cosmicnick,
The very old version of Espionage you were using had its database stored in a different location than the current version. The database should have been moved for you but it seems like something went wrong so you'll have to do it manually:
First, make sure Espionage isn't running before proceeding.1. In the Finder, choose "Go To Folder..." from the Go menu
2. Paste this in and press "Go": ~/Library/Application Support/Espionage
3. Open a new Finder window (File > New Finder Window)
4. Choose "Go To Folder..." again, this time enter: ~/Library/Application Support/com.taoeffect.Espionage3
5.
Copy (don't move) the "database3" file from the "Espionage" folder (the first window from step #2) into the "com.taoeffect.Espionage3" folder. Replace any existing database3 file in the target folder if necessary (but only if you haven't encrypted any folders with 3.5 yet).
WARNING: Make sure you do step #5 in the correct direction. Do NOT copy 'database3' from "com.taoeffect.Espionage3" into "Espionage". Doing so can result in the loss of your data.After you finished, open Espionage 3.5 again. If you need to have your license resent to you
send us an email asking us to resent it (please include the email address you used to purchase it, and/or the name on your license).