AGREEMENT
AND GENERAL RELEASE

This Agreement and General Release
(‘‘Agreement’’), is hereby executed by and
between (‘‘Executive’’ or
‘‘you’’), and AXS-One Inc. (the
‘‘Company’’) on behalf of its past, present
and future parent entities, subsidiaries, divisions, affiliates and
related business entities, successors and assigns, assets, employee
benefit plans or funds, and any of its or their respective past,
present and/or future directors, officers, fiduciaries, agents,
trustees, administrators, employees and assigns, whether acting as
agents for the Company or in their individual capacities (collectively
the ‘‘Company Entities’’), and sets forth
the parties’ agreement regarding Executive’s termination
of employment.

1. The Company and Executive agree
that Executive’s last day of employment with the company will be
June 30, 2005 (the termination date). Executive’s coverage under
the various employee benefit plans maintained by the Company shall
terminate effective as of the termination date.

2. Following the Effective Date of this Agreement (as
defined in paragraph 18 below), and in exchange for your waiver of
claims against the Company Entities and compliance with other terms and
conditions of this Agreement, the Company agrees to pay you severance
of $337,500. This payment will be made to you as a salary continuation,
paid on the Company’s normal pay dates, beginning on the pay
date which is no sooner than fourteen days after the Effective Date of
this agreement. Executive may purchase, if eligible, continuation
health benefits coverage to the extent and for the period provided by
federal law (COBRA), however, provided Executive executes, timely
returns, and does not revoke this Agreement, the Company will pay for
Executive’s COBRA benefits through December 31, 2006 in addition
to, and not as a set off against, the severance set forth above.. For
the avoidance of doubt, the Company paid COBRA benefits include only
medical and dental insurance, and excludes all other employee benefits
you currently are entitled to. Compensation and benefits already paid
to you beginning July 1, 2005 shall count towards your severance
hereunder.

You agree and acknowledge that the payments
and benefits provided for by the above paragraphs constitute full
payment to you of amounts which you might otherwise be entitled under
any policy, plan or procedure of the Company or pursuant to any prior
agreement or contract with the Company, including but not limited to,
your employment agreement dated January 1, 2003.

3. You agree and acknowledge that the payment(s) and
other benefits provided pursuant to this Agreement are in full
discharge of any and all liabilities and obligations of the Company to
you, monetarily or with respect to employee benefits or otherwise,
including but not limited to any and all obligations arising under any
alleged written or oral agreement (including, but not limited to, your
employment contract), policy, plan or procedure of the Company and/or
any alleged understanding or arrangement between you and the
Company.

4. (a) In consideration for the payment
and benefits to be provided you pursuant to paragraph
‘‘2’’ above, you, for yourself and for your
heirs, executors, administrators, trustees, legal representatives and
assigns (hereinafter referred to collectively as
‘‘Releasors’’), forever release and
discharge the Company Entities from any and all claims, demands, causes
of action, fees and liabilities of any kind whatsoever, whether known
or unknown, which you ever had, now have, or may have against any of
the Company Entities by reason of any act, omission, transaction,
practice, plan, policy, procedure, conduct, occurrence, or other matter
up to and including the date on which you sign this
Agreement.

(b) Without limiting the generality of the foregoing,
this Agreement is intended to and shall release the Company Entities
from any and all claims, whether known or unknown, which Releasors ever
had, now have, or may have against the Company Entities arising out of
your employment, and/or the termination of that employment, including,
but not limited to: (i) any claim under the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974 (excluding claims for accrued, vested benefits
under any employee benefit or pension plan of the Company Entities in
accordance with the terms and conditions of such plan and applicable
law), and the Family and Medical Leave Act; (ii) any claim under the
New Jersey Law Against Discrimination, the New Jersey Equal Pay Act,
the New Jersey Family Leave Act, and the New Jersey Conscientious
Employee Protection Act; (iii) any other claim (whether based on
federal, state, or local law, statutory or decisional) relating to or










arising out of your employment, the terms and
conditions of such employment, the termination of such employment,
and/or any of the events relating directly or indirectly to or
surrounding the termination of that employment, including but not
limited to breach of contract (express or implied), wrongful discharge,
detrimental reliance, defamation, emotional distress, retaliation,
discrimination or harassment under any applicable law, or compensatory
or punitive damages; and (iv) any claim for attorneys’ fees,
costs, disbursements and/or the like. Nothing in this Agreement shall
be a waiver of claims that may arise after the date on which you sign
this Agreement.

(c) You acknowledge and agree that by virtue of
the foregoing, you have waived any relief available to you (including
without limitation, monetary damages, equitable relief and
reinstatement) under any of the claims and/or causes of action waived
in this paragraph
‘‘4’’. 

5. The
terms and conditions of this Agreement are and shall be deemed to be
confidential, and shall not be disclosed by a party to any person or
entity without the prior written consent of the other, except if
required by law, and to a party’s accountants, attorneys and/or
immediate family members, provided that, to the maximum extent
permitted by applicable law, rule, code or regulation, they agree to
maintain the confidentiality of the Agreement. You further represent
that you have not disclosed the terms and conditions of the Agreement
to anyone other than your attorneys, accountants and/or immediate
family members. For the avoidance of doubt, the Company will be
required by law to disclose the full terms of this agreement in an 8-K
filing with the Securities and Exchange Commission, and file this
agreement as an exhibit to such filing.

6. You
acknowledge that during the course of your employment with the Company
and/or any of the Company Entities, you have had access to information
relating to the Company and/or the Company Entities and their
respective business that is not generally known by persons not employed
by the Company and/or the Company Entities and that could not easily be
determined or learned by someone outside of the Company and/or the
Company Entities (‘‘Confidential
Information’’). You agree not to disclose or use such
Confidential Information at any time in the future. You also hereby
acknowledge and reaffirm that you remain bound by the restrictive
covenants set forth in Paragraph 12 of your Employment Agreement dated
January 1, 2003, as well as your continuing obligations under your
Non-Disclosure Agreement dated July 12,
1991.

7. You represent that you have returned to
the Company all property belonging to the Company and/or the Company
Entities, including but not limited to keys, card access to the
building and office floors, Employee Handbook, phone card, rolodex (if
provided by the Company and/or the Company Entities), computer user
name and password, disks and/or voicemail code. The Company agrees that
you may keep your laptop computer and your cell phone. The parties
acknowledge full compliance with this Paragraph
7.

8. If any provision of this Agreement is held to
be illegal, void or unenforceable, such provision shall have no effect;
however, the remaining provisions shall be enforced to the maximum
extent possible. If a court should determine that any portion of this
Agreement is overbroad or unreasonable, such provision shall be given
effect to the maximum extent possible by narrowing or enforcing in part
that aspect of the provision found overbroad or unreasonable.

9. This Agreement is not intended, and shall not be
construed, as an admission that any of the Company Entities has or have
violated any federal, state or local law (statutory or decisional),
ordinance or regulation, breached any contract or committed any wrong
whatsoever against you.

10. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company, by agreement in form and
substance reasonably satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession
had taken place. This Agreement will be binding upon and inure to the
benefit of the Company and any successor to the Company, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise (and such
successor shall thereafter be deemed the
‘‘Company’’ for the purposes of this










Agreement), but will not otherwise be
assignable, transferable or delegable by the Company. (b) This
Agreement will inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and
legatees.

11. This Agreement shall be construed and
enforced in accordance with the laws of the State of New Jersey without
regard to the principles of conflicts of law.

This
Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will
constitute one and the same agreement.

12. You
understand that this Agreement constitutes the complete understanding
between the Company and you, and, with the exception of the agreements
referred to in paragraph ‘‘6’’ above, as
well as the Restrictive Covenants set forth in Paragraph 12 of your
Employment Agreement, dated January 1, 2003, and Paragraph 13 therein
relating to Assignment of Inventions, which provisions shall survive
the termination of your employment and are incorporated by reference
into this Agreement, supersedes any and all agreements, understandings,
and discussions, whether written or oral between you and any of the
Company Entities. No other promises or agreements shall be binding
unless in writing and signed by both an authorized representative of
the Company and you after the Release Effective
Date.

13. Omitted


14. Exception
For Challenge Under the Older Workers Benefit Protection
Act: The provisions of paragraph 4 are not intended to, and
shall not affect Executive’s right to file a lawsuit, complaint
or charge that challenges the validity of this Agreement under the
Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), with
respect to claims under the Age Discrimination in Employment Act
(‘‘ADEA’’). Furthermore, in the event of
such a proceeding, the provisions of paragraphs 13 and 19 pertaining to
the Company’s right to cease making payments pursuant to this
Agreement, Executive’s obligation to repay monies paid pursuant
to this Agreement, and the recovery of attorneys’ fees, shall
not apply. This paragraph is not intended to and shall not limit the
right of a court to determine, in its discretion, that the Company is
entitled to restitution, recoupment or setoff of any monies paid should
the release of ADEA claims in this Agreement be found to be invalid.
Neither does this paragraph affect the Company’s right to
recover attorneys’ fees or costs to the extent authorized under
federal law. The provisions of paragraph 4 shall apply with full force
and effect with respect to any other legal
proceeding.

15. Acknowledgment of Receipt of
Disclosure Information. Executive acknowledges receipt of
Disclosure Information Provided Pursuant to Older Workers Benefit
Protection Act, which is attached hereto as Schedule
A.

16. Nondisparagement. The
parties represent, each to the other, that they have not and agree that
they will not in any way disparage the other and/or its employees, or
make or solicit any comments, statements, or the like to the media or
to others that may be considered to be derogatory or detrimental to the
good name or business reputation of the other and/or its
employees.

17. You acknowledge that you: (a) have
carefully read this Agreement in its entirety; (b) have had an
opportunity to consider this Agreement fully for at least forty-five
(45) days; (c) have been, and are hereby, advised by the Company in
writing to consult with an attorney of your choosing in connection with
this Agreement; (d) fully understand the significance of all of the
terms and conditions of this Agreement and have discussed them with
your independent legal counsel, or have had a reasonable opportunity to
do so; (e) have had answered to your satisfaction any questions you
have asked with regard to the meaning and significance of any of the
provisions of this Agreement; and (f) are signing this Agreement
voluntarily and of your own free will and agree to all the terms and
conditions contained herein.

18. You understand
that you will have at least forty-five (45) days (the
‘‘Consideration Period’’) from the date of
receipt of this Agreement to consider the terms and conditions of this
Agreement. You may accept this Agreement by signing it and returning it
to Elizabeth Mack, Human Resources, AXS-One Inc., 301 Route 17 North,
Rutherford, NJ 07070. After executing this Agreement, you shall










have seven (7) days (the
‘‘Revocation Period’’) to revoke this
Agreement by indicating your desire to do so in writing delivered to
Elizabeth Mack at the address above (or by fax at 201-935-5431) by no
later than 5:00 p.m. on the seventh (7th) day after the date you sign
this Agreement. The effective date of this Agreement shall be the
eighth (8th) day after you sign the Agreement (the
‘‘Effective Date’’). If the last day of the
Consideration or Revocation Period falls on a Saturday, Sunday or
holiday, the last day of the Consideration or Revocation Period, as
applicable, will be deemed to be the next business day. In the event
you do not accept this Agreement as set forth above, or in the event
you revoke this Agreement during the Revocation Period, this Agreement,
including but not limited to the obligation of the Company to provide
the payment(s) and other benefits referred to in paragraph
‘‘2’’ above, shall be deemed automatically
null and void.

19. Any notice given to a Party
shall be in writing and shall be deemed to have been given when
delivered personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed address as
such party may subsequently give such notice of

If to the
Company:

AXS-One Inc., 301 Route 17 North, Rutherford,
NJ07070

If to the Executive:

Gennaro
Vendome, 22 Wayside Place, Montclair, NJ07042

20.

:  /s/ Gennaro
Vendome          Date:
10-13-2005        

       Gennaro
Vendome

THE COMPANY

By: /s/ Joseph
P. Dwyer        

Print Name:   Joseph P.
Dwyer        

Title:   CFO