EX-10.5






Exhibit 10.5



THIS SECURITY AGREEMENT AMENDMENT AND THE RIGHTS PROVIDED HEREIN ARE SUBJECT IN ALL RESPECTS TO THE
TERMS OF AN AMENDED AND RESTATED SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH BETWEEN THE AGENT OF
THE SECURED PARTIES AND SAND HILL FINANCE, LLC.




SECOND SECURITY AGREEMENT AMENDMENT




     This SECOND SECURITY AGREEMENT AMENDMENT (the “Amendment”) is made as of July 24, 2008 between
BlueLine Capital Partners, LP, a Delaware limited partnership with an office located at 4115
Blackhawk Plaza Circle, Suite 100, Danville, CA 94596, as agent (hereinafter, in such capacity, the
“Agent”) for itself and the other lenders listed on the signature pages hereto (hereinafter,
collectively, the “Secured Parties”), the Secured Parties and AXS-One Inc., a Delaware corporation
with its principal executive offices located at 301 Route 17 North, Rutherford, NJ 07070,
Attention: President (the “Debtor”).



     WHEREAS, on May 29, 2007, the Debtor issued in favor of certain of the Secured Parties (the
“May Secured Parties”), promissory notes (collectively the “May 2007 Notes”), in the aggregate
principal amount of Five Million Dollars ($5,000,000) and such May 2007 Notes were issued pursuant
to the terms of a Convertible Note and Warrant Purchase Agreement dated as of May 29, 2007 between
the Debtor and the May Secured Parties;



     WHEREAS, on November 16, 2007, the Debtor issued in favor of certain of the Secured Parties
(the “November Secured Parties”), promissory notes (collectively, the “November 2007 Notes”), in
the aggregate principal amount of Three Million Seven Hundred and Fifty Thousand Dollars
($3,750,000) and such November Notes were issued pursuant to the terms of a Convertible Note and
Warrant Purchase Agreement (the “November Purchase Agreement”) dated as of November 13, 2007,
between the Debtor and the November Secured Parties (such transaction, the “November Financing”);



     WHEREAS, in connection with the issuance of the May 2007 Notes, the Debtor entered into that
certain Security Agreement dated as of May 29, 2007, between the Debtor, the Agent and the Secured
Parties described therein, which agreement was amended in connection with the issuance of the
November 2007 Notes pursuant to a Security Agreement Amendment dated November 16, 2007 between the
Company, the Agent and certain of the Secured Parties (such amendment, the “First Amendment” and
such security agreement as amended pursuant to the First Amendment, the “Security Agreement”);



     WHEREAS, on the date hereof, the Debtor has issued in favor of certain of the Secured Parties
(the “July Secured Parties”), promissory notes (collectively, the “July 2008 Notes”), in the
aggregate principal amount of Two Million One Hundred Thousand Dollars ($2,100,000) and the July
2008 Notes have been issued pursuant to the terms of a Convertible Note and Warrant Purchase
Agreement (the “July Purchase Agreement”) as of July 24, 2008, between the Debtor and the July
Secured Parties (such transaction, the “July 2008 Financing”);



 









 





     WHEREAS, it is a condition precedent to the July Secured Parties’ making any loans under the
July Purchase Agreement and the July 2008 Notes or otherwise extending credit to the Debtor that
the Debtor execute and deliver this Amendment; and



     WHEREAS, the Debtor, the Agent and each of the Secured Parties desires to amend the Security
Agreement in order to secure the Debtor’s obligations pursuant to the July 2008 Notes;



     NOW, THEREFORE, in consideration of the premises and to induce the July Secured Parties to
extend the loans to the Debtor pursuant to the July 2008 Notes, the Debtor and the Secured Parties
hereby agree as follows:


1. Capitalized Terms. Capitalized terms used and not defined herein shall have the
respective meanings ascribed to such terms in the Security Agreement.



2. Amendment to the Security Agreement.




     (a) Section 1(c) of the Security Agreement is hereby amended by amending clause (viii) of the
defined term “Permitted Encumbrances” as follows: “(viii) the security interests of Sand Hill
Finance, LLC as set forth in the Amended and Restated Subordination Agreement of even date herewith
between Sand Hill Finance, LLC and the Agent for the Secured Parties.”



     (b) Section 1(c) of the Security Agreement is hereby amended by deleting the following defined
terms and replacing them with amended definitions set forth below:




     “Note” and “Notes” means the May 2007 Notes, the November 2007 Notes
and/or the July 2008 Notes. This definition shall supersede the definition of such terms
set forth in the recitals to this Agreement.




     “Purchase Agreement” means the May Purchase Agreement, the November Purchase
Agreement, and/or the July Purchase Agreement as applicable. This definition shall
supersede the definition of such term in the recitals to this Agreement.




     “Secured Parties” shall mean the holders of the May 2007 Notes that executed
this Agreement, the holders of the November 2007 Notes that are made party to this Agreement
pursuant to the Security Agreement Amendment dated as of November 16, 2007 between the
Company, the Agent and certain of the Secured Parties and the holders of the July 2008 Notes
that are made party to the Security Agreement pursuant to the Second Security Agreement
Amendment dated as of July 24, 2008, between the Debtor, the Agent and the other parties set
forth therein.




     “Warrants” shall mean the warrants to purchase Common Stock of the debtor
issued pursuant to the May Purchase Agreement, the November Purchase Agreement, or the July
Purchase Agreement as applicable.



     (c) Section 1(c) of the Security Agreement is hereby amended by inserting the following
defined terms in appropriate alphabetical order therein:



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     “July 2008 Notes” means the Series D 6% Secured Convertible Promissory Notes of
the Debtor in the aggregate principal amount of Two Million One Hundred Thousand Dollars
($2,100,000) issued pursuant to the July Purchase Agreement.




     “July Purchase Agreement” means the Convertible Note and Warrant Purchase
Agreement dated as of July 24, 2008 among the Debtor and certain of the Secured Parties.



     (d) The Security Agreement is hereby amended by inserting the following Section 20:




“20. Amendment. The provisions of this Agreement may be amended in whole or in
part, modified or supplemented, and waivers or consents to departures from the provisions
hereof may be given, by a written instrument executed by the Agent, the Required Secured
Parties and Debtor.”


3. Joinder. The July Secured Parties executing this Amendment are hereby joined to and
made party to the Security Agreement as amended pursuant to the First Amendment and hereby as
“Secured Parties” thereunder and agree to be bound by all of the terms thereof. The Debtor, the
Agent, the May Secured Parties and the November Secured Parties hereby consent to such joinder.



4. Consent to July Financing. The Secured Parties hereby consent to the July 2008
Financing and, in connection therewith, the Debtor’s execution, delivery and performance of the
July Purchase Agreement, the sale of the July 2008 Notes and the consummation of the other
transactions and execution and performance of the other agreements and documents contemplated by
the July Purchase Agreement.



5. Consent to pari passu Rank. The Secured Parties hereby acknowledge and agree that the
security interests granted in connection with the July 2008 Notes will rank pari passu in priority
of payment and in all other respects with the security interests granted in connection with the May
2007 Notes and November 2007 Notes, and the Secured Parties hereby consent to such pari passu
ranking for all purposes under the Security Agreement, the May 2007 Notes, the November 2007 Notes
and the related transaction documents.



6. Full Force and Effect of the Security Agreement. Except as specifically amended
pursuant to the First Amendment and hereby, the Security Agreement shall remain of full force and
effect and is hereby ratified and affirmed in all respects.



7. Governing Law, etc. This Amendment shall be deemed to be a contract made under the laws
of the State of New York and shall be construed in accordance with such laws without reference to
conflict of laws.



8. Counterparts; Facsimile Execution. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute


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one and the same instrument. Executed signature pages delivered by facsimile or other means of
electronic image transmission shall have the same force and effect as an original thereof.




[Signature pages follow.]




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IN WITNESS WHEREOF, the parties hereto have caused this Second Security Agreement Amendment to be
duly executed and delivered as of the date first above written.




	 	 	 	 	 
	 	AXS-ONE INC.

 	 
	 	By:  	/s/ Joseph P. Dwyer
 	 
	 	 	Name:  	Joseph P. Dwyer 	 
	 	 	Title:  	CFO 	 
	 
	 	BLUELINE CAPITAL PARTNERS, LP, as Agent

 	 
	 	By:  	/s/ Timothy P. Bacci
 	 
	 	 	Name:  	Timothy P. Bacci 	 
	 	 	Title:  	Managing Partner 	 



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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	Robert J. Migliorino





	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert J. Migliorino
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	Print Name:   BlueLine Capital Partners III, LP

	 
	 	 	 	 
	 

	 	By:
	 	/s/ Timothy P. Bacci
	 

	 	 	 	 
	 

	 	Name:
	 	Timothy P. Bacci
	 

	 	 	 	 
	 

	 	Title:
	 	Managing Partner
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	BlueLine Capital Partners II, LP




	 	 	 	 	 
	 

	 	By:
	 	/s/ Timothy P. Bacci
	 

	 	 	 	 
	 

	 	Name:
	 	Timothy P. Bacci
	 

	 	 	 	 
	 

	 	Title:
	 	Managing Partner
	 

	 	 	 	 




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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	Philip L. Rugani
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ Philip L. Rugani
	 

	 	 	 	 
	 

	 	Name:
	 	Philip L. Rugani
	 

	 	 	 	 
	 

	 	Title:
	 	EVP Field Operations
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	William P. Lyons
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ William P. Lyons
	 

	 	 	 	 
	 

	 	Name:
	 	William P. Lyons
	 

	 	 	 	 
	 

	 	Title:
	 	CEO
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT




The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.



	 	 	 	 	 
	 

	 	   Print Name:
	 	Aston Assets, S.A.
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ Alejandro Gonzalez
	 

	 	 	 	 
	 

	 	Name:
	 	Alejandro Gonzalez
	 

	 	 	 	 
	 

	 	Title:
	 	Legal Representative (Power of Attorney)
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	Daniel Burch
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel Burch
	 

	 	 	 	 
	 

	 	Name:
	 	Daniel Burch
	 

	 	 	 	 
	 

	 	Title:
	 	Director
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	Harold D. Copperman
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ Harold D. Copperman
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	   Print Name:
	 	Jurika Family Trust U/A 1989
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ William K. Jurika
	 

	 	 	 	 
	 

	 	Name:
	 	William K. Jurika
	 

	 	 	 	 
	 

	 	Title:
	 	Trustee
	 

	 	 	 	 





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OMNIBUS SIGNATURE PAGE TO

AXS-ONE, INC.

SECOND SECURITY AGREEMENT AMENDMENT



The undersigned, as a Secured Party, hereby executes and delivers the Second Security Agreement
Amendment to which this signature page is attached, which, together with all counterparts of the
Second Security Agreement Amendment and signature pages of the other parties named in said Second
Security Agreement Amendment, shall constitute one and the same document in accordance with the
terms of the Second Security Agreement Amendment.




	 	 	 	 	 
	 

	 	Print Name:
	 	Primafides (Suisse) S.A. as Trustees of Sirius Trust
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	By:
	 	/s/ P.DeSalis      /s/ D. Moran
	 

	 	 	 	 
	 

	 	Name:
	 	Primafides (Suisse) S.A. as Trustees of Sirius Trust
	 

	 	 	 	 
	 

	 	Title:
	 	Directors
	 

	 	 	 	 





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