**Exhibit99.1**

** **

**AMENDMENTNO. 12 TO**

**LOAN AND SECURITY AGREEMENT**

 

AMENDMENT NO. 12, datedas of August 8, 2002, to the LOAN AND SECURITY AGREEMENT, dated as ofMarch 31, 1998 (the ”Loan and Security Agreement”), betweenFOOTHILL CAPITAL CORPORATION, a California corporation, with a place ofbusiness located at 2450 Colorado Avenue, Suite 3000W, Santa Monica, California90404 (“Foothill”), and AXS-ONE INC. (formerly known as COMPUTRONSOFTWARE, INC.), a Delaware corporation, with its chief executive offices locatedat 301 Route 17 North, Rutherford, New Jersey 07070 (the ”Borrower”).

 

Preamble

 

The Borrower hasrequested Foothill to amend the Loan and Security Agreement to increase theamount of the Term Loan.  Accordingly,the Borrower and Foothill hereby agree as follows:

 

1.             Definitions. All terms used herein which are defined in the Loan and SecurityAgreement and not otherwise defined herein are used herein as defined therein.

 

2.             Term Loan. Section 2.3 of the Loan and Security Agreement is hereby amended inits entirety to read as follows:

 

“**2.3        Term Loan.**  (a)  Onthe Closing Date, Foothill made a term loan(the “Initial A Term Loan”) to the Borrower in the original principal amount ofup to $5,000,000.  On December 22,1999, Foothill made available a second term loan (the “Additional A Term Loan”and together with the Initial A Term Loan, the “A Term Loan”) to the Borrowerin the original principal amount of up to $1,300,000.  The outstanding principal amount of the A Term Loan on July 12,2002 is $0.

 

(b)           OnDecember 22, 1999, Foothill made available a new term loan(the ”Initial B Term Loan”) to the Borrower in the original principalamount of up to $750,000.  OnMarch 16, 2001, Foothill made available an additional term loan(the ”First Additional B Term Loan”) to the Borrower in the originalprincipal amount of up to $2,000,000. On June 29, 2001, Foothill made available an additional term loan(the ”Second Additional B Term Loan”) to the Borrower in the originalprincipal amount of up to $500,000.  Theoutstanding aggregate principal amount of the B Term Loan, the First AdditionalB Term Loan and the Second Additional B Term Loan on August 8, 2002 is$1,947,222.20.  On and after August 8,2002 and prior to March 31, 2004, if each of the financial covenants inSection 7.20 of the Loan and Security Agreement have been achieved and noEvent of Default has occurred and is continuing, Foothill will make availablean additional term loan (the ”Third Additional B Term Loan”, and togetherwith the Initial B Term Loan, the First Additional B Term Loan and the SecondAdditional B Term Loan, the ”B Term Loan”; the B Term Loan togetherwith the A Term

 

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Loan,each a “Term Loan” and collectively, the ”Term Loans”) in the originalprincipal amount of up to $1,500,000.

 

(c)           TheThird Additional B Term Loan shall be made upon the Borrower’s request(pursuant to the terms of Section 2.9), at any time, and from time totime, on or after August 8, 2002 but before March 31, 2004.  Each request for a borrowing under the TermLoan must specify (i) the amount of the requested Term Loan, which must bein a minimum amount of $250,000 and (ii) the requested funding date of theTerm Loan.

 

(d)           Theaggregate outstanding principal amount of the Term Loans shall be repaid inmonthly installments of $150,000 over the remaining term of the Loan andSecurity Agreement.  Each suchinstallment shall be due and payable on the first day of each month commencingon September 1, 2002 and continuing on the first day of each succeeding monthuntil and including the date on which the aggregate unpaid principal balance ofthe Term Loans is paid in full.  The outstanding principal balance and all accruedand unpaid interest under the Term Loans shall be due and payable upon thetermination of this Agreement, whether by its terms on March 31, 2004, byprepayment, by acceleration, or otherwise. Except upon the termination of this Agreement and as provided inparagraph (e) below, the unpaid principal balance of the Term Loans may not beprepaid in whole or in part.  Allamounts outstanding under the Term Loans shall constitute Obligations.

 

(e)           Notwithstandinganything herein to the contrary, if the aggregate outstanding principal amountof the Term Loans exceeds the lesser of (i) (A) from and after August8, 2002 until and including December 31, 2002, an amount equal to 40% ofEligible Recurring Maintenance Revenue at such time and (B) from and afterJanuary 1, 2003 until and including March 31, 2004, an amount equalto 25% of Eligible Recurring Maintenance Revenue at such time and(ii) $4,500,000, then the Borrower shall prepay the principal amount ofthe Term Loans in an amount sufficient to cause the aggregate principal amountof the Term Loans to be less than or equal to the relevant amounts set forth inclauses (i) and (ii) above.  All suchprepaid amounts shall be applied to the installments due on the Term Loan inthe inverse order of their maturity; provided that if the aggregateprincipal amount of the Term Loans outstanding prior to giving effect to suchprepayment is less than $4,500,000 then such prepaid amounts shall be appliedto the installments due on the Term Loans in the order of their maturity.”

 

3.             Fees. Sections 2.11(h) and (i) of the Loan and Security Agreement are herebyamended in their entirety as follows:

 

“(h)         Additional B Term Loan Drawing Fee.  On the date of each borrowing of the B TermLoan on or after August 8, 2002, a fee in an amount equal to 2% of theprincipal amount of the B Term Loan borrowed on such date shall be paid by theBorrower.

 

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(i)            Amendment Fee.  An amendment fee in an amount equal to$10,000 shall be paid by the Borrower on the date of the execution of AmendmentNo. 12 to this Agreement.”

 

4.             Financial Covenants.  Section 7.20 of the Loan and Security Agreement is herebyamended to read in its entirety as follows:

 

“EBITDA.  Failure to maintain EBITDA of at least thefollowing amounts, measured on a cumulative basis for the period from thebeginning of each calendar year to each calendar quarter end of such calendaryear as set forth below:

 
| **Quarter End** |   | **EBITDA** |      |
|-----------------|--------|------------|-----------|
| 3/31/02         |   | $          | (400,000  | **)** |
| 6/30/02         |   | $          | (350,000  | **)** |
| 9/30/02         |   | $          | 1,350,000 | ** ** |
| 12/31/02        |   | $          | 1,350,000 | ** ** |

 

provided that,thereafter, upon receipt of the financial projections required to be deliveredto Foothill pursuant to Section 6.3 (fourth paragraph) hereof for eachfiscal year, the Borrower and Foothill shall negotiate in good faith todetermine the minimum EBITDA as of the end of each calendar quarter covered bysuch financial projections and, in the event that the Borrower and Foothill areunable to agree upon the amounts of such EBITDA on or before the date that is30 days after the date that Foothill has received such projections, the EBITDAat the end of each calendar quarter of the fiscal year covered by suchfinancial projections shall not be less than the greater of (i) 70% of theEBITDA contained in such financial projections and (ii) the amount setforth above for the corresponding calendar quarter end plus 10% of suchamount.”

 

5.             Conditions Precedent.  This Amendment shall become effective only upon satisfaction infull of the following conditions precedent (the date upon which all suchconditions have been satisfied being herein called the “Effective Date”):

 

(a)           The representations and warrantiescontained in this Amendment and in Section 5 of the Loan and SecurityAgreement and each other Loan Document, after giving effect to this Amendment,shall be correct on and as of the Effective Date as though made on and as ofsuch date (except where such representations and warranties relate to anearlier date in which case such representations and warranties shall be trueand correct as of such earlier date); no Default or Event of Default shall haveoccurred and be continuing on the Effective Date or result from this Amendmentbecoming effective in accordance with its terms;

 

(b)           Foothill shall have received acounterpart of this Amendment, duly executed by the Borrower;

 

(c)           Foothill shall have received, whichmay be as a result of a change to the Loan Account, the Amendment Fee detailedin Section 2.11(i) of the Loan and Security Agreement; and

 

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(d)           All legal matters incident to thisAmendment shall be satisfactory to Foothill and its counsel.

 

6.             Representations and Warranties.  The Borrower hereby represents and warrantsto Foothill as follows:

 

(a)           The Borrower (i) is a corporationduly organized, validly existing and in good standing under the laws of theState of Delaware and (ii) has all requisite corporate power, authority andlegal right to execute, deliver and perform this Amendment, and to perform theLoan and Security Agreement, as amended hereby.

 

(b)           The execution, delivery andperformance of this Amendment by the Borrower, and the performance by theBorrower of the Loan and Security Agreement, as amended hereby (i) have beenduly authorized by all necessary corporate action, (ii) do not and will notcontravene its charter or by-laws or any applicable law, and (iii) exceptas provided in the Loan Documents, do not and will not result in the creationof any Lien upon or with respect to any of its respective properties.

 

(c)           This Amendment and the Loan andSecurity Agreement, as amended hereby, constitute the legal, valid and bindingobligations of the Borrower, enforceable against the Borrower in accordancewith its terms, except as enforcement may be limited by equitable principles orby bankruptcy, insolvency, reorganization, moratorium, or similar laws relatingto or limiting creditors’ rights generally.

 

(d)           No authorization or approval or otheraction by, and no notice to or filing with, any Governmental Authority isrequired in connection with the due execution, delivery and performance by theBorrower of this Amendment and the performance by the Borrower of the Loan andSecurity Agreement as amended hereby.

 

(e)           The representations and warrantiescontained in Section 5 of the Loan and Security Agreement and each other LoanDocument, after giving effect to this Amendment, are correct on and as of theEffective Date as though made on and as of the Effective Date (except to theextent such representations and warranties expressly relate to an earlier datein which case such representations and warranties shall be true and correct asof such earlier date), and no Default or Event of Default has occurred and iscontinuing on and as of the Effective Date or will result from this Amendmentbecoming effective in accordance with its terms.

 

7.             Continued Effectiveness of the Loan and SecurityAgreement and Loan Documents.  TheBorrower hereby (i) confirms and agrees that each Loan Document to which it isa party is, and shall continue to be, in full force and effect and is herebyratified and confirmed in all respects except that on and after the EffectiveDate of this Amendment all references in any such Loan Document to “the Loanand Security Agreement”, the “Agreement”, “thereto”, “thereof”, “thereunder” orwords of like import referring to the Loan and Security Agreement shall meanthe Loan and Security Agreement as amended by this Amendment; and (ii) confirmsand agrees that to the extent that any such Loan Document purports to assign orpledge to Foothill, or to grant a security interest in or Lien on, anycollateral as security for the obligations of the Borrower from time to timeexisting in respect of the Loan and Security Agreement and

 

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the Loan Documents, suchpledge, assignment and/or grant of the security interest or Lien is herebyratified and confirmed in all respects.

 

8.             Miscellaneous.

 

(a)           This Amendment may be executed in anynumber of counterparts and by different parties hereto in separatecounterparts, each of which shall be deemed to be an original but all of whichtaken together shall constitute one and the same agreement.

 

(b)           Section and paragraph headings hereinare included for convenience of reference only and shall not constitute a partof this Amendment for any other purpose.

 

(c)           This Amendment shall be governed by,and construed in accordance with, the laws of the State of New York.

 

(d)           The Borrower will pay on demand allreasonable fees, costs and expenses of Foothill in connection with thepreparation, execution and delivery of this Amendment including, withoutlimitation, reasonable fees, disbursements and other charges of Schulte Roth& Zabel LLP, counsel to Foothill.

 
|   | AXS-ONE INC.,  a Delaware corporation |
|--------|---------------------------------------|
|   |                                  |   |
|   |                                  |   |
|   | By:                                   |   /s/ WILLIAM. LEVERING |   |
|   |                                  | Name:  William Levering |
|   |                                  | Title:  CFO |
|   |                                  |   |

 
|   |                                                     |                        |
|--------|----------------------------------------------------------|-----------------------------|
|   | FOOTHILL CAPITAL  CORPORATION,  a California corporation |
|   |                                                     |                        |
|   |                                                     |                        |
|   | By:                                                      |   /s/ DAVID SANCHEZ    |   |
|   |                                                     | Name:  David Sanchez   |
|   |                                                     | Title:  Vice President |
|        |                                                          |                             |  |  |

 

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