Document:

ex10-1.htm

    Exhibit
10.1

    _____________________________________________________________________________

     

    

     

    

     

    STANDBY
CONVERTIBLE NOTE PURCHASE AGREEMENT

     

    by and
among

     

    AXS-One
Inc.

     

    and

     

    the
parties named herein on Schedule 1, as Purchasers

     

    

     

    

     

    June 26,
2009

     

    

     

    _____________________________________________________________________________

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    This STANDBY CONVERTIBLE NOTE PURCHASE
AGREEMENT (this “Agreement”) is dated as of
June 26, 2009, among AXS-One Inc., a Delaware corporation (the “Company”), and the purchasers
identified on Schedule
1 hereto (each a “Purchaser” and collectively
the “Purchasers”).

     

    WHEREAS, subject to the terms and
conditions set forth in this Agreement and pursuant to Section 4(2) of the
Securities Act (as defined below), and Rule 506 promulgated thereunder, the
Company desires to issue and sell to the Purchasers, and the Purchasers,
severally and not jointly, desire to purchase from the Company an aggregate
principal amount of up to $250,000 of Series 2009 5% Secured Convertible
Promissory Notes (the “Series
2009 Notes”), convertible, under certain circumstances, at the election
of each holder into shares of common stock, $0.001 par value (the “Unify Common Stock”), of
Unify Corporation, a Delaware corporation (“Unify”), at a conversion
price of $3.00 per share, as more fully set forth herein.

     

    NOW, THEREFORE, in consideration of
the mutual covenants contained in this Agreement, and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and each Purchaser agree as follows:

     

    ARTICLE
I

     

    DEFINITIONS AND TERMS OF
NOTES

     

    1.1           Definitions.

     

    In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings indicated in this Section 1.1:

     

    “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same
investment manager as such Purchaser shall be deemed to be an Affiliate of such
Purchaser.

     

    “Agent” shall have the meaning
ascribed to such term in the Security Agreement.

     

    “Agreement” shall have the
meaning ascribed to such term in the Preamble.

     

    “Blue Sky Laws” shall have the
meaning ascribed to such term in Section 3.1(e)(ii).

     

    “Business Day” means any day
except Saturday, Sunday and any day which shall be a federal legal holiday or a
day on which banking institutions in the State of New Jersey are authorized or
required by law or other governmental action to close.

     

    “Closing” shall have the
meaning ascribed to such term in Section 2.1(a).

     

    “Closing Date” shall have the
meaning ascribed to such term in Section 2.1(a).

     

    “Commission” means the
Securities and Exchange Commission.

     

    “Common Stock” means the
common stock of the Company, $0.01 par value per share, and any securities into
which such common stock may hereafter be reclassified.

     

    “Company” shall have the
meaning ascribed to such term in the Preamble.

     

    “Company IP” shall have the
meaning ascribed to such term in Section 3.1(j)(i).

     

    “Contemplated Transactions”
shall have the meaning ascribed to such term in Section 3.1(a)(ii).

     

    “Disclosure Schedules” means
the Disclosure Schedules concurrently delivered herewith.

     

    “Evaluation Date” shall have
the meaning ascribed to such term in Section 3.1(o).

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    “Financial Statements” shall
have the meaning ascribed to such term in Section 3.1(g)(iv).

     

    “First Security Agreement
Amendment” means the Security Agreement Amendment, dated as of November
16, 2007, among the Company, each of the Prior Purchasers and certain other
parties to the Prior Security Agreement.

     

    
      
        
        

      

      
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    “Fourth Security Agreement
Amendment” means the Fourth Security Agreement Amendment among the
Company, each of the Purchasers and certain other parties to the Prior Security
Agreement, the First Security Agreement Amendment, the Second Security Agreement
Amendment and the Third Security Agreement Amendment, in the form of Exhibit B
hereto.

     

    “GAAP” shall have the meaning
ascribed to such term in Section 3.1(g)(v).

     

    “Governmental Body” shall have the meaning
ascribed to such term in Section 3.1(e)(ii).

     

    “Indemnified Party” shall have
the meaning ascribed to such term in Section 5.3(a).

     

    “Indemnifying Party” shall
have the meaning ascribed to such term in Section 5.3(a).

     

    “Investor Rights Agreement”
means the Investor Rights Agreement between Unify and each of the Purchasers and
other parties thereto, in the form of Exhibit A
hereto.

     

    “July 2008 Purchase Agreement”
means that certain Convertible Note and Warrant Purchase Agreement, dated as of
July 24, 2008, by and among the Company and the other parties set forth on
Schedule 1 thereto as purchasers.

     

    “Legal Requirement” shall have
the meaning ascribed to such term in Section 3.1(f).

     

    “Lien” means a lien, charge,
security interest, encumbrance, right of first refusal or other restriction,
except for a lien for current taxes not yet due and payable and a minor
imperfection of title, if any, not material in nature or amount and not
materially detracting from the value or impairing the use of the property
subject thereto or impairing the operations or proposed operations of the
Company.

     

    “Material Adverse Effect”
shall have the meaning ascribed to such term in Section 3.1(a)(i).

     

    “Material Agreements” shall
have the meaning ascribed to such term in Section 3.1(e)(i).

     

    “Material Permits” shall have
the meaning ascribed to such term in Section 3.1(s).

     

    “May 2007 Purchase Agreement”
means that certain Convertible Note and Warrant Purchase Agreement, dated as of
May 29, 2007, by and among the Company and the other parties set forth on
Schedule 1 thereto as purchasers.

     

    “November 2007 Purchase
Agreement” means that certain Convertible Note and Warrant Purchase
Agreement, dated as of November 13, 2007, by and among the Company and the other
parties set forth on Schedule 1 thereto as purchasers.

     

    “October 2008 Purchase
Agreement” means that certain Convertible Note and Warrant Purchase
Agreement, dated as of October 30, 2008, by and among the Company and the other
parties set forth on Schedule 1 thereto as purchasers.

     

    “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

     

    “Prior Notes” means the Series
A Secured Convertible Promissory Notes and Series B Secured Convertible
Promissory Notes issued pursuant to the May 2007 Purchase Agreement, the Series
C Secured Convertible Promissory Notes issued pursuant to the November 2007
Purchase Agreement, the Series D Secured Convertible Promissory Notes issued
pursuant to the July 2008 Purchase Agreement and the Series E Secured
Convertible Promissory Notes issued pursuant to the October 2008 Purchase
Agreement.

     

    “Prior Purchase Agreements”
means the May 2007 Purchase Agreement, the November 2007 Purchase Agreement, the
July 2008 Purchase Agreement and the October 2008 Purchase
Agreement.

     

    “Prior Purchaser” means a
purchaser of Prior Notes, in such capacity, pursuant to the Prior Purchase
Agreements or any of them.

     

    “Prior Security Agreement”
means the Security Agreement, dated as of May 29, 2007, among the Company, the
Prior Purchasers and certain other parties as set forth therein, as amended
pursuant to the First Security Agreement Amendment, the Second Security
Agreement Amendment, the Third Security Agreement Amendment and the Fourth
Security Agreement Amendment.

     

    
      
        
        

      

      
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    “Purchaser” shall have the
meaning ascribed to such term in the Preamble.

     

    “Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

    “Sand Hill Agreement” means
the Financing Agreement, dated as of May 22, 2008, as amended from time to time,
between the Company and Sand Hill Finance, LLC.

     

    “SEC Documents” shall have the
meaning ascribed to such term in Section 3.1(g)(i).

     

    “Second Security Agreement
Amendment” means the Second Security Agreement Amendment, dated as of
July 24, 2008, among the Company, each of the Prior Purchasers and certain other
parties to the Prior Security Agreement and the First Security Agreement
Amendment.

     

    “Securities” means the Series
2009 Notes and the Unify Common Stock.

     

    “Securities Act” means the
Securities Act of 1933, as amended.

     

    “Security Agreement” means the
Security Agreement between the Company and each of the Purchasers, in the form
of Exhibit F
hereto.

     

    “Series 2009 Notes” shall have
the meaning ascribed to such term in the recitals hereto.

     

    “Subordination Agreement”
means the Third Amended and Restated Subordination Agreement between the Agent,
acting on behalf of the Purchasers and the Prior Purchasers, and Sand Hill
Finance, LLC, in the form of Exhibit C
hereto.

     

    “Subscription Amount” means,
as to each Purchaser, the amount set forth beside such Purchaser’s name on Schedule 1 hereto, in
United States dollars.

     

    “Subsidiary” means, with
respect to any entity, any corporation or other organization of which securities
or other ownership interest having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions, are
directly or indirectly owned by such entity or of which such entity is a partner
or is, directly or indirectly, the beneficial owner of 50% or more of any class
of equity securities or equivalent profit participation interests.

     

    “Third Security Agreement
Amendment” means the Third Security Agreement Amendment, dated as of
October 30, 2008, among the Company, each of the Prior Purchasers and certain
other parties to the Prior Security Agreement, the First Security Agreement
Amendment and the Second Security Amendment.

     

    “Trading Day” means (i) a day
on which the Common Stock is traded on a Trading Market, (ii) if the Common
Stock is not listed on a Trading Market, a day on which the Common Stock is
traded on the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day on
which the Common Stock is quoted in the over-the-counter market as reported by
Pink Sheets LLC (or any similar organization or agency succeeding to its
functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

     

    “Trading Market” means the
following markets or exchanges on which the Common Stock is listed or quoted for
trading on the date in question (or any successors thereto):  the NYSE
Amex, the New York Stock Exchange, the Nasdaq Global Market or the Nasdaq
Capital Market.

     

    “Transaction Documents” means
this Agreement, the Series 2009 Notes, the Security Agreement, the Fourth
Security Agreement Amendment, the Subordination Agreement and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

     

    “Unify Common Stock” shall
have the meaning ascribed to such term in the recitals hereto.

     

    1.2              Terms of
the Series 2009 Notes.  The terms and
provisions of the Series 2009 Notes are set forth in the form of Series 2009 5%
Secured Convertible Promissory Note, attached hereto as Exhibit
D.

     

    
      
        
        

      

      
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    ARTICLE
II

     

    PURCHASE AND
SALE

     

    2.1           Closing.

     

    (a)           The
closing of the transactions contemplated under this Agreement (the “Closing”) shall take place
upon the execution of this Agreement by the Company and the Purchasers
immediately following satisfaction or waiver of the conditions set forth in
Sections 2.2 and 2.3 (other than those conditions which by their terms are not
to be satisfied or waived until the Closing), at the offices of Wiggin and Dana
LLP, 400 Atlantic Street, Stamford, CT 06901 (or remotely via exchange of
documents and signatures) or at such other place or day as may be mutually
acceptable to the Purchasers and the Company.  The date on which the
Closing occurs is the “Closing
Date”.

     

    (b)           At
the Closing, the Purchasers shall purchase, severally and not jointly, and the
Company shall issue and sell, an aggregate maximum principal amount of up to
$250,000 of Series 2009 Notes.  Each Purchaser shall purchase from the
Company, and the Company shall issue and sell to each Purchaser, an amount of
Series 2009 Notes in such aggregate principal amount as is set forth next to
such Purchaser’s name on Schedule
1.  The Company shall have the right to borrow funds from the
Purchasers from time to time as provided in the Series 2009 Notes.

     

    (c)           As
an inducement to the Purchasers to purchase Series 2009 Notes, the Company
agrees to pay a commitment fee on the Closing Date to each Purchaser in an
amount equal to 20% of each Purchaser’s Subscription Amount.

     

    2.2           Conditions
to Obligations of Purchasers to Effect the Closing.

     

    The obligations of each Purchaser to
effect the Closing and the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing of each of the following
conditions, any of which may be waived, in writing, by such
Purchaser:

     

    (a)              At
the Closing (unless otherwise specified below) the Company shall deliver or
cause to be delivered to each Purchaser the following:

     

    (i) this Agreement, duly executed by
the Company;

     

    (ii) an original Series 2009 Note for
such Purchaser in the maximum principal amount that is set forth on Schedule 1 hereto
next to such Purchaser’s name, duly executed by the Company;

     

    (iii) the Investor Rights Agreement,
duly executed by Unify;

     

    (iv) the Security Agreement, duly
executed by the Company

     

    (v) the Fourth Security Agreement
Amendment, duly executed by the Company and each of the parties other than
Purchasers required to execute such agreement in order for it to constitute a
valid amendment of the Security Agreement;

     

    (vi) a legal opinion of Wiggin and
Dana LLP, counsel
to the Company, in the form of Exhibit E
hereto;

     

    (vii) the Subordination Agreement,
duly executed by Sand Hill Finance, LLC and the Company which shall include,
among other things, Sand Hill Finance, LLC’s consent to the Contemplated
Transactions;

     

    (viii) a certificate of the Secretary
of the Company, attaching a true copy of the certificate of incorporation and
bylaws of the Company, as amended to the Closing Date, and attaching true and
complete copies of the resolutions of the Board of Directors of the Company
authorizing the execution, delivery and performance of this Agreement and the
other Transaction Documents;

    

    (ix) a waiver of preemptive rights
duly executed by each of the Prior Purchasers under the Prior Purchase
Agreements pursuant to which such Prior Purchasers waive their preemptive rights
with respect to the Contemplated Transactions; and

    

                                (x)
amendments to the Prior Notes, duly executed by the Company.

    

    (b)              All
representations and warranties of the Company contained in the Transaction
Documents shall remain true and correct in all material respects as of the
Closing Date as though such representations and warranties were made on such
date (except those representations and warranties that address matters only as
of a particular date will remain true and correct as of such date).

     

    
      
        
        

      

      
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    (c)              As
of the Closing Date, there shall have been no Material Adverse Effect with
respect to the Company since the date hereof.

     

    (d)              From
the date hereof to the Closing Date, trading in the Common Stock shall not have
been suspended by the Commission (except for any suspension of trading of
limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New Jersey State authorities.

     

    2.3.              Conditions
to Obligations of the Company to Effect the Closing.

     

    The obligations of the Company to
effect the Closing and the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing of each of the following
conditions, any of which may be waived, in writing, by the Company:

     

    (a)              At
the Closing, each Purchaser shall deliver or cause to be delivered to the
Company the following:

     

    (i) this Agreement, duly executed by
such Purchaser;

     

    (ii) such Purchaser’s Subscription
Amount, by wire transfer of immediately available funds;

     

    (iii) an original Series 2009 Note
for such Purchaser in the maximum principal amount that is set forth on Schedule 1 hereto
next to such Purchaser’s name, countersigned by such Purchaser;

     

    (iv) the Investor Rights Agreement,
duly executed by such Purchaser;

     

    (v) the Security Agreement, duly
executed by such Purchaser;

     

    (vi) the Fourth Security Agreement
Amendment, duly executed by such Purchaser; and

     

    (vii) the Subordination Agreement,
duly executed by Sand Hill Finance, LLC and the Agent;

     

    (b)              All
representations and warranties of each of the Purchasers contained herein shall
remain true and correct as of the Closing Date as though such representations
and warranties were made on such date.

     

    (c)              The
Company shall have received the Fourth Security Agreement Amendment, duly
executed by each party other than the Purchasers or the Company to execute such
agreement in order for it to constitute a valid amendment of the Security
Agreement.

     

    (d)              The
Company shall have received a waiver of preemptive rights duly executed by each
of the Prior Purchasers under the Prior Purchase Agreements pursuant to which
such Prior Purchasers waive their preemptive rights with respect to the
Contemplated Transactions.

     

    (e)              The
Company shall have received amendments to the Prior Notes duly executed by each
of the holders of the Prior Notes.

     

    
      
        
        

      

      
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    ARTICLE
III

     

    REPRESENTATIONS AND
WARRANTIES

     

    3.1           Representations
and Warranties of the Company. Except as set forth under the
corresponding section of the Disclosure Schedules delivered concurrently
herewith and except as provided in the SEC Documents, the Company hereby makes
the following representations and warranties as of the date hereof and as of the
Closing Date to each Purchaser:

     

    (a) Corporate Organization;
Authority; Due Authorization.

     

    (i) The
Company (A) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (B) has the
corporate power and authority to own or lease its properties as and in the
places where its business is now conducted and to carry on its business as now
conducted and (C) is duly qualified as a foreign corporation authorized to do
business in every jurisdiction where the failure to so qualify, individually or
in the aggregate, would have a material adverse effect on the operations,
assets, liabilities, financial condition or business of the Company and its
Subsidiaries taken as a whole (a “Material Adverse
Effect”).  Set forth in Schedule 3.1(a) is a
complete and correct list of all Subsidiaries.  Each Subsidiary is
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is required, except
where failure to so qualify would not have, individually or in the aggregate, a
Material Adverse Effect.

    

    (ii) The
Company (A) has the requisite corporate power and authority to execute, deliver
and perform this Agreement and the other Transaction Documents to which it is a
party and to incur the obligations herein and therein and (B) has been
authorized by all necessary corporate action to execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby (the “Contemplated
Transactions”).  This Agreement is and each of the other
Transaction Documents will be on the Closing Date 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).

    

    (b) Capitalization.

    

    (i) As of the
date hereof, the authorized capital stock of the Company consisted of (i)
125,000,000 shares of Common Stock, of which 41,133,925 shares of Common Stock
were outstanding as of April 3, 2009, and (ii) 5,000,000 shares of Preferred
Stock, $0.01 par value, of which no shares were outstanding.  All
outstanding shares of capital stock of the Company were issued in compliance
with all applicable federal securities laws, and the issuance of such shares was
duly authorized by all necessary corporate action on the part of the
Company.  Except as contemplated by this Agreement or as set forth in
the SEC Documents or in Schedule 3.1(b),
there are (A) no outstanding subscriptions, warrants, options, conversion
privileges or other rights or agreements obligating the Company to purchase or
otherwise acquire or issue any shares of capital stock of the Company (or shares
reserved for such purpose), (B) no preemptive rights contained in the Company’s
certificate of incorporation, as amended, the bylaws of the Company or contracts
to which the Company is a party or rights of first refusal with respect to the
issuance of additional shares of capital stock of the Company other than such
rights as have been duly waived as of the date hereof and (C) no commitments or
understandings (oral or written) of the Company to issue any shares, warrants,
options or other rights to acquire any equity securities of the
Company.  To the Company’s knowledge, except as set forth in Schedule 3.1(b), none
of the shares of Common Stock are subject to any stockholders’ agreement, voting
trust agreement or similar arrangement or understanding.  Except as
set forth in the SEC Documents or in Schedule 3.1(b), the
Company has no outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
the Company on any matter.

     

    (ii) With
respect to each Subsidiary, except as set forth in Schedule 3.1(b), (i)
all the issued and outstanding shares of each Subsidiary’s capital stock have
been duly authorized and validly issued, are fully paid and nonassessable, have
been issued in compliance with applicable securities laws and were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities and (ii) there are no outstanding options to
purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of any Subsidiary’s capital stock or any
such options, rights, convertible securities or obligations.  Except
as disclosed in the SEC Documents or Schedule 3.1(b), the
Company beneficially owns 100% of the outstanding equity securities of each
Subsidiary.

     

    (c) Private
Offering.  Neither the Company nor anyone acting on its behalf
has within the last 12 months issued, sold or offered any security of the
Company to any Person under circumstances that would cause the issuance and sale
of the Series 2009 Notes, as contemplated by this Agreement, to be subject to
the registration requirements of Section 5 of the Securities Act.  The
Company agrees that neither the Company nor anyone acting on its behalf will
offer the Series 2009 Notes or any part thereof or any similar securities for
issuance or sale to, or solicit any offer to acquire any of the same from,
anyone so as to make the issuance and sale of the Series 2009 Notes subject to
the registration requirements of Section 5 of the Securities Act.

    

    (d) Brokers and Finders’
Fees.  No brokerage or finder’s fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by this Agreement.  The Purchasers shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by this
Agreement.

     

    
      
        
        

      

      
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    (e) No Conflict; Required
Filings and Consents.

    

    (i) The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company do not, and the consummation by the Company of the
Contemplated Transactions will not, (A) conflict with or violate the certificate
of incorporation or the bylaws of the Company or its Subsidiaries, (B) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to the Company or its Subsidiaries or by which any property or asset of the
Company or its Subsidiaries is bound or affected or (C) result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss of a material benefit under or
give to others any right of purchase or sale, or any right of termination,
amendment, acceleration, increased payments or cancellation of, or result in the
creation of a Lien on any property or asset of the Company or of any of its
Subsidiaries pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or of any of its Subsidiaries is bound or affected (the “Material
Agreements”).

    

    (ii) The
execution and delivery of this Agreement and the other Transaction Documents by
the Company do not, and the performance of this Agreement and the other
Transaction Documents and the consummation by the Company of the Contemplated
Transactions will not, require, on the part or in respect of the Company, any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Body (as hereinafter defined) except for the filing of a
Form D with the Commission and applicable requirements, if any, of the Exchange
Act or any state securities or “blue sky” laws (collectively, “Blue Sky Laws”), and any
approval required by applicable rules of the markets in which the Company’s
securities are traded.  For purposes of this Agreement, “Governmental Body” shall mean
any:  (A) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (B) federal, state,
local, municipal, foreign or other government; or (C) governmental or
quasi-governmental authority of any nature (including any governmental division,
department, agency, commission, instrumentality, official, organization, unit,
body or entity and any court or other tribunal).

    

    (f) Compliance.  Except
as set forth in the SEC Documents or in Schedule 3.1(f),
neither the Company nor any Subsidiary is in conflict with, or in default or
violation of (A) any law, rule, regulation, order, judgment or decree applicable
to the Company or such Subsidiary or by which any property or asset of the
Company or such Subsidiary is bound or affected (“Legal Requirement”), or (B)
any Material Agreement, in each case except for any such conflicts, defaults or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received any written
notice or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement, except
any such violations or failures that would not, individually or in the
aggregate, have a Material Adverse Effect.

    

    (g) SEC Documents; Financial
Statements.

    

    (i) The
information contained in the following documents did not, as of the date of the
applicable document, include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading, as of their respective filing dates or, if amended, as so
amended (the following documents, collectively, the “SEC Documents”), provided
that the representation in this sentence shall not apply to any misstatement or
omission in any SEC Document filed prior to the date of this Agreement which was
superseded by a subsequent SEC Document filed prior to the date of this
Agreement:  (A) the Company’s Annual Report on Form 10-K for the year
ended December 31, 2008, as amended by Form 10-K/A Amendment No. 1 thereto; (B)
the Company’s definitive Proxy Statement with respect to its 2008 Annual Meeting
of Stockholders, filed with the Commission on April 9, 2008; (C) the Company’s
Quarterly Report on Form 10-Q for the period ended March 31, 2009; and (D) the
Company’s Current Reports on Form 8-K filed February 2, 2009, February 6, 2009,
April 14, 2009, April 21, 2009, May 12, 2009, May 13, 2009 and May 29,
2009.

    

    (ii) In
addition, as of the date of this Agreement, the Disclosure Schedules, when read
together with the SEC Documents and the information, qualifications and
exceptions contained in this Agreement, do not include any untrue statement of a
material fact.

    

    (iii) The
Company has filed all forms, reports and documents required to be filed by it
with the Commission for the 12 months preceding the date of this Agreement,
including without limitation the SEC Documents.  As of their
respective dates, the SEC Documents filed prior to the date hereof complied as
to form in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations
thereunder.

    

    (iv) The
Company’s Annual Report on Form 10-K for the year ended December 31, 2008,
includes consolidated balance sheets as of December 31, 2007 and 2008 and
consolidated statements of income and cash flows for the one year periods then
ended (collectively, the “Financial
Statements”).

    

    (v) The
Financial Statements (including the related notes and schedules thereto) have
been prepared in accordance with generally accepted accounting principles in the
United States, applied on a consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such Financial Statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, subject to normal year-end audit adjustments.  The Financial
Statements (including the related notes and schedules thereto) fairly present in
all material respects the consolidated financial position, the results of
operations, retained earnings or cash flows, as the case may be, of the Company
for the periods set forth therein (subject, in the case of unaudited statements,
to normal year-end audit adjustments that would not be material in amount or
effect), in each case in accordance with GAAP, consistently applied during the
periods involved, except as may be noted therein.

    

    (h) Litigation.  Except
as set forth in the SEC Documents or in Schedule 3.1(h),
there are no claims, actions, suits, investigations, inquiries or proceedings
pending against the Company or any of its Subsidiaries or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries, at law
or in equity, or before or by any court, tribunal, arbitrator, mediator or any
federal or state commission, board, bureau, agency or instrumentality, that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.  Except as set forth in the SEC Documents or
in Schedule
3.1(h), neither the Company nor any of its Subsidiaries is a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect.

     

    
      
        
        

      

      
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    (i) Absence of Certain
Changes.  Except as specifically contemplated by this Agreement
or as set forth in Schedule 3.1(i) or in
the SEC Documents, since December 31, 2008, there has not been (a) any Material
Adverse Effect; (b) any dividends or other distribution of assets to
stockholders of the Company; (c) any acquisition (by merger, consolidation,
acquisition of stock and/or assets or otherwise) of any Person by the Company;
or (d) any transactions, other than in the ordinary course of business,
consistent in all material respects with past practices, with any of its
officers, directors or principal stockholders or any of their respective
Affiliates.

    

    (j) Intellectual
Property.

    

    (i) The
Company and its Subsidiaries own, or have the right to use, sell or license all
intellectual property reasonably required for the conduct of their respective
businesses as presently conducted (collectively, the “Company IP”) except for any
failure to own or have the right to use, sell or license the Company IP that
would not have a Material Adverse Effect.

    

    (ii) The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not constitute a breach of any
instrument or agreement governing any Company IP, will not cause the forfeiture
or termination or give rise to a right of forfeiture or termination of any
Company IP or impair the right of Company and its Subsidiaries to use, sell or
license any Company IP.

    

    (iii) (A)  None
of the manufacture, marketing, license, sale and use of any product currently
licensed or sold by the Company or any of its Subsidiaries (x) violates any
license or agreement between the Company or any of its Subsidiaries and any
third party, (y) to the knowledge of the Company, infringes any patent of any
other party; or (z) to the knowledge of the Company, infringes any copyright,
trademark or trade secret of any other party, and (B) there is no pending or, to
the knowledge of the Company, threatened claim or litigation contesting the
validity, ownership or right to use, sell, license or dispose of any Company
IP.

    

    (k) No Adverse
Actions.  Except as set forth in the SEC Documents or in Schedule 3.1(k),
there is no existing, pending or, to the knowledge of the Company, threatened
termination, cancellation, limitation, modification or change in the business
relationship of the Company or any of its Subsidiaries with any supplier,
customer or other Person except such as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.

    

    (l) Corporate
Documents.  The Company’s certificate of incorporation and
bylaws, each as amended to date, which have been requested and previously
provided to the Purchasers are true, correct and complete and contain all
amendments thereto.

    

    (m) Insurance.  The
Company and its Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries are
engaged.  Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in
cost.

    

    (n) Transactions with Affiliates
and Employees.  Except as set forth in the SEC Documents, none
of the officers or directors of the Company and, to the Company’s knowledge,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors), including any contract or other arrangement providing
for the furnishing of services to or by, proving for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Company’s knowledge, any entity in which
any officer, director or any such employee has a substantial interest or is an
officer, director, trustee or partner, in each case in excess of $100,000, other
than (i) for payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company or the Subsidiaries
or (iii) for other employee benefits, including stock option or restricted stock
agreements under any stock option plan of the Company.

    

    (o) Sarbanes-Oxley; Internal
Accounting Controls . The Company is in material compliance with all
provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of
the Closing Date.  The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by the Company’s most recently
filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The
Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no changes in the
Company’s internal control over financial reporting (as such term is defined in
the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.

     

    
      
        
        

      

      
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    (p) Application of Takeover
Protections . The Company and its Board of Directors have taken all
necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Series 2009 Notes and
the Purchasers’ ownership thereof.

    

    (q) No Other
Representations.  The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to
the Contemplated Transactions other than those specifically set forth in Section
3.2 hereof.

    

    (r) Acknowledgement Regarding
Purchasers’ Trading Activity.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding,
it is understood and acknowledged by the Company that none of the Purchasers
have been asked to agree, nor has any Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Series 2009 Notes for any specified term.  The Company further
understands and acknowledges that (i) one or more Purchasers may engage in
hedging activities at various times during the period that the Series 2009 Notes
are outstanding and (ii) such hedging activities (if any) could reduce the value
of the existing stockholders’ equity interests in the Company at and after the
time that the hedging activities are being conducted.  The Company
acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

    

    (s) Regulatory Permits.
The Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the
SEC Documents, except where the failure to possess such permits could not have
or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

    

    (t) Title to Assets.
Except as set forth in Schedule 3.1(t), the Company and
the Subsidiaries have good and marketable title in fee simple to all real
property owned by them that is material to the business of the Company and the
Subsidiaries and good and marketable title in all personal property owned by
them that is material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other taxes, the
payment of which is neither delinquent nor subject to penalties. Any real
property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in compliance.

    

    (u) Disclosure.  The
Transaction Documents, and the exhibits and schedules attached thereto, when
taken as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were
made.

    

    3.2           Representations and
Warranties of the Purchasers.

     

    Each Purchaser hereby, for itself and
for no other Purchaser, represents and warrants as of the date hereof and as of
the Closing Date to the Company as follows:

     

    (a) Organization; Authority;
Enforceability. Such Purchaser (other than individuals) is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full power and authority to enter into and
to consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or similar action on the
part of such Purchaser. Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, subject to laws of general application relating to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors’ rights generally and rules of law governing specific performance,
injunctive relief, or other equitable remedies.

    

    (b) General Solicitation.
Such Purchaser is not purchasing the Series 2009 Notes as a result of any
advertisement, article, notice or other communication regarding the Series 2009
Notes published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement.

    

    (c) No Public Sale or
Distribution. Such Purchaser is acquiring the Series 2009 Notes for its
own account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof; provided, however, that by
making the representations herein, such Purchaser does not agree to hold any of
the Series 2009 Notes for any minimum or other specific term and reserves the
right to dispose of the Series 2009 Notes at any time in accordance with or
pursuant to a registration statement or an exemption under the Securities
Act.  Such Purchaser is acquiring the Series 2009 Notes hereunder in
the ordinary course of its business. Such Purchaser does not have any agreement
or understanding, directly or indirectly, with any Person to distribute any of
the Securities.

    

    (d) Accredited Investor
Status.  Such Purchaser is an “accredited investor” as that
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.

    

    (e) Residency. Such Purchaser is a
resident of the jurisdiction set forth below such Purchaser’s name on Schedule 1 attached
hereto.

    

    (f) Reliance on
Exemptions. Such Purchaser understands that the Series 2009 Notes are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Series 2009 Notes.

     

    
      
        
        

      

      
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    (g) Information. Such
Purchaser and its advisors, if any, have been furnished with all publicly
available materials (or such materials have been made available to such
Purchaser) relating to the business, finances and operations of the Company and
such other publicly available materials relating to the offer and sale of the
Series 2009 Notes as have been requested by such Purchaser, including without
limitation (i) the SEC Documents, (ii) Unify’s Annual Report on Form 10-K for
the year ended April 30, 2008, as amended by Form 10-K/A Amendment No. 1
thereto, (iii) Unify’s Quarterly Reports on Form 10-Q for the periods ended July
31, 2008, October 31, 2008 and January 31, 2008, (iv) Unify’s definitive Proxy
Statement with respect to its 2009 Annual Meeting of Stockholders, filed with
the Commission on February 27, 2009, and (v) Unify’s Current Reports on Form 8-K
filed June 25, 2008, August 21, 2008, September 5, 2008, November 21, 2008,
February 3, 2009, February 26, 2009, April 20, 2009, May 4, 2009 and May 21,
2009.  Each Purchaser acknowledges that it has read and understands
the risk factors set forth in such documents.  Neither such review nor
any other due diligence investigations conducted by such Purchaser or its
advisors, if any, or its representatives shall modify, amend or affect such
Purchaser’s right to rely on the Company’s representations and warranties
contained in the Transaction Documents.  Such Purchaser understands
that its investment in the Series 2009 Notes involves a high degree of
risk.

    

    (h) No Governmental
Review.  Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Series 2009 Notes or
the fairness or suitability of the investment in the Series 2009 Notes, nor have
such authorities passed upon or endorsed the merits of the offering of the
Series 2009 Notes.

    

    (i) Experience of Such
Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters, including investing in companies engaged in the business
in which the Company is engaged, so as to be capable of evaluating the merits
and risks of the prospective investment in the Series 2009 Notes, and has so
evaluated the merits and risks of such investment.  Such Purchaser is
able to bear the economic risk of an investment in the Series 2009 Notes and, at
the present time, is able to afford a complete loss of such
investment.

    

    (j) No Other
Representations.  The Purchaser acknowledges and agrees that
the Company does not make or has not made any representations or warranties with
respect to the Contemplated Transactions other than those specifically set forth
in this Section 3.1.

    

    

    ARTICLE
IV

     

    OTHER AGREEMENTS OF THE
PARTIES

     

    4.1            Transfer
Restrictions.

     

    (a)        The
Securities may only be disposed of in compliance with state and federal
securities laws.  In connection with any transfer of Securities, other
than pursuant to an effective registration statement, to the Company (in the
case of a transfer of Series 2009 Notes), to an Affiliate of a Purchaser (who is
an accredited investor and executes a customary representation letter) or in
connection with a pledge as contemplated in Section 4.1(b), the Company may
require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably satisfactory to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act, provided, however, that in
the case of a transfer pursuant to Rule 144, no opinion shall be required if the
transferor provides the Company with a customary seller’s representation letter,
and if such sale is not pursuant to subsection (b)(1) of Rule 144, a customary
broker’s representation letter and a Form 144.  Any such transferee
that agrees in writing to be bound by the terms of this Agreement and the
Investor Rights Agreement shall have the rights of a Purchaser under this
Agreement and the Investor Rights Agreement.  Except as required by
federal securities laws and the securities law of any state or other
jurisdiction within the United States, the Securities may be transferred, in
whole or in part, by any of the Purchasers at any time.  The Company
shall reissue certificates evidencing the Series 2009 Notes upon surrender of
certificates evidencing the Series 2009 Notes being transferred in accordance
with this Section 4.1(a).

     

    (b)        The
Purchasers agree to the imprinting, so long as is required by this Section
4.1(b), of one or more legends, as applicable, on any of the Securities in
substantially the following form:

     

    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.

     

    and on
any Series 2009 Note:

     

    “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
BETWEEN THE AGENT OF THE PAYEE AND SAND HILL FINANCE, LLC.”

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    The Company acknowledges and agrees
that, unless prohibited by applicable law, rule or regulation, a Purchaser may
from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the
Securities to a financial institution that is an “accredited investor” as
defined in Rule 501(a) under the Securities Act and, if required under the terms
of such arrangement, such Purchaser may transfer pledged or secured Securities
to the pledgees or secured parties.  Such a pledge or transfer would
not be subject to approval of the Company and no legal opinion of legal counsel
of the pledgee, secured party or pledgor shall be required in connection
therewith; provided, however, that such Purchaser shall provide the Company with
such documentation as is reasonably requested by the Company to ensure that the
pledge is pursuant to a bona fide margin agreement with a registered
broker-dealer or a security interest in some or all of the Securities to a
financial institution that is an “accredited investor” as defined in Rule 501(a)
under the Securities Act.

     

    4.2           Furnishing
of Information.                                                                        As
long as any Purchaser owns Series 2009 Notes, the Company covenants to timely
file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act.  As long as any Purchaser owns
Series 2009 Notes, if the Company is not required to file reports pursuant to
the Exchange Act, it shall prepare and furnish to the Purchasers and make
publicly available in accordance with Rule 144(c)(2), such information as is
required for the Purchasers to sell the Series 2009 Notes under Rule
144.

     

    4.3           Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Series 2009 Notes in
a manner that would require the registration under the Securities Act of the
sale of the Series 2009 Notes to the Purchasers or that would be integrated with
the offer or sale of the Series 2009 Notes for purposes of the rules and
regulations of any applicable Trading Market so as to result in a violation
thereof.

     

    4.4           Publicity.                               The
Company shall, within four Business Days following the Closing Date, file a
Current Report on Form 8-K, disclosing the Contemplated Transactions and make
such other filings and notices regarding the Contemplated Transactions in the
manner and time required by the Commission.

     

    4.5           Negative
Covenants.  Unless approved in writing by those Purchasers
holding a majority of the principal amount of the Series 2009 Notes then
outstanding, the Company (a) shall not declare or pay any dividend or
distribution with respect to any common stock or preferred stock of the Company
and (b) shall not incur any secured indebtedness senior to the Series 2009
Notes.

     

    4.6           Senior
Debt.  Notwithstanding any other provision of the Transaction
Documents, the Purchasers hereby acknowledge and consent as
follows:  (a) the Company may continue to borrow under an accounts
receivable formula based revolving line of credit pursuant to the Sand Hill
Agreement; and (b) the Company may replace the Sand Hill Agreement with another
senior debt facility which shall rank senior to the Series 2009 Notes, provided
that such replacement senior debt facility is an accounts receivable formula
based revolving line of credit secured solely by accounts receivable of the
Company.

     

     

    ARTICLE
V

     

    INDEMNIFICATION, TERMINATION
AND DAMAGES

     

    5.1           Survival
of Representations.

     

    Except as otherwise provided herein,
the representations and warranties of the Company and the Purchasers contained
in or made pursuant to this Agreement shall survive the execution and delivery
of this Agreement and the Closing Date and shall continue in full force and
effect for a period of two (2) years from the Closing Date.  The
Company’s and the Purchasers’ warranties and representations shall in no way be
affected or diminished in any way by any investigation of (or failure to
investigate) the subject matter thereof made by or on behalf of the Company or
the Purchasers.

     

    5.2           Indemnification.

     

    (a) The
Company agrees to indemnify and hold harmless the Purchasers, their Affiliates,
each of their officers, directors, employees and agents and their respective
successors and assigns, from and against any losses, damages or expenses which
are caused by or arise out of (i) any breach or default in the performance by
the Company of any covenant or agreement made by the Company in any of the
Transaction Documents; (ii) any breach of warranty or representation made by the
Company in any of the Transaction Documents; and/or (iii) any and all third
party actions, suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable legal fees and expenses) incident to any of the
foregoing.

    

    (b) The
Purchasers, severally and not jointly, agree to indemnify and hold harmless the
Company, its Affiliates, each of their officers, directors, employees and agents
and their respective successors and assigns, from and against any losses,
damages or expenses which are caused by or arise out of (i) any breach or
default in the performance by the Purchasers of any covenant or agreement made
by the Purchasers in any of the Transaction Documents; (ii) any breach of
warranty or representation made by the Purchasers in any of the Transaction
Documents; and/or (iii) any and all third party actions, suits, proceedings,
claims, demands, judgments, costs and expenses (including reasonable legal fees
and expenses) incident to any of the foregoing.

     

    
      
        
        

      

      
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    5.3           Indemnity
Procedure.

     

    (a) A party
or parties hereto agreeing to be responsible for or to indemnify against any
matter pursuant to this Agreement is referred to herein as the “Indemnifying Party” and the
other party or parties claiming indemnity is referred to as the “Indemnified
Party”.  An Indemnified Party under this Agreement shall, with
respect to claims asserted against such party by any third party, give written
notice to the Indemnifying Party of any liability which might give rise to a
claim for indemnity under this Agreement within sixty (60) Business Days of the
receipt of any written claim from any such third party, but not later than
twenty (20) days prior to the date any answer or responsive pleading is due, and
with respect to other matters for which the Indemnified Party may seek
indemnification, give prompt written notice to the Indemnifying Party of any
liability which might give rise to a claim for indemnity; provided, however, that any
failure to give such notice shall not waive any rights of the Indemnified Party
except to the extent the rights of the Indemnifying Party are materially
prejudiced.

    

    (b) The
Indemnifying Party shall have the right, at its election, to take over the
defense or settlement of such claim by giving written notice to the Indemnified
Party at least fifteen (15) days prior to the time when an answer or other
responsive pleading or notice with respect thereto is required. If the
Indemnifying Party makes such election, it may conduct the defense of such claim
through counsel of its choosing (subject to the Indemnified Party’s approval of
such counsel, which approval shall not be unreasonably withheld or delayed),
shall be solely responsible for the expenses of such defense and shall be bound
by the results of its defense or settlement of the claim. The Indemnifying Party
shall not settle any such claim without prior notice to and consultation with
the Indemnified Party, and no such settlement involving any equitable relief or
which might have an adverse effect on the Indemnified Party may be agreed to
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed).  So long as the Indemnifying Party
is diligently contesting any such claim in good faith, the Indemnified Party may
pay or settle such claim only at its own expense and the Indemnifying Party
shall not be responsible for the fees of separate legal counsel to the
Indemnified Party, unless the named parties to any proceeding include both
parties or representation of both parties by the same counsel would be
inappropriate in the reasonable opinion of counsel to the Indemnified Party, due
to conflicts of interest or otherwise.  If the Indemnifying Party does
not make such election, or having made such election does not, in the reasonable
opinion of the Indemnified Party proceed diligently to defend such claim, then
the Indemnified Party may (after written notice to the Indemnifying Party), at
the expense of the Indemnifying Party, elect to take over the defense of and
proceed to handle such claim in its discretion and the Indemnifying Party shall
be bound by any defense or settlement that the Indemnified Party may make in
good faith with respect to such claim. In connection therewith, the Indemnifying
Party shall fully cooperate with the Indemnified Party should the Indemnified
Party elect to take over the defense of any such claim.  The parties
agree to cooperate in defending such third party claims and the Indemnified
Party shall provide such cooperation and such access to its books, records and
properties (subject to the execution of appropriate non-disclosure agreements)
as the Indemnifying Party shall reasonably request with respect to any matter
for which indemnification is sought hereunder; and the parties hereto agree to
cooperate with each other in order to ensure the proper and adequate defense
thereof.

    

    (c) With
regard to claims of third parties for which indemnification is payable
hereunder, such indemnification shall be paid by the Indemnifying Party upon the
earlier to occur of:  (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five (5) days prior to the date that the judgment creditor has the
right to execute the judgment; (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party; or (iii) a settlement of
the claim.  Notwithstanding the foregoing, the reasonable expenses of
counsel to the Indemnified Party shall be reimbursed on a current basis by the
Indemnifying Party.  With regard to other claims for which
indemnification is payable hereunder, such indemnification shall be paid
promptly by the Indemnifying Party upon demand by the Indemnified
Party.

    

    

    ARTICLE
VI

    

    MISCELLANEOUS

    

    6.1           Fees and
Expenses.                                                      
The Company shall be responsible for the payment of the Purchasers’ reasonable
and documented legal fees and other third-party expenses relating to the
preparation, negotiation and execution of this Agreement and the Transaction
Documents and the consummation of the transactions contemplated herein up to an
aggregate cap of $15,000.

    

    6.2           Entire
Agreement.  The Transaction Documents and the Investor Rights
Agreement, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
 

    6.3           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified below
or on the signature pages attached hereto prior to 5:00 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified below or on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:00 p.m. (New York City time) on any Trading
Day, (c) the Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:

    

    If to the
Purchasers, at each Purchaser’s address set forth under its name on Schedule 1
attached hereto, or with respect to the Company, addressed to:

    

    AXS-One
Inc.

    301 Route
17 North

    Rutherford,
New Jersey 07070

    Attention:
Chief Financial Officer

    Facsimile
No.: (201) 935-5230

    

    or to
such other address or addresses or facsimile number or numbers as any such party
may most recently have designated in writing to the other parties hereto by such
notice. Copies of notices to the Company (which shall not constitute notice)
shall be sent to:

    

    Wiggin
and Dana LLP

    400
Atlantic Street

    Stamford,
Connecticut 06901

    Attention:  Michael
Grundei

    Facsimile
No.: (203) 363-7676

    

    Copies of
notices to any Purchaser (which shall not constitute notice) shall be sent to
the addresses, if any, listed on Schedule 1 attached hereto.

     

    6.4           Amendments;
Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and each Purchaser or, in the case of a waiver, by the party against
whom enforcement of any such waiver is sought.  No waiver of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such
right.  Until such time as that certain Agreement and Plan of Merger,
dated as of April 16, 2009 (the “Merger Agreement”), by and
among Unify, the Company and UCAC, Inc., a wholly-owned subsidiary of Unify, has
been terminated or the transactions contemplated by the Merger Agreement have
been consummated, this Agreement shall not be amended or modified without the
prior written consent of Unify.

    

    6.5           Construction.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement shall be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction shall be applied against any party.

    

    6.6           Successors
and Assigns.  This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each
Purchaser.  Any Purchaser may assign any or all of its rights under
this Agreement to any Person to whom it transfers Series 2009 Notes, provided
such transferee agrees in writing to be bound, with respect to the transferred
Series 2009 Notes, by the provisions hereof that apply to the
Purchasers.

    

    6.7           No
Third-Party Beneficiaries.  This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.5 and Article
V.

    

    6.8           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.

    

    6.9           Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile or other electronic transmission, such signature shall create a valid
and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or other
electronic signature page were an original thereof.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    
 

    6.10           Severability.  If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties shall attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

    

    6.11           Replacement
of Series 2009 Notes.  If any
certificate or instrument evidencing any of the Series 2009 Notes is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested by the
Company.

    

    6.12           Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company shall
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

    

    6.13           Payment
Set Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall, to the
extent permissible under applicable law, be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.

    

    6.14           Independent
Nature of Purchasers' Obligations and Rights.  The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under any
Transaction Document.  Nothing contained herein or in any Transaction
Document, and no action taken by any Purchaser pursuant thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Document.  Except to the
extent otherwise specifically provided in the Transaction Documents, each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose.  Each Purchaser has been represented by its own separate
legal counsel in their review and negotiation of the Transaction
Documents.  The Company has elected to provide all Purchasers with the
same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Purchasers.

    

    6.15           Waiver of
Trial by Jury.  THE PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

    

    6.16           Further
Assurances.  Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to better evidence and reflect the transactions described herein
and contemplated hereby and to carry into effect the intents and purposes of
this Agreement, and further agrees to take promptly, or cause to be taken, all
actions, and to do promptly, or cause to be done, all things necessary, proper
or advisable under applicable law to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents and
approvals, to effect all necessary registrations and filings and to remove any
injunctions or other impediments or delays, legal or otherwise, in order to
consummate and make effective the transactions contemplated by this Agreement
for the purpose of securing to the parties hereto the benefits contemplated by
this Agreement.

    

    6.17           Like
Treatment.  Neither the Company nor any of its Affiliates
shall, directly or indirectly, pay or cause to be paid any consideration
(immediate or contingent), whether by way of interest, fee, payment for
redemption, conversion or exercise of the Series 2009 Notes, or otherwise, to
any Purchaser or holder of Series 2009 Notes, for or as an inducement to, or in
connection with the solicitation of, any consent, waiver or amendment to any
terms or provisions of this Agreement or the other Transaction Documents, unless
such consideration is offered to all Purchasers or holders of Series 2009 Notes
bound by such consent, waiver or amendment.  The Company shall not,
directly or indirectly, redeem any Series 2009 Notes unless such offer of
redemption is made pro rata to all Purchasers or holders of Series 2009 Notes,
as the case may be, on identical terms.

    

    [Signature pages
follow.]

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

     

    COMPANY:

     

    AXS-ONE
INC.

    

    

    By: /s/ William P.
Lyons

    Name:
William P. Lyons

    Title:   CEO

    

    

    PURCHASERS:

    

    Print
Exact Name:  BlueLine Capital Partners
III, LP

    

    

    By:           /s/ Scott
Shuda                                                      

    Name:     
Scott Shuda

    Title:        Managing
Director

    

    Address:
402 Railroad Avenue,
Suite 201

    

    Danville,
CA  94526                                                                           

    

    
 

    

    Telephone:                                                                 

    

    Facsimile:                                                                 

    

    Email:                                            

    

    SSN/EIN:                                                                 

    

    

    Amount of
Investment: $75,000

    

    

    [Omnibus
AXS-One Inc. Convertible Note and Warrant Purchase Agreement Signature
Page]

    

    

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    

    PURCHASERS:

    

    Print
Exact Name: Jurika
Family Trust U/A 1989

    

    

    

    By: /s/ William K.
Jurika                                                                                     

    Name:  William
K. Jurika

    Title:
Trustee

    

    Address:                                                                           

    

    42 Glen Alpine
Rd.                                                                                     

    

    Piedmont, CA
94611

    

    Telephone:                                                                                     

    

    Facsimile:                                                                                     

    

    Email:                                                                                     

    

    SSN/EIN:                                                                                     

    

    

    Amount of
Investment:  $75,000

    

    

    [Omnibus
AXS-One Inc. Convertible Note and Warrant Purchase Agreement Signature
Page]

    

    PURCHASERS:

    

    Print
Exact Name: Harold D.
Copperman

    

    By:
/s/ Harold D.
Copperman

    Name:

    Title:

    

    Address:
2804 Tarflower
Way                                                                                     

    

    Naples, FL
34105                                                                                     

    

    

    

    Telephone:                                                                                     

    

    Facsimile:                                                                                     

    

    Email:                                                                                     

    

    SSN/EIN:                                                                                     

    

    

    Amount of
Investment:  $50,000.00

    

    

    [Omnibus
AXS-One Inc. Convertible Note and Warrant Purchase Agreement Signature
Page]

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
 

    PURCHASERS:

    

    Print
Exact Name: Primafides
(Suisse) S.A. as

    Trustees of Sirius
Trust                                                                                     

    

    

    By: /s/ P.
DeSalis                                           /s/ D.
Moran

    Name:
Primafides (Suisse) SA as Trustees of Sirius Trust

    Title:   Directors

    

    Address:
Stonehage
SA                                                                                     

    

    Rue du Puits-Godet
12                                                                                     

    

    P.O Box
763                                                                                     

    

    2002
Neuchâtel                                                                                     

    

    Switzerland                                                                                     

    

    Attn,
IAD                                                                                     

    

    Telephone:                                                                                     

    

    Facsimile:                                                                 

    

    Email:                                                                                     

    

    SSN/EIN:                                                                                     

    

    

    Amount of
Investment:  $50,000.00

    

    

    [Omnibus
AXS-One Inc. Convertible Note and Warrant Purchase Agreement Signature
Page]

    

    

    

    

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    

    

    

    

    Schedule
1

    

    to
Standby Convertible Note Purchase Agreement

     

    
      	
              Name, Address and Fax
      Number

              of
    Purchaser

            	
              Aggregate Principal Amount of
      Series 2009 Notes Purchased

            	
              Purchase
      Price

            
	
              BlueLine
      Capital Partners III, LP

              402
      Railroad Avenue, Suite 202

              Danville,
      CA  94526

              Attn:  Scott
      Shuda

              (925)
      988-0287 (fax)

               

            	
              $75,000

            	
              $75,000

            
	
              Jurika
      Family Trust U/A 3/17/1989

              42
      Glen Alpine Road

              Piedmont,
      CA  94611

              Attn:  William
      Jurika

              (510)
      985-1197 (fax)

               

            	
              $75,000

            	
              $75,000

            
	
              Harold
      D. Copperman

              2804
      Tarflower Way

              Naples,
      FL  34105

              (239)
      659-4473 (fax)

               

            	
              $50,000

            	
              $50,000

            
	
              Sirius
      Trust

              c/o
      Stonehage SA

              Rue
      du Puits-Godet 12

              2002
      Neuchatel, Switzerland

              Attn:  Anthony
      Bloom

              (44)
      32-723-1001 (fax)

               

            	
              $50,000

            	
              $50,000

            
	
               

              Totals:

               

            	
              $250,000

            	
              $250,000

            

    

    

    
      
        
        

      

      
        19ex10-2.htm

Exhibit
10.2

     

    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.
      $[__________]

              	
                Rutherford,
      NJ

              
	
                No.:
      [___________]

              	
                June
      26, 2009

              

      

      
 

    

    FOR VALUE RECEIVED, the
undersigned, AXS-ONE INC., a Delaware corporation (the “Company”), hereby
promises to pay to the order of [______________] or any future holder of
this promissory note (the “Payee”), at the
principal office of the Payee set forth herein, or at such other place as the
holder may designate in writing to the Company, the principal sum of the lesser
of (i) [______________] Dollars (US$[_________]) (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

        
          

        

      

      
        
        

      

    

     

    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.

     

    “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.

     

    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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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;

     

    (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.

     

    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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (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.

     

    (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

     

    (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).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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.

     

    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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    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.

    

    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.

    

    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.]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    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]

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    

    
      	
              Amount of Advance

            	
              Date of Advance

            	
              Outstanding Principal
    Balance

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    

    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:

    

    

    

    

    
      
        
        

      

      
        9

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