Document:

Unassociated Document

    
      Exhibit
10.51

       

    

    REGENCY
AFFILIATES, INC.

     

    STOCK OPTION
AGREEMENT

     

    THIS
STOCK OPTION AGREEMENT (this “Agreement”) dated as of April 30, 2009 (the “Grant
Date”), is between Regency Affiliates, Inc., a Delaware corporation (the
“Company”), and Laurence S. Levy (the “Participant”), relating to options to
purchase shares of Stock, which options are granted under the Regency
Affiliates, Inc. 2003 Stock Incentive Plan, as amended (the
“Plan”).  Capitalized terms used, but not otherwise defined, in this
Agreement shall have the meanings ascribed to such terms in the
Plan.

     

    I.           Grant of Stock Option,
Option Price and Term.

     

    The
Company grants to the Participant a Non-Qualified Stock Option to purchase 50,000 shares of Stock of the Company (“Option
Shares”) at a price of $2.90 per share (“Option Price”), subject to the
provisions of the Plan and the terms and conditions herein.  The term
of this Stock Option shall be a period of 10 years from the Grant Date unless
earlier terminated as provided herein and in the Plan (the “Option
Period”).  Subject to the provisions contained herein and in the Plan,
the Stock Option shall become exercisable immediately upon the Grant
Date.

     

    The Stock
Option granted hereunder is designated as a nonqualified stock option which is
not transferable by the Participant except to a Family Member, as provided in
Section 4 of the Plan, or by will or the laws of descent and
distribution.

     

    II.           Exercise.

     

    The Stock
Option shall be exercisable during the Participant’s lifetime only by the
Participant (or his Representative), and after the Participant’s death only by a
Representative.  The Stock Option may only be exercised by the
delivery to the Company of a properly completed written notice, in form
satisfactory to the Committee, which notice shall specify the number of Option
Shares to be purchased and the aggregate Option price for such shares, together
with payment in full of such aggregate Option Price.  Payment shall
only be made as specified in the Plan.  If any part of the payment of
the Option Price is made in shares of Stock, such shares shall be valued by
using their Fair Market Value as of the date of exercise of the Stock
Option.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The Stock
Option may not be exercised unless there has been compliance with all the
preceding provisions of this Section 2, and, for all purposes of this Agreement,
the date of the exercise of the Stock Option shall be the date upon which there
is compliance with all such requirements.  The Committee may deny any
method of exercise permitted hereunder if such method would result in liability
under Federal or state securities law to the Participant or the Company, result
in an expense charge to the Company or prevent the use of pooling of interest
accounting.

     

    III.           Payment of Withholding
Taxes.

     

    If the
Company is obligated to withhold an amount on account of any tax imposed as a
result of the exercise of the Stock Option, the Participant shall be required to
pay such amount to the Company, as provided in the Plan.  The
Participant acknowledges and agrees that he is responsible for the tax
consequences associated with the grant of the Stock Option and its
exercise.

     

    IV.           Changes in Company’s Capital
Structure.

     

    The
existence of this Stock Option will not affect in any way the right or authority
of the Company or its stockholders to make or authorize (a) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business; (b) any merger or consolidation of
the Company’s capital structure or its business; (c) any merger or consolidation
of the Company; (d) any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Stock or the rights thereof; (e) the
dissolution or liquidation of the Company; (f) any sale or transfer of all or
any part of its assets or business; or (g) any other corporate act or
proceeding, whether of a similar character or otherwise.

     

    In the
event of a Change in Control or other corporate restructuring provided for in
the Plan, the Committee shall take such actions as are provided for in the
Plan.

     

    V.           Plan.

     

    The Stock
Option is granted pursuant to the Plan, and the Stock Option and this Agreement
are in all respects governed by the Plan and subject to all of the terms and
provisions thereof, all of which terms and provisions are made a part of and
incorporated in this Agreement as if they were expressly set forth
herein.  Any capitalized terms not defined in this Agreement shall
have the same meaning as is ascribed thereto under the Plan.  The
Participant hereby acknowledges receipt of a true copy of the Plan and the
Participant has read the Plan carefully and fully understands its
content.  In the event of any conflict between the terms of this
Agreement and the terms of the Plan, the terms of the Plan shall
control.

     

    VI.           Employment
Rights.

     

    No
provision of this Agreement or of the Stock Option granted hereunder shall give
the Participant any right to continue as a director of the Company or any
Affiliates, create any inference as to the length of directorship of the
Participant, affect the right of the Company or any Affiliates to terminate the
provision of services of the Participant, with or without Cause, or give the
participant any right to participate in any employee welfare or benefit plan or
other program (other than the Plan) of the Company or any
Affiliate.

     

    
      
        
        

      

      
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    VII.           Governing
Law.

     

    This
Agreement and the Stock Option granted hereunder shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
(other than its laws respecting choice of law), except to the extent Federal
laws would be mandatorily applicable.

     

    VIII.         Waiver; Cumulative
Rights.

     

    The
failure or delay of either party to require performance by the other party of
any provision hereof shall not affect its right to require performance of such
provision unless and until such performance has been waived in
writing.  Each and every right hereunder is cumulative and may be
exercised in part or in whole from time to time.

     

    IX.           Notices.

     

    Any
notice which either party hereto may be required or permitted to give the other
shall be in writing and may be delivered personally or by mail, postage prepaid,
addressed to the Secretary of the Company, at its then corporate headquarters,
and the Participant at his address as shown on the Company’s records, or to such
other address as the Participant, by notice to the Company, may designate in
writing from time to time.

     

    [Remainder
of page intentionally left blank.  Signature page
follows.]

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an
officer thereunto duly authorized, and the Participant has hereunto set his
hand, all as of the day and year first above.

     

    REGENCY
AFFILIATES, INC.

    

    
      
        	 	 	 	 	 
	
                /s/
      Neil N. Hasson   

              	 	 	
                /s/
      Laurence S. Levy

              	 
	
                Name:
      Neil N. Hasson   

              	 	 	
                Laurence
      S. Levy

              	 
	
                Title:
      Chief Financial Officer   

              	 	 	
                Participant

              	 

      

    

     

     

    
      4 of
4Exhibit 4.3 

THIS SECURITY AND THE RIGHTS
PROVIDED HEREIN ARE SUBJECT IN ALL RESPECTS TO THE TERMS OF THE THIRD AMENDED
AND RESTATED SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH AMONG THE AGENT OF
THE PAYEE, THE AGENT OF THE HOLDERS OF THE SERIES A 6% SECURED CONVERTIBLE
PROMISSORY NOTES, THE SERIES B 6% SECURED CONVERTIBLE PROMISSORY NOTES, THE
SERIES C 6% SECURED CONVERTIBLE PROMISSORY NOTES, THE SERIES D 6% SECURED
CONVERTIBLE PROMISSORY NOTES AND THE SERIES E 6% SECURED CONVERTIBLE PROMISSORY
NOTES AND SAND HILL FINANCE, LLC.

THIS SECURITY HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, SUCH
COUNSEL AND THE SUBSTANCE OF SUCH OPINION SHALL BE REASONABLY ACCEPTABLE TO
AXS-ONE INC. UNLESS PROHIBITED BY APPLICABLE LAW, RULE OR REGULATION, THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN
“ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT.

AXS-ONE INC. 

SERIES 2009 5% SECURED CONVERTIBLE
PROMISSORY NOTE 

	U.S. $50,000  	Rutherford,
      NJ 
	No.: 4  	June [__],
      2009 

FOR VALUE RECEIVED, the undersigned, AXS-ONE INC., a Delaware corporation (the
“Company”),
hereby promises to pay to the order of Sirius Trust 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 the lesser of (i) Fifty Thousand Dollars (US$50,000) (the
“Available Amount”) and (ii) so much thereof as shall have been advanced by the Payee to
the Company (such lesser amount, 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”).

     Provided
no Event of Default (as defined below) has occurred, advances under this Note up
to an aggregate amount not exceeding the Available Amount may be requested from
time to time upon written notice by the Company to the Payee (each, an
“Advance Request”). Within two (2) Business Days of receipt of an Advance Request, the
Payee shall pay to the Company the amount requested by wire transfer in
immediately funds to an account designated by the Company. A record of all
advances under this Note shall be maintained by each of the Company and the
Payee in substantially the form of Exhibit
A hereto; provided, however, that the failure to so record
shall in no way limit the Company’s obligations with respect to repayment of all
amounts due and owing hereunder.

     This Note
is one of a duly authorized issue of Series 2009 5% Secured Promissory Notes of
the Company, in an aggregate principal amount of up to Two Hundred and Fifty
Thousand Dollars (US$250,000) (collectively, the “Promissory Notes”) issued pursuant to
that certain Standby Convertible Note Purchase Agreement dated as of the date
hereof (the “Purchase Agreement”; capitalized
terms used herein without definition shall have the meanings assigned in the
Purchase Agreement). The Promissory Notes rank pari passu in priority of payment and
in all other respects with one another and rank senior to (i) all of the Series
A 6% Secured Convertible Promissory Notes and the Series B 6% Secured
Convertible Promissory Notes sold and issued by the Company for the aggregate
amount of $5,000,000 on May 29, 2007, pursuant to a Convertible Note and Warrant
Purchase Agreement (the “May 2007 Notes”), (ii) all of the Series C 6%
Secured Convertible Promissory Notes sold and issued by the Company for the
aggregate amount of $3,750,000 on November 16, 2007, pursuant to a Convertible
Note and Warrant Purchase Agreement (the “November 2007 Notes”), (iii) all of
the Series D 6% Secured Convertible Promissory Notes sold and issued by the
Company for the aggregate amount of $2,100,000 on July 24, 2008, pursuant to a
Convertible Note and Warrant Purchase Agreement (the “July 2008 Notes”), and (iv) all of the
Series E 6% Secured Convertible Promissory Notes sold and issued by the Company
for the aggregate amount of $1,100,000 on October 30, 2008, pursuant to a
Convertible Note and Warrant Purchase Agreement (the “October 2008 Notes”).

     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) If the closing of the Merger (as defined below) does not occur prior to
June 30, 2010, the Company shall repay in full the entire Principal Amount plus
all accrued and unpaid interest thereon on such date or, if the closing of the
Merger does occur prior to June 30, 2010, the Company shall repay the Principal
Amount plus all accrued and unpaid interest thereon in twelve (12) equal monthly
installments of principal and interest commencing on the one year anniversary of
the date of the closing of the Merger; provided, however, that, in each case, if, prior
to the repayment by the Company of the entire Principal Amount plus all accrued
and unpaid interest thereon, there occurs a Sale Transaction (as defined below)
other than the Merger or an acceleration of the Company’s obligations under this
Note as contemplated by this Note, the Company shall repay in full the entire
Principal Amount plus all accrued and unpaid interest thereon on the date of
such Sale Transaction or acceleration.

2 

     “Merger” shall mean the merger of a wholly-owned subsidiary (“Merger Sub”) of Unify
Corporation, a Delaware corporation (“Unify”), with and into the Company,
pursuant to the terms and conditions of the Agreement and Plan of Merger, dated
as of April 16, 2009, by and among Unify, Merger Sub and the Company (the
“Merger Agreement”). 

     “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 five percent (5.00%) per annum. 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 as provided in Section 1(a). Furthermore, upon the occurrence and during
the continuance of an Event of Default, then, to the extent permitted by law,
the Company shall 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 cure thereof or payment in full, at a per annum rate equal to the lower of
(A) five percent (5%) above the rate charged or then eligible to be charged by
Sand Hill Finance, LLC or any other senior lender to the Company or (B) the
maximum rate permitted by law.

               (c) The Company may prepay the outstanding principal amount of this Note or
the interest thereon at any time and from time to time (a “Prepayment”) without the
written consent of the Payee, provided that the Company shall provide at least
ten (10) days prior written notice of the date on which the Company intends to
make such a 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 as set forth in Section 8 at any time after receipt of the Prepayment
Notice and prior to the time at which such Prepayment is made.

3 

          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 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 dated as of the date hereof among
the Company and the other parties thereto, including the holders of Promissory
Notes set forth therein (the “Security Agreement”), by a security
interest in the Collateral (as such term is defined in the Security Agreement),
which security interest will rank senior to the security interests granted in
connection with the May 2007 Notes, the November 2007 Notes, the July 2008 Notes
and the October 2008 Notes. 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 of the Company or
common stock, par value $0.01 per share, of the Company (the “Common Stock”) 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 except as limited
by applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting the enforcement of creditors’ rights and the availability of equitable
remedies (regardless of whether such enforceability is considered in a
proceeding at law or equity), 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 under any other Promissory Note, the May 2007 Notes, the November
2007 Notes, the July 2008 Notes or the October 2008 Notes after the date such
payment shall become due and payable hereunder or thereunder; 

4 

               (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, in any other Promissory Note,
in any May 2007 Note, in any November 2007
Note, in any July 2008 Note, in any October 2008 Note 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);

               (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, declare the entire unpaid Principal
Amount, together with all interest accrued thereon, due and payable, and
thereupon, the same shall be accelerated and be due and payable; provided, however, that upon the
occurrence of an Event of Default described in 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
Amount and accrued interest hereunder shall be automatically due and payable;
provided,
further,
that upon the occurrence of an Event of Default described in 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.

5 

          8. Conversion. 

               (a) General. The holder of this Note shall have the right at any time
after the closing of the Merger and prior to the one year anniversary of the
date of the closing of the Merger, at such holder’s option, to convert all or
any lesser portion of the Principal Amount plus accrued and unpaid interest
thereon into such number of fully paid and non-assessable shares of common
stock, $0.001 par value (the “Unify Common
Stock”), of Unify 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 $3.00, 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 Unify a conversion notice in the form attached hereto as
Exhibit B
(the “Conversion Notice”), appropriately completed and duly signed, and by surrender
to Unify 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 Unify Common Stock shall be issued, if other
than the name in which this Note is registered. Promptly after the receipt of
the Conversion Notice, Unify 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 Unify 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 Unify of the Conversion Notice (the “Conversion Date”), and the
person or persons entitled to receive the shares of Unify Common Stock issuable
upon conversion shall be treated for all purposes as the holder or holders of
record of such shares of Unify 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 Unify 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 Unify Common Stock. 

               (ii) Unify shall effect such issuance of Unify Common Stock
within three (3) Business 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) Business Days after the
receipt by Unify 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 Unify 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 shall be entitled to revoke and
withdraw its Conversion Notice, in whole or in part, at any time prior to its
receipt of those certificates.

6 

               (c) Fractional
Shares. Unify shall not be required to issue
a fractional share of Unify 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, Unify shall pay an amount in cash equal to the
Current Market Price (as defined below) per share of Unify Common Stock on the
date of conversion, multiplied by such fraction.

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

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

     (2) if there shall then be a public market for the Unify
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 Unify 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 Unify 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 no such price
is so furnished, as furnished by any similar entity then engaged in such
business, or (v) if there is no such entity, as furnished by any member of the
Financial Industry Regulatory Authority (“FINRA”) selected mutually by holders
of a majority in interest of the Promissory Notes and Unify or, if they cannot
agree upon such selection, as selected by two such members of FINRA, 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 Unify. 

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

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

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

7 

     (iii) combine its outstanding shares of Unify 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 Unify Common Stock (excluding treasury shares, if any)
outstanding immediately before such event and of which the denominator shall be
the number of shares of Unify Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this Section 8(d) 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(d) 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. 

     (e) Certain Other
Distributions. If at any time while this Note
is outstanding Unify shall take a record of the holders of Unify 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 Unify Common Stock as provided in
Section 8(d)); 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(e)(i), 8(e)(ii) and 8(e)(iii), 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 shares of Unify Common Stock, the Distributed
Property that such holder would have been entitled to receive in respect of such
number of shares of Unify Common Stock had the holder been the record holder of
such shares of Unify Common Stock 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
of Directors of Unify and set forth in reasonable detail in a written valuation
report (the “Valuation Report”) prepared by the
Board of Directors of Unify. Unify 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, Unify shall submit such valuation to an
investment banking firm of recognized national standing selected by the holder
of this Note and acceptable to Unify in its reasonable discretion, whose opinion
shall be binding upon Unify and the holder of this Note. A reclassification of
the Unify 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 Unify Common
Stock and shares of any other class of stock shall be deemed a distribution by
Unify to the holders of Unify Common Stock of such shares of such other class of
stock within the meaning of this Section 8(e) and, if the outstanding shares of
Unify Common Stock shall be changed into a larger or smaller number of shares of
Unify 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 Unify Common Stock within the meaning of Section 8(d).

8 

          9. Other Provisions
Applicable to Adjustments. The following
provisions shall be applicable to the making of adjustments of the number of
shares of Unify 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 Unify Common Stock, as provided for
in Section 8(d)) 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 Unify 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 Unify Common Stock shall be taken into
account to the nearest 1/100th of a share. 

               (c) When Adjustment Not
Required. If Unify undertakes a transaction
contemplated under Section 8(e) and as a result takes a record of the holders of
Unify 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(e) 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(e), 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. 

          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. 

9 

          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, or
pledged, hypothecated or otherwise granted as security by the Payee. 

          12. Amendments. This Note may not be
waived, modified or amended in any manner except in writing executed by the
Company and the Majority Noteholders (as defined below) which writing shall be
binding upon the Payee regardless of whether the Payee is among the holders
actually executing such writing; provided that any such waiver, modification or
amendment that would have a materially disproportionate adverse effect on the
Payee’s rights hereunder compared to the holders of the other Promissory Notes
shall require execution by the Payee. “Majority Noteholders” shall mean the
holders of a majority-in-interest of principal amount of all then-outstanding
Promissory Notes. Until such time as the Merger Agreement shall have been
terminated or the Merger consummated, this Note may not be amended or modified
without the prior written consent of Unify. 

          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
      (which shall  		Wiggin and Dana
      LLP  
	not constitute
      notice) to:  		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 law provisions. This Note shall not be
interpreted or construed with any presumption against the party causing this
Note to be drafted.

10 

          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 applicable state securities laws and the laws of the United States of
America and as guided by the rules of the Securities and Exchange Commission.
Any note issued in substitution or replacement for this Note shall be stamped or
imprinted with legends, as applicable, in substantially the form stamped or
imprinted hereon. 

          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.

11 

          21.
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 the Company liable for the payment of this Note, AND DO HEREBY
WAIVE TRIAL BY JURY. 

               (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. 

[Signature page follows.]

12 

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

	AXS-ONE INC.  
	  
	  
	By:   	 	 	 
		Name:  
		Title:  

ACKNOWLEDGED AND AGREED TO FOR
PURPOSES OF
ACKNOWLEDGING SECTIONS 8, 9 AND 12 ONLY, BY: 

UNIFY CORPORATION 

	By: 
    	 
	Name:   
	Title:   

 

	PAYEE  
	  
	Print Exact
      Name: 	 

 

	By: 
    	 
	Name:   
	Title:   

[Signature Page to Series 2009 5% Secured Promissory Note] 

13 

EXHIBIT A 

	Amount of
      Advance  	Date of
      Advance  	Outstanding Principal Balance 

14 

EXHIBIT B 

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 2009 5% Secured Convertible Promissory Note (the
“Note”) of
AXS-One Inc., a Delaware corporation, held by the undersigned into shares of
common stock, $0.001 par value (the “Unify Common Stock”), of Unify
Corporation, a Delaware corporation (“Unify”), 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 Unify 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 Unify 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 Unify 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 Unify 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:   

15

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