Secured Convertible Promissory Note – Accrue Software

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. EXCEPT IN COMPLIANCE WITH RULE 144 PROMULGATED UNDER THE
SECURITIES ACT OF 1933 OR ANY OTHER AVAILABLE EXEMPTION FROM REGISTRATION, NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

SECURED CONVERTIBLE PROMISSORY NOTE

$250,000.00

May 19, 2003

Fremont, California

For value received, Accrue Software, Inc., a Delaware
corporation (the “Company“), promises to pay to Red Fox Investment
Partners, LLC (the “Holder“), the principal sum of Two Hundred Fifty
Thousand and 00/100 Dollars ($250,000.00). Interest shall accrue from the date
of this Note on the unpaid principal amount at a rate equal to 6.0% per annum,
compounded annually. This Note is one of a series of Secured Convertible
Promissory Notes containing substantially identical terms and conditions issued
pursuant to that certain Secured Convertible Promissory Note Purchase Agreement
dated February 4, 2003 (the “Purchase Agreement“). Such Notes are
referred to herein as the “Notes,” and the holders thereof are referred
to herein as the “Holders.” All other capitalized terms not defined
herein shall have the meanings ascribed to such terms in the Purchase Agreement.
This Note is subject to the following terms and conditions.

1. Maturity. Unless converted as
provided in Section 2, this Note will automatically mature and be due and
payable on May 9, 2006 (the “Maturity Date“). Subject to Section 2 below,
interest shall accrue on this Note but shall not be due and payable until the
Maturity Date. Notwithstanding the foregoing, the entire unpaid principal sum of
this Note, together with accrued and unpaid interest thereon, shall become
immediately due and payable upon the occurrence of any Event of Default (as
defined herein).

2. Conversion. The Notes shall be
converted into equity securities of the Company (each a “Conversion“)
upon the terms and conditions set forth below:

(a) Optional Conversion. Upon the
written request of the Holders of a majority of the outstanding principal amount
of the Notes (the “Majority Holders“), the entire principal amount of and
(if requested by the Majority Holders) accrued interest on this and all other
Notes shall be converted at the option of the Majority Holders either into
shares of the Company’s Common Stock or, in the event that there is a series of
Preferred Stock of the Company issued or proposed to be issued, into the most
senior series of such Preferred Stock. If the Majority Holders, as the case may
be, elect to convert accrued interest into equity securities upon a Conversion,
this election shall apply equally to all of the Notes.

(b) Automatic Conversion. In the
event that the closing bid or sales prices (whichever is applicable) of the
Company’s Common Stock is at least $0.20 per share (as adjusted for stock
splits, stock dividends, recapitalizations and like transactions) for a period
of 60 consecutive trading days, the entire principal amount of and accrued
interest on this and all other Notes shall automatically be converted (an
“Automatic Conversion“) into shares of the Company’s Common Stock. The
Company shall promptly thereafter provide the Holder written notice of the
terms, effect and mechanics of such Automatic Conversion.

(c) Conversion Price. The number of
shares of Common Stock or Preferred Stock, as applicable, to be issued upon a
Conversion shall be equal to the quotient obtained by dividing (i) the entire
principal amount of this Note plus (as applicable) accrued interest by (ii)
$0.06 (as adjusted pursuant to Section 2(d)) (the “Conversion Price“),
rounded to the nearest whole share.

(d) Conversion Price Adjustments. The Conversion
Price shall be subject to adjustment from time to time as follows:

(i) Issuance of Additional Stock below Purchase
Price. If the Company should issue, at any time after the date on
which the first Note was sold (the “Purchase Date“), any Additional Stock
(as defined below) without consideration or for a consideration per share less
than the Conversion Price in effect immediately prior to the issuance of such
Additional Stock, the Conversion Price in effect immediately prior to each such
issuance shall automatically be adjusted as set forth in this Section 2(d),
unless otherwise provided in this Section 2(d).

(A) Price Adjustment Formula. Whenever the Conversion
Price is adjusted pursuant to this Section 2(d), the Conversion Price shall be
adjusted to a price equal to the price paid per share for such Additional Stock.

(B) Definition of “Additional Stock”. For purposes of
this Section 2(d), “Additional Stock” shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to Section 2(d)(D) by the
Company after the Purchase Date) other than

(1) Common Stock issued pursuant to stock dividends, stock splits or similar
transactions;

(2) Shares of Common Stock issued or issuable to employees, consultants or
directors of the Company pursuant to a stock option plan or restricted stock
plan or incentive arrangement approved by the Board of Directors of the Company;

(3) Capital stock, or options or warrants to purchase capital stock, issued
to financial institutions or lessors in connection with commercial credit
arrangements, equipment financings, commercial property lease transactions or
similar transactions approved by the Board of Directors where the principal
purpose thereof is not to raise additional equity capital for the Company;

(4) Capital stock, or warrants or options to purchase capital stock, issued
in connection with bona fide acquisitions, mergers or similar transactions, the
terms of which are approved by the Board of Directors of the Company;

(5) Shares of Common Stock issued or issuable upon conversion of the
Preferred Stock of the Company; and

(6) Capital stock issued or issuable to an entity as a component of any
business relationship with such entity for the purpose of (A) joint venture,
technology licensing or development activities, (B) distribution, supply or
manufacture of the Company’s products or services or (C) any other arrangements
involving corporate partners that are primarily for purposes other than raising
capital, the terms of which business relationship with such entity are approved
by the Board of Directors.

(C) Determination of Consideration. In the case of
the issuance of Common Stock for cash, the consideration shall be deemed to be
the amount of cash paid therefor before deducting any reasonable discounts,
commissions or other expenses allowed, paid or incurred by the Company for any
underwriting or otherwise in connection with the issuance and sale thereof. In
the case of the issuance of the Common Stock for a consideration in whole or in
part other than cash, the consideration other than cash shall be deemed to be
the fair value thereof as determined by the Board of Directors.

(D) Deemed Issuances of Common Stock. In the case of
the issuance after the Purchase Date of securities or rights convertible into,
or entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (the “Common Stock Equivalents“), the following
provisions shall apply for all purposes of this Section 2(d):

(1) The aggregate maximum number of shares of Common Stock deliverable upon
conversion, exchange or exercise (assuming the satisfaction of any conditions to
convertibility, exchangeability or exercisability, including, without
limitation, the passage of time, but without taking into account potential
antidilution adjustments) of any Common Stock Equivalents and subsequent
conversion, exchange or exercise thereof shall be deemed to have been issued at
the time such securities were issued or such Common Stock Equivalents were
issued and for a consideration equal to the consideration, if any, received by
the Company for any such securities and related Common Stock Equivalents
(excluding any cash received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if any, to be received by
the Company (without taking into account potential antidilution adjustments)
upon the conversion, exchange or exercise of any Common Stock Equivalents (the
consideration in each case to be determined in the manner provided in Section
2(d)(i)(C).

(2) In the event of any change in the number of shares of Common Stock
deliverable or in the consideration payable to the Company upon conversion,
exchange or exercise of any Common Stock Equivalents including, but not limited
to, a change resulting from the antidilution provisions thereof, the Conversion
Price, to the extent in any way affected by or computed using such Common Stock
Equivalents, shall be recomputed to reflect such change, but no further
adjustment shall be made for the actual issuance of Common Stock or any payment
of such consideration upon the conversion, exchange or exercise of such Common
Stock Equivalents.

(3) Upon the termination or expiration of the convertibility, exchangeability
or exercisability of any Common Stock Equivalents, the Conversion Price, to the
extent in any way affected by or computed using such Common Stock Equivalents,
shall be recomputed to reflect the issuance of only the number of shares of
Common Stock (and Common Stock Equivalents that remain convertible, exchangeable
or exercisable) actually issued upon the conversion, exchange or exercise of
such Common Stock Equivalents.

(4) The number of shares of Common Stock deemed issued and the consideration
deemed paid therefor pursuant to Section 2(d)(i)(D)(1) shall be appropriately
adjusted to reflect any change, termination or expiration of the type described
in either Section 2(d)(i)(D)(2) or 2(d)(i)(D)(3).

(E) Limits on Conversion Price Adjustments.
Notwithstanding any other provisions of this Section (2)(d)(i), no adjustment of
the Conversion Price pursuant to this Section 2(d)(i) shall (1) except to the
limited extent provided for in Sections 2(d)(i)(D)(2) and 2(d)(i)(D)(3), have
the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment, and (2) have the effect of
decreasing the Conversion Price below the fair market value of the Company’s
Common Stock as of the Closing (as defined in the Purchase Agreement)(as
adjusted for stock splits, stock dividends, recapitalizations and like
transactions).

(ii) Stock Splits and Dividends. In the event the
Company should at any time after the Purchase Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or Common
Stock Equivalents without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise thereof),
then, as of such record date (or the date of such dividend distribution, split
or subdivision if no record date is fixed), the Conversion Price shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of this Note shall be increased in proportion to such increase in
outstanding shares of Common Stock and Common Stock Equivalents.

(iii) Reverse Stock Splits. If the number of shares
of Common Stock outstanding at any time after the Purchase Date is decreased by
a combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price shall be appropriately
increased so that the number of shares of Common Stock issuable on conversion of
this Note shall be decreased in proportion to such decrease in outstanding
shares.

(e) Mechanics and Effect of
Conversion. No fractional shares of the Company’s capital stock
will be issued upon conversion of this Note. In lieu of any fractional share to
which the Holder would otherwise be entitled, the Company will pay to the Holder
in cash the amount of the unconverted principal and interest balance of this
Note that would otherwise be converted into such fractional share. Upon
conversion of this Note pursuant to this Section 2, the Holder shall surrender
this Note, duly endorsed, at the principal offices of the Company or any
transfer agent of the Company. At its expense, the Company will, as soon as
practicable thereafter, issue and deliver to such Holder, at such principal
office, a certificate or certificates for the number of shares to which such
Holder is entitled upon such conversion, together with any other securities and
property to which the Holder is entitled upon such conversion under the terms of
this Note, including a check payable to the Holder for any cash amounts payable
as described herein. Upon conversion of this Note, the Company will be forever
released from all of its obligations and liabilities under this Note with regard
to that portion of the principal amount and accrued interest being converted
including without limitation the obligation to pay such portion of the principal
amount and accrued interest.

(f) Payment of Interest. Upon
conversion of the principal amount of this Note into the Company’s equity
securities, any interest accrued on this Note that is not by reason of Section
2(a) or 2(b) hereof simultaneously converted into equity securities shall be
immediately paid to the Holder.

(g) Regulatory Compliance. Notwithstanding the
foregoing, in the event that the Company’s Common Stock is listed on the Nasdaq
Stock Market or another national securities exchange (or a listing application
is pending with any such exchange), a Conversion of this Note (or a conversion
into Common Stock of Preferred Stock issued pursuant to a Conversion of this
Note) shall only be effective to the maximum extent permissible under the
applicable rules and regulations of such an exchange without the approval of the
transaction by the Company’s stockholders. In the event such stockholder
approval is required to give full effect to the Conversion of this Note, the
maximum amount of principal and accrued interest (or the maximum number of
shares of convertible Preferred Stock) that is permissible to be converted
without the approval of the Company’s stockholders shall be converted as
otherwise provided herein and the Company shall promptly seek to obtain the
stockholder approval necessary to give full effect to the Conversion.

3. Payment.

(a) Payment. Except as
expressly contemplated herein, all payments shall be made in lawful money of the
United States of America at such place as the Holder hereof may from time to
time designate in writing to the Company. Payment shall be credited first to the
accrued interest then due and payable and the remainder applied to principal.

(b) Mandatory Prepayment on
Liquidation. If a Liquidation Event (as defined below) is
consummated prior to the Maturity Date or a Conversion, the Company shall pay
the Holder an amount (the “Liquidation Amount“) equal to 150% of the
principal amount of this Note, plus accrued interest. The Liquidation Amount
shall be paid in cash unless the Majority Holders consent in writing to the
payment of all or any portion of the Liquidation Amount in consideration other
than cash. The value of any such consideration other than cash shall be deemed
to be the fair value thereof as determined by the Board of Directors
irrespective of any accounting treatment. Upon payment of the Liquidation
Amount, the Company will be forever released from all of its obligations and
liabilities under this Note. For purposes of this Note, a “Liquidation
Event” shall mean (i) a sale of all or substantially all of the assets or
business of the Company whether by merger, sale of assets, sale of stock or
otherwise, (ii) any reorganization, consolidation or merger of the Company where
the outstanding voting securities of the Company immediately before the
transaction represent or are converted into less than 50% of the outstanding
voting power of the surviving entity (or its parent entity) immediately after
the transaction, (iii) a sale or exchange of the Company’s capital stock by the
stockholders of the Company in one transaction or a series of related
transactions where more than 50% of the outstanding voting power of the Company
is acquired by a person or entity or group of related persons or entities, or
(iv) any liquidation or dissolution of the Company, whether by bankruptcy, a
general assignment for the benefit of creditors, receivership or otherwise.

(c) Notices of Certain Transactions.
In case of any consolidation or merger of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company (a “Change
of Control“), the Company will mail or cause to be mailed to the Holder a
notice specifying the effective date on which such consolidation, merger or
transfer, and the time, if any is to be fixed, as of which the holders of record
of Common Stock are to be determined. Such notice shall be mailed at least
twenty (20) days prior to the record date or effective date for the event
specified in such notice. In the event that the Majority Holders submit a
written request for Conversion in connection with a Change of Control (a
“Change of Control Conversion Request“), such Change of Control
Conversion Request will be conditioned on, and will be effected immediately
prior to, the occurrence of such Change of Control. At such time, the respective
Holders of the Notes shall be deemed to have become the respective holders of
record of the capital stock of the Company issued pursuant to the Conversion.

4. Events of Default.

(a) Definition. The occurrence of any of the
following shall constitute an “Event of Default” under this Note:

(i) Failure to Pay. The Company’s
failure to pay any principal or interest or any other amount required to be paid
by it under the terms of this Note on the date due, and such failure shall
continue for five (5) business days after the Holder has given written notice of
such default to the Company;

(ii) Failure to Comply With
Covenants. The Company’s failure to perform or observe any other
material covenant or agreement contained in any Note or the Purchase Agreement,
and such failure shall continue for fifteen (15) business days after the Holder
has given written notice of such failure to the Company (provided, however, that
no notice from the Holder shall be required to commence the 15 business day cure
period if the Company has knowledge of failure to perform or observe any such
material covenant or agreement and has not complied with Section 4(b) hereof);

(iii) Voluntary Bankruptcy or Insolvency
Proceedings. The Company’s (A) applying for or consenting
to the appointment of a receiver, trustee, liquidator or custodian of itself or
of all or a substantial part of its property, (B) making a general assignment
for the benefit of all or any of its creditors, (C) commencing dissolution or
liquidation proceedings, (D) commencing any voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consenting to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other
proceeding commenced against it, or (E) taking any action for the purpose of
effecting any of the foregoing; or

(iv) Involuntary Bankruptcy or Insolvency
Proceedings. Commencement of any proceedings for the appointment of
a receiver, trustee, liquidator or custodian of Company or of all or a
substantial part of the property thereof, or an involuntary case or other
proceedings seeking liquidation, reorganization or other relief with respect to
the Company or the debts thereof under any bankruptcy, insolvency or other
similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
thirty (30) days of commencement.

(v) Default on Other Obligations. The occurrence of a
default or event of default in any agreement between the Company and a third
party that gives the third party the right to accelerate any indebtedness
exceeding $500,000 or more or that could have a Material Adverse Effect (as
defined in the Purchase Agreement) on the Company; and such failure shall
continue for fifteen (15) business days after written notice of such default to
the Company.

(vi) Failure to Obtain Stockholder Approval. The
Company does not receive the requisite approval of its stockholders pursuant to
Section 2(g) hereof within 120 days of written request to obtain such approval
from the Majority Holders.

(b) Notice. The Company shall, as
promptly as possible and in any event within three (3) business days of the
occurrence thereof, notify the Holder of the occurrence of an Event of Default
(i.e. upon the occurrence of one of the events described in Section 4(a) above
without giving effect to the cure periods or notices required under clauses (i),
(ii) and (v) thereof).

(c) Remedies. Upon the occurrence of
any Event of Default, the Majority Holders, at their option, may (i) by notice
to the Company, declare the unpaid principal amount of this Note, all interest
accrued and unpaid hereon and all other amounts payable hereunder to be
immediately due and payable, whereupon the unpaid principal amount of this Note,
all such interest and all such other amounts shall become immediately due and
payable, without presentment, demand, protest or further notice of any kind,
provided that if an event described in Section 4(a)(iii) or (iv) shall occur,
all interest and all such other amounts shall become immediately due and payable
automatically, without the giving of any such notice; and (ii) whether or not
the actions referred to in clause (i) have been taken, exercise any or all of
the Holders’ rights and remedies under the Purchase Agreement and proceed to
enforce all other rights and remedies available to the Holders under applicable
law.

5. Transfer; Successors and Assigns.
The terms and conditions of this Note shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties.
Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise
transfer this Note without the prior written consent of the Company, which
consent shall not be unreasonably withheld. Subject to the preceding sentence,
this Note may be transferred only upon surrender of the original Note for
registration of transfer, duly endorsed, or accompanied by a duly executed
written instrument of transfer in form satisfactory to the Company. Thereupon, a
new note for the same principal amount and interest will be issued to, and
registered in the name of, the transferee. Interest and principal are payable
only to the registered holder of this Note.

6. Governing Law. This Note and all
acts and transactions pursuant hereto and the rights and obligations of the
parties hereto shall be governed, construed and interpreted in accordance with
the laws of the State of California, without giving effect to principles of
conflicts of law.

7. Notices. Any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon receipt, when delivered personally or by courier, overnight delivery
service or confirmed facsimile, or 48 hours after being deposited in the U.S.
mail as certified or registered mail with postage prepaid, if such notice is
addressed to the party to be notified at such party’s address or facsimile
number as set forth below or as subsequently modified by written notice.

8. Amendments and Waivers. Any term
of this Note may be amended only with the written consent of the Company and the
Majority Holders. Any amendment or waiver effected in accordance with this
Section 8 shall be binding upon the Company, each Holder and each transferee of
any Note.

9. Stockholders, Officers and Directors Not
Liable. In no event shall any stockholder, officer or director of
the Company be liable for any amounts due or payable pursuant to this Note.

10. Seniority. The indebtedness
evidenced by this Note is hereby expressly senior in right of payment to the
prior payment of all other indebtedness of the Company other than Permitted
Senior Indebtedness (as defined in the Purchase Agreement), and the Company
shall not be permitted to incur secured indebtedness which is senior in right of
payment to the Notes other than Permitted Senior Indebtedness while this Note is
outstanding.

11. Subordination. The indebtedness
evidenced by this Note is hereby expressly subordinated, to the extent and in
the manner hereinafter set forth, in right of payment to the prior payment in
full of all of the Company’s Permitted Senior Indebtedness. Upon any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization, or arrangement which creditors (whether or not pursuant to
bankruptcy or other insolvency laws), sale of all or substantially all of the
assets, dissolution, liquidation, or any other marshaling of the assets and
liabilities of the Company or in the event this Note shall be declared due and
payable, (i) no amount shall be paid by the Company, whether in cash or property
in respect of the principal of or interest on this Note at the time outstanding,
unless and until the full amount of any Permitted Senior Indebtedness then
outstanding shall be paid in full (but only to the extent of the value of the
collateral securing any such Permitted Senior Indebtedness), and (ii) no claim
or proof of claim shall be filed with the Company by or on behalf of the holder
of this Note which shall assert any right to receive any payments in respect of
the principal of and interest on this Note except subject to the payment in full
all of the Permitted Senior Indebtedness then outstanding (but only to the
extent of the value of the collateral securing any such Permitted Senior
Indebtedness).

Nothing contained in the preceding paragraphs shall impair,
as between the Company and the Holder, the obligation of the Company, which is
absolute and unconditional, to pay to the Holder hereof the principal hereof and
interest hereon as and when the same shall become due and payable, or shall
prevent the Holder, upon default hereunder, from exercising all rights, powers
and remedies otherwise provided herein or by applicable law, all subject to the
rights, if any, of the holders of Permitted Senior Indebtedness under the
preceding paragraphs to receive cash or other properties otherwise payable or
deliverable to the Holder pursuant to this Note.

At any time and from time to time, upon the written request
of the Company, the Holders will promptly and duly authenticate and deliver such
instruments and documents and take such further action as the Company may
reasonably request to give effect to the purpose and intent of this Section 11,
including without limitation to permit the creation of Permitted Liens (as
defined in the Purchase Agreement).

12. Security Interest. The Company hereby grants to
the Holder a first priority security interest (subject to Permitted Liens
created to secure Senior Permitted Indebtedness) in all assets and property now
or hereafter owned or held by the Company, including without limitation:
accounts, inventory, goods, equipment, fixtures, general intangibles (including
goodwill and all intellectual property, including without limitation patents,
patent applications, copyrights, trademarks and trade names), contract rights,
royalties, documents, cash, securities, letters of credit, certificates of
deposit, notes, instruments, chattel paper, deposit accounts, other financial
assets, claims (whether by litigation, settlement, payment through insurance or
otherwise, and including claims of past, present and future infringement) and
all proceeds of the foregoing (the “Collateral“). In addition, the
Company hereby appoints Holder as its attorney-in-fact for the purpose of
signing and filing any uniform commercial code financial statements or other
documents considered necessary or appropriate by Holder to perfect or enhance
the foregoing grant of Holder’s security interest, or deliver any notices
required thereunder.

13. Usury. Anything herein to the contrary
notwithstanding, if during any period for which interest is computed hereunder,
the amount of interest computed on the basis provided for in this Note, together
with all fees, charges and other payments which are treated as interest under
applicable law, as provided for herein or in any other document executed in
connection herewith, would exceed the amount of such interest computed on the
basis of the Highest Lawful Rate, the Company shall not be obligated to pay, and
the Holder shall not be entitled to charge, collect, receive, reserve or take,
interest in excess of the Highest Lawful Rate, and during any such period the
interest payable hereunder shall be computed on the basis of the Highest Lawful
Rate. As used herein, “Highest Lawful Rate” means the maximum
non-usurious rate of interest, as in effect from time to time, which may be
charged, contracted for, reserved, received or collected by the Holder in
connection with this Note under applicable law.

14. Expenses. The Company agrees to pay on demand all
the losses, costs, and expenses (including, without limitation, attorneys’ fees
and disbursements) which the Holder incurs in connection with enforcement or
attempted enforcement of this Note, or the protection or preservation of the
Holder’s rights under this Note, whether by judicial proceedings or otherwise.
Such costs and expenses include, without limitation, those incurred in
connection with any workout or refinancing, or any bankruptcy, insolvency,
liquidation or similar proceedings.

15. Waivers. The Company hereby waives diligence,
demand, presentment, protest or further notice of any kind. The Company agrees
to make all payments under this Note without setoff or deduction and regardless
of any counterclaim or defense. No single or partial exercise of any power under
this Note shall preclude any other or further exercise of such power or exercise
of any other power. No delay or omission on the part of the Holder in exercising
any right under this Note shall operate as a waiver of such right or any other
right hereunder.

16. Counterparts. This Note may be executed in any
number of counterparts, each of which will be deemed to be an original and all
of which together will constitute a single agreement.

17. Loss of Note. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Note or any Note exchanged for it, and indemnity satisfactory
to the Company (in case of loss, theft or destruction) or surrender and
cancellation of such Note (in the case of mutilation), the Company will make and
deliver in lieu of such Note a new Note of like tenor.

	COMPANY:
	ACCRUE SOFTWARE, INC.
	By:/s/ ACCRUE SOFTWARE, INC.
	Name:
	(print)
	Title:
	Address: 48634 Milmont Drive Fremont, CA 94538-7353
	Facsimile: (510) 580-4501

AGREED TO AND ACCEPTED:

Red Fox Investment Partners, LLC

By: /s/ Robert M. Smelick
Name: Robert M. Smelick
(print)
Title: Managing Partner

Address: 65 Cloudview Road, Sausalito, CA 94965

Facsimile: (415) 289-2541