving organization.
 
 
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(i)              Asset Sales.  The Borrower shall not, and shall not permit any
subsidiary to, directly or indirectly, consummate any Asset Sale, other than (i)
the transfer of technology licenses to third parties in the ordinary course of
business consistent with past practices (including without limitation in
connection with implementation of any source code escrow agreement in customary
form into which Borrower enters for the benefit of any licensee of the
Borrower’s Intellectual Property) or (ii) with the prior written consent of the
Lender (which shall not be unreasonably withheld).
 
(j)              Transactions With Affiliates.  The Borrower shall not, and
shall not permit any of its subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into, make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate
Transaction”).  Notwithstanding the foregoing, the following items shall not be
deemed to be Affiliate Transactions: (A) the payment of reasonable directors’
fees to persons who are not otherwise Affiliates of the Borrower or
indemnification and similar arrangements, consulting fees, employee salaries,
bonuses, employment agreements, compensation or employee benefit arrangements or
incentive arrangements with any officer, director or employee of the Borrower or
any subsidiary (including benefits under the foregoing and agreements directly
in connection with the foregoing); (B) Restricted Payments made in compliance
with Section 7(m); and (C) loans or advances to employees and reimbursement of
actual out-of-pocket expenses incurred by officers, directors and employees, in
each case in the ordinary course of business consistent with past practices.
 
(k)              Payment of Taxes.  The Borrower shall pay all material taxes,
assessments and other governmental charges of any kind imposed on or in respect
of its income or any of its businesses or assets, or in respect of taxes and
other amounts it is required by law to withhold from amounts paid by it to its
employees, before any penalty or interest accrues on the amount payable and
before any Lien or other encumbrance on any of its property exists as a result
of nonpayment; provided, however, that the Borrower shall not be required by
this section to pay any amount if it is diligently contesting its alleged
obligation to pay that amount in good faith through appropriate proceedings and
maintains appropriate reserves or other provisions in respect of the contested
amount as may be required under GAAP.
 
(l)              Limitation on Indebtedness.  The Borrower and its subsidiaries,
on a consolidated basis, shall not directly or indirectly incur, create, assume,
guarantee, become liable, contingently or otherwise, with respect to, or
otherwise become responsible for the payment of, including, without limitation,
by way of assumption or acquisition in a business combination, any Indebtedness
other than (i) pursuant to this Note; (ii) any Indebtedness that is by its terms
expressly subordinated in all respects to the Obligations, on terms and
conditions satisfactory to the Lender, in its sole discretion; (iii)
Indebtedness secured by Permitted Liens; and (iv) Indebtedness outstanding as of
the date hereof.
 
 
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(m)              Restricted Payments.  The Borrower shall not, and shall not
permit any subsidiary, directly or indirectly, to make a Restricted Payment.
 
(n)              Investments.  The Borrower shall not make or permit to remain
outstanding any Investments except:
 
(i)            Investments outstanding on the date hereof.
 
(ii)            Deposit and securities accounts with banks for the purpose of
holding cash or Cash Equivalents.
 
(iii)            Investments in the Borrower or a subsidiary.
 
(iv)            Hedging Agreements entered into in the ordinary course of the
Borrower’s financial planning or business and not for speculative purposes.
 
(v)            Advances to officers, directors and employers of such person in
the ordinary course of business (provided that such advances have been approved
by a majority of the disinterested members of the Board of Directors) and
advances made pursuant to the Consulting Agreements.
 
(vi)            Accounts receivable in the ordinary course of business on
reasonable and customary trade terms, including notes receivable and other
securities received in connection with the payment of such accounts receivable.
 
(o)              EBITDA.  The Borrower will not permit the EBITDA, on a
consolidated basis, of Borrower and its subsidiaries for any period of four
consecutive fiscal quarters beginning with the fiscal quarter ending December
31, 2007 or a later fiscal quarter and ending with the fiscal quarter ending
December 31, 2009 or a prior fiscal quarter to be less than the sum of the
amounts set forth below opposite the quarters comprising such period:
 
Fiscal Quarter
Ending on:

Minimum EBITDA

December 31, 2007

($338,046)

March 31, 2008

($809,460)

June 30, 2008

($145,630)

September 30, 2008

($33,307)

December 31, 2008

$644,469

March 31, 2009

$717,684

June 30, 2009

$797,883

September 30, 2009

$868,600

December 31, 2009

$1,010,479

 
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(p)              Additional Warrant.  On or prior to the date of the Additional
Loan, the Borrower shall issue to the Lender a warrant for the purchase of
shares of Common Stock in the form attached hereto as Exhibit A (the “Additional
Warrant”), provided that the Additional Warrant (i) shall initially be
exercisable for that number of shares of Common Stock equal to the greater of
(A) 26,735,508 shares of Common Stock (subject to appropriate adjustment to
reflect any stock split, subdivision, combination, reclassification or similar
corporate event affecting the Common Stock, in each case, consummated prior to
such issuance, including without limitation, if consummated prior to such
issuance, the 1000-to-1 reverse stock split contemplated hereby), and (B) 20% of
the fully diluted outstanding shares of Common Stock as of the date of such
issuance (including any equity granted under management option plans), and (ii)
shall have an initial exercise price of $0.08 (subject to appropriate adjustment
to reflect any stock split, subdivision, combination, reclassification or
similar corporate event affecting the Common Stock, in each case, consummated
prior to such issuance, including without limitation, if consummated prior to
such issuance, the 1000-to-1 reverse stock split contemplated hereby).
 
(q)              Intellectual Property Claim.  The Borrower shall promptly
notify the Lender if any person shall have asserted or threatened in writing to
assert any Claim (i) contesting the right of the Borrower to use, exercise,
sell, license, transfer or dispose of any of the Borrower’s Intellectual
Property or any products, processes, or materials covered thereby in any manner
or (ii) challenging the ownership, validity or enforceability of any of the
Borrower’s Intellectual Property (an “IP Claim”).  In the event of an IP Claim,
(i) the Lender shall have the right to participate at its expense in, but not
control, the compromise or defense of such IP Claim; (ii) the compromise or
defense of such IP Claim shall be by counsel selected by the Borrower, which
counsel must be reasonably satisfactory to the Lender; and (iii) the Borrower
shall obtain the prior written approval (such approval not to be unreasonably
withheld or delayed) of the Lender before entering into any settlement or
adjustment of or otherwise completing the compromise of such IP Claim.
 
(r)              Maintenance of Liquidity Value.  The Borrower shall maintain an
amount of cash or Cash Equivalents with a value of not less than $100,000.
 

8.
Events of Default.  Upon the occurrence of any of the following (each an “Event
of Default”):

 
(a)              The Borrower shall fail to pay any principal, interest or other
amount when due and payable hereunder;
 
(b)              The Borrower or any subsidiary thereof shall default in the
payment of any indebtedness under the Secured Promissory Notes, dated March 15,
2002 and April 19, 2002, issued by the Borrower and payable to Spescom Ltd.,
assigned to Lender pursuant to the Securities Purchase Agreement, dated as of
September 30, 2007, by and among the Lender, Spescom Ltd. and Spescom Limited
(as amended on the date hereof, the “Old Notes”) or shall default in the
performance of any other obligation under such Old Notes;
 
 
14

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(c)              The Borrower or any subsidiary thereof shall be dissolved or
liquidated (or any judgment, order or decree therefore shall be entered), other
than the liquidation of a subsidiary pursuant to the merger of such subsidiary
with the Borrower or another subsidiary in accordance with Section 7(h) hereof;
or if the Borrower or any such subsidiary shall have made a general assignment
for the benefit of creditors or shall have been adjudicated bankrupt and if not
an adjudication based on a filing by Borrower it shall not have been dismissed
within sixty (60) days or shall have filed a voluntary petition in bankruptcy or
for reorganization or to effect a plan or arrangement with creditors or shall
fail to pay its debts generally as such debts become due in the ordinary course
of business (except as contested in good faith and for which adequate reserves
are made in such party’s financial statements); or shall file an answer to a
creditor’s petition or other petition filed against it, admitting the material
allegations thereof for an adjudication in bankruptcy or for reorganization; or
shall have applied for or permitted the appointment of a receiver or trustee or
custodian for any of its property or assets; or such receiver, trustee or
custodian shall have been appointed for any of its property or assets (otherwise
than upon application or consent of Borrower or any such subsidiary) and shall
not have been removed within sixty (60) days; or if an order shall be entered
approving any petition for reorganization of Borrower or any such subsidiary and
shall not have been reversed or dismissed within sixty (60) days; or Borrower or
any such subsidiary shall take any action (corporate or other) authorizing or in
furtherance any of the actions described above in this subsection;
 
(d)              Any material provision of any document securing or guaranteeing
the indebtedness evidenced by this Note, or of any Lien or security interest
purported to be granted thereby, shall at any time for any reason cease to be
valid, binding and enforceable against the Borrower or any other party thereto
(other than in accordance with the terms thereof), as applicable, or the
validity, binding effect or enforceability thereof shall be contested by the
Borrower or any other party thereto, or the Borrower or any other party thereto
shall deny in writing that it has any or further liability or obligation under
any such document, or any such document shall be terminated (other than in
accordance with the terms thereof), invalidated, revoked or set aside or in any
way cease to give or provide to the Lender the benefits purported to be created
thereby;
 
(e)              The Borrower fails to perform or observe any covenant contained
in Section 7 to be performed or observed by it, and does not remedy such failure
on or before the 10th day after the Borrower first becomes aware of such
occurrence;
 
(f)              The Borrower fails to complete the Borrower Actions on or prior
to April 30, 2008;
 
(g)              Any person shall have prevailed pursuant to a final
adjudication in any Claim against the Borrower or its subsidiaries in an
aggregate amount equal to or greater than $500,000; or
 
 
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(h)              Any person shall have filed a Claim (i) contesting the right of
the Borrower to use, exercise, sell, license, transfer or dispose of any of the
Borrower's Intellectual Property or any products, processes, or materials
covered thereby in any manner having a total aggregate value greater than
$250,000 or (ii) challenging the ownership, validity or enforceability of any of
the Borrower's Intellectual Property having a total aggregate value greater than
$250,000, and either (A) a preliminary injunction has been entered and become
effective against the Company with respect to the Claim and such preliminary
injunction has not been vacated within 60 days of the date of such
effectiveness, (B) (i) a motion for summary judgment with respect to such Claim
has not been filed by or on behalf of the Company on or before the date (the
“Service Date Anniversary”) that is one year from the date on which such Claim
is served on the Company and (ii) such Claim has not been dismissed, withdrawn
or resolved in the Company’s favor by settlement or judgment on the merits on or
before the Service Date Anniversary or (C) (i) a motion for summary judgment
with respect to such Claim has been filed by or on behalf of the Company on or
before the Service Date Anniversary and such motion has been denied and (ii)
such Claim has not been dismissed, withdrawn or resolved in the Company’s favor
by settlement or judgment on the merits on or before the date of such denial;
and
 
(i)              Any of the Borrower’s Intellectual Property having a total
aggregate value greater than $250,000 shall be subject to any outstanding order,
judgment, decree, stipulation or agreement related to or restricting in any
manner the licensing, assignment, transfer, use or conveyance thereof by the
Borrower;then, Lender may declare the entire unpaid principal indebtedness
evidenced by this Note immediately due and payable, without presentment, notice
or demand, all of which are hereby expressly waived by Borrower (and in the
event of the occurrence of any Event of Default specified in clause (b) above,
and notwithstanding the lack of any declaration by Lender hereunder, the entire
unpaid principal amount of such indebtedness shall become automatically and
immediately due and payable).
 
9.
Waiver.  Borrower and any endorser of this Note hereby waive presentment,
demand, protest and notice of any kind.  No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.  In addition, no action by any directors designated
by Lender or actions by the Lender exercising its right as a stockholder shall
operate as a waiver by the holder hereof of any rights hereunder.

 
10.
Consulting Agreements.  Each party agrees to use its reasonable best efforts to
enter into one or more agreements (each, a “Consulting Agreement” and,
collectively, the “Consulting Agreements”) pursuant to which one or more
designees of Lender shall provide management consulting, strategic and financial
advisory services to Borrower during the period that any Indebtedness of
Borrower is outstanding hereunder or under the Old Notes, on terms and
conditions mutually satisfactory to the Lender and the Borrower.  The aggregate
fees to be paid by the Borrower provided pursuant to the Consulting Agreements
shall not exceed $60,000 in any fiscal quarter.

 
 
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11.
Fees and Expenses; Closing Fee.  The Borrower shall pay (A) all reasonable fees
and expenses of Lender in connection with the negotiation, execution and
delivery of this Note and the amendments dated as of the date hereof to the
Secured Promissory Notes referenced in Section 8(b) and (B) no later than three
(3) business days after the date of the Initial Loan, a closing fee of $75,000
to Lender or Lender’s designee, as directed by Lender.  Lender agrees that such
fees paid pursuant to the previous sentence shall include and constitute all
fees and expenses to be reimbursed to Lender by Borrower pursuant to the letter
agreement, dated October 22, 2007, between Lender and Borrower.

 
12.
Withholding Tax.  The Borrower shall withhold any taxes required to be withheld
from interest payments made on this Note and the Old Notes.  The Lender shall
provide the Borrower with applicable certifications (including any applicable
IRS form W-8 and W-9 from persons who hold, directly or indirectly, an interest
in the Lender) and any other information and calculations necessary to ascertain
any withholding obligation with respect to such interest payments.  The Borrower
shall be entitled to rely exclusively on such certifications, information, and
calculations provided by the Lender in making such withholding, and the Lender
shall indemnify the Borrower for any liability incurred by Borrower in
connection with such withholding obligations.  Provided that the Lender complies
with the foregoing requirements, in determining Borrower’s withholding
obligation, Borrower shall be treated as having actual knowledge that Lender is
receiving the interest payments as an agent (within the meaning of Treasury
Regulations Section 1.1441-1(b)(2)(ii)) of its non-U.S. investors, and thus,
must treat the payments as being made directly to those non-U.S. investors.  The
parties agree that the value attributable to the Existing Warrant shall be
$1,467 and the value attributable to the Additional Warrant shall be $2,283.

 
THIS SECURED PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS SECURED PROMISSORY NOTE SHALL, PURSUANT TO NEW YORK COMMERCIAL LAW, BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
 

 
[Signature Page Follows]
 

 
 
 
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed and delivered
by its proper and duly authorized officer as of the date set forth above.
 
                    ENTERPRISE INFORMATICS INC.
 
 

                           By:  /s/ John W. Low    
                         Name:       John W. Low    
                         Title:       Chief Financial Officer  

 
Acknowledged and Agreed:
 
ERP2 HOLDINGS, LLC
 
By:_ _/s/ Kevin Wyman_________
     Name:  Kevin Wyman
     Title:    Majority Manager
 

[Signature Page to New Note]

 
 
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SCHEDULE A
 
SECURED PROMISSORY NOTE
 
GRID
 
Date
Interest Capitalized as Principal
Amount of Principal Paid This Date
Outstanding Principal Balance at This Date
Notation Made By
January 31, 2008
$0.00
$0.00
$300,000.00
                                                                               
                                                                               
                                                                       

 

 
 
 
 
 

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