EXHIBIT 10.67


 


FIRST LOAN MODIFICATION AGREEMENT


 


This First Loan Modification Agreement (this “Loan
Modification Agreement”) is entered into as of January 27, 2005, 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 400 Madison Avenue, Suite 15A, 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 August 11, 2004, evidenced
by, among other documents, a certain Loan and Security Agreement dated as of August 11,
2004, 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
(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.             DESCRIPTION OF
CHANGE IN TERMS.


 


A.            Modifications
to Loan Agreement.


 


1              The
Loan Agreement shall be amended by deleting the following text appearing as subsection (b)(i)(B) of Section 6.6 thereof, entitled “EBITDA”:


 


“(B)
($100,000.00), for the six (6) month period ending December 31, 2004,”


 


and
inserting in lieu thereof the following:


 


“(B)
($3,400,000.00), for the six (6) month period ending December 31, 2004,”


 


2              The
Compliance Certificate appearing as Exhibit D to the Loan Agreement is
hereby replaced with the Compliance Certificate attached as Exhibit A
hereto.


 


B.            Waivers.


 


1              Bank
hereby waives Borrower’s existing default under the Loan Agreement by virtue of
Borrower’s failure to comply with the financial covenant set forth in Section 6.6(b)(i)(A) thereof as of the quarter ended September 30,
2004. Bank’s waiver of Borrower’s compliance of said financial covenant shall
apply only to the foregoing specific period.


 


4.             FEES.  Borrower shall pay to Bank a modification fee
equal to Ten Thousand Dollars ($10,000,000) (the “Modification Fee”), which
Modification Fee shall be due on the date hereof and shall be deemed fully
earned as of the date hereof. Notwithstanding the foregoing, Bank will waive
the Modification Fee provided that Borrower transfer all of its cash management
business and excess cash to Bank on or prior to February 1, 2005. The
Borrower shall also reimburse Bank for all legal fees and expenses incurred in
connection with this amendment to the Existing Loan Documents.


 





















 


5.             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 above Borrower provided to Bank in the Perfection
Certificate has not changed, as of the date hereof.


 


6.             AUTHORIZATION TO
FILE.  Borrower hereby authorizes
Bank to file financing statements without notice to Borrower, with all
appropriate jurisdictions, as Bank deems appropriate, in order to further
perfect or protect Bank’s interest in the Collateral, including a notice that
any disposition of the Collateral, by either the Borrower or any other Person,
shall be deemed to violate the rights of the Bank under the Code.


 


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 Loan Modification 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 Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification 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 Loan Modification Agreement.


 


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


 


[The remainder of this page is
intentionally left blank]


 





















 


This Loan Modification Agreement is executed as a
sealed instrument under the laws of the State of New York as of the date first
written above.


 


	
  BORROWER:

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  AXS-ONE INC.

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  William Lyons

  	
   

  	
  By:

  	
  /s/
  Michael Moretti

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  W.P.
  Lyons

  	
   

  	
  Name:

  	
  Michael
  Moretti

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
  Title:

  	
  SVP

  	
   

  
												



 





















 


EXHIBIT A


COMPLIANCE CERTIFICATE


 


TO:         SILICON VALLEY BANK


FROM:   AXS-ONE INC.


 


The
undersigned authorized officer of AXS-ONE INC. certifies that under the terms
and conditions of the Loan and Security Agreement between Borrower and Bank
(the “Agreement”), (i) Borrower is in compliance for the period ending                               
with all required covenants except as noted below and (ii) there are no Events
of Default, and all representations and warranties in the Agreement are true
and correct in all material respects on this date.  Attached are the required documents
supporting the certification.  The Officer certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) consistently
applied from one period to the next except as explained in an accompanying
letter or footnotes.  The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the Agreement,
and that compliance is determined not just at the date this certificate is
delivered.


 


	
  Please indicate compliance status by circling Yes/No
  under “Complies” column.

  	
   

  	
   

  
	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
  Interim financial statements with CC

  	
   

  	
  Quarterly within 45 days*

  	
   

  	
  Yes  No

  
	
  Annual (CPA Audited)

  	
   

  	
  FYE within 120 days

  	
   

  	
  Yes  No

  
	
  10-Q, 10-K and 8-K

  	
   

  	
  Within 5 days after filing with SEC

  	
   

  	
  Yes  No

  
	
  BBC A/R Agings

  	
   

  	
  Quarterly within 45 days*

  	
   

  	
  Yes  No

  



 










*Monthly w/in 30 days when
borrowing.


 


	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  
	
  Minimum Adjusted Quick Ratio (quarterly*)

  	
   

  	
  1.75:1.0

  	
   

  	
            :1.0

  	
   

  	
  Yes  No

  
	
  Minimum EBITDA

  	
   

  	
                  

  	
   

  	
   

  	
   

  	
   

  
	
  (quarterly - beginning
  quarter ending6/30/05)

  	
   

  	
  $1.00**

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
  (cumulative - beginning quarter ending9/30/04)

  	
   

  	
  ($500,000) 7/1/04 thru 9/30/04

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  ($3,400,000) 7/1/04 thru 12/31/04

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  $500,0001/1/05 thru 3/31/05

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  $1,000,000 1/1/05 thru 6/30/05

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  $1,500,000 1/1/05 thru 9/30/05

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  $2,000,000 1/1/05 thru 12/31/05

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  $500,0001/1/06 thru 3/31/06

  	
   

  	
  $                

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
  $1,000,000 1/1/06 thru 6/30/06

  	
   

  	
  $                

  	
   

  	
  Yes  No

  



 










*Monthly
when borrowing.


**except
for any 1 of the last 3 quarters in 2005 during which Borrower may sustain a
maximum net EBITDA loss of no greater than $500,000.


 


 


	
   

  	
  BANK USE ONLY

  
	
   

  	
  Comments Regarding Exceptions: See Attached.

  	
  Received by:

  	
   

  	
   

  
	
   

  	
  Sincerely,

  	
   

  	
   

  	
  AUTHORIZED SIGNER

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
  SIGNATURE  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Verified:

  	
   

  	
   

  
	
   

  	
  TITLE  

  	
   

  	
   

  	
  AUTHORIZED SIGNER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
  DATE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Compliance Status:              Yes         No