THIS NOTE AND THE RIGHTS PROVIDED HEREIN
		ARE SUBJECT IN ALL RESPECTS TO THE TERMS OF THE SUBORDINATION AGREEMENT OF EVEN
		DATE HEREWITH BETWEEN THE AGENT OF THE PAYEE AND SILICON VALLEY
		BANK.
	 

	 
		THIS NOTE HAS NOT BEEN REGISTERED UNDER
		THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
		STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
		UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
		SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT
		REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
		PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
	 

	 
		AXS-ONE INC.
	 

	 
		SERIES B 6% SECURED CONVERTIBLE
		PROMISSORY NOTE
	 

	 
		 
	 

	 
			
				
				  U.S. $____________
				

			 	
				
				  Rutherford, NJ
				

			 
	
				
				  No.: PN-2007-B-__
				

			 	
				
				  May 29, 2007
				

			 

 

	 
		FOR VALUE RECEIVED, the undersigned, AXS-ONE INC., a Delaware corporation
		(the “Company”),
		hereby promises to pay to the order of
		_________ or any future holder of this
		promissory note (the “Payee”), at
		the principal office of the Payee set forth herein, or at such other place as
		the holder may designate in writing to the Company, the principal sum of
		_____________ Dollars (U.S. $__________), or such other amount as may be
		outstanding hereunder (the “Principal Amount”), together with all accrued but unpaid interest,
		in such coin or currency of the United States of America as at the time shall
		be legal tender for the payment of public and private debts and in immediately
		available funds, as provided in this promissory note (the “Note”).
	 

	 
		This Note is one of a duly authorized issue
		of Series B 6% Secured Convertible Promissory Notes of the Company, in
		aggregate principal amount of Two Million Five Hundred Thousand Dollars
		($2,500,000) (together with the authorized issue of Series A 6% Secured
		Convertible Promissory Notes of the Company, in aggregate principal amount of
		Two Million Five Hundred Thousand Dollars ($2,500,000), collectively the
		“Promissory Notes”) issued pursuant to the Convertible Note and
		Warrant Purchase Agreement of even date herewith (the “Purchase Agreement”; capitalized terms used herein without definition
		shall have the meanings assigned in the Purchase Agreement). The Promissory
		Notes rank equally and ratably without priority over one another. No payment,
		including any prepayment, shall be made hereunder unless payment, including any
		prepayment, is offered with respect to the other Promissory Notes 
	 

	 
		 
	 

	 
		 
	 



	 
	 

	 

	 
		in an amount which bears the same ratio to
		the then unpaid principal amount of such Promissory Notes as the payment made
		hereon bears to the then unpaid principal amount under this Note.
	 

	 
		1. Principal and Interest Payments.
	 

	 
		(a) The Company shall repay in full the
		entire principal balance then outstanding under this Note plus all accrued and
		unpaid interest on the first to occur (the “Maturity Date”) of: (i) May 29, 2009; (ii) such time as there
		occurs a Sale Transaction (as defined below) or (iii) the acceleration of the
		obligations as contemplated by this Note. 
	 

	 
		“Sale Transaction” shall mean (i) the sale or other disposition of
		all or substantially all of the Company’s assets, or (ii) the acquisition
		of the Company by another entity by means of any transaction or series of
		related transactions to which the Company is party (including, without
		limitation, any stock acquisition, reorganization, merger or consolidation but
		excluding any sale of stock for capital raising purposes) other than a
		transaction or series of transactions in which the holders of the voting
		securities of the Company outstanding immediately prior to such transaction
		continue to retain (either by such voting securities remaining outstanding or
		by such voting securities being converted into voting securities of the
		surviving entity), as a result of shares in the Company held by such holders
		prior to such transaction, at least fifty percent (50%) of the total voting
		power represented by the voting securities of the Company or such surviving
		entity outstanding immediately after such transaction or series of
		transactions. 
	 

	 
		(b) Interest on the outstanding principal
		balance of this Note shall accrue at a rate of six percent (6.00%) per annum,
		compounded quarterly. Interest on the outstanding principal balance of this
		Note shall be computed on the basis of the actual number of days elapsed and a
		year of three hundred sixty (360) days and shall be payable on the Maturity
		Date, upon earlier prepayment of this Note or in the form of shares of common
		stock, par value $0.01 per share, of the Company (the “Common Stock”) upon conversion of this Note as set forth in
		Section 8 below. Furthermore, upon the occurrence of an Event of Default, then
		to the extent permitted by law, the Company will pay interest to the Payee,
		payable on demand, on the outstanding principal balance of this Note from the
		date of the Event of Default until payment in full at the rate of fifteen
		percent (15%) per annum, compounded quarterly.
	 

	 
		(c) The Company may not prepay the
		outstanding principal amount of this Note or the interest thereon prior to the
		Maturity Date (a “Prepayment”) without the written consent of the Payee, unless
		the Company shall provide at least thirty (30) days prior written notice of the
		date on which the Company intends to make such Prepayment (a
		“Prepayment Notice”). Any partial Prepayment shall be applied first
		to accrued but unpaid interest and second to unpaid principal. Nothing in this
		Section 1(c) shall limit the right of the Payee to convert this Note into
		Common Stock at any time after receipt of the Prepayment Notice and prior to
		the time at which such Prepayment is made.
	 

	 
		2. Non-Business Days. Whenever any payment to be made shall be due on a
		non-Business Day, such payment may be due on the next succeeding Business Day
		and such next 
	 

	 
		 
	 

	 
		 
	 

	 
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		succeeding day shall be included in the
		calculation of the amount of accrued interest payable on such date.
	 

	 
		3. Security. This
		Note is secured pursuant to the terms of a Security Agreement (the
		“Security Agreement”) between the Company and the holders of the
		Promissory Notes of even date herewith by a security interest in the Collateral
		(as such term is defined in the Security Agreement). This Note is subject to
		the provisions of the Security Agreement.
	 

	 
		4. Subordination of Future Debt; Payment of
		Dividends. Except as provided in the
		Transaction Documents, any debt incurred after the date hereof to any creditor
		shall be subordinated to the indebtedness evidenced by this Note. The Company
		shall not declare or pay any dividend or distribution with respect to any
		preferred stock or Common Stock of the Company other than a pro rata dividend
		with respect to the Common Stock payable solely in shares of Common
		Stock.
	 

	 
		5. Representations and Warranties of the
		Company. The Company represents and
		warrants to the Payee as follows:
	 

	 
		(a) The Company has been duly incorporated
		and is validly existing and in good standing under the laws of the state of
		Delaware, with full corporate power and authority to own, lease and operate its
		properties and to conduct its business as currently conducted.
	 

	 
		(b) This Note has been duly authorized,
		validly executed and delivered on behalf of the Company and is a valid and
		binding obligation of the Company enforceable against the Company in accordance
		with its terms, subject to limitations on enforcement by general principles of
		equity and by bankruptcy or other laws affecting the enforcement of
		creditors’ rights generally, and the Company has full power and authority
		to execute and deliver this Note and to perform its obligations
		hereunder.
	 

	 
		6. Events of Default. The occurrence of any of the following events shall be
		an “Event of
		Default” under this Note:
	 

	 
		(a) the Company shall fail to pay the
		principal or any accrued interest hereunder or any other Note after the date
		such payment shall become due and payable hereunder or thereunder; or
	 

	 
		(b) if default shall be made in the
		performance or observance of any representation, warranty, covenant, or
		agreement contained in this Note, in the Security Agreement, in the Purchase
		Agreement or in the Investor Rights Agreement, or in any other agreement
		between the Company and the Payee relating to indebtedness of the Company to
		the Payee or any of its affiliates for borrowed money and such default shall
		have continued for a period of five (5) days after Company’s receipt of
		written notice of such default (unless such default is on account of failure to
		give a required notice, in which event such 5 day cure period shall commence
		with the date of such default); or
	 

	 
		 
	 

	 
		 
	 

	 
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		(c) the Company shall (i) apply for or
		consent to the appointment of, or the taking of possession by, a receiver,
		custodian, trustee or liquidator of itself or of all or a substantial part of
		its property or assets, (ii) make a general assignment for the benefit of its
		creditors, (iii) commence a voluntary case under the United States Bankruptcy
		Code (the “Bankruptcy
		Code”) or under the comparable
		laws of any jurisdiction (foreign or domestic), (iv) file a petition seeking to
		take advantage of any bankruptcy, insolvency, moratorium, reorganization or
		other similar law affecting the enforcement of creditors’ rights
		generally, (v) acquiesce in writing to any petition filed against it in an
		involuntary case under the Bankruptcy Code or under the comparable laws of any
		jurisdiction (foreign or domestic), or (vi) take any action under the laws of
		any jurisdiction (foreign or domestic) analogous to any of the foregoing;
		or
	 

	 
		(d) a proceeding or case shall be commenced
		in respect of the Company or any of its subsidiaries without its application or
		consent, in any court of competent jurisdiction, seeking (i) the liquidation,
		reorganization, moratorium, dissolution, winding up, or composition or
		readjustment of its debts, (ii) the appointment of a trustee, receiver,
		custodian, liquidator or the like of it or of all or any substantial part of
		its assets or (iii) similar relief in respect of it under any law providing for
		the relief of debtors, and such proceeding or case described in clause (i),
		(ii) or (iii) shall continue undismissed, or unstayed and in effect, for a
		period of thirty (30) consecutive days or any order for relief shall be entered
		in an involuntary case under the Bankruptcy Code or under the comparable laws
		of any jurisdiction (foreign or domestic) against the Company or any of its
		subsidiaries or action under the laws of any jurisdiction (foreign or domestic)
		analogous to any of the foregoing shall be taken with respect to the Company or
		any of its subsidiaries and shall continue undismissed, or unstayed and in
		effect for a period of ninety (90) consecutive days.
	 

	 
		7. Remedies Upon an Event of Default. If an Event of Default shall have occurred and shall
		be continuing, the Payee of this Note may at any time at its option, (a)
		declare the entire unpaid principal balance of this Note, together with all
		interest accrued hereon, due and payable, and thereupon, the same shall be
		accelerated and so due and payable; provided,
		however, that upon the occurrence of an Event of Default
		described in (i) Sections 6(c) and (d), without presentment, demand, protest,
		or notice, all of which are hereby expressly unconditionally and irrevocably
		waived by the Company, the outstanding principal balance and accrued interest
		hereunder shall be automatically due and payable, and (ii) Sections 6(a) and
		(b) the Payee may exercise or otherwise enforce any one or more of the
		Payee’s rights, powers, privileges, remedies and interests under this Note
		or applicable law. No course of delay on the part of the Payee shall operate as
		a waiver thereof or otherwise prejudice the right of the Payee. No remedy
		conferred hereby shall be exclusive of any other remedy referred to herein or
		now or hereafter available at law, in equity, by statute or otherwise.
	 

	 
		8. Conversion.
		
	 

	 
		(a) General. The
		holder of this Note shall have the right at any time following approval by the
		American Stock Exchange of an Additional Listing Application with respect to
		the Conversion Shares, at such holder’s option, to convert all or any
		lesser portion of the 
	 

	 
		 
	 

	 
		 
	 

	 
		4
	 

	 
		 
	 



	 
	 

	 

	 
		Principal Amount plus accrued and unpaid
		interest thereon into such number of fully paid and non-assessable shares of
		Common Stock as is determined by dividing (i) the portion of the Principal
		Amount to be converted plus accrued and unpaid interest thereon by (ii) the
		Conversion Rate (as defined below) then in effect for this Note. The initial
		conversion rate shall be $2.50, such rate to be subject to adjustment in
		accordance with the provisions of this Section 8. Such conversion rate in
		effect from time to time, as adjusted pursuant to this Section 8, is referred
		to herein as a “Conversion
		Rate.” All of the remaining
		provisions of this Section 8 shall apply separately to each Conversion Rate in
		effect from time to time with respect to this Note.
	 

	 
		(b) Mechanics of Conversion.
	 

	 
		(i) Such right of conversion shall be
		exercised by the Payee by delivering to the Company a conversion notice in the
		form attached hereto as Exhibit
		A (the “Conversion Notice”), appropriately completed and duly signed, and by
		surrender not later than two (2) Business Days thereafter of this Note. The
		Conversion Notice shall also contain a statement of the name or names (with
		addresses and tax identification or social security numbers) in which the
		certificate or certificates for Common Stock shall be issued, if other than the
		name in which this Note is registered. Promptly after the receipt of the
		Conversion Notice, the Company shall issue and deliver, or cause to be
		delivered, to the Payee or such Payee’s nominee, a certificate or
		certificates for the number of shares of Common Stock issuable upon such
		conversion. Such conversion shall be deemed to have been effected as of the
		close of business on the date of receipt by the Company of the Conversion
		Notice (the “Conversion
		Date”), and the person or persons
		entitled to receive the shares of Common Stock issuable upon conversion shall
		be treated for all purposes as the holder or holders of record of such shares
		of Common Stock as of the close of business on the Conversion Date. If the
		Payee has not converted the entire amount of this Note pursuant to the
		Conversion Notice, then the Company shall execute and deliver to the Payee a
		new Note instrument identical in terms to this Note, but with a principal
		amount reflecting the unconverted portion of this Note. The new Note instrument
		shall be delivered subject to the same timing terms as the certificates for the
		Common Stock.
	 

	 
		(ii) The Company shall effect such issuance
		of Common Stock within three (3) trading days following the Conversion Date and
		shall transmit the certificates by messenger or reputable overnight delivery
		service to reach the address designated by such holder within three (3) trading
		days after the receipt by the Company of such Conversion Notice. Provided that
		the holder complies with all of the provisions of this Note relating to the
		conversion hereof, if certificates evidencing the Common Stock are not received
		by the holder (through no fault or negligence of the holder) within five (5)
		Business Days following the Conversion Date, then the holder will be entitled
		to revoke and withdraw its Conversion Notice, in whole or in part, at any time
		prior to its receipt of those certificates.
	 

	 
		(d) Fractional Shares. The Company shall not be required to issue a
		fractional share of Common Stock upon conversion of this Note. As to any
		fraction of a share which the holder of this Note would otherwise be entitled
		to acquire upon such conversion, the Company shall pay an amount in cash equal
		to the Current Market Price (as defined below) per share of Common Stock on the
		date of conversion, multiplied by such fraction.
	 

	 
		 
	 

	 
		 
	 

	 
		5
	 

	 
		 
	 



	 
	 

	 

	 
		“Current Market Price” means, in respect of any share of Common Stock on
		any date herein specified:
	 

	 
		(1) if there shall not then be a public
		market for the Common Stock, the higher of (a) the book value per share of
		Common Stock at such date, and (b) the fair market value per share of Common
		Stock as determined in good faith by the Board, or
	 

	 
		(2) if there shall then be a public market
		for the Common Stock, the average of the daily market prices for the 20
		consecutive trading days immediately before such date. The daily market price
		for each such trading day shall be (i) the closing bid price on such day on the
		principal stock exchange (including Nasdaq) on which such Common Stock is then
		listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes
		place on such day on any such exchange, the last reported closing bid price on
		such day as officially quoted on any such exchange (including Nasdaq), (iii) if
		the Common Stock is not then listed or admitted to trading on any stock
		exchange, the last reported closing bid price on such day in the
		over-the-counter market, as furnished by the National Association of Securities
		Dealers Automatic Quotation System or the Pink Sheets LLC, (iv) if neither such
		corporation at the time is engaged in the business of reporting such prices, as
		furnished by any similar firm then engaged in such business, or (v) if there is
		no such firm, as furnished by any member of the National Association of
		Securities Dealers, Inc. (the “NASD”)
		selected mutually by holders of a majority in interest of the Promissory Notes
		and the Company or, if they cannot agree upon such selection, as selected by
		two such members of the NASD, one of which shall be selected by holders of a
		majority in interest of the Promissory Notes and one of which shall be selected
		by the Company (as applicable, the “Daily Market Price”).
	 

	 
		(e) Stock Dividends, Subdivisions and
		Combinations. If at any time while this
		Note is outstanding, the Company shall: 
	 

	 
		(i) cause the holders of its Common Stock to
		be entitled to receive a dividend payable in, or other distribution of,
		additional shares of Common Stock,
	 

	 
		(ii) subdivide its outstanding shares of
		Common Stock into a larger number of shares of Common Stock, or
	 

	 
		(iii) combine its outstanding shares of
		Common Stock into a smaller number of shares of Common Stock,
	 

	 
		then in each such case the Conversion Rate
		shall be multiplied by a fraction of which the numerator shall be the number of
		shares of Common Stock (excluding treasury shares, if any) outstanding
		immediately before such event and of which the denominator shall be the number
		of shares of Common Stock outstanding immediately after such event. Any
		adjustment made 
	 

	 
		 
	 

	 
		 
	 

	 
		6
	 

	 
		 
	 



	 
	 

	 

	 
		pursuant to clause (i) of this Section 8(e)
		shall become effective immediately after the record date for the determination
		of stockholders entitled to receive such dividend or distribution, and any
		adjustment pursuant to clauses (ii) or (iii) of this Section 8(e) shall become
		effective immediately after the effective date of such subdivision or
		combination. If any event requiring an adjustment under this paragraph occurs
		during the period that a Conversion Rate is calculated hereunder, then the
		calculation of such Conversion Rate shall be adjusted appropriately to reflect
		such event.
	 

	 
		(f) Certain Other Distributions. If at any time while this Note is outstanding the
		Company shall take a record of the holders of its Common Stock for the purpose
		of entitling them to receive any dividend or other distribution of:
	 

	 
		(i) cash,
	 

	 
		(ii) any evidences of its indebtedness, any
		shares of stock of any class or any other securities or property or assets of
		any nature whatsoever (other than cash or additional shares of Common Stock as
		provided in Section 8(e) hereof), or 
	 

	 
		(iii) any warrants or other rights to
		subscribe for or purchase any evidences of its indebtedness, any shares of
		stock of any class or any other securities or property or assets of any nature
		whatsoever (in each case set forth in subparagraphs 8(f)(i), 8(f)(ii) and
		8(f)(iii) hereof, the “Distributed
		Property”), 
	 

	 
		then upon any conversion of this Note that
		occurs after such record date, the holder of this Note shall be entitled to
		receive, in addition to the Conversion Shares, the Distributed Property that
		such holder would have been entitled to receive in respect of such number of
		Conversion Shares had the holder been the record holder of such Conversion
		Shares as of such record date. Such distribution shall be made whenever any
		such conversion is made. In the event that the Distributed Property consists of
		property other than cash, then the fair value of such Distributed Property
		shall be as determined in good faith by the Board and set forth in reasonable
		detail in a written valuation report (the “Valuation Report”) prepared by the Board. The Company shall give
		written notice of such determination and a copy of the Valuation Report to the
		holder of this Note, and if the holder objects to such determination within
		twenty (20) Business Days following the date such notice is given, the Company
		shall submit such valuation to an investment banking firm of recognized
		national standing selected by the holder of this Note and acceptable to the
		Company in its reasonable discretion, whose opinion shall be binding upon the
		Company and the holder of this Note. A reclassification of the Common Stock
		(other than a change in par value, or from par value to no par value or from no
		par value to par value) into shares of Common Stock and shares of any other
		class of stock shall be deemed a distribution by the Company to the holders of
		its Common Stock of such shares of such other class of stock within the meaning
		of this Section 8(f) and, if the outstanding shares of Common Stock shall be
		changed into a larger or smaller number of shares of Common Stock as a part of
		such reclassification, such change shall be deemed a subdivision or
		combination, as the case may be, of the outstanding shares of Common Stock
		within the meaning of Section 8(e).
	 

	 
		 
	 

	 
		 
	 

	 
		7
	 

	 
		 
	 



	 
	 

	 

	 
		(g) Common Stock Reserved. The Company shall at all times reserve and keep
		available out of its authorized but unissued Common Stock, solely for issuance
		upon the conversion of the Promissory Notes, such number of shares of Common
		Stock as shall from time to time be issuable upon the conversion of all the
		Promissory Notes at the time outstanding.
	 

	 
		9. Other Provisions Applicable to
		Adjustments. The following provisions
		shall be applicable to the making of adjustments of the number of shares of
		Common Stock into which this Note is convertible and the current Conversion
		Rate provided for in Section 8: 
	 

	 
		(a) When Adjustments to Be Made. The adjustments required by Section 8 shall be made
		whenever and as often as any specified event requiring an adjustment shall
		occur, except that any adjustment to the Conversion Rate that would otherwise
		be required may be postponed (except in the case of a subdivision or
		combination of shares of the Common Stock, as provided for in Section 8(e)) up
		to, but not beyond the Conversion Date if such adjustment either by itself or
		with other adjustments not previously made adds or subtracts less than 1% of
		the shares of Common Stock into which this Note is convertible immediately
		prior to the making of such adjustment. Any adjustment representing a change of
		less than such minimum amount (except as aforesaid) which is postponed shall be
		carried forward and made as soon as such adjustment, together with other
		adjustments required by Section 8 and not previously made, would result in a
		minimum adjustment or on the Conversion Date. For the purpose of any
		adjustment, any specified event shall be deemed to have occurred at the close
		of business on the date of its occurrence. 
	 

	 
		(b) Fractional Interests. In computing adjustments under Section 8, fractional
		interests in Common Stock shall be taken into account to the nearest 1/100th of
		a share.
	 

	 
		(c) When Adjustment Not Required. If the Company undertakes a transaction contemplated
		under Section 8(f) and as a result takes a record of the holders of its Common
		Stock for the purpose of entitling them to receive a dividend or distribution
		or subscription or purchase rights or other benefits contemplated under Section
		8(f) and shall, thereafter and before the distribution to stockholders thereof,
		legally abandon its plan to pay or deliver such dividend, distribution,
		subscription or purchase rights or other benefits contemplated under Section
		8(f), then thereafter no adjustment shall be required by reason of the taking
		of such record and any such adjustment previously made in respect thereof shall
		be rescinded and annulled.
	 

	 
		(d) Escrow of Stock.
		If after any property becomes distributable pursuant to Section 8 by reason of
		the taking of any record of the holders of Common Stock, but prior to the
		occurrence of the event for which such record is taken, a holder of this Note
		converts this Note during such period, the holder of this Note shall continue
		to be entitled to receive any shares of Common Stock issuable upon conversion
		under Section 8 by reason of such adjustment (as if this Note were not yet
		converted) and such shares or other property shall be held in escrow for the
		holder of this Note by the Company to be issued to holder of this Note upon and
		to the extent that the event actually takes place. Notwithstanding any other
		provision to the contrary herein, if the event for which such record was taken
		fails to occur or is rescinded, then such escrowed shares shall be canceled by
		the Company and escrowed property returned to the Company.
	 

	 
		 
	 

	 
		 
	 

	 
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		10. Replacement.
		Upon receipt of a duly executed, notarized and unsecured written statement from
		the Payee with respect to the loss, theft or destruction of this Note (or any
		replacement hereof), and, if requested by the Company, an indemnity bond
		customary in the industry, or, in the case of a mutilation of this Note, upon
		surrender and cancellation of such Note, the Company shall issue a new Note, of
		like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated
		Note.
	 

	 
		11. Parties in Interest, Transferability. This Note shall be binding upon the Company and its
		successors and permitted assigns and the terms hereof shall inure to the
		benefit of the Payee and its successors and assigns. This Note may be
		transferred or sold, subject to the provisions of Section 19 of this Note, or
		pledged, hypothecated or otherwise granted as security by the Payee.
	 

	 
		12. Amendments. This
		Note may not be modified or amended in any manner except in writing executed by
		the Company and the Payee.
	 

	 
		13. Notices. Any
		notice, demand, request, waiver or other communication required or permitted to
		be given hereunder shall be in writing and shall be effective (a) upon hand
		delivery by telecopy or facsimile at the address or number designated below (if
		delivered on a Business Day during normal business hours where such notice is
		to be received), or the first Business Day following such delivery (if
		delivered other than on a Business Day during normal business hours where such
		notice is to be received) or (b) on the second Business Day following the date
		of mailing by express courier service, fully prepaid, addressed to such
		address, or upon actual receipt of such mailing, whichever shall first occur.
		The Company will give written notice to the Payee at least twenty (20) days
		prior to the date on which dissolution, liquidation or winding-up will take
		place and in no event shall such notice be provided to the Payee prior to such
		information being made known to the public. Notices to the Payee shall be made
		to the address set forth in the Purchase Agreement. Notices to the Company
		shall be made to the following:
	 

	 
		 
	 

	 
			
				
				  Address of the Company:
				

			 	
				
				   
				

			 	
				
				  AXS-One Inc.

				  301 Route 17 North 

				  Rutherford, New Jersey 07070 

				  Attention: Chief Financial Officer 

				  Facsimile No.: (201) 935-5230
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  with a copy to:
				

			 	
				
				   
				

			 	
				
				  Wiggin and Dana LLP 

				  400 Atlantic Street 

				  Stamford, Connecticut 06901 

				  Attention: Michael Grundei

				  Facsimile No.: (203) 363-7676
				

			 

 

	 
		14. Governing Law.
		This Note shall be governed by and construed in accordance with the internal
		laws of the State of New York, without giving effect to the choice of 
	 

	 
		 
	 

	 
		 
	 

	 
		9
	 

	 
		 
	 



	 
	 

	 

	 
		law provisions. This Note shall not be
		interpreted or construed with any presumption against the party causing this
		Note to be drafted.
	 

	 
		15. Headings.
		Article and section headings in this Note are included herein for purposes of
		convenience of reference only and shall not constitute a part of this Note for
		any other purpose.
	 

	 
		16. Remedies, Characterizations, Other Obligations, Breaches
		and Injunctive Relief. The remedies
		provided in this Note shall be cumulative and in addition to all other remedies
		available under this Note, at law or in equity (including, without limitation,
		a decree of specific performance and/or other injunctive relief), no remedy
		contained herein shall be deemed a waiver of compliance with the provisions
		giving rise to such remedy and nothing herein shall limit a Payee’s right
		to pursue actual damages for any failure by the Company to comply with the
		terms of this Note. Amounts set forth or provided for herein with respect to
		payments and the like (and the computation thereof) shall be the amounts to be
		received by the Payee and shall not, except as expressly provided herein, be
		subject to any other obligation of the Company (or the performance thereof).
		The Company acknowledges that a breach by it of its obligations hereunder will
		cause irreparable and material harm to the Payee and that the remedy at law for
		any such breach may be inadequate. Therefore the Company agrees that, in the
		event of any such breach or threatened breach, the Payee shall be entitled, in
		addition to all other available rights and remedies, at law or in equity, to
		such equitable relief, including but not limited to an injunction restraining
		any such breach or threatened breach, without the necessity of showing economic
		loss and without any bond or other security being required.
	 

	 
		17. Failure or Indulgence Not Waiver. No failure or delay on the part of the Payee in the
		exercise of any power, right or privilege hereunder shall operate as a waiver
		thereof, nor shall any single or partial exercise of any such power, right or
		privilege preclude other or further exercise thereof or of any other right,
		power or privilege.
	 

	 
		18. Enforcement Expenses. The Company agrees to pay all costs and expenses of
		enforcement of this Note, including, without limitation, reasonable
		attorneys’ fees and expenses.
	 

	 
		19. Compliance with Securities Laws. The Payee of this Note acknowledges that this Note is
		being acquired solely for the Payee’s own account and not as a nominee for
		any other party, and for investment, and that the Payee shall not offer, sell
		or otherwise dispose of this Note other than in compliance with the laws of the
		United States of America and as guided by the rules of the Securities and
		Exchange Commission. This Note and any Note issued in substitution or
		replacement therefore shall be stamped or imprinted with legends, as
		applicable, in substantially the following form:
	 

	 
		“THIS NOTE AND THE RIGHTS PROVIDED
		HEREIN ARE SUBJECT IN ALL RESPECTS TO THE TERMS OF THE 
	 

	 
		 
	 

	 
		 
	 

	 
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		SUBORDINATION AGREEMENT OF EVEN DATE
		HEREWITH BETWEEN THE AGENT OF THE PAYEE AND SILICON VALLEY BANK.
	 

	 
		THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
		SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
		STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
		UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
		SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT
		REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
		PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”
	 

	 
		20. Severability.
		The provisions of this Note are severable, and if any provision shall be held
		invalid or unenforceable in whole or in part in any jurisdiction, then such
		invalidity or unenforceability shall not in any manner affect such provision in
		any other jurisdiction or any other provision of this Note in any
		jurisdiction.
	 

	 
		21. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby
		irrevocably submits to the jurisdiction of the United States District Court
		sitting in the Southern District of New York and the courts of the State of New
		York located in New York county for the purposes of any suit, action or
		proceeding arising out of or relating to this Note and (ii) hereby waives, and
		agrees not to assert in any such suit, action or proceeding, any claim that it
		is not personally subject to the jurisdiction of such court, that the suit,
		action or proceeding is brought in an inconvenient forum or that the venue of
		the suit, action or proceeding is improper. Each of the Company and the Payee
		consents to process being served in any such suit, action or proceeding by
		mailing a copy thereof to such party at the address set forth in Section 13
		hereof and agrees that such service shall constitute good and sufficient
		service of process and notice thereof. Nothing in this Section 21 shall affect
		or limit any right to serve process in any other manner permitted by
		law.
	 

	 
		22. Company Waivers.
		
	 

	 
		(a) Except as otherwise specifically
		provided herein, the Company and all others that may become liable for all or
		any part of the obligations evidenced by this Note, hereby waive presentment,
		demand, notice of nonpayment, protest and all other demands and notices in
		connection with the delivery, acceptance, performance and enforcement of this
		Note, and do hereby consent to any number of renewals of extensions of the time
		or payment hereof and agree that any such renewals or extensions may be made
		without notice to any such persons and without affecting their liability herein
		and do further consent to the release of any person liable hereon, all without
		affecting the liability of the other persons, firms or Company liable for the
		payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.
	 

	 
		 
	 

	 
		 
	 

	 
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		(b) No delay or omission on the part of the
		Payee in exercising its rights under this Note, or course of conduct relating
		hereto, shall operate as a waiver of such rights or any other right of the
		Payee, nor shall any waiver by the Payee of any such right or rights on any one
		occasion be deemed a waiver of the same right or rights on any future
		occasion.
	 

	 
		(c) THE COMPANY ACKNOWLEDGES THAT THE
		TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO
		THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND
		HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS
		SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.
	 

	 
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		IN WITNESS WHEREOF, the Company has executed and delivered this Promissory
		Note as of the date first written above.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  AXS-ONE INC.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name: 
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title: 
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
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		EXHIBIT A
	 

	 
		FORM OF CONVERSION NOTICE
	 

	 
		(To be executed by the registered holder in
		order to convert the Note)
	 

	 
		The undersigned hereby irrevocably elects to
		convert the Series B 6% Secured Convertible Promissory Note (the
		“Note”) of AXS-One Inc., a Delaware corporation (the
		“Company”), due May 29, 2009 held by the
		undersigned into shares of Common Stock, according to the terms and conditions
		of the Note and the conditions hereof, as of the date written below. The
		undersigned hereby requests that certificates for the shares of Common Stock to
		be issued to the undersigned pursuant to this Conversion Notice be issued in
		the name of, and delivered to, the undersigned or its designee as indicated
		below. If the shares of Common Stock are to be issued in the name of a person
		other than the undersigned, the undersigned will pay all transfer taxes payable
		with respect thereto. A copy of the Note being converted is attached hereto
		(and the original Note shall be transmitted to the Company pursuant to the
		terms thereof). All capitalized terms used in this Conversion Notice, but not
		otherwise defined herein shall have the meanings assigned in the Note.
	 

	 
		 
	 

	 
			
				
				   
				

			 
	
				
				  Date of Conversion (Date of
				  Notice)
				

			 
	
				
				   
				

			 
	
				
				  Principal Amount of Note to be
				  Converted
				

			 
	
				
				   
				

			 
	
				
				  Principal Amount of Note not to be
				  Converted (Principal Amount Remaining after Conversion)
				

			 
	
				
				   
				

			 
	
				
				  Amount of accumulated and unpaid
				  interest on principal amount of Note to be Converted
				

			 
	
				
				   
				

			 
	
				
				  Number of shares of Common Stock to
				  be Issued (including conversion of accrued but unpaid interest on Notes to be
				  Converted)
				

			 
	
				
				   
				

			 
	
				
				  Applicable Conversion Value
				

			 

 

	 
		Conversion Information:[NAME OF
		HOLDER]
	 

	 
		___________________________________
	 

	 
		Address of Holder:
	 

	 
		___________________________________ 
	 

	 
		___________________________________ 
	 

	 
		Issue Common Stock to (if different than
		above): 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 



	 
	 

	 

	 
		Name:_______________________________ 
	 

	 
		Address:____________________________ 
	 

	 
		____________________________ 
	 

	 
		Tax ID #:_____________________
	 

	 
		 
	 

	 
			 	 
	
				
				  Name of Holder
				

			 	 

 

			
				
				  By: 
				

			 	
				
				

			 	
				
				   
				

			 
	
				
				  Name: 
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  Title: 
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
		 
	 

	 
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