CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

Exhibit 10.1

CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT

by and among

AXS-One Inc.

and

the parties named herein on Schedule 1, as Purchasers

July 24, 2008

     This CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT (this “ Agreement ”) is dated as of July 24, 2008, 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 (i) an aggregate original principal amount of $2,100,000 of Series D 6% Secured Convertible Promissory Notes (the “ Series D Notes ”) and (ii) Common Stock Purchase Warrants (the “ Warrants ”) entitling the holders thereof to purchase an aggregate of 4,200,000 shares of the Company’s Common Stock 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 AND WARRANTS

      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:

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

     “ 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 will 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.

     “ Applicable Investor ” shall have the meaning ascribed to such term in Section 4.7.

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

     “ Common Stock Equivalents ” means any securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

     “ 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(k).

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

     “ Conversion Shares ” means the shares of Common Stock issuable upon conversion of the Series D Notes.

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

     “ 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(h)(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 Security Agreement.

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

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

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

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

     “ Investor Rights Agreement ” means the Investor Rights Agreement between the Company and each of the Purchasers, in the form of Exhibit A hereto.

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

     “ 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(f)(i).

     “ 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.

     “ 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 and the Series C Secured Convertible Promissory Notes issued pursuant to the November 2007 Purchase Agreement.

     “ Prior Purchase Agreements ” means the May 2007 Purchase Agreement and the November 2007 Purchase Agreement.

     “ Prior Purchaser ” means a purchaser pursuant to the Prior Purchase Agreements or either of them.

     “ 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(h)(i).

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

     “ Securities ” means the Series D Notes, the Conversion Shares, the Warrants and the Warrant Shares.

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

     “ Security Agreement ” means the Security Agreement dated as of May 29, 2007, among the Company and certain purchasers of secured convertible promissory notes of the Company as set forth therein, as amended pursuant to the First Security Agreement Amendment and the Second Security Agreement Amendment.

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

     “ Subordination Agreement ” means the 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 and in immediately available funds.

     “ 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.

     “ Trading Day ” means (i) a day on which the Common Stock is traded on a Trading Market, or (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: the American Stock Exchange, the New York Stock Exchange, the Nasdaq Global Market or the Nasdaq Capital Market.

     “ Transaction Documents ” means this Agreement, the Series D Notes, the Security Agreement as amended by the First Security Agreement Amendment and the Second Security Agreement Amendment, the Investor Rights Agreement, the Warrants, the Subordination Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

     “ Warrants ” shall have the meaning ascribed to such term in the recitals hereto.

     “ Warrant Shares ” means the shares of Common Stock issuable upon exercise of the Warrants.

      1.2 Terms of the Series D Notes and Warrants . The terms and provisions of the Series D Notes are set forth in the form of Series D 6% Secured Convertible Promissory Note, attached hereto as Exhibit D. The terms and provisions of the Warrants are more fully set forth in the form of Warrant, attached hereto as Exhibit E .

ARTICLE II

PURCHASE AND SALE

      2.1 Closing .

     (a) The closing of the transactions contemplated under this Agreement (the “ Closing ”) will 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, (i) an aggregate original principal amount of $2,100,000 of Series D Notes and (ii) Warrants to purchase 4,200,000 shares of Common Stock. Each Purchaser shall purchase from the Company, and the Company shall issue and sell to each Purchaser, an amount of Series D Notes in such aggregate principal amount and a Warrant to purchase such number of Warrant Shares, in each case, as is set forth next to such Purchaser’s name on Schedule 1 .

      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 D Note for such Purchaser in the principal amount that is set forth on Schedule 1 hereto next to such Purchaser’s name;

          (iii) an original Warrant, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire up to the number of shares of Common Stock, as set forth next to such Purchaser’s name on Schedule 1 hereto;

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

          (v) the Second 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 F hereto;

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

          (viii) a certificate of the Secretary of the Company (the “ Secretary’s Certificate ”), 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 and joinder agreement 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 agree that, effective upon the execution of this Agreement by the Company and the Purchasers, Section 4.7 of the November 2007 Purchase Agreement and the preemptive rights set forth therein shall be terminated and that Section 4.7 of this Agreement shall be made applicable to such Prior Purchasers by their joinder hereto for such purpose; 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).

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

          (iv) the Second Security Agreement Amendment, duly executed by such Purchaser; and

          (v) 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 Second 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; and

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

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 40,533,925 shares of Common Stock were outstanding 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, including without limitation the Conversion Shares and the Warrant Shares, in each case, 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 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, 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)  Issuance of Securities . The Series D Notes and Warrants are duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and non-assessable. The Conversion Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with the Transaction Documents, shall be duly and validly issued, fully paid and non-assessable. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable upon conversion of the Series D Notes and exercise of the Warrants.

     (d)  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 (including, without limitation, any Common Stock or warrants of similar tenor to the Warrants) to any Person under circumstances that would cause the issuance and sale of the Securities, 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 Securities 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 Securities subject to the registration requirements of Section 5 of the Securities Act.

     (e)  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.

     (f)  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 SEC 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).

     (g)  Compliance . Except as set forth in the SEC Documents or in Schedule 3.1(g) , 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.

     (h)  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, 2007, and (B) the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008; (C) the Company’s definitive Proxy Statement with respect to its 2008 Annual Meeting of Stockholders, filed with the Commission on April 9, 2008; and (D) the Company’s Current Reports on Form 8-K filed January 14, 2008, January 17, 2008, February 13, 2008, March 24, 2008, April 30, 2008, May 6, 2008 and May 28, 2008.

          (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 SEC 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, 2007, includes consolidated balance sheets as of December 31, 2006 and 2007 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.

     (i)  Litigation . Except as set forth in the SEC Documents or in Schedule 3.1(i) , there are no claims, actions, suits, investigations, inquiries or proceedings (each, an “ Action ”) 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(i) , 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.

     (j)  Absence of Certain Changes . Except as specifically contemplated by this Agreement or as set forth in Schedule 3.1(j) or in the SEC Documents, since December 31, 2007, 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.

     (k)  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.

     (l)  No Adverse Actions . Except as set forth in the SEC Documents or in Schedule 3.1(l) , there is no existing, pending or, to the knowledge of the Company, threatened termination, cancellation, limitation