**Exhibit10.35**

 

SECURED PROMISSORY NOTE

 
| $700,000.00 |   | SAN DIEGO,  CALIFORNIA |   | May 31,2002 |
|-------------|--------|------------------------|--------|-------------|

 

Altris Software, Inc., aCalifornia corporation (“Maker”), promises to pay on demand to Spescom LTD, aUnited Kingdom corporation, or order (“Holder”), the principal sum of theamounts set forth in the upper left-hand corner of this Secured Promissory Note(this “Note”), plus interest at the rate of ten percent (10.0%) per annum,payable as more fully set forth below:

 

1.             Payments. All unpaid principal and accrued interest under this Note shall beimmediately due and payable on demand by Holder.

 

2.             Manner of Payments.  All payments by Maker under this Note shall be (a) made in lawfulmoney of the United States of America without set off, deduction orcounterclaim of any kind whatsoever, (b) credited first to amounts for latecharges, if any, second to amounts for Holder’s costs of enforcing this Note,if any, third to any accrued interest under this Note and finally to theprincipal balance under this Note, and (c) deemed paid by Maker upon theiractual receipt by Holder.

 

3.             Security. This Note is secured by a security interest over all of the assets ofDebtor pursuant to a Security Agreement (the “Security Agreement”), includingapplicable financing statements, and a Pledge Agreement (the “PledgeAgreement”), all of even date herewith.

 

4.             Late Charge. If any amount of interest and/or principal under this Note is notreceived by Holder within fifteen (15) days after its due date, then, withoutany requirement for notice to Maker, Maker shall immediately pay to Holder anadditional sum of five percent (5%) of such overdue amount as a latecharge.  Such late charge is fair andreasonable based upon the facts and circumstances existing as of the date ofthis Note.  Acceptance of such latecharge by Holder shall not constitute a waiver of Maker’s default with respectto such overdue amount, nor prevent Holder from exercising any of the otherrights and remedies available to Holder under this Note, the Security Agreementor the Pledge Agreement.

 

5.             Default Interest.  If any payment under this Note is not received by Holder withinfifteen (15) days after its due date, then, without any requirement for noticeto Maker, the rate of interest on such overdue amount shall increase to thelesser of fourteen percent (14%) or the maximum legally permissible rate,whichever is the lesser, until such late payment is made.  Such default interest represents a fair andreasonable estimate of the costs that Holder will incur by reason of any latepayment by Maker.  Acceptance of suchdefault interest by Holder shall not constitute a waiver of Maker’s defaultwith respect to such overdue amount, nor prevent Holder from exercising any ofthe other rights and remedies available to Holder under this Note, the SecurityAgreement or the Pledge Agreement.

 

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6.             Prepayment. This Note may be prepaid in whole or in part at any time, provided thatamounts prepaid shall be credited first to amounts for late charges, if any,second to amounts for Holder’s costs of enforcing this Note, if any, third toany accrued interest under this Note and finally to the principal balance underthis Note.

 

7.             Note Waivers. Maker waives presentment, demand, protest, notice of demand anddishonor.

 

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

 

9.             Further Assurances.  Each party to this Note shall execute and deliver all instrumentsand documents and take all actions as may be reasonably required or appropriateto carry out the purposes of this Note.

 

10.           Venue and Jurisdiction. All actions and proceedingsarising in connection with this Note must be tried and litigated exclusively inthe State and Federal courts located in San Diego County, California, whichcourts have personal jurisdiction and venue over each of the parties to thisNote for the purpose of adjudicating all matters arising out of or related tothis Note.  Each party authorizes and acceptsservice of process sufficient for personal jurisdiction in any action againstit as contemplated by this paragraph by registered or certified mail, returnreceipt requested, postage prepaid, to its address for the giving of noticesset forth in this Note.

 

11.           Time of Essence. Time and strict and punctual performance are of the essence with respectto each provision of this Note.

 

12.           Attorneys’ Fees. The prevailing party in anylitigation, arbitration, mediation, bankruptcy, insolvency or other proceeding(“Proceeding”) relating to the enforcement or interpretation of this Note mayrecover from the unsuccessful party all costs, expenses, and actual attorney’sfees (including expert witness and other consultants’ fees and costs) relatingto or arising out of (a) the Proceeding (whether or not the Proceeding proceedsto judgment), and (b) any post-judgment or post-award proceeding including,without limitation, one to enforce or collect any judgment or award resultingfrom the Proceeding.  All such judgmentsand awards shall contain a specific provision for the recovery of all suchsubsequently incurred costs, expenses, and actual attorney’s fees.

 

13.           Partial Invalidity.  Each provision of this Note is valid and enforceable to thefullest extent permitted by law.  If anyprovision of this Note (or the application of such provision to any person orcircumstance) is or becomes invalid or unenforceable, the remainder of thisNote, and the application of such provision to persons or circumstances otherthan those as to which it is held invalid or unenforceable, are not affected bysuch invalidity or unenforceability.

 

14.           Waiver.  Anywaiver of a default or provision under this Note must be in writing.  No such waiver constitutes a waiver of anyother default or provision

 

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concerning the same or any other provision ofthis Note.  No delay or omission by aparty in the 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 unnecessarythe consent to or approval of any other or subsequent act.

 

15.           Interest Limitation.  It is not intended by any provision of this Note to chargeinterest at a rate in excess of the maximum rate of interest permitted to becharged to Maker under applicable law on a cumulative basis over the life ofthe loan evidenced by this Note (the “Loan”). If by mistake or error, interest in excess of such maximum rate shall bepaid for any period during the term of the Loan, the excess amount shall, ifpermitted by applicable law, be retained by Holder as additional cash  collateral for the Loan to be held withoutinterest or trust and commingled with other assets of Holder or, if not permittedto be so held by Holder, shall be refunded to Maker.  If for any period during the term of the Loan, Holder is unable,because of a limitation on the rate of interest permitted to be charged toMaker under applicable law, to collect all of the interest and premium providedfor in this Note, such interest or premium (“Interest Shortage”) shall, ifpermitted by applicable law, be added to the interest earned or to be earnedfor prior or subsequent periods during the term of the Loan so that, to theextent permitted by applicable law on a cumulative basis over the life of theLoan, Holder may collect all of the interest and premium provided for in thisNote, the same to be accomplished in the following manner, or otherwise aspermitted by applicable law:  (1) ifHolder were permitted by applicable law to charge interest to Maker in suchprior periods in excess of the amount of interest and premium actually chargedduring such prior periods, then the interest due on the Loan for such priorperiods shall automatically be increased by the amount of such InterestShortage, but not in excess of the maximum interest permitted to be charged toMaker during such prior periods, and such increased interest for such priorperiods shall be immediately due and payable upon demand; and (2) if Holdershall have collected all interest permitted by applicable law to be charged toMaker in such prior periods, and if Holder is thereafter permitted byapplicable law to charge interest to Maker in such subsequent periods in excessof the amount of interest and premium actually charged during such subsequentperiods, the interest due on the Loan for such subsequent periods shallautomatically be increased by the amount of such Interest Shortage, but not inexcess of the maximum interest permitted to be charged to Maker during suchsubsequent period, and such increased interest for such subsequent periodsshall be due and payable at the end of each such subsequent period upon demand.

 

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

 
| Holder: | Spescom  LTD                     |
|---------|----------------------------------|
|    | P.O.  Box 288                    |
|    | Halfway  House 1685 Midrand      |
|    | South  Africa                    |
|    | Attention:  Hilton Isaacman |

 

 

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| with  a copy to: | Solomon,  Ward, Seidenwurm & Smith, LLP |
|------------------|---------------------------------------------|
|             | 401  B Street, Suite 1200                   |
|             | San  Diego, CA 92101                        |
|             | Attention:  Norman L. Smith                 |
|             |                                        |
| Maker:           | Altris  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 bymail in accordance with this paragraph, then it shall be deemed given,delivered and received three days after the date such notice or othercommunication is deposited with the United States Postal Service in accordancewith this paragraph.  Any party to thisNote may give a notice of a change of its address to the other party to thisNote.

 

17.           DraftingAmbiguities.Each party to this Note has reviewed and revised thisNote.  Each party to this Note has hadthe opportunity to have such party’s legal counsel review and revise thisNote.  Altris acknowledges that thisNote has been prepared by Solomon Ward Seidenwurm & Smith, LLP (“SWSS”)which represents only Spescom Ltd., a United Kingdom corporation, with respectto this Note and all related matters, that it is not being represented by SWSSin relation to this Note and related matters and that it has been advised toretain its own legal counsel. The rule of construction that ambiguities are tobe resolved against the drafting party or in favor of the party receiving aparticular benefit under an agreement may not be employed in the interpretationof this Note or of any amendments to this Note.

 
|   | ALTRIS  SOFTWARE, INC.    |
|--------|---------------------------|
|   | a  California corporation |
|   |                      |   |
|   | By:                       | /s/John W. Low |   |
|   |                      |   | John W. Low |
|   |                      |   | Chief Financial Officer |
|        |                           |  |  |  |

 

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