Document:

<PAGE>   1

                                                                 EXHIBIT 10.27

                              SETTLEMENT AGREEMENT
                              --------------------

         This is a Settlement Agreement ("Agreement"), dated effective December
1, 2000, and between CSA Private Limited, a Singapore corporation ("CSA") and
MAI Systems Corporation, a Delaware corporation ("MAI").

                                    RECITALS
                                    --------

a. On December 28, 1999, CSA filed a complaint against MAI in the United States
District Court for the Central District of California, Southern Division, Case
No. SACV99-1592 DOC ("the Litigation"), which sought injunctive relief and
damages for MAI's alleged breach of the Agreement of Settlement and Release (the
"Settlement Agreement"), dated May 13, 1999, between the parties.

b. On or about March 6, 2000, MAI filed its answer to CSA's complaint in the
Litigation, denying its material allegations and raising various material
affirmative defenses. On November 24, 2000, CSA and MAI reached an agreement in
principle to settle the Litigation according to the provisions of a Settlement
Term Sheet, a copy of which is attached as Exhibit "A". The parties intend this
Settlement Agreement to fully express and implement the intentions of the
parties to settle the case in accordance with the Settlement Term Sheet.

c. CSA and MAI now compromise and settle their disputes and end the Litigation.

<PAGE>   2

                               TERMS OF AGREEMENT

         1. Definitions.

         a. Unless the parties agree in writing to a later date, "Closing Date"
means the earlier of the following: (i) the date on which all conditions
specified in section 7 of this Agreement either occur or are waived in writing
by the required party; and (ii) February 16, 2001.

         b. "Effective Date" means December 1, 2000.

         2. Issuance of Shares. On or before the Closing Date, MAI will deliver
to counsel of record for CSA in the Litigation certificates issued to CSA for a
total of 2,433,333 shares of MAI common stock, including the 517,319 shares
previously issued to CSA. CSA Private Limited was formerly known as "Computer
Systems Advisers (Private) Limited." Its current corporate name reflects only a
name change. MAI will reissue all stock previously issued to "Computer Systems
Advisers (Private) Limited" or "CSA Pte. Ltd." to "CSA Private Limited", and all
MAI stock to be issued and registered to CSA under this Agreement will be issued
and registered to "CSA Private Limited".

         3. Registration of All Shares. Within five (5) business days after the
Closing Date, MAI will file all necessary documents with the United States
Securities and Exchange Commission ("SEC") to register all of CSA's shares of
MAI common stock for resale. After filing with the SEC, MAI will promptly notify
CSA of the filing by providing it evidence of the filing of the Registration
Statement. MAI will use its best efforts to cause such Registration Statement to
become effective on or before March 31, 2001. If SEC registration of all of
CSA's shares is not effective by March 31, 2001, CSA may, at its option and in
its sole and absolute discretion, terminate this agreement by giving written
notice of termination to MAI after March 31, 2001 and before April 30, 2001. If
CSA gives MAI written notice of termination in accordance with this section,
this Agreement
<PAGE>   3

will be deemed null and void in its entirety, the dismissal of the Litigation
shall be set aside, and both CSA and MAI will be returned to their same
respective positions before any agreement to settle the Litigation, without
prejudice to their claims and defenses or the prosecution of the Litigation. If
the Registration Statement is declared effective by the SEC, MAI will use its
best efforts to cause it to remain continuously effective for a period of three
years or until all of the 2,433,333 shares of MAI common stock have been resold
by CSA.

         4. Subordinated Secured Indebtedness.

         a. MAI will execute a Subordinated Note due 2003 in favor of CSA in the
form attached as Exhibit "B" in the principal sum of Two Million Eight Hundred
Thousand Dollars ($2,800,000.00). MAI will execute a Security Agreement in the
form attached as Exhibit "C" providing CSA a fourth secured position among MAI's
secured creditors. MAI and CSA will execute a Subordination Agreement and Riders
"A", "B", and "C" to Subordination Agreement in the forms attached as Exhibits
"D", "E", "F", and "G" subordinating CSA's claims under the Secured Promissory
Note and Security Agreement to the debt of Coast Business Credit, The Value
Realization Fund, L.P., Canyon Value Realization Fund (Cayman), Ltd., GRS
Partners II, CPI Securities L.P., and GetornicsWang Co. LLC (the "Senior
Lenders").

         b. On or before the Closing Date, CSA and MAI will execute and deliver
to the counsel of record in the Litigation for the other party the following
documents duly executed, to the extent the documents require, by each of them
and, in the case of MAI, by or on behalf of all the Senior Lenders: a
Subordinated Note due 2003 in the form attached as Exhibit "B"; a Security
Agreement in the form attached as Exhibit "C"; a Subordination Agreement and
Riders "A", "B", and "C" to Subordination Agreement in the forms attached as
Exhibits "D", "E", "F", and "G"; and all other documents necessary

<PAGE>   4

to perfect CSA's security interest under the Security Agreement and to
carry out the subordination provided in the Subordination Agreement.

         5. Mutual General Releases.

         a. Except as expressly stated in this Settlement Agreement, CSA, for
itself, and on behalf of its officers, directors, agents, attorneys, employees,
stockholders, successors, and assigns, hereby forever and fully releases and
discharges MAI, and its officers, directors, agents, attorneys, employees,
stockholders, subsidiaries, affiliates, successors, and assigns, from all causes
of actions, debts, rights, and claims, of any kind or nature, whether at law or
in equity, whether known or unknown, whether suspected or unsuspected, which CSA
now has or has ever had, arising on or before the Effective Date of this
Agreement.

         b. Except as expressly stated in this Settlement Agreement, MAI for
itself, and on behalf of its officers, directors, agents, attorneys, employees,
stockholders, successors, and assigns, hereby forever and fully releases and
discharges CSA and its officers, directors, agents, attorneys, employees,
stockholders, subsidiaries, affiliates, successors, and assigns, from all causes
of actions, debts, rights, and claims, of any kind or nature, whether at law or
in equity, whether known or unknown, whether suspected or unsuspected, which MAI
now has or has ever had, arising on or before the Effective Date of this
Agreement.

         c. Waiver of Unknown Claims. In making the mutual general releases
stated in sections 5a and 5b of this Agreement, CSA and MAI intend to release
all causes of actions, debts, rights, and claims that are unknown or
unanticipated as of the Effective Date, including those that were unknown or
unanticipated, whether in fact of occurrence or in nature or extent, as of the
Effective Date. The parties hereby waive all protections against the release of
unknown claims, including any rights under California Civil Code Section 1542 or
similar laws in other jurisdictions. California Civil Code Section 1542 reads as
follows:

<PAGE>   5

        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.

The parties also knowingly and voluntarily waive any protection that may exist
under any comparable or similar statutes or principles of law of any and all
states of the United States or of the United States.

         6. Stipulation for Dismissal. On or before the Closing Date, counsel of
record for CSA in the Litigation will execute the Stipulation for Dismissal with
prejudice in the form attached as Exhibit "H" and deliver it to counsel of
record for MAI in the Litigation. CSA authorizes counsel of record for MAI in
the Litigation to submit the Stipulation for Dismissal to the Court for entry
and filing upon the Closing Date. The Stipulation shall provide that the Federal
Court shall retain jurisdiction over the Litigation and this Agreement,
including the power to set aside the dismissal in accordance with the terms of
this Agreement.

         7. Conditions.

         a. The following will be conditions to the effectiveness of this
Agreement that must occur or be waived in writing by CSA on or before the
Closing Date: delivery to counsel of record for CSA in the Litigation of an
original of this Agreement executed on behalf of MAI, and originals of Exhibits
"B", "C", "D, " "E", "F", and "G" executed by or on behalf of MAI and/or the
Senior Lenders, as required.

         b. The following will be conditions to the effectiveness of this
Agreement that must occur or be waived in writing by MAI on or before the
Closing Date:

            i. Delivery to counsel of record for MAI in the Litigation of an
original of this Agreement executed on behalf of CSA, and executed originals of
Exhibits "C", "D",

<PAGE>   6

"E", "F", "G", and "H" executed by or on behalf of CSA, to the extent required;
and

            ii. Written consent to this transaction, including the form and
content of Exhibits "C", "D", "E", "F", and "G" and execution of the originals
of those exhibits as required, by the Senior Lenders.

         8. Representations and Warranties. In connection with this Agreement,
each party hereto represents and warrants to each other party hereto that (i) it
has the capacity and full power and authority to execute, deliver and perform
this Agreement and that the individual executing the Agreement is authorized to
do so on its behalf; (ii) this Agreement is a binding agreement, enforceable in
all respects in accordance with its terms; (iii) it or he has not sold,
assigned, transferred or otherwise disposed of any of the claims, demands or
rights that are the subject of this Agreement; and (iv) it or he has not
commenced any legal action against any other party hereto except the Litigation.

         9. General Provisions.

         a. This Agreement is the result of a compromise of disputed claims
between CSA and MAI, and will never at any time for any purpose be considered as
an admission of liability or responsibility by any party and it or its existence
may not be offered as evidence except in a proceeding arising out of this
Agreement.

         b. The advice of legal counsel has been obtained by all parties prior
to the execution of this Agreement. Each of parties represents that it has
executed this Agreement voluntarily and with full advice of independent counsel
of its choosing.

         c. This Agreement binds the successors and assigns of the respective
parties, and any parent, subsidiary, or affiliated entity of such parties.

         d. This Agreement constitutes the entire agreement between CSA and MAI,
and the final, complete, and exclusive expression of the terms and conditions of
the only agreement between them as of the Closing Date. This Agreement
supersedes any and all

<PAGE>   7

other agreements, understandings, negotiations or discussions, either oral or in
writing, expressed or implied, concerning the subject matter of this Agreement.
Without limitation, all rights and obligations of the parties with respect to
each other under the Put/Call and Registration Rights Agreement, dated as of
August 9, 1996, between MAI and Hotel Information Systems, Inc., and the
Settlement Agreement are terminated and superseded by this Agreement. This
agreement may only be modified by a writing duly executed by CSA and MAI.

         e. The parties agree to take all further steps as may be reasonable and
necessary to carry out the terms of this Agreement, including but not limited to
preparing, executing, and delivering other documents.

         f. This Agreement will be governed by and construed in accordance with
the laws of the State of California without regard to conflict of laws
provisions.

         g. This Agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which will constitute one and the
same written agreement. Signatures obtained and exchanged by fax will be binding
to the same extent as original signatures.

         h. CSA and MAI will each bear its own attorneys' fees, costs, and
expenses incurred through the Closing Date, and neither will make any claim
against the other for reimbursement. In the event of any future dispute arising
under this Agreement, the prevailing party will be entitled to recover
reasonable attorney's fees, costs, and expenses incurred after the Closing Date
from the other, including all attorney's fees, costs, and expenses associated
with efforts to negotiate or mediate a resolution without litigation or
arbitration.

         i. Any dispute between the parties arising out of this Agreement,
including but not limited to the interpretation, administration, or enforcement
of any of its terms, will be

<PAGE>   8

submitted to binding arbitration at San Francisco, California in accordance with
the Rules then in effect of the Judicial Arbitration and Mediation Service
("JAMS"). The decision of the arbitrator will be final and binding and may be
confirmed in any Federal Court having jurisdiction or the Superior Court of
California in and for the County of San Francisco.

        j. All parties, through their counsel, participated in the drafting of
this Agreement, and any rule that agreements are to be construed or interpreted
adverse to the drafter will not apply.

        k. Any notice, request, demand, instruction or other communication given
to one party by another under this Agreement, will be in writing, addressed and
delivered as follows:
                                             With copy to:
                                             ------------
To CSA:  Sunny Tan                           Arthur D. Levy
         CSA Private Limited                 Levy, Ram, Olson & Rossi LLP
         By fax: 011-65-271-5198             639 Front Street, 4th Floor
                                             San Francisco, CA 94111
                                             (415) 433-4949
                                             (415) 433-7311 (fax)

<PAGE>   9

                                          With copy to:
                                          ------------
To MAI:  Brian Kretzmer                   Steven Thomas
         MAI Systems Corporation          Sullivan & Cromwell
         9601 Jeronimo Road               1888 Century Park East
         Irvine, CA 92618                 Los Angeles, CA 90067
         (949) 598-6000                   (310) 712-6600
         (949) 598-6448 (fax)             (310) 712-8800 (fax)

        The addressees for the purposes of this paragraph may be changed by the
affected party by giving written notice in the manner provided herein for giving
notice.

                                      CSA PRIVATE LIMITED

DATED: January __, 2001               by
                                          -------------------------------------
                                                   Sunny S.H. Tan
                                                     Its Director

                                      MAI SYSTEMS CORPORATION

DATED: January __, 2001               by
                                          -------------------------------------
                                                   W. Brian Kretzmer
                                               Its Chief Executive Officer

DATED: January __, 2001               by
                                          -------------------------------------
                                                   Richard S. Ressler
                                               Its Chairman of the Board<PAGE>   1

                                                                  EXHIBIT 10.28

                               SECURITY AGREEMENT

        THIS SECURITY AGREEMENT dated effective December 1, 2000 ("SECURITY
AGREEMENT"), is made by MAI SYSTEMS CORPORATION, a Delaware corporation
("GRANTOR"), in favor of CSA PRIVATE LIMITED, a Singapore corporation ("SECURED
PARTY").

                                    RECITALS

        A. Secured Party and Grantor are parties to that certain Settlement
Agreement dated effective December 1, 2000 (the "Settlement Agreement") pursuant
to which Grantor has certain obligations to Secured Party, including the payment
of $2,800,000 plus accrued interest pursuant to the terms of the promissory note
dated effective December 1, 2000 executed by Grantor in favor of Secured Party
(the "Note"). Any amounts payable by the Grantor to the Secured Party pursuant
to the Note are herein called the "Obligations".

        B. Pursuant to the Settlement Agreement, Grantor has agreed to secure
the Obligations pursuant to the terms hereof.

                                    AGREEMENT

        NOW, THEREFORE, in order to induce Secured Party to enter into the
Settlement Agreement and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, and intending to be legally
bound, Grantor hereby represents, warrants, covenants and agrees as follows:

        1. DEFINED TERMS. When used in this Security Agreement the following
terms shall have the following meanings (such meanings being equally applicable
to both the singular and plural forms of the terms defined):

        "COLLATERAL" shall have the meaning assigned to such term in Section 2
of this Security Agreement.

        "CONTRACTS" means all contracts, undertakings, franchise agreements or
other agreements in or under which Grantor now holds or hereafter acquires any
right, title or interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.

        "COPYRIGHT LICENSE" means any written agreement, in which Grantor now
holds or hereafter acquires any interest, granting any right in or to any
Copyright or Copyright registration (whether Grantor is the licensee or the
licensor thereunder) including, without limitation, licenses pursuant to which
Grantor has obtained the exclusive right to use a copyright owned by a third
party.

<PAGE>   2

        "COPYRIGHTS" means all of the following in which Grantor now holds or
hereafter acquires any interest: (a) all copyrights, whether registered or
unregistered, held pursuant to the laws of the United States, any State thereof
or any other country; (b) registrations, applications, recordings and
proceedings in the United States Copyright Office or in any similar office or
agency of the United States, any State thereof or any other country; (c) any
continuations, renewals or extensions thereof; (d) any registrations to be
issued in any pending applications; (e) prior versions of works covered by
copyright and all works based upon, derived from or incorporating such works;
(f) income, royalties, damages, claims and payments now and hereafter due and/or
payable with respect to copyrights, including, without limitation, damages,
claims and recoveries for past, present or future infringement; (g) rights to
sue for past, present and future infringements of any copyright; and (h) any
other rights corresponding to any of the foregoing rights throughout the world.

        "EVENT OF DEFAULT" means any (i) breach by Grantor of any material
covenant, term or condition set forth herein or (ii) failure to make a payment
required under the Note which results in an event of a default under the Note.

        "LICENSE" means any Copyright License, Patent License, Trademark License
or other license of rights or interests now held or hereafter acquired by
Grantor (excluding, however, licenses granted to Grantor by third party vendors
of software for the right to use such software).

        "LIEN" means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

        "PATENT LICENSE" means any written agreement, in which Grantor now holds
or hereafter acquires any interest, granting any right with respect to any
invention on which a Patent is in existence (whether Grantor is the licensee or
the licensor thereunder).

        "PATENTS" means all of the following in which Grantor now holds or
hereafter acquires any interest: (a) all letters patent of the United States or
any other country, all registrations and recordings thereof and all applications
for letters patent of the United States or any other country, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country; (b) all reissues, divisions,
continuations, renewals, continuations-in-part or extensions thereof; (c) all
petty patents, divisionals and patents of addition; (d) all patents to issue in
any such applications; (e) income, royalties, damages, claims and payments now
and hereafter due and/or payable with respect to patents, including, without
limitation, damages, claims and

<PAGE>   3

recoveries for past, present or future infringement; and (f) rights to sue for
past, present and future infringements of any patent.

        "PERMITTED LIEN" means (a) any Liens in favor of Coast Business Credit,
CPI Securities LP (including its related parties) or GetronicsWang Co. LLC
existing on the date of this Security Agreement and set forth on Schedule A
attached hereto; (b) Liens in favor of the Secured Party; (c) Liens that are
either Permitted Liens or Permitted Encumbrances for purposes of the security
agreements with the senior lenders referenced in clause (a) above (except for
any Liens permitted under clause (d) of the definition of "Permitted Liens" set
forth in that certain Loan and Security Agreement dated as of April 23, 1998
among the Debtor, Gaming Systems International, Hotel Information Systems, Inc.
and Coast Business Credit); and (d) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the
type described in clauses (a), (b) and (c) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended,
renewed or refinanced does not increase.

        "SECURED OBLIGATIONS" means (a) the obligation of Grantor to repay
Secured Party all of the Obligations (including any interest and fees that
accrues after the commencement of bankruptcy), (b) the obligation of Grantor to
pay any fees, costs and expenses of the Secured Party under Section 6(b) hereof
and (c) all other indebtedness, liabilities and obligations of Grantor to
Secured Party, whether now existing or hereafter incurred in connection with the
Settlement Agreement or this Security Agreement.

        "TRADEMARK LICENSE" means any written agreement, in which Grantor now
holds or hereafter acquires any interest, granting any right in and to any
Trademark or Trademark registration (whether Grantor is the licensee or the
licensor thereunder).

        "TRADEMARKS" means any of the following in which Grantor now holds or
hereafter acquires any interest: (a) any trademarks, tradenames, corporate
names, company names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof and any applications in connection therewith, including, without
limitation, registrations, recordings and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country (collectively, the "Marks"); (b)
any reissues, extensions or renewals thereof; (c) the goodwill of the business
symbolized by or associated with the Marks; (d) income, royalties, damages,
claims and payments now and hereafter due and/or payable with respect to the
Marks, including, without limitation,

<PAGE>   4

damages, claims and recoveries for past, present or future infringement; and (e)
rights to sue for past, present and future infringements of the Marks.

        "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of California; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Secured Party's security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of California, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection of priority and for purposes of
definitions related to such provisions.

        In addition, the following terms shall be defined terms having the
meaning set forth for such terms in the UCC (definition sections of the UCC are
noted parenthetically): "ACCOUNT DEBTOR" (9-105(1)(a)); "ACCOUNTS" (9-106);
"CHATTEL PAPER" (9-105(1)(b)); "DEPOSIT ACCOUNTS" (9-105(e)); "DOCUMENTS"
(9-105(1)(f)); "EQUIPMENT" (9-109(2)); "FINANCIAL ASSETS" (8-102(a)(9));
"FIXTURES" (9-313(1)(a)); "GENERAL INTANGIBLES" (9-106); "INSTRUMENTS"
(9-105(1)(i)); "INVENTORY" (9-109(4)); "INVESTMENT PROPERTY" (9-115(1)(f);
"PROCEEDS" (9-306(1)).

Each of the foregoing defined terms shall include all of such items now owned,
or hereafter acquired, by Grantor.

        2. GRANT OF SECURITY INTEREST. As collateral security for the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all the Secured Obligations and in order to induce
Secured Party to cause the Loans to be made, Grantor hereby mortgages, pledges,
and hypothecates to Secured Party, and hereby grants to Secured Party, a
security interest in all of Grantor's right, title and interest in, to and under
the following, whether now owned or hereafter acquired, (all of which being
collectively referred to herein as the "Collateral"):

        (a) All Accounts of Grantor;

        (b) All Chattel Paper of Grantor;

        (c) All Contracts of Grantor;

        (d) All Deposit Accounts of Grantor;

        (e) All Documents of Grantor;

<PAGE>   5

        (f) All Equipment of Grantor;

        (g) All Financial Assets of Grantor;

        (h) All Fixtures of Grantor;

        (i) All General Intangibles of Grantor, including, without limitation,
all Copyrights, Patents, Trademarks, Licenses, designs, drawings, technical
information, marketing plans, customer lists, trade secrets, proprietary or
confidential information, inventions (whether or not patentable), procedures,
know-how, models and data;

        (j) All Instruments of Grantor;

        (k) All Inventory of Grantor;

        (1) All Investment Property of Grantor;

        (m) All property of Grantor held by Secured Party, or any other party
for whom Secured Party is acting as agent hereunder, including, without
limitation, all property of every-description now or hereafter in the possession
or custody of or in transit to Secured Party or such other party for any
purpose, including, without limitation, safekeeping, collection or pledge, for
the account of Grantor, or as to which Grantor may have any right or power;

        (n) All other goods and personal property of Grantor, wherever located,
whether tangible or intangible, and whether now owned or hereafter acquired,
existing, leased or consigned by or to Grantor; and

        (o) To the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for and rents,
profits and products of each of the foregoing.

        3. COLLECTION OF ACCOUNTS.

        Secured Party may at any time, upon the occurrence and during the
continuance of any Event of Default, without notifying Grantor of its intention
to do so, notify Account Debtors of Grantor, parties to the Contracts of
Grantor, obligors in respect of Instruments of Grantor and obligors in respect
of Chattel Paper of Grantor that the Accounts and the right, title and interest
of Grantor in and under such Contracts, Instruments and Chattel Paper have been
assigned to Secured Party and that payments shall be made directly to Secured
Party. Upon the request of Secured Party, Grantor shall so notify such Account

<PAGE>   6

Debtors, parties to such Contracts, obligors in respect of such Instruments and
obligors in respect of such Chattel Paper. Upon the occurrence and during the
continuance of any Event of Default, Secured Party may, in its name or in the
name of others, communicate with such Account Debtors, parties to such
Contracts, obligors in respect of such Instruments and obligors in respect of
such Chattel Paper to verify with such parties, to Secured Party's satisfaction,
the existence, amount and terms of any such Accounts, Contracts, Instruments or
Chattel Paper.

        4. REPRESENTATIONS AND WARRANTIES. Grantor hereby represents and
warrants to Secured Party that:

            (a) Except for the security interest granted to Secured Party under
this Security Agreement and Permitted Liens, Grantor is the sole legal and
equitable owner of each item of the Collateral in which it purports to grant a
security interest hereunder, having good and marketable title thereto, free and
clear of any and all Liens except for Permitted Liens.

            (b) No effective security agreement, financing statement, equivalent
security or lien instrument or continuation statement covering all or any part
of the Collateral exists, except such as may have been filed by Grantor in favor
of Secured Party pursuant to this Security Agreement and except for Permitted
Liens.

            (c) This Security Agreement creates a legal and valid security
interest on and in all of the Collateral in which Grantor now has rights. Upon
the filing of appropriate UCC-1 financing statements with the appropriate filing
jurisdictions and the filing of appropriate documentation with the United States
Copyright Office and/or Patent and Trademark Office, as applicable, with respect
to items of intellectual property pledged hereunder, Secured Party will have a
fully perfected first priority security interest in all of the Collateral in
which Grantor now has rights subject only to Permitted Liens. This Security
Agreement will create a legal and valid and fully perfected first priority
security interest in the Collateral in which Grantor later acquires rights, when
Grantor acquires those rights subject only to Permitted Liens and additional
filings to be made with the United States Copyright Office and/or Patent and
Trademark Office as are necessary to perfect Secured Party's security interest
in subsequent ownership rights and interests of Grantor in Copyrights, Patents,
Trademarks and Licenses.

            (d) Grantor's chief executive office, principal place of business
and the place where Grantor maintains its records concerning the Collateral are
presently located at the address set forth on the signature page hereof. The
Collateral is presently located at such address and at such additional addresses
set forth on Schedule B attached hereto.

<PAGE>   7

            (e) All Copyrights (which have been applied for with the United
States Copyright Office), Copyright Licenses, Patents, Patent Licenses,
Trademarks and Trademark Licenses now owned, held or in which Grantor otherwise
has any interest are listed on Schedule C attached hereto.

            5. COVENANTS. Grantor covenants and agrees with Secured Party that
from and after the date of this Security Agreement and until the Secured
Obligations have been performed and paid in full:

               5.1 DISPOSITION OF COLLATERAL. Grantor shall not sell, lease,
transfer or otherwise dispose of any of the Collateral, or attempt or contract
to do so, other than (a) the sale of Inventory, (b) the granting of
non-exclusive Licenses, (c) the disposal of worn-out or obsolete Equipment, and
(d) the sale of assets that are reflected as held for sale on the Grantor's
balance sheet, all in the ordinary course of Grantor's business.

               5.2 RELOCATION OF BUSINESS OR COLLATERAL. Grantor shall not
relocate its chief executive office, principal place of business or its records,
or allow the relocation of any Collateral (except as allowed pursuant to Section
5.1 immediately above or with respect to moveable equipment which is being used
in the ordinary course of business) from such address(es) provided to Secured
Party pursuant to Section 4(d) above without thirty (30) days prior written
notice to Secured Party.

               5.3 LIMITATION ON LIENS ON COLLATERAL. Grantor shall not,
directly or indirectly, create, permit or suffer to exist, and shall defend the
Collateral against and take such other action as is necessary to remove, any
Lien on the Collateral, except (a) Permitted Liens and (b) the Lien granted to
Secured Party under this Security Agreement.

               5.4 INSURANCE. Maintain insurance policies insuring the
Collateral against loss or damage from such risks and in such amounts and forms
and with such companies as are customarily maintained by businesses similar to
Grantor.

               5.5 TAXES, ASSESSMENTS, ETC. Grantor shall pay promptly when due
all property and other taxes, assessments and government charges or levies
imposed upon, and all claims (including claims for labor, materials and
supplies) against, the Equipment, Fixtures or Inventory, except to the extent
the validity thereof is being contested in good faith and adequate reserves are
being maintained in connection therewith.

<PAGE>   8

               5.6 NOTIFICATION REGARDING CHANGES IN INTELLECTUAL PROPERTY.
Grantor shall promptly advise Secured Party of any subsequent ownership right or
interest of the Grantor in or to any material Copyright, Patent, Trademark or
License not specified on Schedule C hereto and shall permit Secured Party to
amend such Schedule, as necessary, to reflect any addition or deletion to such
ownership rights.

               5.8 FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS. At any time and
from time to time, upon the written request of Secured Party, and at the sole
expense of Grantor, Grantor shall promptly and duly execute and deliver any and
all such further instruments and documents and take such further action as
Secured Party may reasonably deem necessary or desirable to obtain the full
benefits of this Security Agreement, including, without limitation, facilitating
the filing of UCC-1 Financing Statements in all applicable jurisdictions and
this Security Agreement (and any amendment hereto) with the United States
Copyright Office and/or Patent and Trademark Office, as applicable, and
transferring Collateral to the Secured Party's possession if such Collateral
consists of Chattel Paper, Instruments or if a Lien on such Collateral can be
perfected by possession.

        6. RIGHTS AND REMEDIES UPON DEFAULT.

            (a) After any Event of Default shall have occurred and while such
Event of Default is continuing, Secured Party may exercise in addition to all
other rights and remedies granted to it under this Security Agreement, all
rights and remedies of a secured party under the UCC.

            (b) Grantor also agrees to pay all reasonable fees, costs and
expenses of Secured Party, including, without limitation, reasonable attorneys'
fees, incurred in connection with the enforcement of any of its rights and
remedies hereunder.

            (c) Grantor hereby waives presentment, demand, protest or any notice
(to the maximum extent permitted by applicable law) of any kind in connection
with this Security Agreement or any Collateral.

            (d) The Proceeds of any sale, disposition or other realization upon
all or any part of the Collateral shall be distributed by Secured Party in the
following order of priorities:

            FIRST, to Secured Party in an amount sufficient to pay in full the
reasonable costs of Secured Party in connection with such sale, disposition or
other realization, including all reasonable fees, costs, expenses, liabilities
and advances incurred or made by Secured Party in connection therewith,
including, without limitation, reasonable attorneys' fees;

<PAGE>   9

            SECOND, to Secured Party in an amount equal to the then unpaid
Secured Obligations; and

            FINALLY, upon payment in full of the Secured Obligations, to Grantor
or its representatives, in accordance with the UCC or as a court of competent
jurisdiction may direct.

        7. INDEMNITY. Grantor agrees to defend, indemnify and hold harmless
Secured Party and its officers, employees, and agents against (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Security
Agreement and (b) all losses or reasonable expenses in any way suffered,
incurred, or paid by Secured Party as a result of or in any way arising out of,
following or consequential to transactions between Secured Party and Grantor,
under this Security Agreement or the Note (including without limitation,
reasonable attorneys fees and expenses), except for losses arising from or out
of Secured Party's gross negligence or willful misconduct.

        8. LIMITATION ON SECURED PARTY'S DUTY IN RESPECT OF COLLATERAL. Secured
Party shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it takes such action as Grantor requests
in writing, but failure of Secured Party to comply with any such request shall
not in itself be deemed a failure to act reasonably, and no failure of Secured
Party to do any act not so requested shall be deemed a failure to act
reasonably.

        9. REINSTATEMENT. This Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Grantor for liquidation or reorganization, should Grantor become insolvent or
make an assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of Grantor's property and assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment and performance of the Secured Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Secured Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

        10. MISCELLANEOUS.

            10.1 NO WAIVER; CUMULATIVE REMEDIES.

<PAGE>   10

            (a) Secured Party shall not by any act, delay, omission or otherwise
be deemed to have waived any of its respective rights or remedies hereunder, nor
shall any single or partial exercise of any right or remedy hereunder on any one
occasion preclude the further exercise thereof or the exercise of any other
right or remedy.

            (b) The rights and remedies hereunder provided are cumulative and
may be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law.

            (c) None of the terms or provisions of this Security Agreement may
be waived, altered, modified or amended except by an instrument in writing, duly
executed by Grantor and Secured Party.

            10.2 TERMINATION OF THIS SECURITY AGREEMENT. Subject to Section 9
hereof, this Security Agreement shall terminate upon the payment and performance
in full of the Secured Obligations.

            10.3 SUCCESSOR AND ASSIGNS. This Security Agreement and all
obligations of Grantor hereunder shall be binding upon the successors and
assigns of Grantor, and shall, together with the rights and remedies of Secured
Party hereunder, inure to the benefit of Secured Party, any future holder of any
of the indebtedness and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Secured Obligations or any
portion thereof or interest therein shall in any manner affect the lien granted
to Secured Party hereunder.

            10.4 GOVERNING LAW. In all respects, including all matters of
construction, validity and performance, this Security Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws.

<PAGE>   11

        IN WITNESS WHEREOF, each of the parties hereto has caused this Security
Agreement to be executed and delivered by its duly authorized officer on the
date first set forth above.

ADDRESS OF GRANTOR                      MAI SYSTEMS CORPORATION

MAI Systems Corporation                 By:
9601 Jeronimo Road                          -----------------------------------
Irvine, CA 92618
                                        Printed Name:
                                                      -------------------------
                                        Title:
                                               --------------------------------

ACCEPTED AND ACKNOWLEDGED BY:

CSA PRIVATE LIMITED

By:
     ---------------------------

Printed Name:   Sunny S.H. Tan

Title:  Director

<PAGE>   12

                                   SCHEDULE A

              LIENS EXISTING ON THE DATE OF THIS SECURITY AGREEMENT

<PAGE>   13

                                   SCHEDULE B

                             LOCATION OF COLLATERAL

             ENTITY                                      ADDRESS

<PAGE>   14

                                   SCHEDULE C

                              INTELLECTUAL PROPERTY

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