FORBEARANCE AGREEMENT

This Forbearance Agreement (this Agreement) is entered into
		as of May 15, 2007, by and between SILICON VALLEY BANK, a
		California-chartered bank, with its principal place of business at
		3003 Tasman Drive, Santa Clara, California 95054 and with a loan
		production office located at 535 Fifth Avenue, 27th Floor, New York, New York
		10017 (Bank) and AXS-ONE INC., a Delaware corporation with
		its chief executive office located at 301 Route 17 North, Rutherford, New
		Jersey 07070 (Borrower).

1.

DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
		indebtedness and obligations which may be owing by Borrower to Bank, Borrower
		is indebted to Bank pursuant to a loan arrangement dated as of September 13,
		2005, evidenced by, among other documents, a certain Amended and Restated Loan
		and Security Agreement dated as of September 13, 2005, between Borrower and
		Bank, as amended by a certain First Loan Modification Agreement dated as of
		March 14, 2006, between Borrower and Bank, as further amended by a certain
		Second Loan Modification Agreement dated as of October 31, 2006, between
		Borrower and Bank, as further amended by a certain Third Loan Modification
		Agreement dated as of November 11, 2006, between Borrower and Bank, and as
		further amended by a certain Fourth Loan Modification Agreement dated as of
		March 6, 2007, between Borrower and Bank (as amended, the Loan
		Agreement).  Capitalized terms used but not otherwise defined herein
		shall have the same meaning as in the Loan Agreement.

2.

DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is
		secured by the Collateral as described in the Loan Agreement and the
		Intellectual Property Collateral as described in a certain Intellectual
		Property Security Agreement dated as of October 31, 2006 (the IP Security
		Agreement) (together with any other collateral security granted to Bank,
		the  Security Documents).  Hereinafter, the Security
		Documents, together with all other documents evidencing or securing the
		Obligations shall be referred to as the Existing Loan Documents.

3.

ACKNOWLEDGMENT OF DEFAULT; FORBEARANCE BY BANK.  Borrower
		acknowledges that it is currently in default under the Loan Agreement by virtue
		of its failure to comply with the financial covenant set forth in subsection
		(a) of Section 5 of the Schedule to the Loan Agreement (relative to
		Borrowers Tangible Net Worth) as of the months ended February 28, 2007
		and March 31, 2007 (the Existing Defaults).  In addition,
		Borrower acknowledges that Borrower will be unable to comply with the financial
		covenant set forth in subsection (a) of Section 5 of the Schedule to the Loan
		Agreement (relative to Borrowers Tangible Net Worth) thereof as of the
		month ending April 30, 2007 (the Future Default) (the Existing
		Defaults and the Future Default are collectively referred to as the
		Defaults).  Bank, however, hereby agrees to forbear from
		exercising its rights and remedies with respect to the Defaults until the
		earlier to occur of (i) an Event of Default under the Loan Agreement (other
		than the Defaults) or (ii) June 15, 2007.  Borrower hereby acknowledges
		and agrees that except as specifically provided herein, nothing in this section
		or anywhere in this Agreement shall be deemed or otherwise construed as a
		waiver by the Bank of the Defaults or of any of its rights and remedies
		pursuant to the Existing Loan Documents, applicable law or otherwise.

4.

FEES.  Borrower shall pay to Bank a forbearance fee equal to
		Seven Thousand Five Hundred Dollars ($7,500.00) which fee shall be due on the
		date hereof and shall be deemed fully earned as of the date hereof.
		 Borrower shall also reimburse Bank for all legal fees and expenses
		incurred in connection with this Agreement.

5.

RATIFICATION OF IP SECURITY AGREEMENT.  Borrower hereby
		ratifies, confirms and reaffirms, all and singular, the terms and conditions of
		the IP Security Agreement and acknowledges, confirms and agrees that the IP
		Security Agreement contains an accurate and complete listing of all
		Intellectual Property Collateral as defined therein.







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6.

RATIFICATION OF PERFECTION CERTIFICATE.  Borrower hereby
		ratifies, confirms and reaffirms, all and singular, the terms and disclosures
		contained in a certain Perfection Certificate dated as of August 11, 2004
		between Borrower and Bank, and acknowledges, confirms and agrees the
		disclosures and information Borrower provided to Bank in the Perfection
		Certificate have not changed, as of the date hereof.

7.

CONSISTENT CHANGES.  The Existing Loan Documents are hereby
		amended wherever necessary to reflect the changes described above.

8.

RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies,
		confirms, and reaffirms all terms and conditions of all security or other
		collateral granted to the Bank, and confirms that the indebtedness secured
		thereby includes, without limitation, the Obligations.

9.

NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and
		agrees that Borrower has no offsets, defenses, claims, or counterclaims against
		Bank with respect to the Obligations, or otherwise, and that if Borrower now
		has, or ever did have, any offsets, defenses, claims, or counterclaims against
		Bank, whether known or unknown, at law or in equity, all of them are hereby
		expressly WAIVED and Borrower hereby RELEASES Bank from any liability
		thereunder.

10.

CONTINUING VALIDITY.  Borrower understands and agrees that in
		modifying the existing Obligations, Bank is relying upon Borrowers
		representations, warranties, and agreements, as set forth in the Existing Loan
		Documents.  Except as expressly modified pursuant to this Agreement, the
		terms of the Existing Loan Documents remain unchanged and in full force and
		effect.  Banks agreement to modifications to the existing
		Obligations pursuant to this Agreement in no way shall obligate Bank to make
		any future modifications to the Obligations.  Nothing in this Agreement
		shall constitute a satisfaction of the Obligations.  It is the intention
		of Bank and Borrower to retain as liable parties all makers of Existing Loan
		Documents, unless the party is expressly released by Bank in writing.  No
		maker will be released by virtue of this Agreement.

11.

COUNTERSIGNATURE.  This Agreement shall become effective only
		when it shall have been executed by Borrower and Bank.

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This Agreement is executed as of the date first written above.

BORROWER:

BANK:

AXS-ONE INC.

SILICON VALLEY BANK

By: /s/ Joseph P. Dwyer

By: /s/ Jay T. Tracy

Name: Joseph P. Dwyer

Name: Jay T. Tracy

Title: Chief Financial Officer

Title: Vice President









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