Document:

Exhibit
10.10

 

SECURED
PROMISSORY NOTE

 

	
  $600,000.00

  	
   

  	
  SAN DIEGO,
  CALIFORNIA

  	
   

  	
  November 18,
  2003

  

 

Altris Software, Inc., a California
corporation (“Maker”), promises to pay on demand to Spescom LTD, a United
Kingdom corporation, or order (“Holder”), the principal sum of the amounts set
forth in the upper left-hand corner of this Secured Promissory Note (this
“Note”), plus interest at the rate of five percent (5.0%) per annum, payable as
more fully set forth below:

 

1.                                       Payments.  On January 31, 2004 Maker will pay
Holder $300,000 in principal plus any accrued interest. All remaining unpaid
principal and accrued interest under this Note shall be immediately due and
payable on March 31, 2004.

 

2.                                       Manner of
Payments.  All payments by Maker
under this Note shall be (a) made in lawful money of the United States of
America without set off, deduction or counterclaim of any kind whatsoever, (b)
credited first to amounts for late charges, 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 the principal balance under this Note, and (c)
deemed paid by Maker upon their actual receipt by Holder.

 

3.                                       Security.  This Note is secured by a security interest
over all of the assets of Debtor pursuant to a Security Agreement (the
“Security Agreement”), including applicable financing statements, and a Pledge
Agreement (the “Pledge Agreement”), all of March 15, 2002.

 

4.                                       Late Charge.  If any amount of interest and/or principal
under this Note is not received by Holder within fifteen (15) days after its
due date, then, without any requirement for notice to Maker, Maker shall
immediately pay to Holder an additional sum of five percent (5%) of such
overdue amount as a late charge. Such late charge is fair and reasonable based
upon the facts and circumstances existing as of the date of this Note.
Acceptance of such late charge by Holder shall not constitute a waiver of
Maker’s default with respect to such overdue amount, nor prevent Holder from
exercising any of the other rights and remedies available to Holder under this
Note, the Security Agreement or the Pledge Agreement.

 

5.                                       Default
Interest.  If any payment under this
Note is not received by Holder within fifteen (15) days after its due date,
then, without any requirement for notice to Maker, the rate of interest on such
overdue amount shall increase to the lesser 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 and reasonable
estimate of the costs that Holder will incur by reason of any late payment by
Maker. Acceptance of such default interest by Holder shall not constitute a
waiver of Maker’s default with respect to such overdue amount, nor prevent
Holder from exercising any of the other rights and remedies available to Holder
under this Note, the Security Agreement or the Pledge Agreement.

 

 

6.                                       Prepayment.  This Note may be prepaid in whole or in part
at any time, provided that amounts 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 to any accrued interest under this Note and finally to
the principal balance under this Note.

 

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

 

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

 

9.                                       Further
Assurances.  Each party to this Note
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
Note.

 

10.                                 Venue and
Jurisdiction.  All actions and
proceedings arising in connection with this Note must be tried and litigated
exclusively in the State and Federal courts located in San Diego County,
California, which courts have personal jurisdiction and venue over each of the
parties to this Note for the purpose of adjudicating all matters arising out of
or related to this Note.  Each party
authorizes and accepts service of process sufficient for personal jurisdiction
in any action against it as contemplated by this paragraph by registered or
certified mail, return receipt requested, postage prepaid, to its address for
the giving of notices set forth in this Note.

 

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

 

12.                                 Attorneys’ Fees.  The prevailing party in any litigation,
arbitration, mediation, bankruptcy, insolvency or other proceeding
(“Proceeding”) relating to the enforcement or interpretation of this Note may
recover from the unsuccessful party 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.

 

13.                                 Partial Invalidity.  Each provision of this Note is valid and
enforceable to the fullest extent permitted by law.  If any provision of this Note (or the application of such
provision to any person or circumstance) is or becomes invalid or
unenforceable, the remainder of this Note, 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.

 

14.                                 Waiver.  Any waiver of a default or provision under
this Note 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 Note.  No delay or omission by a party 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 unnecessary the
consent to or approval of any other or subsequent act.

 

15.                                 Interest
Limitation.  It is not intended by
any provision of this Note to charge interest at a rate in excess of the
maximum rate of interest permitted to be charged to Maker under applicable law
on a cumulative basis over the life of the loan evidenced by this Note (the
“Loan”).  If by mistake or error,
interest in excess of such maximum rate shall be paid for any period during the
term of the Loan, the excess amount shall, if permitted by applicable law, be
retained by Holder as additional cash collateral for the Loan to be held
without interest or trust and commingled with other assets of Holder or, if not
permitted to 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 to Maker under applicable law,
to collect all of the interest and premium provided for in this Note, such
interest or premium (“Interest Shortage”) shall, if permitted by applicable
law, be added to the interest earned or to be earned for prior or subsequent
periods during the term of the Loan so that, to the extent permitted by
applicable law on a cumulative basis over the life of the Loan, Holder may
collect all of the interest and premium provided for in this Note, the same to
be accomplished in the following manner, or otherwise as permitted by
applicable law: (1) if Holder were permitted by applicable law to charge
interest to Maker in such prior periods in excess of the amount of interest and
premium actually charged during such prior periods, then the interest due on
the Loan for such prior periods shall automatically be increased by the amount
of such Interest Shortage, but not in the excess of maximum interest permitted
to be charged to Maker during such prior periods, and such increased interest for
such prior periods shall be immediately due and payable upon demand; and (2) if
Holder shall have collected all interest permitted by applicable law to be
charged to Maker in such prior periods, and if Holder is thereafter permitted
by applicable law to charge interest to Maker in such subsequent periods in
excess of the amount of interest and premium actually charged during such
subsequent periods, the interest due on the Loan for such subsequent periods
shall automatically be increased by the amount of such Interest Shortage, but
not in excess of the maximum interest permitted to be charged to Maker during
such subsequent period, and such increased interest for such subsequent periods
shall 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 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:

 

	
  Holder:

  	
   

  	
  Spescom LTD

  
	
   

  	
   

  	
  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

  
	
   

  	
   

  	
   

  
	
  Maker:

  	
   

  	
  Altris Software, Inc.

  
	
   

  	
   

  	
  10052 Mesa Ridge Court, Suite #100

  
	
   

  	
   

  	
  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
Note may give a notice of a change of its address to the other party to this
Note.

 

17.                                 Drafting
Ambiguities.Each party to this Note has reviewed and revised this
Note.  Each party to this Note has had
the opportunity to have such party’s legal counsel review and revise this
Note.  Altris acknowledges that this
Note has been prepared by Solomon Ward Seidenwurm & Smith, LLP (“SWSS”)
which represents only Spescom Ltd., a United Kingdom corporation, with respect
to this Note and all related matters, that it is not being represented by SWSS
in relation to this Note and related matters and that it has been advised to retain
its 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 Note or of any amendments to this
Note.

 

 

	
   

  	
  ALTRIS
  SOFTWARE, INC.

  
	
   

  	
  a California
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W.
  Low

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  John W. Low

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial OfficerExhibit 10.39

 

[COMPANY
LETTERHEAD]

 

October 14, 2003

 

James L. Bildner

5 Boardman Avenue

Manchester, Massachusetts 01944

 

Dear Jim:

 

This letter sets forth the terms and conditions of our agreement (the
“Agreement”) regarding your termination of employment with TIER TECHNOLOGIES, INC. (the “Company”)
pursuant to Sections 3 and 4 of the Third Amended and Restated Employment
Agreement effective as of October 1, 2000, by and between the Company and you
(the “Employment Agreement”). Effective September 30,2003, you and the Company
hereby agree as follows:

 

1.             Separation.  Your
duties as Chief Executive Officer pursuant to the Employment Agreement ended on
August 30, 2003.  In all other respects,
except as provided herein, the Company and you agree that you will continue as
an employee of the Company under the terms of the Employment Agreement during
the period from August 30, 2003, to April 1, 2004 (such period is referred to
herein as the “Transition Period”). 
During the Transition Period, (i) you will receive the Base Salary and
benefits provided in the Employment Agreement until September 30, 2003, and
from October 1, 2003 through April 1, 2004, your annual Base Salary will be
$100,000, and, except as provided herein, you will receive the other benefits
provided in the Employment Agreement, and (ii) the Company will not terminate
your employment with the Company.  You
and the Company further agree that you will resign as an employee of the
Company effective as of April 1, 2004 (the “Separation Date”), by executing and
delivering to the Company the resignation letter attached hereto as Exhibit
A.  During the period from October 1,
2003, through April 1, 2004, you will continue to be an employee of the Company
for all purposes and provide services on an “as needed” basis.

 

2.             Accrued
Salary and Vacation.  As soon as practicable after September 30,
2003, the Company will pay you all of your accrued but unused vacation through
such date, based on your salary in effect, prior to October 1, 2003, and you
will not accrue any vacation after such date. 
On the Separation Date, the Company will pay you all accrued but unpaid
salary as of that date, subject to standard payroll deductions and
withholdings.  You are entitled to these
payments regardless of whether or not you sign this Agreement.

 

1

 

3.             Severance
Benefits.  Upon your furnishing the Company with an
effective Release and Waiver of Claims in the form attached to this Agreement
as Exhibit B, and in addition to the amounts specified in Paragraph 2 hereof,
the Company agrees to provide you with the following severance benefits:

 

(a)           Total payments of $675,000, subject to
standard payroll deductions and withholdings, of which $225,000 will be paid on
November 1, 2003, $225,000 will be paid on the Separation Date and the
remaining $225,000 will be paid on April 1, 2005.

 

(b)           All options to purchase Company stock
(“Options”), granted to you pursuant to any plan or otherwise shall remain
outstanding and shall become immediately accelerated and fully vested as of the
Separation Date and any restrictions on such Options shall to the extent
permissible under applicable securities laws, fully lapse as of that date;

 

(c)           The exercise period of your Options shall be
extended such that the Options may be exercised up to and until April 1, 2006;

 

(d)           In the event that you elect to continue
coverage under COBRA, the Company will reimburse you for the same portion of
your COBRA health insurance premiums that it paid during your employment up
until the last day of your COBRA health insurance benefit coverage;

 

(e)           The Company shall provide you, for a period
of eighteen months following the Separation Date, with:  (1) telecommunications service and full
access to all email services and all equipment currently in your possession or
needed in the future to access these services; (2) reasonable office space; and
(3) secretarial assistance equivalent to the support you are currently
receiving, either as reimbursement for the cost of such assistance or as a
direct cost, in your discretion.  Any
such secretarial assistance will be provided by an individual who is classified
as an employee of the Company; and

 

(f)            If the Company terminates your employment
with the Company before April 1, 2004, for any reason, then notwithstanding
anything in the Employment Agreement to the contrary, (i) the date of such
termination shall be your “Separation Date” for purposes of Subparagraphs (a),
(b), (c), and (e) of this Paragraph 3, (ii) your lump payment described in
Subparagraph (a) above will be increased by the amount of the salary that you
would have been paid from the date of such termination of employment through
March 31, 2004, had you been continually employed during that time under the
Employment Agreement, and (iii) in addition to the continued benefits coverage
described in Subparagraph (d) above, the Company will provide you with
continued coverage of all such benefits from the date of such termination of
employment through March 31, 2004.

 

4.             Indemnification
Rights and Liability Insurance.  The Company will indemnify you
and take all steps necessary to provide indemnification for you, pursuant to
California Labor Code § 2802 and/or California Corporations Code § 317, for any
and all expenditures or losses, damages, judgments, witness fees, fines,
settlement payments, reasonable attorneys' fees and costs, incurred in the
defense or participation as a witness in any pending or threatened claims,
demands, suits, proceedings or actions, whether civil or criminal,
arbitrational, administrative, or investigative, arising from your employment
or service to the Company, to the maximum extent allowable by California
law.  Your indemnification, as described
in this Paragraph 4 will survive the later of the termination of your
employment or service relationship with the Company.  The

 

2

 

Company further agrees that your indemnification provided under this
Paragraph 4 includes the agreement and obligation to advance, on a monthly
basis, the full amount of all expenditures described in this Paragraph 4,
including your reasonable monthly attorneys' fees and costs in connection with
any claims, demands, and actions arising from or in connection with your
employment or service to the Company. 
For purposes of this agreement, reasonable attorneys' fees shall be
defined as the fees incurred by counsel of your own selection and shall not
exceed the hourly rate for the Company's outside counsel in the same or similar
matters.  Costs shall be defined as any
costs incurred by your counsel deemed by your counsel to be necessary in its
representation of you.  If the Company
contests your right to indemnification on the grounds that your actions did not
arise out of or in connection with your employment or service to the Company,
or for any other reason under this Paragraph 4, you shall still be entitled to
indemnification as described in this Paragraph 4 unless and until the trier of
fact in the applicable proceeding determines that your actions did not arise
from or in connection with your employment or service to the Company or that
you are otherwise not entitled to indemnification.  In addition, you will continue to be covered under the Company's
directors' and officers' liability insurance policy, and the Company shall
continue to maintain such an insurance policy with coverage for former
employees, officers and directors on the same terms and conditions as for
active employees, officers and directors, after the later of the termination of
your employment or service relationship with the Company.

 

5.             Proprietary
Information Obligations.  You acknowledge your continuing obligations
under your Proprietary Information and Inventions Agreement not to use or
disclose any confidential or proprietary information of the Company.  A copy of your Proprietary Information and
Inventions Agreement is attached hereto as Exhibit C.

 

6.             Miscellaneous. 
Except to the extent that provisions of the Employment Agreement and
Option agreements continue to apply, this Agreement, including Exhibits A, B
and C, (i) constitutes the complete, final and exclusive embodiment of the
entire agreement between you and the Company with regard to this subject matter
and supercedes any prior or inconsistent document, and (ii) is entered into
without reliance on any promise or representation, written or oral, other than
those expressly contained herein, and supersedes any other such promises,
warranties or representations.  This Agreement
may not be modified or amended except in a writing signed by both you and a
duly authorized officer of the Company. 
This Agreement shall bind the heirs, personal representatives,
successors and assigns of both you and the Company, and inure to the benefit of
both you and the Company, their heirs, successors and assigns.  If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the
provision in question shall be modified by the court so as to be rendered
enforceable.  This Agreement shall be
deemed to have been entered into and shall be construed and enforced in
accordance with the laws of the State of California as applied to contracts
made and to be performed entirely within California.

 

3

 

Please confirm your agreement to the foregoing terms and conditions by
signing and returning a copy of this letter to me.

 

Sincerely,

 

	
  TIER TECHNOLOGIES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeffrey A. McCandless

  	
   

  	
   

  
	
   

  	
  Jeffrey A. McCandless

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  Its:

  	
  SVP & CFO

  	
   

  	
   

  
					

 

Exhibit A – Resignation Letter

Exhibit B – Release and Waiver of Claims

Exhibit C – Proprietary Information and Inventions Agreement

 

	
  AGREED:

  	
   

  
	
   

  	
   

  
	
  /s/  James L. Bildner

  	
   

  	
  10/14/03

  	
   

  
	
  James L. Bildner

  	
  Date

  
				

 

4

 

EXHIBIT A

 

RESIGNATION
LETTER

 

April 1, 2004

 

Tier Technologies, Inc.

2001 N. Main Street, Suite 500

Walnut Creek, CA 94596

 

To the Board of Directors of Tier Technologies, Inc.:

 

I, James L. Bildner, hereby tender my resignation as an officer of Tier
Technologies, Inc., such resignation to be effective immediately.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  James L. Bildner

  

 

 

EXHIBIT B

 

RELEASE AND
WAIVER OF CLAIMS

 

I, JAMES L. BILDNER, hereby
furnish TIER TECHNOLOGIES, INC. (the ”Company”), with the following release and
waiver (“Release and Waiver”) in consideration of the payments and other
benefits set forth in Paragraph 3 of the letter Agreement dated
                              ,
2003, by and between the Company and me (the “Separation Agreement”):

 

I hereby release, and
forever discharge the Company, its officers, directors, agents, employees,
stockholders, successors, assigns, affiliates and benefit plans (the “Released Parties”),
of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (referred to collectively as “Claims”),
arising at any time prior to and including my employment termination date with
respect to any claims relating to my employment and the termination of my
employment, including but not limited to, claims pursuant to any federal, state
or local law relating to employment, including, but not limited to,
discrimination claims, claims under the California Fair Employment and Housing
Act, and the Federal Age Discrimination in Employment Act of 1967, as amended
(“ADEA”), or claims for wrongful termination, breach of the covenant of good
faith, contract claims, tort claims, and wage or benefit claims, including but
not limited to, claims for salary, bonuses, commissions, stock, stock options,
vacation pay, fringe benefits, severance pay or any form of compensation;
except that, the Released Parties shall not be so released with respect to any
Claims relating to or arising from rights granted to me pursuant to the
Separation Agreement between the Company and me, including, but not limited to,
my rights with respect to indemnification, coverage under employee benefit
plans of the Company and Company stock options granted to me.

 

I also acknowledge that I
have read and understand Section 1542 of the California Civil Code which reads
as follows: “A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with
the debtor.”  I hereby expressly waive
and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against
the Company.

 

I acknowledge that, among
other rights, I am waiving and releasing any rights I may have under ADEA, that
this Release and Waiver is knowing and voluntary, and that the consideration
given for this Release and Waiver is in addition to anything of value to which
I was already entitled as an employee of the Company. I further acknowledge
that I have been advised, as required by the Older Workers Benefit Protection
Act, that: (a) the Release and Waiver granted herein does not relate to claims
which may arise after this Release and Waiver is executed; (b) I have the right
to consult with an attorney prior to executing this Release and Waiver
(although I may choose voluntarily not to do so); and if I am over 40 years of
age upon execution of this Release and Waiver: (c) I have twenty-one (21) days
from the date of termination of my employment with the Company in which to
consider this Release and Waiver (although I may choose voluntarily to execute
this Release and Waiver earlier); (d) I have seven (7) days

 

 

following the execution of
this Release and Waiver to revoke my consent to this Release and Waiver; and
(e) this Release and Waiver shall not be effective until the seven (7) day
revocation period has expired.

 

	
  Date: 

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  James L. Bildner

  	
   

  

 

 

EXHIBIT C

 

PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT

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