Exhibit 10.30

 

SECURITY AGREEMENT

 

This Security Agreement (“Agreement”) is executed as of February 15, 2002
between Altris Software, Inc., a California corporation (“Debtor”) and Spescom
Limited, a United Kingdom corporation (“Spescom UK”) and Spescom Limited, a
South African corporation (“Spescom SA” and collectively with Spescom UK, the
“Secured Parties”), who agree as follows:

 

1.  Definitions.  For purposes of this Agreement, the following definitions
shall apply:

 

1.1.  “Accounts” shall mean all “accounts” as defined in the UCC now owned or
hereafter acquired by Debtor, including without limitation (a) all accounts
receivable, contract rights, notes, drafts and other obligations or indebtedness
owing to Debtor and arising from whatever source; (b) all present and future
monies, securities, credit balances, deposits, deposit accounts and other
property of Debtor now or hereafter held or received by or in transit to the
Secured Parties or their affiliates or at any other depository or other
institution from or for the account of Debtor, whether for safekeeping, pledge,
custody, transmission, collection or otherwise, and all present and future
liens, security interests, rights, remedies, title and interest in, to and in
respect of Accounts and other Collateral, including (i) rights and remedies
under or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lien holder or secured party, (iii) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Accounts or other Collateral, including returned, repossessed and
reclaimed goods, and (iv) deposits by and property of account debtors or other
persons securing the obligations of account debtors; (c) all of the rights of
Debtor in, to and under all purchase orders for goods, services or other
property; (d) all monies due to or to become due to Debtor under all contracts
for the sale, lease or exchange of goods or other property and/or the
performance of services by it (whether or not yet earned by performance on the
part of Debtor) and (e) all of the rights of Debtor to any goods, services or
other property represented by any of the foregoing, in each case whether now in
existence or hereafter arising or acquired including, without limitation, the
right to receive the proceeds of said purchase orders and contracts and all
collateral security and guarantees of any kind given by any person with respect
to any of the foregoing.

 

1.2.  “Collateral” has the meaning set forth in the Paragraph in this Agreement
entitled “Security Interests”

 

1.3.  “Default” shall mean any Event of Default and any event which with the
passing of time or the giving of notice, or both, would, unless cured or waived,
constitute an Event of Default.

 

1.4.  “Documents” shall mean all “documents” as defined in the UCC or other
receipts covering, evidencing or representing goods, now owned or hereafter
acquired by Debtor.

 

1.5.  “Equipment” shall mean all “equipment” as defined in the UCC (excluding
motor vehicles, and railway rolling stock), now or hereafter used or acquired
for use in the business or otherwise of Debtor (together with all accessions
thereto and all

 

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substitutions and replacements thereof and parts therefor), whether or not the
same shall be deemed affixed to real property, and all rights under or arising
out of present or future contracts relating to the acquisition or use of the
above.

 

1.6.  "Event of Default” shall mean any default by Debtor (a) in the full and
punctual payment of any amounts owing with respect to the Secured Obligations
which default continues for a period of not less than 10 days, or (b) in the
full and punctual performance of its obligations (other than those specified in
clause (a) above) under this Agreement or the Loan that has continued unremedied
for a period of 30 days after notice thereof by any Secured Party to Debtor.

 

1.7.  "General Intangibles” shall mean all “general intangibles” as defined in
the UCC now owned or hereafter acquired by Debtor, including without limitation
(a) all obligations or indebtedness owing to Debtor (other than Accounts) from
whatever source arising, (b) all registered and unregistered (i) patent
licenses, (ii) patents, (iii) trademark licenses, (iv) trademarks, (v) rights in
intellectual property, (vi) trade names, (vii) service marks, (viii) trade
secrets, (ix) copyrights, (x) permits, (xi) licenses, and (xii) applications for
the foregoing, (c) goodwill, processes, drawings, blueprints and customer lists,
(d) all rights or claims in respect of refunds for taxes paid, and (e) all
rights in respect of any pension plan or similar arrangement maintained for
employees of Debtor or any of its subsidiaries.

 

1.8.  "Instruments” shall mean (a) all “instruments”, “chattel paper” or
“letters of credit”, each as defined in the UCC, evidencing, representing,
arising from or existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts, including without limitation
promissory notes, drafts, bills of exchange and trade acceptances, and (b) notes
or other obligations or indebtedness owing to a Debtor (including without
limitation obligations of Debtor to any other Debtor) from whatever source
arising, in each case now owned or hereafter acquired by Debtor.

 

1.9.  "Inventory” shall mean all “inventory” as defined in the UCC, now owned or
hereafter acquired by Debtor, wherever located, including without limitation all
raw materials and other materials and supplies, work–in–process and finished
goods and any products made or processed therefrom and all substances, if any,
commingled therewith or added thereto.

 

1.10.  "Lien” shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
including the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.

 

1.11.  ”Loan” shall mean collectively, all loans made by the Secured Parties to
the Debtor.

 

1.12.  “Note” shall  mean, collectively, the Promissory Note dated evenly
herewith executed by Debtor in favor of the Secured Parties (as the same may be
amended from time to time), and all other promissory notes executed by Debtor in
favor of either Secured Party.

 

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1.13.  “Proceeds” shall mean all products and proceeds of, and all other
profits, rentals or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or
realization upon, any item or portion of the Collateral, including without
limitation all claims of Debtor against third parties for loss of, damage to,
destruction of, or for proceeds payable under, or unearned premiums with respect
to, policies of insurance in respect of, any Collateral and any condemnation or
requisition payments with respect to any Collateral, in each case whether now
existing or hereafter arising.

 

1.14.  “Security Interests” shall mean the security interests securing the
Secured Obligations, including without limitation the Security Interests granted
pursuant to this Agreement.

 

1.15.  “Secured Obligations” shall mean the Note, all obligations, liabilities
and indebtedness pursuant to the Loan or future loans made by either Secured
Party to Debtor, and all other obligations, liabilities and indebtedness of
every kind, nature and description owing by Debtor to the Secured Parties and/or
their affiliates, including principal, interest, charges, fees, costs and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, arising under this Agreement or the Note, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of this Agreement or the Note or after the commencement of any case
with respect to Debtor under the United States Bankruptcy Code or any similar
statute (including the payment of interest and other amounts which would accrue
and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, secured or unsecured, and
however acquired by the Secured Parties.

 

1.16.  “Site” shall mean the Debtor’s principal place of business located at the
address set forth in the Introductory Paragraph of this Agreement.

 

1.17.  “Subsidiary” shall mean, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other person
performing similar functions are at the time directly or indirectly owned by
such Person.

 

1.18.  “UCC” shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of California; provided that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non–perfection
of the Security Interest in any item or portion of the Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of California, then “UCC” shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non–perfection.

 

2.  Representations and Warranties.  Except as set forth in writing to the
Secured Parties, Debtor represents and warrants to the Secured Parties as
follows (which shall survive the execution and delivery of this Agreement):

2.1.  Debtor has good and marketable title to all of the Collateral owned by it,
free and clear of any Liens other than the Security Interests [and “Permitted
Liens”].

 

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2.2.  Debtor has not performed any acts which might prevent either Secured Party
from enforcing any of the terms and conditions of this Agreement or which would
limit either Secured Party in any such enforcement.  Other than financing
statements or other similar or equivalent documents or instrument with respect
to the Security Interests, as of the date hereof and thereafter no financing
statement, mortgage, security agreement or other similar or equivalent document
or instrument covering all or any part of the Collateral is or will be on file
or of record in any government office in any jurisdiction in which such filing
or recording would be effective to perfect a Lien on such Collateral.  No
Collateral is in the possession of any person or entity whatsoever (other than
Debtor) which has taken action to assert any claim thereto or security interest
therein, except that the Secured Parties or their designee may have possession
of Collateral as contemplated hereby.

 

2.3.  The Security Interests constitute valid security interests under the UCC
securing the Secured Obligations.

 

2.4.  This Agreement has been duly authorized, executed and delivered by Debtor
and constitutes a valid and binding agreement of Debtor.  The execution,
delivery and performance by Debtor of this Agreement, each filing, statement,
supplementary assignment, pledge agreement or other document related to this
Agreement to which Debtor is a party do not and will not contravene, or
constitute (with or without the giving of notice or lapse of time or both) a
default under, any provision of applicable law or regulation or of the charter
or by–laws of Debtor or of any material agreement, judgment, injunction, order,
decree or other instrument binding upon it or result in the creation of any Lien
(other than the Security Interests) on any asset of Debtor or any of its
Subsidiaries.

 

2.5.  Debtor has filed, or caused to be filed, in a timely manner all material
tax returns, reports and declarations which are required to be filed by it. All
information in such tax returns, reports and declarations is complete and
accurate in all material respects. Debtor has paid or caused to be paid all
material taxes due and payable or claimed due and payable in any assessment
received by it, except taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to Debtor and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.

 

2.6.  There is no present investigation by any governmental agency pending, or
to the best of Debtor’s knowledge threatened, against or affecting Debtor, its
assets or business and there is no action, suit, proceeding or claim by any
person or entity pending, or to the best of Debtor’s knowledge threatened,
against Debtor or its assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, which if adversely determined
against Debtor would result in any material adverse change in the assets,
business or prospects of Debtor or would impair the ability of Debtor to perform
its obligations hereunder or under the Note or the Loan or of the Secured
Parties to enforce any Secured Obligations or realize upon any Collateral.

 

2.7.  Debtor is not in default in any material respect under, or in violation in
any material respect of any of the terms of, any agreement, contract,
instrument, lease or other commitment to which it is a party or by which it or
any of its assets are bound and

 

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Debtor is in compliance in all material respects with all applicable provisions
of laws, rules, regulations, licenses, permits, approvals and orders of any
foreign, Federal, State or local governmental authority.

 

2.8.  All representations and warranties contained in this Agreement or any of
the agreements concerning the Note or the Loan shall survive the execution and
delivery of this Agreement and shall be deemed to have been made again to the
Secured Parties on the date of each additional borrowing or other credit
accommodation hereunder and shall be conclusively presumed to have been relied
on by the Secured Parties regardless of any investigation made or information
possessed by the Secured Parties. The representations and warranties set forth
herein shall be cumulative and in addition to any other representations or
warranties which Debtor shall now or hereafter give, or cause to be given, to
the Secured Parties.

 

3.  Security Interests.  In order to secure the full and punctual payment and
performance of the Secured Obligations in accordance with the terms thereof,
Debtor hereby grants to the Secured Parties a continuing security interest in
and to all of the following property of Debtor, whether now owned or existing or
hereafter acquired or arising and regardless of where located (collectively,
“Collateral”):

 

3.1.  Accounts;

 

3.2.  Documents;

 

3.3.  Equipment;

 

3.4.  General Intangibles;

 

3.6.  Instruments;

 

3.7.  Inventory;

 

3.8.  All other personal property and assets of Debtor;

 

3.9.  All books and records (including, without limitation, customer lists,
supplier lists, credit files, computer programs, printouts and other computer
materials and records) of such Debtor pertaining to any of the Collateral; and

 

3.10.  All Proceeds of any of the Collateral described in the preceding clauses
of this Paragraph, in any form, including without limitation insurance proceeds
and all claims against third parties for loss or damage to or destruction of any
or all of the foregoing.

4.  Further Assurances; Covenants.

4.1.  Debtor shall not change the location of (a) its chief executive office or
chief place of business or (b) the locations where it keeps or holds any
Collateral, or any records relating to such Collateral, from the Site unless it
shall have given the Secured Parties at least 45 days’ prior written notice. 
Debtor shall not in any event change the location of any Collateral if such
change would cause the Security Interests in such Collateral to lapse or cease
to be perfected.

 

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4.2.  Debtor shall maintain Inventory only at (a) the Site, (b) at a location in
the United States of which the Secured Parties have received at least 45 days’
prior written notice, or (c) in transit to a location specified in the preceding
clauses.

 

4.3.  Debtor shall not change its name, identity, any tradename used by it or
its corporate structure in any manner unless it shall have given the Secured
Parties at least 45 days’ prior written notice.

 

4.4.  Debtor shall cause each Secured Party to be named as an insured party and
loss payee on each insurance policy covering  risks relating to any of its
Collateral.  Such insurance shall be maintained against such risks as are
insured against by companies of established repute in the same or similar lines
of business as Debtor, in amounts, under policies, and with insurers reasonably
acceptable to the Secured Parties.  Debtor will deliver to either Secured Party,
upon request of either Secured Party, the insurance policies for such
insurance.  Each such insurance policy shall include effective waivers by the
insurer of all claims for insurance premiums against the Secured Parties, shall
provide that, for so long as any Event of Default shall have occurred and be
continuing and the insurer shall have received notice thereof from the Secured
Parties, all insurance proceeds shall be adjusted with and payable to the
Secured Parties and shall provide that no cancellation or termination thereof
shall be effective until at least 30 days after receipt by the Secured Parties
of written notice thereof.

 

4.5.  Debtor will, promptly upon request, provide to either Secured Party all
information and evidence it may reasonably request concerning the Collateral to
enable such Secured Party to enforce the provisions of this Agreement.

 

4.6.  At the request of either Secured Party, Debtor will join with such Secured
Party in executing one or more (1) Financing Statements, (2) Copyright
Registration Applications, and/or (3) Notices of Assignment of Copyright
pursuant to any applicable law, in form satisfactory to the Secured Parties.

 

4.7  The Debtor shall not, without the prior written approval of the Secured
Parties, , sell, encumber or otherwise transfer any Collateral, or agree or
attempt to do so, other than licenses to customers and others in the ordinary
course of business, sales of Debtor’s products in the ordinary course of
business and sales of obsolete or excess assets in the ordinary course of
business..

 

4.8

 

(a) Debtor shall notify the Secured Parties promptly of: (i) any material delay
in Debtor’s performance of any of its obligations to any account debtor or the
assertion of any claims, offsets, defenses or counterclaims by any account
debtor, or any disputes with account debtors, or any settlement, adjustment or
compromise thereof, (ii) all material adverse information relating to the
financial condition of any account debtor and (iii) any event or circumstance
which, to Debtor’s knowledge would cause any then existing Accounts to no longer
be collected pursuant to their original terms. No credit, discount, allowance or
extension or agreement for any of the foregoing shall be granted to any account
debtor without the Secured Parties’ consent, except in the ordinary course of
Debtor’s business in accordance with practices and policies previously disclosed
in writing to Debtor. So long as

 

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no Event of Default exists or has occurred and is continuing, Debtor shall
settle, adjust or compromise any claim, offset, counterclaim or dispute with any
account debtor. At any time that an Event of Default exists or has occurred and
is continuing, the Secured Parties shall, at their option, have the exclusive
right to settle, adjust or compromise any claim, offset, counterclaim or dispute
with account debtors or grant any credits, discounts or allowances.

 

(b) Either Secured Party shall have the right at any time or times, in such
Secured Party’s name or in the name of a nominee of such Secured Party, to
verify the validity, amount or any other matter relating to any Account or other
Collateral, by mail, telephone, facsimile transmission or otherwise.

 

(c) Either Secured Party may, at any time or times that an Event of Default
exists or has occurred and is continuing, (i) notify any or all account debtors
that the Accounts have been assigned to the Secured Parties and that the Secured
Parties has a security interest therein and the Secured Parties may direct any
or all accounts debtors to make payment of Accounts directly to the Secured
Parties, (ii) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of merchandise or otherwise, and upon any terms or
conditions, any and all Accounts or other obligations included in the Collateral
and thereby discharge or release the account debtor or any other party or
parties in any way liable for payment thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Accounts or such
other obligations, but without any duty to do so, and the Secured Parties shall
not be liable for its failure to collect or enforce the payment thereof nor for
the negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action the Secured Parties may deem necessary or desirable for
the protection of its interests. At any time that an Event of Default exists or
has occurred and is continuing, at either the Secured Party’s request, all
invoices and statements sent to any account debtor shall state that the Accounts
and such other obligations have been assigned to the Secured Parties and are
payable directly and only to the Secured Parties and Debtor shall deliver to the
Secured Parties such originals of documents evidencing the sale and delivery of
goods or the performance of services giving rise to any Accounts as the Secured
Parties may require.

 

4.9  With respect to the Equipment:

 

(a) upon either Secured Party’s request, Debtor shall, at its expense, at any
time or times as such Secured Party may request on or after an Event of Default,
deliver or cause to be delivered to the Secured Parties written reports or
appraisals as to the Equipment in form, scope and methodology acceptable to the
Secured Parties and by an appraiser acceptable to the Secured Parties;

 

(b) Debtor shall keep the Equipment in good order, repair, running and
marketable condition (ordinary wear and tear excepted);

 

(c) Debtor shall use the Equipment with all reasonable care and caution and in
accordance with applicable standards of any insurance and in conformity with all
material applicable laws;

 

(d) the Equipment is and shall be used in Debtor’s business and not for
personal, family, household or farming use;

 

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(e) the Equipment is now and shall remain personal property and Debtor shall not
permit any of the Equipment to be or become a part of or affixed to real
property; and

 

(f) Debtor assumes all responsibility and liability arising from the use of the
Equipment unless in the Secured Parties’ possession.

 

4.10  With respect to the Inventory:

 

(a) upon either Secured Party’s request, Debtor shall, at its expense, no more
than once in any twelve (12) month period, but at any time or times as either
Secured Party may request on or after an Event of Default, deliver or cause to
be delivered to the Secured Parties written reports or appraisals as to the
Inventory in form, scope and methodology acceptable to the Secured Parties and
by an appraiser acceptable to the Secured Parties, addressed to the Secured
Parties, upon which the Secured Parties are expressly permitted to rely;

 

(b) Debtor shall produce, use, store and maintain the Inventory with all
reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto);

 

(c) Debtor assumes all responsibility and liability arising from or relating to
the production, use, sale or other disposition of the Inventory; and

 

(d) Debtor shall keep the Inventory in good and marketable condition.

 

4.11  Debtor shall duly pay and discharge all taxes, assessments, contributions
and governmental charges upon or against it or its properties or assets, except
for taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to Debtor and with respect to which
adequate reserves have been set aside on its books. Debtor shall be liable for
any tax or penalties (other than income taxes, franchise taxes and any penalties
related thereto) imposed on the Secured Parties as a result of the financing
arrangements provided for herein and Debtor agrees to indemnify and hold the
Secured Parties harmless with respect to the foregoing, and to repay to the
Secured Parties on demand the amount thereof, and until paid by Debtor such
amount shall be added and deemed part of the Loan. The foregoing indemnity shall
survive the payment of the Secured Obligations and the termination or
non-renewal of this Agreement.

 

4.12.  Except in the ordinary course of business, other than the Secured
Obligations, Debtor shall not incur, create, assume, become liable in any manner
with respect to, or permit to exist, any obligations or indebtedness.

 

5.  General Authority. Debtor hereby irrevocably appoints the Secured Parties as
its true and lawful attorneys, with full power of substitution, in the name of
Debtor, the Secured Parties or otherwise, for the sole use and benefit of the
Secured Parties, but at such Debtor’s expense, to the extent permitted by law to
exercise, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral owned by Debtor:  (a) to settle, compromise,

 

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compound, prosecute or defend any action or proceeding with respect to the
Collateral, (b) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the Secured
Parties were the absolute owner of the Collateral; provided, that the Secured
Parties shall give Debtor not less than 10 days’ prior written notice of the
time and place of any sale or other intended disposition of any of the
Collateral, except any Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market. 
Debtor agrees that such notice constitutes “reasonable notification” within the
meaning of Section 9-504(3) of the UCC.

 

6.  Remedies Upon Event of Default.

6.1.  If any Event of Default has occurred and is continuing, either Secured
Party may exercise all other rights of a secured party under the UCC (whether or
not in effect in the jurisdiction where such rights are exercised) and, in
addition, the Secured Parties may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
sell the Collateral or any part thereof at public or private sale or at any
broker’s board or on any securities exchange, for cash, upon credit or for
future delivery, and at such price or prices as the Secured Parties may deem
satisfactory.  Either Secured Party may be the purchaser of any or all of the
Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations, at any private sale) and
thereafter hold the same, absolutely, free from any right or claim of whatsoever
kind.  Debtor agrees to execute and deliver such documents and take such other
action as either Secured Party deems necessary or advisable in order that any
such sale may be made in compliance with law.  Upon any such sale, the Secured
Parties shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold.  Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely, free from any claim or right of whatsoever
kind, including any equity or right of redemption of Debtor which may be waived
and Debtor, to the extent permitted by law, hereby specifically waives all
rights of redemption, stay or appraisal which it has or may have under any law
now existing or hereafter adopted.  The notice of sale shall, (1) in case of a
public sale, state the time and place fixed for such sale, and (2) in the case
of a private sale, state the day after which such sale may be consummated.  Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Secured Parties may fix in the notice
of such sale.  At any such sale the Collateral may be sold in one lot as an
entirety or in separate parcels, as the Secured Parties may determine.  The
Secured Parties shall not be obligated to make any such sale pursuant to any
such notice.  The Secured Parties may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned.  In case of any
sale of all or any part of the Collateral on credit or for future delivery, the
Collateral so sold may be retained by the Secured Parties until the selling
price is paid by the purchaser thereof, but the Secured Parties shall not incur
any liability in case of the failure of such purchaser to take up and pay for
the Collateral so sold and, in case of any such failure, such Collateral may
again be sold upon like notice.  The Secured Parties, instead of exercising the
power of sale herein conferred upon them, may proceed by a suit or suits at law
or in equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction.

 

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6.2.  For the purpose of enforcing any and all rights and remedies under this
Agreement, if any Event of Default has occurred and is continuing, then either
Secured Party may (a) require Debtor to, and Debtor agrees that it will, at its
own expense, forthwith assemble all or any part of the Collateral as directed by
such Secured Party and make it available at a place designated by such Secured
Party which is, in its opinion, reasonably convenient to such Secured Party and
Debtor, whether at the premises of Debtor or otherwise, (b) to the extent
permitted by applicable law, enter, with or without process of law and without
breach of the peace, any premise where any of the Collateral is or may be
located, and without charge or liability to it seize and remove such Collateral
from such premises, (c) have access to and use any of Debtor’s books and records
relating to the Collateral and (d) prior to the disposition of the Collateral,
process, repair or recondition it or otherwise prepare it for disposition in any
manner and to the extent such Secured Party deems appropriate and, in connection
with such preparation and disposition, use without charge any trademark, trade
name, copyright, patent or technical process used by Debtor.

 

6.3.  Any laboratory which has possession of any of the Collateral is hereby
constituted and appointed by Debtor as pledgeholder for the Secured Parties and
the Secured Parties may authorize each such pledgeholder to sell all or any
portion of the Collateral upon the order and direction of the Secured Parties,
and Debtor hereby waives any and all claims for damages, or otherwise, for any
action taken by such pledgeholder.

 

7.  Application of Proceeds. Upon the occurrence and during the continuance of
an Event of Default, the proceeds of any sale of, or other realization upon, all
or any part of the Collateral shall be applied by the Secured Parties in the
following order of priorities:

 

7.1.  First, to payment of the expenses of such sale or other realization,
including, on a pari passu basis, reasonable compensation to agents and counsel
for each Secured Party and all expenses, liabilities and advances incurred or
made by each Secured Party in connection therewith, and any other unreimbursed
expenses for which either Secured Party is to be reimbursed under any other
agreement or instrument entered into in connection with the Loan or this
Agreement and unpaid fees owing to either Secured Party.

 

7.2.  Next, to the payment of the Secured Obligations, on a pari passu basis, in
accordance with the provisions of the Loan, until all such amounts have been
paid in full.

 

7.3.  Finally, to Debtor or its successors or assigns, or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.

 

The Secured Parties may make distributions hereunder in cash or in kind or in
any combination thereof.

 

8.  Termination of Security Interest; Release of Collateral. Upon the repayment
in full of all Secured Obligations, the Security Interests shall terminate and
all rights to the Collateral shall revert to Debtor.  At any time and from time
to time prior to such termination of the Security Interests, the Secured Parties
may release any of the Collateral or release Debtor of its obligations hereunder
with the prior written consent of each Secured Party.

 

9.  Governing Law. This Agreement is governed by and construed in accordance
with the laws of the State of California, irrespective of California’s
choice-of-law principles.

 

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10.  Further Assurances. Each party to this Agreement shall execute and deliver
all instruments and documents and take all actions as may be reasonably required
or appropriate to carry out the purposes of this Agreement.

 

11.  Counterparts and Exhibits. This Agreement may be executed in counterparts,
each of which is deemed an original and all of which together constitute one
document.  All exhibits attached to and referenced in this Agreement are
incorporated into this Agreement.

 

12.  Time of Essence. Time and strict and punctual performance are of the
essence with respect to each provision of this Agreement.

 

13.  Attorney’s Fees. The prevailing party(ies) in any litigation, arbitration,
mediation, bankruptcy, insolvency or other proceeding (“Proceeding”) relating to
the enforcement or interpretation of this Agreement may recover from the
unsuccessful party(ies) all costs, expenses, and actual attorney’s fees
(including expert witness and other consultants’ fees and costs) relating to or
arising out of (a) the Proceeding (whether or not the Proceeding proceeds to
judgment), and (b) any post-judgment or post-award proceeding including, without
limitation, one to enforce or collect any judgment or award resulting from the
Proceeding.  All such judgments and awards shall contain a specific provision
for the recovery of all such subsequently incurred costs, expenses, and actual
attorney’s fees.

 

14.  Modification. This Agreement may be modified only by a contract in writing
executed by the party to this Agreement against whom enforcement of the
modification is sought.

 

15.  Headings.  The paragraph headings in this Agreement:  (a) are included only
for convenience, (b) do not in any manner modify or limit any of the provisions
of this Agreement, and (c) may not be used in the interpretation of this
Agreement.

 

16.  Prior Understandings.  This Agreement and all documents specifically
referred to and executed in connection with this Agreement:  (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.

 

17.  Interpretation.  Whenever the context so requires in this Agreement, all
words used in the singular may include the plural (and vice versa) and the word
“person” includes a natural person, a corporation, a firm, a partnership, a
joint venture, a trust, an estate or any other entity.  The terms “includes” and
“including” do not imply any limitation.  For purposes of this Agreement, the
term “day” means any calendar day and the term “business day” means any calendar
day other than a Saturday, Sunday or any other day designated as a holiday under
California Government Code Sections 6700-6701.  Any act permitted or required to
be performed under this Agreement upon a particular day which is not a business
day may be performed on the next business day with the same effect as if it had
been performed upon the day appointed.  No remedy or election under this
Agreement is exclusive, but rather, to the extent permitted by applicable law,
each such remedy and election is cumulative with all other remedies at law or in
equity.

 

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18.  Partial Invalidity.  Each provision of this Agreement is valid and
enforceable to the fullest extent permitted by law.  If any provision of this
Agreement (or the application of such provision to any person or circumstance)
is or becomes invalid or unenforceable, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, are not affected by such invalidity
or unenforceability.

 

19.  Successors-in-Interest and Assigns.  Debtor may not voluntarily or by
operation of law assign, hypothecate, delegate or otherwise transfer or encumber
all or any part of its rights, duties or other interests in this Agreement
without the prior written consent of each Secured Party, which consent may be
withheld in each Secured Party’s sole and absolute discretion.  Any such
transfer in violation of this paragraph is void.  Subject to the foregoing and
any other restrictions on transferability contained in this Agreement, this
Agreement is binding upon and inures to the benefit of the
successors-in-interest and assigns of each party to this Agreement

 

20.  Notices. All notices or other communications required or permitted to be
given to a party to this Agreement shall be in writing and shall be personally
delivered, sent by certified mail, postage prepaid, return receipt requested, or
sent by an overnight express courier service that provides written confirmation
of delivery, to such party at the following respective address:

 

Spescom UK and Spescom SA

P.O. Box 288

Halfway House 1685 Midrand

South Africa

Attention:  Hilton Isaacman

 

with a copy to:        Solomon, Ward, Seidenwurm & Smith, LLP

401 B Street, Suite 1200

San Diego, CA 92101

Attention: Norman L. Smith

 

Spescom Software, Inc.

9339 Carroll Park Drive

San Diego, CA 92121

Attention:  John Low

 

Each such notice or other communication shall be deemed given, delivered and
received upon its actual receipt, except that if it is sent by mail in
accordance with this paragraph, then it shall be deemed given, delivered and
received three days after the date such notice or other communication is
deposited with the United States Postal Service in accordance with this
paragraph.  Any party to this Agreement may give a notice of a change of its
address to the other party(ies) to this Agreement.

 

21.  Waiver.  Any waiver of a default or provision under this Agreement must be
in writing.  No such waiver constitutes a waiver of any other default or
provision concerning the same or any other provision of this Agreement.  No
delay or omission by a party in the

 

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exercise of any of its rights or remedies constitutes a waiver of (or otherwise
impairs) such right or remedy.  A consent to or approval of an act does not
waive or render unnecessary the consent to or approval of any other or
subsequent act.

 

22.  Drafting Ambiguities.  Each party to this Agreement has reviewed and
revised this Agreement and has had the opportunity to have such party’s legal
counsel review and revise this Agreement.  Each party to this Agreement
acknowledges that this Agreement has been prepared by Solomon Ward Seidenwurm &
Smith, LLP (“SWSS”) which represents only Spescom SA, that Debtor and Spescom UK
are not being represented by SWSS in relation to this Agreement and that Debtor
and Spescom UK have been advised to retain their own legal counsel. The rule of
construction that ambiguities are to be resolved against the drafting party or
in favor of the party receiving a particular benefit under an agreement may not
be employed in the interpretation of this Agreement or any amendment to this
Agreement.

 

23.  Third Party Beneficiaries.  Nothing in this Agreement is intended to confer
any rights or remedies on any person or entity other than the parties to this
Agreement and their respective successors-in-interest and permitted assignees,
unless such rights are expressly granted in this Agreement to another person
specifically identified as a “Third Party Beneficiary.”

 

24.  ARBITRATION OF DISPUTES.  WITHOUT LIMITING IN ANY WAY THE SECURED PARTIES’
RIGHT TO ENFORCE ANY REMEDY AVAILABLE UNDER THE UCC WITHOUT FORMAL LEGAL OR
JUDICIAL ACTION, ANY CONTROVERSY OR CLAIM RELATING TO THIS AGREEMENT SHALL BE
SETTLED BY ARBITRATION IN SAN DIEGO, CALIFORNIA, IN ACCORDANCE WITH THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION, AND
JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION.  THE ARBITRATOR(S) SHALL NOT HAVE THE AUTHORITY TO
AWARD PUNITIVE DAMAGES AGAINST ANY PARTY(IES) TO THIS AGREEMENT.  NO PROVISION
OF THIS PARAGRAPH SHALL LIMIT THE RIGHT OF ANY PARTY TO EXERCISE SELF–HELP
REMEDIES SUCH AS FORECLOSURE AGAINST OR SALE OF ANY REAL OR PERSONAL PROPERTY

COLLATERAL OR SECURITY, OR TO OBTAIN PROVISIONAL OR ANCILLARY REMEDIES FROM A
COURT OF COMPETENT JURISDICTION BEFORE, AFTER, OR DURING THE PENDENCY OF ANY
ARBITRATION OR OTHER PROCEEDING.  THE EXERCISE OF A REMEDY SHALL NOT WAIVE THE
RIGHT OF EITHER PARTY TO RESORT TO ARBITRATION.

 

NOTICE:  YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THIS AGREEMENT
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING
UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY
TRIAL.  YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL.  IF YOU
REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

 

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DEBTOR:

 

ALTRIS SOFTWARE, INC

 

 

 

a California corporation

 

 

 

 

 

 

 

By:

  /s/John W. Low

 

 

 

 

John W. Low

 

 

 

Chief Financial Officer

 

 

 

 

 

SECURED PARTIES:

 

 

 

 

 

 

 

 

 

SPESCOM LIMITED.,

 

 

 

a South African corporation

 

 

 

 

 

 

 

By:

 

  /s/Hilton Isaacman

 

 

 

 

Hilton Isaacman

 

 

 

Director Corporate Finance

 

 

 

 

 

 

 

 

 

 

 

SPESCOM LIMITED.,

 

 

 

a United Kingdom corporation

 

 

 

 

 

 

 

By:

 

  /s/Hilton Isaacman

 

 

 

 

Hilton Isaacman

 

 

 

Director Corporate Finance

 

 

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