EXHIBIT 10.68
SECOND LOAN MODIFICATION AGREEMENT
This Second Loan Modification Agreement (this "Loan Modification Agreement") is
entered into as of March 28, 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 PURSUANT TO A
CERTAIN FIRST LOAN MODIFICATION AGREEMENT DATED AS OF JANUARY 27, 2005 (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 SECTION 6.6 THEREOF, ENTITLED "FINANCIAL COVENANTS":
"6.6
Financial Covenants.
(a)
Adjusted Quick Ratio.
Borrower shall maintain at all times, to be
tested as of the last day of each: (i) quarter, and (ii) month when a Credit
Extension is requested or Obligations are outstanding, a ratio of Quick Assets
to Current Liabilities minus Deferred Revenue of at least 1.75 to 1.0.
(b)
EBITDA.
Borrower shall maintain, to be tested as of the last day
of each quarter:
(i) beginning with the quarter ending September 30, 2004,
EBITDA of at least: (A) ($500,000.00), for the three (3) month period ending
September 30, 2004, (B) ($3,400,000.00), for the six (6) month period ending
December 31, 2004, (C) $500,000.00, for the three (3) month period ending March
31, 2005, (D) $1,000,000.00, for the six (6) month period ending June 30, 2005,
(E) $1,500,000.00, for the nine (9) month period ending September 30, 2005, (F)
$2,000.000.00 for the twelve (12) month period ending December 31, 2005, (G)
$500,000.00, for the three (3) month period ending March 31, 2006, and (H)
$1,000,000.00 for the six (6) month period ending June 30, 2006, and (ii)
beginning with the quarter ending June 30, 2005 and for each calendar quarter
thereafter, EBITDA of at least $1.00, provided, however, that at any time or
times during any one (1) quarter ending June 30, 2005 and thereafter through
December 31, 2005, Borrower may have a maximum net EBITDA loss of no greater
than