SUBORDINATION AGREEMENT
	 

	 
		This Subordination Agreement is made as of
		May 29, 2007, by and between BLUELINE
		CAPITAL PARTNERS, LP, as Agent for the
		secured parties, with an office at 4115 Blackhawk Plaza Circle, Suite 100,
		Danville, CA 94596 (“Creditor”), and 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 2221 Washington Street, Suite 200, Newton,
		Massachusetts 02462 (“Bank”).
	 

	 
		Recitals
	 

	 
		A. AXS-ONE INC.
		(“Borrower”) has requested and/or obtained certain loans or other
		credit accommodations from Bank to Borrower which are or may be from time to
		time secured by assets and property of Borrower.
	 

	 
		B. Creditor has extended loans or other
		credit accommodations to Borrower, and/or may extend loans or other credit
		accommodations to Borrower from time to time.
	 

	 
		C. In order to induce Bank to extend credit
		to Borrower and, at any time or from time to time, at Bank’s option, to
		make such further loans, extensions of credit, or other accommodations to or
		for the account of Borrower, or to purchase or extend credit upon any
		instrument or writing in respect of which Borrower may be liable in any
		capacity, or to grant such renewals or extension of any such loan, extension of
		credit, purchase, or other accommodation as Bank may deem advisable, Creditor
		is willing to subordinate: (i) all of Borrower’s indebtedness and
		obligations to Creditor, whether presently existing or arising in the future
		(the “Subordinated Debt”) to all of Borrower’s indebtedness and
		obligations to Bank; and (ii) all of Creditor’s security interests, if
		any, to all of Bank’s security interests in the Borrower’s
		property.
	 

	 
		NOW, THEREFORE, THE PARTIES AGREE AS
		FOLLOWS:
	 

	 
		1. Creditor subordinates to Bank any
		security interest or lien that Creditor may have in any property of Borrower.
		Notwithstanding the respective dates of attachment or perfection of the
		security interest of Creditor and the security interest of Bank, the security
		interest of Bank in the Collateral (the “Collateral”), as defined in
		a certain Amended and Restated Loan and Security Agreement between Borrower and
		Bank dated as of September 13, 2005, as amended by a certain First Loan
		Modification Agreement dated as of March 14, 2006, as further amended by a
		certain Second Loan Modification Agreement dated as of October 31, 2006, as
		further amended by a certain Third Loan Modification Agreement dated as of
		November 11, 2006, as further amended by a certain Fourth Loan Modification
		Agreement dated as of March 6, 2007, as further affected by a certain
		Forbearance Agreement dated as of May 15, 2007, and as may be further amended
		from time to time (the “Loan Agreement”), shall at all times be
		senior to the security interest of Creditor.
	 

	 
		2. All Subordinated Debt is subordinated in
		right of payment to all obligations of Borrower to Bank now existing or
		hereafter arising, together with all costs of collecting such obligations
		(including attorneys’ fees), including, without limitation, all interest
		accruing after the commencement by or against Borrower of any bankruptcy,
		reorganization or similar proceeding, and all obligations under the Loan
		Agreement (the “Senior Debt”).
	 

	 
		3. Without Bank’s prior written
		consent, Creditor will not demand or receive from Borrower (and Borrower will
		not pay to Creditor) all or any part of the Subordinated Debt, by way of
		payment, prepayment, setoff, lawsuit or otherwise, nor will Creditor exercise
		any remedy with respect to the Collateral, nor will Creditor accelerate the
		Subordinated Debt, or commence, or cause to commence, prosecute or participate
		in any administrative, legal or equitable action against Borrower, until such
		time as both (i) the Senior Debt is fully paid in cash, (ii) Bank has no
		commitment or obligation to lend any further funds to Borrower, and (iii) all
		financing agreements between Bank and Borrower are terminated. Nothing in the
		foregoing paragraph shall prohibit Creditor from converting all or any part of
		the Subordinated Debt into equity securities of Borrower. 
	 

	 
		 
	 

	 
		 
	 

	 
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		4. Creditor shall promptly deliver to Bank
		in the form received (except for endorsement or assignment by Creditor where
		required by Bank) for application to the Senior Debt any payment, distribution,
		security or proceeds received by Creditor with respect to the Subordinated Debt
		other than in accordance with this Agreement.
	 

	 
		5. In the event of Borrower’s
		insolvency, reorganization or any case or proceeding under any bankruptcy or
		insolvency law or laws relating to the relief of debtors, these provisions
		shall remain in full force and effect, and Bank’s claims against Borrower
		and the estate of Borrower shall be paid in full before any payment is made to
		Creditor.
	 

	 
		6. Until the Senior Debt is fully paid in
		cash and Bank’s arrangements to lend any funds to Borrower has been
		terminated, Creditor irrevocably appoints Bank as Creditor’s
		attorney-in-fact, and grants to Bank a power of attorney with full power of
		substitution, in the name of Creditor or in the name of Bank, for the use and
		benefit of Bank, without notice to Creditor, to perform at Bank’s option
		the following acts in any bankruptcy, insolvency or similar proceeding
		involving Borrower:
	 

	 
		(i) To file the appropriate claim or claims
		in respect of the Subordinated Debt on behalf of Creditor if Creditor does not
		do so prior to 30 days before the expiration of the time to file claims in such
		proceeding and if Bank elects, in its sole discretion, to file such claim or
		claims; and
	 

	 
		(ii) To accept or reject any plan of
		reorganization or arrangement on behalf of Creditor and to otherwise vote
		Creditor’s claims in respect of any Subordinated Debt in any manner that
		Bank deems appropriate for the enforcement of its rights hereunder.
	 

	 
		7. Creditor shall immediately affix a legend
		to the instruments evidencing the Subordinated Debt stating that the
		instruments are subject to the terms of this Agreement. By the execution of
		this Agreement, Creditor hereby authorizes Bank to amend any financing
		statements filed by Creditor against Borrower as follows: “In accordance
		with a certain Subordination Agreement by and among the Secured Party, the
		Debtor and Silicon Valley Bank, the Secured Party has subordinated any security
		interest or lien that Secured Party may have in any property of the Debtor to
		the security interest of Silicon Valley Bank in all assets of the Debtor,
		notwithstanding the respective dates of attachment or perfection of the
		security interest of the Secured Party and Silicon Valley Bank.”
	 

	 
		8. No amendment of the documents evidencing
		or relating to the Subordinated Debt shall directly or indirectly modify the
		provisions of this Agreement in any manner which might terminate or impair the
		subordination of the Subordinated Debt or the subordination of the security
		interest or lien that Creditor may have in any property of Borrower. By way of
		example, such instruments shall not be amended to (i) increase the rate of
		interest with respect to the Subordinated Debt, or (ii) accelerate the payment
		of the principal or interest or any other portion of the Subordinated
		Debt.
	 

	 
		9. If, at any time after payment in full of
		the Senior Debt any payments of the Senior Debt must be disgorged by Bank for
		any reason (including, without limitation, the bankruptcy of Borrower), this
		Agreement and the relative rights and priorities set forth herein shall be
		reinstated as to all such disgorged payments as though such payments had not
		been made and Creditor shall immediately pay over to Bank all payments received
		with respect to the Subordinated Debt to the extent that such payments would
		have been prohibited hereunder. At any time and from time to time, without
		notice to Creditor, Bank may take such actions with respect to the Senior Debt
		as Bank, in its sole discretion, may deem appropriate, including, without
		limitation, terminating advances to Borrower, increasing the principal amount,
		extending the time of payment, increasing applicable interest rates, renewing,
		compromising or otherwise amending the terms of any documents affecting the
		Senior Debt and any collateral securing the Senior Debt, and enforcing or
		failing to enforce any rights against Borrower or any other person. No such
		action or inaction shall impair or otherwise affect Bank’s rights
		hereunder.
	 

	 
		10. This Agreement shall bind any successors
		or assignees of Creditor and shall benefit any successors or assigns of Bank.
		This Agreement shall remain effective until terminated in writing by Bank. This
		Agreement is solely for the benefit of Creditor and Bank and not for the
		benefit of Borrower or any other party. 
	 

	 
		 
	 

	 
		 
	 

	 
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		Creditor further agrees that if Borrower is
		in the process of refinancing any portion of the Senior Debt with a new lender,
		and if Bank makes a request of Creditor, Creditor shall agree to enter into a
		new subordination agreement with the new lender on substantially the terms and
		conditions of this Agreement.
	 

	 
		11. Creditor hereby agrees to execute such
		documents and/or take such further action as Bank may at any time or times
		reasonably request in order to carry out the provisions and intent of this
		Agreement, including, without limitation, ratifications and confirmations of
		this Agreement from time to time hereafter, as and when requested by
		Bank.
	 

	 
		12. This Agreement may be executed in two or
		more counterparts, each of which shall be deemed an original and all of which
		together shall constitute one instrument.
	 

	 
		13. This Agreement shall be governed by and
		construed in accordance with the laws of the Commonwealth of Massachusetts,
		without giving effect to conflicts of laws principles. Creditor and Bank submit
		to the exclusive jurisdiction of the state and federal courts located in
		Boston, Massachusetts in any action, suit, or proceeding of any kind, against
		it which arises out of or by reason of this Agreement; provided, however, that
		if for any reason Bank cannot avail itself of the Courts of The Commonwealth of
		Massachusetts, Creditor accepts jurisdiction of the Courts and venue in Santa
		Clara County, California. CREDITOR AND BANK WAIVE THEIR RESPECTIVE RIGHTS TO A
		JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
		AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN.
	 

	 
		14. This Agreement represents the entire
		agreement with respect to the subject matter hereof, and supersedes all prior
		negotiations, agreements and commitments. Creditor is not relying on any
		representations by Bank or Borrower in entering into this Agreement, and
		Creditor has kept and will continue to keep itself fully apprised of the
		financial and other condition of Borrower. This Agreement may be amended only
		by written instrument signed by Creditor and Bank.
	 

	 
		 
	 

	 
		 
	 

	 
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		IN WITNESS WHEREOF, the undersigned have
		executed this Agreement as of the date first above written.
	 

	 
		 
	 

	 
			
				
				  “Creditor”
				

			 	
				
				   
				

			 	
				
				  “Bank”
				

			 
	
				
				  
 BLUELINE CALIPTAL PARTNERS,
				  LP
				

			 	
				
				   
				

			 	
				
				  SILICON VALLEY BANK
				

			 
	
				
				  By:
				

			 	
				
				  
 BlueLine Partners, LLC, its
				  General Partner
				

			 	
				
				   
				

			 	
				
				  By:
				

			 	
				
				  
 /s/ Jay T. Tracy
				

			 
	
				
				  By:
				

			 	
				
				  
/s/ Scott Alan Shuda
				

			 	
				
				   
				

			 	
				
				  Title: 
				

			 	
				
				  Vice President
				

			 
	
				
				  Title: 
				

			 	
				
				  Managing Director of BlueLine
				  Partners, LLC
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		The undersigned approves of the terms of
		this Agreement.
	 

	 
		“Borrower”
	 

	 
		 
	 

	 
			
				
				  AXS-ONE INC.
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  By:
				

			 	
				
				  
 /s/ William P. Lyons
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  Title:
				

			 	
				
				  CEO
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
							

 

	 
		 
	 

	 
		 
	 

	 
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