Document:

JDU Revision 4-2-01

Exhibit

10.1

 

 DIRECT REPORTS AGREEMENT

This Agreement (this “Agreement”),

effective as of May 1, 2002, is between Fargo Electronics, Inc., a Delaware

corporation located at 6533 Flying Cloud Drive, Eden Prairie, Minnesota 55344

(“Fargo”) and Paul W. B. Stephenson, an individual residing at 818

Hidden Meadow Trail, Eagan, MN 55123  (the ”Executive”).

A.            The

Executive is currently employed as Fargo’s Chief Financial Officer.

B.            The

Board considers that the Executive’s services are of significant value to the Company

and its shareholders.   Therefore, the

Fargo and the Board believe that the establishment and maintenance of a program

that provides the Executive with security if a Change of Control of Fargo

occurs is in the best interests of the Company and its shareholders.

C.            This

Agreement, which has been approved by the Board, sets forth the benefits that

the Fargo agrees will be provided to the Executive in the event the Executive’s

employment with Fargo or its Successor is terminated in connection with a Change

in Control under the circumstances described below.

D.            Definitions

For purposes of the

Agreement, the following terms will have the meaning set forth below unless the

context clearly requires otherwise. 

Terms defined elsewhere in the Agreement will have the same meaning

throughout the Agreement.

1.             “Base Pay” means the Executive’s annual base

salary from Fargo at the rate in effect immediately prior to a Change in

Control or at the time Notice of Termination is given, whichever is

greater.  Base Pay includes only the

gross cash salary excluding incentive compensation.

2.             “Board” means the board of

directors of Fargo duly qualified and acting at the time in question.  On and after the date of a Change in

Control, any duty of the Board in connection with this Agreement is

nondelegable and any attempt by the Board to delegate any such duty is

ineffective.

3.             “Cause” means:

(a)           the

Executive’s gross misconduct that is materially and demonstrably injurious to

the Successor;

                (b)           the

Executive’s willful and continued failure to perform substantially the

Executive’s duties with the Successor (unless the Executive cannot perform

these duties due to bodily injury or physical or mental illness or if the

Change in Control has so changed the Executive’s responsibilities that the

change constitutes a Good Reason for termination.

 

1

If the Successor

determines that the Executive has not performed his or her duties under the

terms of this clause after a Change of Control occurs, the Successor will

specifically identify these areas and provide the Executive a reasonable period

of time to take corrective actions; or

(c)           the

Executive’s conviction (including a plea of nolo contendere) of willfully

engaging in illegal conduct constituting a felony or gross misdemeanor under

federal or state law which is materially and demonstrably injurious to the

Successor or which impairs the Executive’s ability to perform substantially the

Executive’s duties for the Company.

For the purpose of this

clause, a “gross or willful” action will mean an act that is done by the

Executive in bad faith and without reasonable belief that it was in, or not

opposed to, the best interests of the Successor.  Any action based on a resolution of the Board of Directors or a

committee thereof will be conclusively presumed to be done in good faith. If

the Executive has other duties not related to Fargo (such as charitable or

service on other Boards) prior to the Change of Control, continuation of those

actions is conclusively presumed to be done in good faith. If there is a

dispute regarding the termination of the Executive for cause, such dispute

shall be subject to the dispute resolution as described in Section 4(g) of this

Agreement.

4.             “Change in Control” means the occurrence of any

of the following on or after May 1, 2002:

(a)           the

sale, lease, exchange or other transfer, directly or indirectly, of all or

substantially all of the assets of Fargo, in one transaction or in a series of

related transactions, to any Successor;

(b)           the

approval by the stockholders of Fargo of any plan or proposal for the

liquidation or dissolution of Fargo;

(c)           any

Successor, other than a “bona fide underwriter,” becomes, after the date of

this Agreement, the “beneficial owner” (as defined in Rule 13d-3 under the

Exchange Act), directly or indirectly, of (i) 20 percent or more, but not more

than 50 percent, of the combined voting power of Fargo’s outstanding securities

ordinarily having the right to vote at elections of directors, unless the

transaction resulting in such ownership has been approved in advance by the

“continuity directors” or (ii) more than 50 percent of the combined voting

power of Fargo’s outstanding securities ordinarily having the right to vote at

elections of directors (regardless of any approval by the continuity

directors);

(d)           a

merger or consolidation to which Fargo is a party if the stockholders of Fargo

immediately prior to the effective date of such merger or consolidation have,

solely on account of ownership of securities of Fargo at such time, “beneficial

ownership” (as defined in Rule 13d-3 under the Exchange Act) immediately

following the effective date of such merger or consolidation of

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securities of the surviving

corporation representing (i) 50 percent or more, but not more than 80 percent,

of the combined voting power of the surviving corporation’s then outstanding

securities ordinarily having the right to vote at elections of directors,

unless such merger or consolidation has been approved in advance by the

continuity directors, or (ii) less than 50 percent of the combined voting power

of the surviving corporation’s then outstanding securities ordinarily having

the right to vote at elections of directors (regardless of any approval by the

continuity directors); or

(e)           the

continuity directors cease for any reason to constitute at least a majority of

the Board.

A “continuity director”

means any individual who is a member of the Board on the date of the Agreement,

and any individual who subsequently becomes a member of the Board whose

election or nomination for election by Fargo’s stockholders was approved by a

vote of at least a majority of the directors who are continuity directors

(either by a specific vote or by approval of the proxy statement of Fargo in

which such individual is named as a nominee for director without objection to

such nomination). A “bona fide underwriter” means an entity engaged in business

as an underwriter of securities that acquires securities of Fargo through such

entity’s participation in good faith in a firm commitment underwriting until

the expiration of 40 days after the date of such acquisition.

5.             “Code” means the Internal Revenue Code of 1986,

as amended.  Any reference to a specific

provision of the Code includes a reference to such provision as it may be

amended from time to time and to any successor provision.

6.             “Date of Termination” means upon last day of paid

employment.

7.             “ERISA” means the Employee Retirement Income Security

Act of 1974, as amended.  Any reference

to a specific provision of ERISA includes a reference to such provision as it

may be amended from time to time and to any successor provision.

8.             “Exchange Act” means the Securities Exchange Act

of 1934, as amended.  Any reference to a

specific provision of the Exchange Act or to any rule or regulation thereunder

includes a reference to such provision as it may be amended from time to time

and to any successor provision.

9.             “Good Reason” means:

(a)           a

change in the Executive’s title(s), status, position(s), authority, duties or

responsibilities as an executive of the Successor as in effect immediately

prior to the Change in Control which, in the Executive’s reasonable judgment,

is material and adverse.  However, if

the changes are those that are consistent with working for a subsidiary of

another company or if the change in duties is directly attributable to the fact

that Fargo or the Successor is no longer publicly owned, then these will not be

material and adverse.  Provided, that

Good Reason does not include such a change that is remedied by the Company

promptly after receipt of notice of such change is given by the Executive;

 

3

 

(b)           a

reduction by the Successor in the Executive’s Base Pay, or an adverse change in

the form or timing of the payment thereof, as in effect immediately prior to

the Change in Control or as thereafter increased; provided, however, that Good

Reason does not include such a reduction that applies to all employees of Fargo

and is not more than 20% of the Executive’s Base Pay;

(c)           the

failure by the Successor to provide to the Executive (and/or the Executive’s

family and dependents) substantially similar benefits to those the Successor

provides to its employees;

(d)           the

Successor’s requiring the Executive to be based in a different metropolitan

area (other than the Minneapolis or St. Paul metropolitan area)  from where the Executive’s office is located

immediately prior to the Change in Control, except for required travel on the

Successor’s business, and then only to the extent substantially consistent with

the business travel obligations which the Executive undertook on behalf of

Fargo during the 90-day period immediately preceding the Change in Control

(without regard to travel related to or in anticipation of the Change in

Control);

(e)           the

failure by Fargo to obtain from any Successor the assent to this Agreement

contemplated by Section 5(a) of the Agreement;

(f)            any

purported termination by Fargo or the Successor of the Executive’s employment

that is not properly effected pursuant to a Notice of Termination and pursuant

to any other requirements of this Agreement, and, for purposes of this

Agreement, no such purported termination will be effective; or

The Executive’s continued

employment does not constitute consent to, or waiver of any rights arising in

connection with, any circumstances constituting Good Reason.  The Executive’s termination of employment

for Good Reason as defined above will constitute Good Reason for all purposes

of the Agreement notwithstanding that the Executive may also thereby be deemed

to have retired under any applicable benefit plan, policy or practice of Fargo.

11.           “Notice of Termination” means

a written notice given on or after the date of a Change in Control unless the

Executive’s termination before the date of the Change in Control was either a

condition of the Change in Control or was at the request or insistence of any

Successor related to the Change in Control in which case the written notice may

be given before the date of the Change in Control which indicates the specific

termination provision in the Agreement pursuant to which the notice is given

12.           “Other Arrangement” is any

Benefit Plan or other plan, policy or practice of the Company or any other

agreement between the Executive and Fargo, other than this Agreement.

4

13.           “Fargo” means Fargo

Electronics, Inc.

14 .          “Successor” means any individual,

corporation partnership, group, association or other person,” as such term is

used in Section 13(d) or Section 14(d) of the Exchange Act, other than the

Fargo, any Affiliate or any benefit plan(s) sponsored by the Fargo that

succeeds to, or has the practical ability to control (either immediately or

solely with the passage of time), the Parent Corporation’s business directly,

by merger, consolidation or other form of business combination, or indirectly,

by purchase of the Parent Corporation’s outstanding securities ordinarily

having the right to vote at the election of directors or all or substantially

all of its assets or otherwise. 

Successor shall also mean the entity after the Change in Control,

regardless of what form such entity shall take.

Accordingly, the Company and

Employee each intending to be legally bound, agree as follows:

1.             Term of Agreement.  This Agreement is effective immediately and will have an initial

term ending on December 31, 2004.  After

this initial term, this Agreement will automatically continue for consecutive

one-year terms (“Renewal Periods”).  The

Company or the Executive can choose to terminate this Agreement by giving

notice 90 (ninety) calendar days prior to the automatic renewal that the

Agreement will not be extended.

Notwithstanding anything

to the contrary, if a Change in Control has occurred during the term of this

Agreement, this Agreement will continue in effect for a period of 18 months

following the month during which the Change in Control occurs.

2.             Benefits upon a Change in Control Termination.  The Executive will become entitled to the

benefits described in this Section 2 if and only if (i) the Successor

terminates the Executive’s employment for any reason other than the Executive’s

death or Cause, or the Executive terminates the Executive’s employment with the

Successor for Good Reason, and (ii) is within 18 months after the date of the

Change in Control (or before the Change in Control if at the request of or

required by the Successor related to the change in control.

(a)           Cash

Payment.  Not more than 30 days

following the Date of Termination, or, if later, not more than 30 days

following the date of the Change in Control, the Company will make a lump-sum

cash payment to the Executive in an amount equal to the sum of (i) 150% of the

Executive’s Base Pay.

(b)           Stock

Options.   All stock options owned

by the Executive under any stock option plan adopted by Fargo shall vest in

their entirety without regard to any conflicting clauses in such option plans.

 3.            Indemnification.  Following a Change in Control, the Successor

will indemnify and advance expenses to the Executive for damages, costs and

expenses (including, without limitation, judgments, fines, penalties,

settlements and reasonable fees and expenses of the Executive’s counsel)

incurred in connection with all matters, events and transactions relating to

the Executive’s service to or status with Fargo or the Successor employee

benefit plan or other service.  

5

The Successor must

do so to the extent that would have been required under applicable law,

corporate articles, bylaws or agreements or instruments of any nature with or

covering the Executive, as in effect immediately prior to the Change in Control

and to any further extent as may be determined or agreed upon following the

Change in Control.

4.             Miscellaneous.

(a)           Successors.  Fargo must have any Successor, by agreement

in form and substance satisfactory to the Executive, assent to the fulfillment

by the Company of the Company’s obligations under this Agreement.  If a Successor does not agree to such a

continuation of obligations, the Executive may exercise his or her rights under

this Agreement.

(b)           Binding

Agreement.  This Agreement inures to

the benefit of, and is enforceable by, the Executive, or in the event of death

or incapacity of the Executive, the Executive’s personal and legal

representatives, executors, administrators, successors, heirs, distributees,

devisees and legatees.

(c)           No

Mitigation.  The Executive will not be

required to mitigate the amount of any benefits the Successor becomes obligated

to provide to the Executive in connection with this Agreement by seeking other

employment or otherwise.

(d)           No

Setoff.  The Successor has no right

to setoff benefits owed to the Executive under this Agreement against amounts

owed (or claimed to be owed) by the Executive to Fargo or the Successor under

this Agreement or otherwise.

(e)           Taxes.  All benefits to be provided to the Executive

in connection with this Agreement will be subject to required withholding of

federal, state and local income, excise and employment-related taxes.  The Successor’s good faith determination

with respect to its obligation to withhold such taxes relieves it of any

obligation that such amounts should have been paid to the Executive.

(f)            Notices.  For the purposes of this Agreement, notices

and all other communications provided for in, or required under, this Agreement

must be in writing and will be deemed to have been duly given when personally

delivered or when mailed by United States registered or certified mail, return

receipt requested to the last known address of either party.

(g)           Disputes.  The Parties agree that any dispute,

controversy or claim arising under or in connection with this Agreement will be

settled exclusively by binding arbitration administered by the American

Arbitration Association in Minneapolis, Minnesota in accordance with the

Commercial Arbitration Rules of the American Arbitration Association then in

effect.  The arbiter’s decision will

6

be binding on both parties. The Successor will pay all fees and costs

of the arbitration including legal fees.

(h)           Effect

of Plan Benefits on Other Severance Plans. 

In the event the Executive receives any payment under the terms of this

Agreement, the Executive will not be eligible to receive benefits under any

other severance pay plan sponsored or maintained by the Successor.

 (i)           Related Agreements and Other

Arrangements.  This Agreement constitutes

the entire agreement of the parties with respect to the subject matter hereof,

and no agreements or representations, oral or otherwise, express or implied,

with respect to the subject matter to this Agreement have been made by any

party which are not expressly set forth in this Agreement.  If there are any other Agreements or

provisions in other Agreements to the contrary, this Agreement shall apply and

take precedence.

(j)            No

Employment or Service Contract. 

Nothing in this Agreement is intended to provide the Executive with any

right to continue in the employ of Fargo or the Successor for any period of

specific duration or interfere with or otherwise restrict in any way the

Executive’s rights or the rights of Fargo or the Successor.

(k)           Payment;

Assignment.  Benefits payable under

this Agreement will be paid only from the general assets of the Successor and

the Executive will be a general unsecured creditor.

(l)            Late

Payments.  Benefits not paid under

this Agreement when due will accrue interest at the rate of 18% per year, or

the maximum rate permitted under applicable law.

(m)          Survival.  The respective obligations and benefits of

this Agreement shall survive termination until the obligations are satisfied.

(n)           Amendments;

Waivers.  No provision of this

Agreement may be modified, waived or discharged unless such modification,

waiver or discharge is agreed to in writing signed by the Executive and the

Chief Operating Officer of Fargo.  No

waiver of any breach of this Agreement, or of compliance with any condition or

provision of this Agreement will be deemed a waiver of similar or dissimilar

provisions or conditions at any time.

(o)           Governing

Law.  This Agreement and the legal

relations among the parties as to all matters shall be governed by the laws of

the State of Minnesota (without regard to the conflict of laws principles of

any jurisdiction).

(p)           Further

Assurances.  The parties to this

Agreement agree to perform, or cause to be performed, such further acts and

deeds, and to execute and deliver, or cause to be executed and delivered, such

additional or supplemental documents or instruments as may be reasonably

required by the other party to carry into effect the intent and purpose of this

Agreement.

7

 

(q)           Interpretation.  The invalidity or unenforceability of all or

any part of any provision of this Agreement will not affect the validity or

enforceability of the remainder of such provision or of any other provision of

this Agreement, which will remain in full force and effect.

(r)            Counterparts.  This Agreement may be executed in several

counterparts, each of which will be deemed to be an original, but all of which

together will constitute one and the same instrument.

 

Fargo and the Executive have executed this Agreement as of the date

first above written.

	

   

  	

  FARGO

  ELECTRONICS, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/  GARY R.

  HOLLAND

  
	

   

  	

   

  	

  Gary R. Holland

  CEO

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  Agreed to as of this 1st day of May, 2002

  
	

   

  	

   

  
	

   

  	

  /s/  PAUL

  W.B. STEPHENSON

  
	

   

  	

  Paul W. B. Stephenson

  

 

8Promissory Note

Exhibit

10.34

 

SECURED PROMISSORY NOTE

 

$500,000.00                                                           SAN

DIEGO, CALIFORNIA                         April 19, 2002

 

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 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 be

immediately due and payable on demand by Holder.

 

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 even date herewith.

 

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 excess of the 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.

  
	

   

  	

  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

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

  	

   

  
	

   

  	

   

  	

   

  	

  John W. Low

  
	

   

  	

   

  	

   

  	

  Chief Financial Officer

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