Contract
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.
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(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.
000 Xxxxx
00 Xxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
Attention:
Chief Financial Officer
Facsimile
No.: (000) 000-0000
with a
copy (which
shall
Xxxxxx and Xxxx LLP
not
constitute notice)
to:
000 Xxxxxxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
Attention: Xxxxxxx
Xxxxxxx
Facsimile
No.: (000) 000-0000
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
