Document:

Exhibit 4.2

 

THE SECURITIES
REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN
REGISTERED FOR SALE PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II)
SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144(K), OR (III) THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSFER
MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

SUBJECT TO THE
PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M.
EASTERN TIME ON APRIL 26, 2009 (the “EXPIRATION DATE”).

 

No.
                     

 

UNIFY CORPORATION

 

WARRANT TO PURCHASE SHARES OF

COMMON STOCK, PAR VALUE $0.001 PER SHARE

 

For VALUE
RECEIVED,                                      
(“Warrantholder”), is entitled to purchase, subject to the provisions of this
Warrant, from Unify Corporation, a Delaware corporation (“Company”), at any
time not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined
above), at an initial exercise price per share equal to $0.90 (the exercise
price in effect being herein called the “Warrant Price”),
           shares (“Warrant
Shares”) of the Company’s Common Stock, par value $0.001 per share (“Common
Stock”).  The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be
subject to adjustment from time to time as described herein.

 

Section 1.               Registration.  The Company shall maintain books for the
transfer and registration of the Warrant. 
Upon the initial issuance of this Warrant, the Company shall issue and
register the Warrant in the name of the Warrantholder.

 

Section 2.               Transfers.  As provided herein, this Warrant may be
transferred only pursuant to a registration statement filed under the
Securities Act of 1933, as amended (the “Securities Act”), or an exemption from
such registration.  Subject to such
restrictions, the Company shall transfer this Warrant from time to time upon
the books to be maintained by the Company for that purpose, upon surrender
thereof for transfer properly endorsed or accompanied by appropriate
instructions for transfer and such other documents as may be reasonably
required by the Company, including, if required by the Company, an opinion of its
counsel to the effect that such transfer is exempt from the registration
requirements of the Securities Act, to establish that such transfer is being
made in accordance with the terms hereof,

 

 

and a new
Warrant shall be issued to the transferee and the surrendered Warrant shall be
canceled by the Company.

 

Section 3.               Exercise of
Warrant.  Subject to the provisions
hereof, the Warrantholder may exercise this Warrant in whole or in part at any
time prior to its expiration upon surrender of the Warrant, together with
delivery of the duly executed Warrant exercise form attached hereto as Appendix
A (the “Exercise Agreement”) and payment by cash, certified check or wire
transfer of funds for the aggregate Warrant Price for that number of Warrant
Shares then being purchased, to the Company during normal business hours on any
business day at the Company’s principal executive offices (or such other office
or agency of the Company as it may designate by notice to the Warrantholder).  The Warrant Shares so purchased shall be
deemed to be issued to the Warrantholder or the Warrantholder’s designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered (or evidence of loss, theft or
destruction thereof and security or indemnity satisfactory to the Company), the
Warrant Price shall have been paid and the completed Exercise Agreement shall
have been delivered.  Certificates for
the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the Warrantholder
within a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. 
The certificates so delivered shall be in such denominations as may be
requested by the Warrantholder and shall be registered in the name of the
Warrantholder or such other name as shall be designated by the
Warrantholder.  If this Warrant shall
have been exercised only in part, then, unless this Warrant has expired, the
Company shall, at its expense, at the time of delivery of such certificates,
deliver to the Warrantholder a new Warrant representing the number of shares
with respect to which this Warrant shall not then have been exercised.  As used herein, “business day” means a day,
other than a Saturday or Sunday, on which banks in New York City are open for
the general transaction of business. 
Each exercise hereof shall constitute the re-affirmation by the
Warrantholder that the representations and warranties contained in Section 5 of
the Purchase Agreement (as defined below) are true and correct in all material
respects with respect to the Warrantholder as of the time of such exercise.

 

Section 4.               Compliance with
the Securities Act of 1933. Except as provided in the Purchase Agreement
(as defined below), the Company may cause the legend set forth on the first
page of this Warrant to be set forth on each Warrant or similar legend on any
security issued or issuable upon exercise of this Warrant, unless counsel for
the Company is of the opinion as to any such security that such legend is
unnecessary.

 

Section 5.               Payment of Taxes.  The Company will pay any documentary stamp
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issuance or delivery of any certificates for Warrant
Shares in a name other than that of the Warrantholder in respect of which such
shares are issued, and in such case, the Company shall not be required to issue
or deliver any certificate for Warrant Shares or any Warrant until the person
requesting the same has paid to the Company the amount of such tax or has
established to the Company’s reasonable satisfaction that such tax has been
paid.  The Warrantholder shall be
responsible for income taxes due under federal, state or other law, if any such
tax is due.

 

2

 

Section 6.               Mutilated or
Missing Warrants.  In case this
Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue
in exchange and substitution of and upon cancellation of the mutilated Warrant,
or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and for the purchase of a like number of Warrant Shares,
but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction of the Warrant, and with respect to a lost,
stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto,
if requested by the Company.

 

Section 7.               Reservation of
Common Stock.  The Company hereby
represents and warrants that there have been reserved, and the Company shall at
all applicable times keep reserved until issued (if necessary) as contemplated
by this Section 7, out of the authorized and unissued shares of Common Stock,
sufficient shares to provide for the exercise of the rights of purchase represented
by this Warrant.  The Company agrees
that all Warrant Shares issued upon due exercise of the Warrant shall be, at
the time of delivery of the certificates for such Warrant Shares, duly
authorized, validly issued, fully paid and non-assessable shares of Common
Stock of the Company.

 

Section 8.               Adjustments.  Subject and pursuant to the provisions of
this Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth hereinafter.

 

(a)           If the Company shall,
at any time or from time to time while this Warrant is outstanding, pay a
dividend or make a distribution on its Common Stock in shares of Common Stock,
subdivide its outstanding shares of Common Stock into a greater number of
shares or combine its outstanding shares of Common Stock into a smaller number
of shares or issue by reclassification of its outstanding shares of Common
Stock any shares of its capital stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation), then the number of Warrant Shares purchasable upon
exercise of the Warrant and the Warrant Price in effect immediately prior to
the date upon which such change shall become effective, shall be adjusted by
the Company so that the Warrantholder thereafter exercising the Warrant shall
be entitled to receive the number of shares of Common Stock or other capital
stock which the Warrantholder would have received if the Warrant had been exercised
immediately prior to such event upon payment of a Warrant Price that has been
adjusted to reflect a fair allocation of the economics of such event to the
Warrantholder.  Such adjustments shall
be made successively whenever any event listed above shall occur.

 

(b)           If any capital
reorganization, reclassification of the capital stock of the Company,
consolidation or merger of the Company with another corporation in which the
Company is not the survivor, or sale, transfer or other disposition of all or substantially
all of the Company’s assets to another corporation shall be effected, then, as
a condition of such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition, lawful and adequate provision shall be
made whereby each Warrantholder shall thereafter have the right to purchase and
receive upon the basis and upon the terms and conditions herein specified and
in lieu of the Warrant Shares immediately theretofore issuable upon exercise of
the Warrant, such shares of stock, securities or assets as would have been
issuable or payable with respect to or in

 

3

 

exchange for a
number of Warrant Shares equal to the number of Warrant Shares immediately
theretofore issuable upon exercise of the Warrant, had such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition
not taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of each Warrantholder to the end that the
provisions hereof (including, without limitation, provision for adjustment of
the Warrant Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof.  The Company shall not effect any such consolidation, merger,
sale, transfer or other disposition unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing or
otherwise acquiring such assets or other appropriate corporation or entity
shall assume the obligation to deliver to the Warrantholder, at the last
address of the Warrantholder appearing on the books of the Company, such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
the Warrantholder may be entitled to purchase, and the other obligations under
this Warrant.  The provisions of this
paragraph (b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.

 

(c)           In case the Company
shall fix a payment date for the making of a distribution to all holders of Common
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of
indebtedness or assets (other than cash dividends or cash distributions payable
out of consolidated earnings or earned surplus or dividends or distributions
referred to in Section 8(a)), or subscription rights or warrants, the Warrant
Price to be in effect after such payment date shall be determined by
multiplying the Warrant Price in effect immediately prior to such payment date
by a fraction, the numerator of which shall be the total number of shares of
Common Stock outstanding multiplied by the Market Price (as defined below) per
share of Common Stock immediately prior to such payment date, less the fair
market value (as determined by the Company’s Board of Directors in good faith)
of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the
total number of shares of Common Stock outstanding multiplied by such Market
Price per share of Common Stock immediately prior to such payment date.  “Market Price” as of a particular date (the
“Valuation Date”) shall mean the following: (a) if the Common Stock is then
listed on a national stock exchange, the closing sale price of one share of
Common Stock on such exchange on the last trading day prior to the Valuation
Date; (b) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc.
(“Nasdaq”) or the Over-the-Counter Bulletin Board (“OTC/BB”), the closing sale
price of one share of Common Stock on Nasdaq on the last trading day prior to
the Valuation Date or, if no such closing sale price is available, the average
of the high bid and the low asked price quoted on Nasdaq or OTC/BB on the last
trading day prior to the Valuation Date; or (c) if the Common Stock is not then
listed on a national stock exchange or quoted on Nasdaq, the fair market value
of one share of Common Stock as of the Valuation Date, shall be determined in
good faith by the Board of Directors of the Company and the Warrantholder.  If the Common Stock is not then listed on a
national securities exchange or quoted on Nasdaq, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Warrantholder
prior to the exercise hereunder as to the fair market value of a share of
Common Stock as determined by the Board of Directors of the Company.  In the event

 

4

 

that the Board
of Directors of the Company and the Warrantholder are unable to agree upon the
fair market value in respect of subpart (c) hereof, the Company and the
Warrantholder shall jointly select an appraiser, who is experienced in such
matters.  The decision of such appraiser
shall be final and conclusive, and the cost of such appraiser shall be borne
equally by the Company and the Warrantholder. 
Such adjustment shall be made successively whenever such a payment date
is fixed.

 

(d)           An adjustment to the
Warrant Price shall become effective immediately after the payment date in the
case of each dividend or distribution and immediately after the effective date
of each other event which requires an adjustment.

 

(e)           In the event that, as a
result of an adjustment made pursuant to this Section 8, the Warrantholder
shall become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, the number of such other shares so
receivable upon exercise of this Warrant shall be subject thereafter to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
this Warrant.

 

(f)            Except as provided in
subsection (g) hereof, if and whenever the Company shall issue or sell, or is,
in accordance with any of subsections (f)(l) through (f)(7) hereof, deemed to
have issued or sold, any shares of Common Stock for no consideration or for a
consideration per share less than the Warrant Price in effect immediately prior
to the time of such issue or sale, then and in each such case (a “Trigger
Issuance”) the then-existing Warrant Price, shall be reduced, as of the
close of business on the effective date of the Trigger Issuance, to a price
determined as follows:

 

	
  Adjusted Warrant Price =

  	
  (A x B) + D

  
	
   

  	
  A+C

  

 

where

 

“A” equals the
number of shares of Common Stock outstanding, including Additional Shares of
Common Stock (as defined below) deemed to be issued hereunder, immediately
preceding such Trigger Issuance;

 

“B” equals the
Warrant Price in effect immediately preceding such Trigger Issuance;

 

“C” equals the
number of Additional Shares of Common Stock issued or deemed issued hereunder
as a result of the Trigger Issuance; and

 

“D” equals the
aggregate consideration, if any, received or deemed to be received by the
Company upon such Trigger Issuance;

 

provided, however, that in no event shall the
Warrant Price after giving effect to such Trigger Issuance be greater than the
Warrant Price in effect prior to such Trigger Issuance.

 

5

 

For purposes
of this subsection (f), “Additional Shares of Common Stock” shall mean all
shares of Common Stock issued by the Company or deemed to be issued pursuant to
this subsection (f), other than Excluded Issuances (as defined in subsection
(g) hereof).

 

For purposes
of this subsection (f), the following subsections (f)(l) to (f)(7) shall also
be applicable:

 

(f)(1)  Issuance of Rights or
Options.  In case at any time the
Company shall in any manner grant (directly and not by assumption in a merger
or otherwise) any warrants or other rights to subscribe for or to purchase, or
any options for the purchase of, Common Stock or any stock or security
convertible into or exchangeable for Common Stock (such warrants, rights or
options being called “Options” and such convertible or exchangeable stock or
securities being called “Convertible Securities”) whether or not such Options
or the right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
the exercise of such Options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the sum (which sum shall
constitute the applicable consideration) of (x) the total amount, if any,
received or receivable by the Company as consideration for the granting of such
Options, plus (y) the aggregate amount of additional consideration payable to
the Company upon the exercise of all such Options, plus (z), in the case of
such Options which relate to Convertible Securities, the aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options) shall be less than the
Warrant Price in effect immediately prior to the time of the granting of such
Options, then the total number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the total amount of
such Convertible Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the date of granting
of such Options or the issuance of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Warrant
Price.  Except as otherwise provided in
subsection 8(f)(3), no adjustment of the Warrant Price shall be made upon the
actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.

 

(f)(2)  Issuance of Convertible
Securities.  In case the Company shall
in any manner issue (directly and not by assumption in a merger or otherwise)
or sell any Convertible Securities, whether or not the rights to exchange or
convert any such Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange

 

6

 

(determined by
dividing (i) the sum (which sum shall constitute the applicable consideration)
of (x) the total amount received or receivable by the Company as consideration
for the issue or sale of such Convertible Securities, plus (y) the aggregate
amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (ii) the total number of shares of Common
Stock issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than the Warrant Price in effect immediately prior to
the time of such issue or sale, then the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued for such price per share as of
the date of the issue or sale of such Convertible Securities and thereafter
shall be deemed to be outstanding for purposes of adjusting the Warrant Price,
provided that (a) except as otherwise provided in subsection 8(f)(3), no
adjustment of the Warrant Price shall be made upon the actual issuance of such
Common Stock upon conversion or exchange of such Convertible Securities and (b)
no further adjustment of the Warrant Price shall be made by reason of the issue
or sale of Convertible Securities upon exercise of any Options to purchase any
such Convertible Securities for which adjustments of the Warrant Price have
been made pursuant to the other provisions of subsection 8(f).

 

(f)(3) Change in Option Price or Conversion Rate.  Upon the happening of any of the following
events, namely, if the purchase price provided for in any Option referred to in
subsection 8(f)(l) hereof, the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities referred to in subsections
8(f)(l) or 8(f)(2), or the rate at which Convertible Securities referred to in
subsections 8(f)(l) or 8(f)(2) are convertible into or exchangeable for Common
Stock shall change at any time (including, but not limited to, changes under or
by reason of provisions designed to protect against dilution), the Warrant
Price in effect at the time of such event shall forthwith be readjusted to the
Warrant Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or conversion rate, as the case may be, at the
time initially granted, issued or sold. 
On the termination of any Option for which any adjustment was made
pursuant to this subsection 8(f) or any right to convert or exchange
Convertible Securities for which any adjustment was made pursuant to this
subsection 8(f) (including without limitation upon the redemption or purchase
for consideration of such Convertible Securities by the Company), the Warrant
Price then in effect hereunder shall forthwith be changed to the Warrant Price
which would have been in effect at the time of such termination had such Option
or Convertible Securities, to the extent outstanding immediately prior to such
termination, never been issued.

 

(f)(4) Stock Dividends.  Subject
to the provisions of this Section 8(f), in case the Company shall declare a
dividend or make any other distribution upon any stock of the Company (other
than the Common Stock) payable in Common Stock, Options or Convertible
Securities, then any Common Stock, Options or

 

7

 

Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.

 

(f)(5) Consideration for Stock. 
In case any shares of Common Stock, Options or Convertible Securities
shall be issued or sold for cash, the consideration received therefor shall be
deemed to be the net amount received by the Company therefor, before deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection therewith.  In case any shares of Common Stock, Options
or Convertible Securities shall be issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company shall be deemed to be the fair value of such consideration as
determined in good faith by the Board of Directors of the Company, before
deduction of any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection therewith.  In case any Options shall be issued in
connection with the issue and sale of other securities of the Company, together
comprising one integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such Options shall be deemed
to have been issued for such consideration as determined in good faith by the
Board of Directors of the Company.  If
Common Stock, Options or Convertible Securities shall be issued or sold by the
Company and, in connection therewith, other Options or Convertible Securities
(the “Additional Rights”) are issued, then the consideration received or deemed
to be received by the Company shall be reduced by the fair market value of the
Additional Rights (as determined using the Black-Scholes option pricing model
or another method mutually agreed to by the Company and the Warrantholder).  The Board of Directors of the Company shall
respond promptly, in writing, to an inquiry by the Warrantholder as to the fair
market value of the Additional Rights. 
In the event that the Board of Directors of the Company and the
Warrantholder are unable to agree upon the fair market value of the Additional
Rights, the Company and the Warrantholder shall jointly select an appraiser,
who is experienced in such matters.  The
decision of such appraiser shall be final and conclusive, and the cost of such
appraiser shall be borne evenly by the Company and the Warrantholder.

 

(f)(6) Record Date.  In case the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them (i) to receive a dividend or other distribution payable in
Common Stock, Options or Convertible Securities or (ii) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.

 

(f)(7) Treasury Shares.  The
number of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the Company or any of its
wholly-owned subsidiaries, and the

 

8

 

disposition of
any such shares (other than the cancellation or retirement thereof) shall be
considered an issue or sale of Common Stock for the purpose of this subsection
(f).

 

(g)           Anything herein to the
contrary notwithstanding, the Company shall not be required to make any
adjustment of the Warrant Price in the case of the issuance of (A) capital
stock, Options or Convertible Securities issued to directors, officers,
employees or consultants of the Company in connection with their service as
directors of the Company, their employment by the Company or their retention as
consultants by the Company pursuant to an equity compensation program approved
by the Board of Directors of the Company or the compensation committee of the
Board of Directors of the Company, (B) shares of Common Stock issued upon the
conversion or exercise of Options or Convertible Securities issued prior to the
date hereof, (C) securities issued pursuant to that certain Purchase Agreement
dated April 23, 2004, among the Company and the Investors named therein (the
“Purchase Agreement”) and securities issued upon the exercise or conversion of
those securities, and (D) shares of Common Stock issued or issuable by reason
of a dividend, stock split or other distribution on shares of Common Stock (but
only to the extent that such a dividend, split or distribution results in an
adjustment in the Warrant Price pursuant to the other provisions of this
Warrant) (collectively, “Excluded Issuances”).

 

(h)           Upon any adjustment to
the Warrant Price pursuant to Section 8(f) above, the number of Warrant Shares
purchasable hereunder shall be adjusted by multiplying such number by a
fraction, the numerator of which shall be the Warrant Price in effect
immediately prior to such adjustment and the denominator of which shall be the
Warrant Price in effect immediately thereafter.

 

Section 9.               Fractional
Interest.  The Company shall not be
required to issue fractions of Warrant Shares upon the exercise of this
Warrant.  If any fractional share of
Common Stock would, except for the provisions of the first sentence of this
Section 9, be deliverable upon such exercise, the Company, in lieu of
delivering such fractional share, shall pay to the exercising Warrantholder an
amount in cash equal to the Market Price of such fractional share of Common
Stock on the date of exercise.

 

Section 10.             Extension of
Expiration Date.  If the Company
fails to cause any Registration Statement covering Registrable Securities
(unless otherwise defined herein, capitalized terms are as defined in the
Registration Rights Agreement relating to the Warrant Shares (the “Registration
Rights Agreement”)) to be declared effective prior to the applicable dates set
forth therein, or if any of the events specified in Section 2(c)(ii) of the
Registration Rights Agreement occurs, and the Blackout Period or Allowed Delay
(whether alone, or in combination with any other Blackout Period or Allowed
Delay) continues for more than 60 days in any 12 month period, or for more than
a total of 90 days, then the Expiration Date of this Warrant shall be extended
one day for each day beyond the 60-day or 90-day limits, as the case may be,
that the Blackout Period continues.

 

Section 11.             Benefits.  Nothing in this Warrant shall be construed
to give any person, firm or corporation (other than the Company and the
Warrantholder) any legal or equitable right,

 

9

 

remedy or
claim, it being agreed that this Warrant shall be for the sole and exclusive
benefit of the Company and the Warrantholder.

 

Section 12.             Notices to
Warrantholder.  Upon the happening
of any event requiring an adjustment of the Warrant Price, the Company shall
promptly give written notice thereof to the Warrantholder at the address
appearing in the records of the Company, stating the adjusted Warrant Price and
the adjusted number of Warrant Shares resulting from such event and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.  Failure to
give such notice to the Warrantholder or any defect therein shall not affect
the legality or validity of the subject adjustment.

 

Section 13.             Identity of
Transfer Agent.  The Transfer Agent
for the Common Stock is American Stock Transfer & Trust Company.  Upon the appointment of any subsequent
transfer agent for the Common Stock or other shares of the Company’s capital
stock issuable upon the exercise of the rights of purchase represented by the
Warrant, the Company will mail to the Warrantholder a statement setting forth
the name and address of such transfer agent.

 

Section 14.             Notices.  Unless otherwise provided, any notice
required or permitted under this Warrant shall be given in writing and shall be
deemed effectively given as hereinafter described (i) if given by personal
delivery, then such notice shall be deemed given upon such delivery, (ii) if
given by telex or facsimile, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal, (iii) if given by mail, then
such notice shall be deemed given upon the earlier of (A) receipt of such
notice by the recipient or (B) three days after such notice is deposited in
first class mail, postage prepaid, and (iv) if given by an internationally
recognized overnight air courier, then such notice shall be deemed given one
business day after delivery to such carrier.  All notices shall be addressed as follows: if to the
Warrantholder, at its address as set forth in the Company’s books and records
and, if to the Company, at the address as follows, or at such other address as
the Warrantholder or the Company may designate by ten days’ advance written
notice to the other:

 

If
to the Company:

 

Unify
Corporation

201 Arena
Blvd., Suite 100

Sacramento,
CA  95834

Attention:  Pete DiCorti

Fax:  (916) 928-6408

 

With
a copy to:

 

Gray Cary Ware
& Freidenrich LLP

400 Capitol
Mall, Suite 2400

Sacramento, CA
95814

Attention:  Kevin A. Coyle, Esq.

Fax:  (916) 930-3201

 

10

 

Section 15.             Registration
Rights.  The initial Warrantholder
is entitled to the benefit of certain registration rights with respect to the
shares of Common Stock issuable upon the exercise of this Warrant as provided
in the Registration Rights Agreement, and any subsequent Warrantholder may be
entitled to such rights.

 

Section 16.             Successors.  All the covenants and provisions hereof by
or for the benefit of the Warrantholder shall bind and inure to the benefit of
its respective successors and assigns hereunder.

 

Section 17.             Governing Law;
Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without reference to the
choice of law provisions thereof.  The
Company and, by accepting this Warrant, the Warrantholder, each irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York
located in New York County and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Warrant and the transactions
contemplated hereby.  Service of process
in connection with any such suit, action or proceeding may be served on each
party hereto anywhere in the world by the same methods as are specified for the
giving of notices under this Warrant. 
The Company and, by accepting this Warrant, the Warrantholder, each
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court.  The Company and, by accepting this Warrant,
the Warrantholder, each irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.  EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL
BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT
COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

Section 18.             Call Provision.  Notwithstanding any other provision
contained herein to the contrary, in the event that the closing bid price of a
share of Common Stock as reported by such exchange, stock market or
over-the-counter quotation system on which the Common Stock may then be listed
or by such reporting service on which such quotations may be published, equals
or exceeds $1.80 (appropriately adjusted for any stock split, reverse stock
split, stock dividend or other reclassification or combination of the Common
Stock occurring after the date hereof) for twenty (20) consecutive trading days
commencing after the Registration Statement (as defined in the Registration
Rights Agreement) has been declared effective (the “Call Conditions”),
the Company, upon twenty (20) days’ prior written notice (the “Notice Period”)
given to the Warrantholder within one business day immediately following the
end of such twenty (20) trading day period, may call this Warrant for 25% of
the shares of Common Stock initially purchasable pursuant hereto (appropriately
adjusted for any stock split, reverse stock split, stock dividend or other
reclassification or combination of the Common Stock occurring after the date
hereof), at a redemption price equal to $0.01 per share of Common Stock then
purchasable pursuant to this Warrant; provided that (i) the Company
simultaneously calls all Company Warrants (as defined below) on the same terms
and on a pro rata basis and (ii) all of

 

11

 

the shares of
Common Stock issuable hereunder either (A) are registered pursuant to an
effective Registration Statement (as defined in the Registration Rights
Agreement) which has not been suspended and for which no stop order is in
effect, and pursuant to which the Warrantholder is able to sell such shares of
Common Stock at all times during the Notice Period or (B) no longer constitute
Registrable Securities (as defined in the Registration Rights Agreement).  On each such occasion, if any, that the Call
Conditions are once again met during the thirty (30) day period immediately
after consummation of a previous call, the Company may once again call this
Warrant for an additional increment of 25% of the shares of Common Stock
initially purchasable pursuant to this Warrant (appropriately adjusted for any
stock split, reverse stock split, stock dividend or other reclassification or
combination of the Common Stock occurring after the date hereof), or such
lesser number as shall then remain purchasable hereunder, and in the same
manner and subject to the same notice requirements as the initial call, until
all of the shares purchasable hereunder have been called; provided that (i) the
Company simultaneously calls all Company Warrants (as defined below) on the same
terms and on a pro rata basis and (ii) all of the shares of Common Stock
issuable hereunder either (A) are registered pursuant to an effective
Registration Statement (as defined in the Registration Rights Agreement) which
has not been suspended and for which no stop order is in effect, and pursuant
to which the Warrantholder is able to sell such shares of Common Stock at all
times during the Notice Period or (B) no longer constitute Registrable
Securities (as defined in the Registration Rights Agreement).  Notwithstanding any notice by the Company,
the Warrantholder shall have the right to exercise this Warrant prior to the
end of any Notice Period.

 

Section 19.             No Rights as
Stockholder.  The Warrantholder
shall not have or exercise any rights as a stockholder of the Company solely by
virtue of its ownership of this Warrant.

 

Section 20.             Amendment; Waiver.  This Warrant is one of a series of Warrants
of like tenor issued by the Company pursuant to the Purchase Agreement and
initially covering an aggregate of 2,253,560 shares of Common Stock
(collectively, the “Company Warrants”). 
Any term of this Warrant may be amended or waived (including the
adjustment provisions included in Section 8 of this Warrant) upon the written
consent of the Company and the holders of Company Warrants representing at
least 50% of the number of shares of Common Stock then subject to all
outstanding Company Warrants (the “Majority Holders”); provided,
that (x) any such amendment or waiver must apply to all Company Warrants; and
(y) the number of Warrant Shares subject to this Warrant, the Warrant Price and
the Expiration Date may not be amended, and the right to exercise this Warrant
may not be altered or waived, without the written consent of the Warrantholder.

 

Section 21.             Section Headings.  The section headings in this Warrant are for
the convenience of the Company and the Warrantholder and in no way alter,
modify, amend, limit or restrict the provisions hereof.

 

[signature page follows]

 

12

 

IN
WITNESS WHEREOF, the Company has caused this Warrant
to be duly executed, as of the
             
day of
                  ,
2004.

 

	
   

  	
  UNIFY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

13

 

APPENDIX A

UNIFY CORPORATION

WARRANT EXERCISE FORM

 

To Unify
Corporation:

 

The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant (“Warrant”) for, and to purchase thereunder
by the payment of the Warrant Price and surrender of the Warrant,
                           
shares of Common Stock (“Warrant Shares”) provided for therein, and requests
that certificates for the Warrant Shares be issued as follows:

 

 

Name

 

 

Address

 

 

Federal Tax ID
or Social Security No.

 

	
   

  	
  and
  delivered by

  	
   

  	
  (certified
  mail to the above address, or

  
	
   

  	
   

  	
   

  	
  (electronically
  (provide DWAC
  Instructions:                               
                    ),

  
	
  or

  	
   

  	
   

  	
  (other
  (specify):
                                                                                             ).

  

 

and, if the
number of Warrant Shares shall not be all the Warrant Shares purchasable upon
exercise of the Warrant, that a new Warrant for the balance of the Warrant
Shares purchasable upon exercise of this Warrant be registered in the name of
the undersigned Warrantholder or the undersigned’s Assignee as below indicated
and delivered to the address stated below.

 

Dated:
                              ,
         

 

	
  Note:

  	
  The
  signature must correspond with

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
  the name of
  the Warrantholder as written on the

  	
   

  
	
  first page
  of the Warrant in every particular,

  	
   

  	
   

  
	
  without
  alteration or enlargement or any change

  	
  Name (please print)

  	
   

  
	
  whatever,
  unless the Warrant has been assigned.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Federal
  Identification or

  Social Security No.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Assignee:Exhibit 10.10

 

Silicon Valley Bank

 

Amendment to Loan Documents

 

	
  Borrower:

  	
   

  	
  Unify
  Corporation

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  June 3,
  2004

  

 

THIS AMENDMENT TO LOAN DOCUMENTS is
entered into between Silicon Valley Bank (“Silicon”) and the borrower named
above (“Borrower”).

 

The Parties
agree to amend the Loan and Security Agreement between them, dated June 6, 2003
(as otherwise amended, if at all, the “Loan Agreement”), as follows, effective
as of the date hereof.  (Capitalized
terms used but not defined in this Amendment, shall have the meanings set forth
in the Loan Agreement.)

 

1.                                      Amendment to Schedule.  The Schedule to Loan and Security Agreement is hereby
deleted and replaced with the Amended Schedule to Loan and Security Agreement
being entered into concurrently herewith.

 

2.                                      Fee.  In consideration for Silicon entering into this Amendment,
Borrower shall concurrently pay Silicon a fee in the amount of $10,000, which
shall be non-refundable and in addition to all interest and other fees payable
to Silicon under the Loan Documents. 
Silicon is authorized to charge said fee to Borrower’s loan account.

 

3.                                      Representations True.  Borrower represents and warrants to Silicon
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.

 

4.                                      General Provisions.  This Amendment, the
Loan Agreement, any prior written amendments to the Loan Agreement signed by
Silicon and Borrower, and the other written documents and agreements between
Silicon and Borrower set forth in full all of the representations and
agreements of the parties with respect to the subject matter hereof and
supersede all prior discussions, representations, agreements and understandings
between the parties with respect to the subject hereof.  Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Silicon and Borrower shall continue in full force and effect
and the same are hereby ratified and confirmed.

 

1

 

	
  Borrower:

  	
  Silicon:

  
	
   

  	
   

  
	
  UNIFY CORPORATION

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  President or
  Vice President

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary or
  Ass’t Secretary

  	
   

  
							

 

2

 

Silicon Valley Bank

 

Amended Schedule to

 

Loan and Security Agreement

 

	
  Borrower:

  	
   

  	
  Unify
  Corporation

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  2101
  Arena Blvd., Suite 100

  Sacramento, California 95834

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  June 3,
  2004

  

 

This Amended Schedule is
executed and delivered pursuant to an Amendment to Loan Documents of even date
between Silicon Valley Bank (“Silicon”) and the above-borrower (the
“Borrower”), forms an integral part of the Loan and Security Agreement between
Silicon and the Borrower dated June 6, 2003 (as amended from time to time, the
“Loan Agreement”) and amends and restates the Schedule to the Loan Agreement
(the “Original Schedule”). All reference to the “Loan Agreement” and to “this
Agreement” shall be deemed to refer to the Loan Agreement and the Schedule to
the Loan Agreement (including this Amended Schedule).

 

1. 
CREDIT LIMIT

(Section 1.1):                                                                                                                           An
amount not to exceed the sum of 1 and 2 below:

 

1.               Revolving
Loans. An amount equal to:  (A) the
lesser of:  (i) $1,000,000 at any one time outstanding (the
“Maximum Credit Limit”), or (ii) the sum of (a) 75% (an “Advance Rate”) of the amount of Borrower’s Eligible
Accounts (as defined in Section 8 above) plus (b) 30% (an “Advance Rate”) of the amount of Borrower’s
unrestricted cash in investment accounts maintained at Silicon minus (B)
the Term Loans (as defined below).

 

Silicon may, from time to time, modify the Advance Rate, in its good
faith business judgment, upon notice to the Borrower, based on changes in
collection experience with respect to Accounts or other issues or factors
relating to the Accounts or other Collateral.

 

plus

 

2.               Term
Loans.  An amount equal to the
aggregate unpaid principal balance from time to time outstanding of the Loans
(“Term Loans”)

 

1

 

made from time to time by Silicon to Borrower in a total amount not to
exceed $500,000 for the purchase
by Borrower of new or used Equipment acceptable to Silicon in its sole
discretion, including computer equipment, office equipment, lab equipment, test
equipment and furnishings.  To evidence
each of the Term Loans, Borrower shall deliver to Silicon, at the time of each
Term Loan request, an invoice for the Equipment (a) to be purchased or (b)
which was previously purchased by the Borrower.  The Loan request with respect to any particular Equipment must be
made within 90 days of the date such Equipment was purchased.  The Term Loans shall be used only to (a)
purchase Equipment or (b) reimburse the Borrower for previously purchased
Equipment and shall not exceed 100%
of the invoice amount of such Equipment approved from time to time by Silicon.
Subject to and upon the terms and conditions of this Agreement, Term Loans
shall be available through December 31, 2004. 
The Term Loans shall be repaid as provided for herein.  Interest shall accrue from the date of each
Term Loan at the rate provided for herein and is payable monthly as provided
for herein.  Term Loans shall be made in
disbursements of not less than $100,000.

 

The Term Loans, once repaid, cannot be reborrowed.  If an Overadvance results from any Term
Loan, Borrower shall immediately provide Silicon with cash collateral in an
amount equal to 100% of the such Overadvance, to secure all of the Obligations
relating to such Overadvance, pursuant to Silicon’s then standard form cash
pledge agreement.

 

As used in this Agreement, the term “Loans” includes the Revolving
Loans and the Term Loans.

 

Letter of Credit Sublimit

(Section 1.6):                                                                                                                                                   $750,000

 

Cash
Management

Sublimit:                                                                                                                                                                     $250,000,
provided that the total Cash Management Sublimit and the Foreign Exchange
Contract Sublimit shall not, at any time, exceed $250,000.

 

Borrower may
use Loans available hereunder, up to the above Cash Management Sublimit for
Silicon’s Cash Management Services (as defined below), including, merchant
services, business credit card, ACH and other services identified in the cash
management services agreement related to such service (the “Cash Management
Services”).  Silicon may, in its sole
discretion, reserve against Loans which would otherwise be available hereunder
such sums as Silicon shall determine in its good faith business judgment in
connection with the Cash Management Services (the “Cash Management Reserves”),
and Silicon may charge to Borrower’s Loan account, any amounts that may become
due or owing to Silicon in connection with the Cash

 

2

 

Management
Services.  Borrower agrees to execute
and deliver to Silicon all standard form applications and agreements of Silicon
in connection with the Cash Management Services, and, without limiting any of
the terms of such applications and agreements, Borrower will pay all standard
fees and charges of Silicon in connection with the Cash Management
Services.  The Cash Management Services
shall terminate on the Maturity Date.

 

Foreign Exchange

Contract Sublimit:                                                                                                                  $250,000,
provided that the total Cash Management Sublimit and the Foreign Exchange
Contract Sublimit shall not, at any time, exceed $250,000.

 

Borrower may enter into foreign exchange forward contracts with
Silicon, on its standard forms, under which Borrower commits to purchase from
or sell to Silicon a set amount of foreign currency more than one business day
after the contract date (the “FX Forward Contracts”); provided that (1) at the
time the FX Forward Contract is entered into Borrower has Loans available to it
under this Agreement in an amount at least equal to 10% of the amount of the FX
Forward Contract; (2) the total FX Forward Contracts at any one time
outstanding may not exceed 10 times the amount of the Foreign Exchange Contract
Sublimit set forth above. Silicon shall have the right to withhold, from the
Loans otherwise available to Borrower under this Agreement, a reserve (which
shall be in addition to all other reserves) (the “FX Reserves”) in an amount
equal to 10% of the total FX Forward Contracts from time to time outstanding,
and in the event at any time there are insufficient Loans available to Borrower
for such reserve, Borrower shall deposit and maintain with Silicon cash
collateral in an amount at all times equal to such deficiency, which shall be
held as Collateral for all purposes of this Agreement. Silicon may, in its
discretion, terminate the FX Forward Contracts at any time that an Event of
Default occurs and is continuing. Borrower shall execute all standard form
applications and agreements of Silicon in connection with the FX Forward
Contracts, and without limiting any of the terms of such applications and
agreements, Borrower shall pay all standard fees and charges of Silicon in
connection with the FX Forward Contracts.

 

2. 
INTEREST.

 

Interest Rate
(Section 1.2):

 

A rate equal to the “Prime Rate” in effect from time to time, plus 2.0% per annum, provided that, for purposes
of calculating interest

 

3

 

hereunder, the Prime Rate on each day shall not be less than 4.0% per
annum.  Interest shall be calculated on
the basis of a 360-day year for the actual number of days elapsed.  “Prime Rate” means the rate announced from
time to time by Silicon as its “prime rate;” it is a base rate upon which other
rates charged by Silicon are based, and it is not necessarily the best rate
available at Silicon.  The interest rate
applicable to the Obligations shall change on each date there is a change in
the Prime Rate.

 

Notwithstanding the foregoing, with respect to the Term Loans:

 

A rate equal to the “Prime Rate” in effect from time to time, plus 2.50% per annum, provided that, for
purposes of calculating interest hereunder, the Prime Rate on each day shall
not be less than 4.0% per annum. 
Interest shall be calculated on the basis of a 360-day year for the
actual number of days elapsed.  “Prime
Rate” means the rate announced from time to time by Silicon as its “prime
rate;” it is a base rate upon which other rates charged by Silicon are based,
and it is not necessarily the best rate available at Silicon.  The interest rate applicable to the
Obligations shall change on each date there is a change in the Prime Rate.

 

3. 
FEES (Section 1.4):

 

Loan Fees:                                                                                                              See
Amendment to Loan Documents of even date herewith.

 

Collateral Monitoring

Fee:                                                                                                                                                  $1,250,
per month, payable in arrears (prorated for any partial month at the beginning
and at termination of this Agreement), provided that no Collateral Monitoring
Fee shall be charged in a month in which the Streamline Period is in effect
during the entire month.

 

4. 
MATURITY DATE

(Section 6.1):                                                                                                                           June
5, 2005.

 

Notwithstanding the foregoing, with respect to the Term Loans:  The outstanding principal balance of each
Term Loan shall be repaid by Borrower to Silicon in twenty-four (24) equal
monthly payments of principal, commencing on the last day of the calendar month
in which the applicable Term Loan is made and continuing on the same day of
each subsequent month until the earlier of the following dates:  (i) the date such Term Loan has been
indefeasibly paid in full, or (ii) the date the Revolving Loans are terminated,
or (iii) the date this Agreement terminates by its terms or is terminated by
either party in accordance with its terms. 
On the earlier to occur of the foregoing dates, the entire

 

4

 

unpaid principal balance of the Term Loans, plus all accrued and unpaid
interest thereon, shall be due and payable. 
Interest on each Term Loan shall be payable monthly as provided in
Section 1.2 of this Agreement.

 

5. 
FINANCIAL COVENANTS

(Section 5.1):                                                                                                                           Borrower
shall comply with each of the following covenants:

 

Minimum Tangible

Net Worth:                                                                                                          Borrower
shall maintain a Tangible Net Worth of not less than the following amounts as
of the end of each of the following months:

 

	
  As of end of:

  	
   

  	
  Minimum
  Tangible

  Net Worth

  	
   

  
	
  May, 2004

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  June, 2004

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  July, 2004

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  August, 2004

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  September, 2004

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  October, 2004

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  November, 2004

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  December, 2004

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  January, 2005

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  February, 2005

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  March 2005

  	
   

  	
  $

  	
  2,250,000

  	
   

  
	
  April, 2005

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  May, 2005

  	
   

  	
  $

  	
  2,250,000

  	
   

  

 

Definitions.                                                                                                        For
purposes of the foregoing financial covenants, the following term shall have
the following meaning:

 

“Tangible Net Worth” shall mean the excess of total assets over total
liabilities, determined in accordance with GAAP, with the following
adjustments:

 

(A) there
shall be excluded from assets:  (i)
notes, accounts receivable and other obligations owing to Borrower from its
officers or other Affiliates, and (ii) all assets which would be

 

5

 

classified as
intangible assets under GAAP, including without limitation goodwill, licenses,
patents, trademarks, trade names, copyrights, capitalized software and
organizational costs, licenses and franchises

 

(B) there
shall be excluded from liabilities:  all
indebtedness which is subordinated to the Obligations under a subordination
agreement in form specified by Silicon or by language in the instrument
evidencing the indebtedness which Silicon agrees in writing is acceptable to
Silicon in its good faith business judgment.

 

6. 
REPORTING.

(Section 5.3):

 

Borrower shall provide Silicon with the following:

 

1.               Weekly
(within five days after the end of each week), and on each request for a Loan,
transaction reports and schedules of collections, on Silicon’s standard form.

 

2.               Monthly
accounts receivable agings, aged by invoice date, within fifteen days after the
end of each month.

 

3.               Monthly
accounts payable agings, aged by invoice date, and outstanding or held check
registers, if any, within fifteen days after the end of each month.

 

4.               Monthly
reconciliations of accounts receivable agings (aged by invoice date),
transaction reports, and general ledger, within fifteen days after the end of
each month.

 

5.               Monthly
unaudited financial statements, as soon as available, and in any event within
thirty days after the end of each month.

 

6.               Monthly
Compliance Certificates, within thirty days after the end of each month, in
such form as Silicon shall reasonably specify, signed by the Chief Financial
Officer of Borrower, certifying that as of the end of such month Borrower was
in full compliance with all of the terms and conditions of this Agreement, and
setting forth calculations showing compliance with the financial covenants set
forth in this Agreement and such other information as Silicon shall reasonably
request, including, without limitation, a statement that at the end of such
month there were no held checks.

 

7.               Quarterly
unaudited financial statements, as soon as available, and in any event within
forty-five days after the end of each fiscal quarter of Borrower.

 

6

 

8.               Annual
operating budgets (including income statements, balance sheets and cash flow
statements, by month) for the upcoming fiscal year of Borrower within thirty
days after the end of each fiscal year of Borrower.

 

9.               Annual
financial statements, as soon as available, and in any event within 120 days
following the end of Borrower’s fiscal year, certified by, and with an
unqualified opinion of, independent certified public accountants acceptable to
Silicon.

 

7.  BORROWER INFORMATION:

 

Borrower represents and warrants that the information set forth in the
Representations and Warranties of the Borrower dated June 4, 2003, previously
submitted to Silicon (the “Representations”) is true and correct as of the date
hereof.

 

8. 
ADDITIONAL PROVISIONS

 

(a)                                  Banking Relationship. 
Borrower shall at all times maintain its primary banking
relationship with Silicon.  Without
limiting the generality of the foregoing, Borrower shall, at all times,
maintain not less than 60% of its total cash and investments, as shown on
Borrower’s consolidated balance sheet, on deposit with Silicon.  As to any Deposit Accounts and investment
accounts maintained with another institution, Borrower shall cause such
institution, within 30 days after the date of this Agreement, to enter into a
control agreement in form acceptable to Silicon in its good faith business
judgment in order to perfect Silicon’s first-priority security interest in said
Deposit Accounts and investment accounts.

 

7

 

(b)                                  Subordination of Inside Debt.  All present and future
indebtedness of Borrower to its officers, directors and shareholders (“Inside
Debt”) shall, at all times, be subordinated to the Obligations pursuant to a
subordination agreement on Silicon’s standard form.  Borrower represents and warrants that there is no Inside Debt
presently outstanding.  Prior to
incurring any Inside Debt in the future, Borrower shall cause the person to
whom such Inside Debt will be owed to execute and deliver to Silicon a
subordination agreement on Silicon’s standard form.

 

(c)                                  Streamline Provisions.

 

(1)                                  Borrower
may, at its option, elect not to have any Loans or Letters of Credit
outstanding, except as provided for below, for specified periods of time (the
“Streamline Periods”). At least 10 days prior to putting a Streamline Period
into effect, Borrower will give Silicon written notice thereof, specifying the
date the Streamline Period is to start.

 

(2)                                  In
order for a Streamline Period to go into effect, and at all times during the
Streamline Period, no Revolving Loans may be outstanding or made, no Letters of
Credit may be outstanding, the combined amount of the required FX Reserves and
Cash Management Reserves may not exceed $250,000 and the amount of Obligations
outstanding with respect to the Term Loans may not exceed $500,000.

 

(3)                                  During
the Streamline Period, provided no Event of Default has occurred and is
continuing, Borrower will not be required to provide Silicon with weekly
reporting of transactions, weekly schedules of Accounts or schedules of
collections (as called for by Section 4.3 of this Agreement).

 

(4)                                  Provided
no Default or Event of Default has occurred and is continuing, Borrower may, at
its option, terminate the Streamline Period, so that Borrower can thereafter
request Loans and Letters of Credit under this Agreement, by giving Silicon
written notice at least 30 days before the Streamline Period is to terminate,
together with such information relating to the Accounts and other Collateral as
Silicon shall specify.

 

(5)                                  Upon
Borrower giving notice that it wishes to terminate the Streamline Period, and
thereafter, Borrower will, provide Silicon with the (at a minimum) weekly

 

8

 

reporting of transactions and related schedules and assignments of
Accounts and schedules of collections, as called for by Section 4.3 of this
Agreement.

 

(6)                                  During
the Streamline Period, Borrower shall provide a borrowing base certificate,
accounts receivable aging, accounts payable aging and reconciliation to
Silicon, on a monthly basis, all in such form as Silicon shall specify, within
30 days after the end of each month.

 

(d)                                  Warrants.  Borrower
previously provided Silicon with a seven year warrant to purchase 115,385
shares of common stock of Borrower at an exercise of price of $0.39 per share,
which warrant shall remain in full force and effect.

 

(e)                                  UCC Termination. 
To the extent not yet completed, Borrower agrees to cause to
be terminated that certain UCC-1 Financing Statement in favor of Imperial Bank
(Financing Statement No. 9805460034) filed in the Office of the California
Secretary of State on February 17, 1999 and shall provide evidence of such
termination, satisfactory to Silicon in its discretion.

 

	
  Borrower:

  	
  Silicon:

  
	
   

  	
   

  
	
   

  	
  UNIFY CORPORATION

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  President or Vice President

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Secretary or Ass’t Secretary

  	
   

  
								

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]