Document:

AMENDMENT NO. 4

TO

FINANCING AGREEMENT

THIS AMENDMENT NO. 4 (this ‘‘Amendment No. 4’’) is entered into as of March  5,  2007, by and among G-III Leather Fashions, Inc., a New York corporation (‘‘G-III Inc.’’), J. Percy for Marvin Richards, Ltd., a New York corporation (‘‘JPMR’’), CK Outerwear, LLC, a New York limited liability company (‘‘CKO’’, and together with G-III and JPMR, individually a ‘‘Company’’ and collectively, the ‘‘Companies’’), The CIT Group/Commercial Services, Inc., a New York corporation (‘‘CIT’’), the various other financial institutions named herein or which hereafter become a party to the Financing Agreement (as hereafter defined) (together with CIT, each a ‘‘Lender’’ and collectively, ‘‘Lenders’’), and CIT as agent for Lenders (CIT, in such capacity, ‘‘Agent’’).

BACKGROUND

The Companies, Agent and Lenders are parties to a Financing Agreement, dated as of July  11,  2005 (as amended by letter agreement dated as of August  1,  2005, Amendment No. 2 to Financing Agreement dated as of February  24,  2006, Amendment No. 3 to Financing Agreement dated as of July  26,  2006 and as the same may be further amended, restated, modified and/or supplemented from time to time, the ‘‘Financing Agreement’’) pursuant to which Agent and Lenders provide the Companies with certain financial accommodations.

The Companies have requested Agent and Lenders to amend certain of the terms of the Financing Agreement which relate to the financial covenants. Agent and Lenders have agreed to amend the Financing Agreement on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or hereafter made to or for the account of Borrowers by Agent and Lenders, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Definitions.    All capitalized terms not otherwise defined herein shall have the meanings given to them in the Financing Agreement.

2.    Amendments to Financing Agreement.    Subject to satisfaction of the conditions precedent set forth in Section 3 below, the Financing Agreement is hereby amended as follows:

(a)    The definition of ‘‘Applicable Margin’’ appearing in Section 1 of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘Applicable Margin shall mean, (x) for the period commencing on the Closing Date and continuing through March  31,  2007, with respect to (a) the Revolving Loans, zero% for Chase Bank Rate Loans and 2.25% for LIBOR Loans, (b) the Term Loan, 1.00% for Chase Bank Rate Loans and 3.25% for LIBOR Loans, (c) standby Letters of Credit, 1.50%, (d) documentary Letters of Credit, 0.125%, or (e) Bankers Acceptances, Airway Releases and Steamship Guaranties, CIT’s discount rate plus 2.50% and (y) for the period commencing on April  1,  2007 and continuing thereafter until all Obligations have been satisfied in full, with respect to (a) the Revolving Loans, minus 0.25% for Chase Bank Rate Loans and 2.00% for LIBOR Loans, (b) the Term Loan, 0.75% for Chase Bank Rate Loans and 3.00% for LIBOR Loans, (c) standby Letters of Credit, 1.50%, (d) documentary Letters of Credit, 0.125%, or (e) Bankers Acceptances, Airway Releases and Steamship Guaranties, CIT’s discount rate plus 2.50%.’’

(b)    The definition of ‘‘Effective Net Worth’’ appearing in Section 1 of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘Effective Net Worth shall mean, at any time, Net Worth plus subordinated Indebtedness of the Parent and its Subsidiaries, the terms of which are acceptable to Agent in its sole discretion, minus the sum of (x) good will and other intangible assets (each determined in accordance with GAAP) and (y) the aggregate amount of all Accounts due from Affiliates.’’

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(c)    The definition of ‘‘Other Permitted Investments’’ appearing in Section 1 of the Financing Agreement is hereby amended by deleting the word ‘‘and’’ in subsection (vii) and inserting the following new subsection (ix) immediately after subsection (viii):

‘‘(ix) (a) shares of common stock of any publicly traded company having a market capitalization of no less than $500,000,000, in an aggregate amount at any time not to exceed $5,000,000 or (b) shares of common stock of any publicly traded company having a market capitalization of less than $500,000,000, in an aggregate amount at any time not to exceed $3,000,000.’’

(d)    The definition of ‘‘Permitted Distributions’’ appearing in Section 1 of the Financing Agreement is hereby amended by deleting the clause ‘‘; and provided, further, that any distributions in excess of $1,500,000 in the aggregate during the term of this Agreement and permitted under this clause (d) shall be a redemption of capital stock of Parent’’ appearing at the end of clause (d).

(e)    The definition of the ‘‘Revolving Line of Credit’’ appearing in Section 1 of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘Revolving Line of Credit shall mean the Commitments of the Lenders to make Revolving Loans pursuant to Section 3 of this Financing Agreement and assist the Companies in opening Letters of Credit, Bankers Acceptances, Steamship Guarantees and Airway Releases pursuant to Section 5 of this Financing Agreement, in an aggregate amount equal to the following amounts during the following periods:

							
	Period			Revolving Line of Credit
	Closing Date through and including July  31,  2005				$	140,000,000	

	August  1,  2005 through and including August  31,  2005				$	165,000,000	

	September  1,  2005 through and including September  30,  2005				$	165,000,000	

	October  1,  2005 through and including October  31,  2005				$	165,000,000	

	November  1,  2005 through and including November  30,  2005				$	165,000,000	

	December  1,  2005 through and including December  31,  2005				$	105,000,000	

	January  1,  2006 through and including January  31,  2006				$	70,000,000	

	February  1,  2006 through and including February  28,  2006				$	45,000,000	

	March  1,  2006 through and including March  31,  2006				$	45,000,000	

	April  1,  2006 through and including April  30,  2006				$	45,000,000	

	May  1,  2006 through and including May  31,  2006				$	65,000,000	

	June  1,  2006 through and including June  30,  2006				$	100,000,000	

	July  1,  2006 through and including July  31,  2006				$	145,000,000	

	August  1,  2006 through and including August  31,  2006				$	165,000,000	

	September  1,  2006 through and including September  30,  2006				$	165,000,000	

	October  1,  2006 through and including October  31,  2006				$	165,000,000	

	November  1,  2006 through and including November  30,  2006				$	165,000,000	

	December  1,  2006 through and including December  31,  2006				$	115,000,000	

	January  1,  2007 through and including January  31,  2007				$	75,000,000	

	February  1,  2007 through and including April  30,  2007				$	45,000,000	

	May  1,  2007 through and including May  31,  2007				$	65,000,000	

	June  1,  2007 through and including June  30,  2007				$	100,000,000	

	July  1,  2007 through and including July  31,  2007				$	145,000,000	

	August  1,  2007 through and including August  31,  2007				$	165,000,000	

	September  1,  2007 through and including September  30,  2007				$	165,000,000	

	October  1,  2007 through and including October  31,  2007				$	165,000,000	

	November  1,  2007 through and including November  30,  2007				$	165,000,000	

	December  1,  2007 through and including December  31,  2007				$	115,000,000	

	January  1,  2008 through and including January  31,  2008				$	75,000,000	

	February  1,  2008 through and including April  30,  2008				$	45,000,000	

	

With respect to the period subsequent to April  30,  2008, the Revolving Line of Credit shall be determined for all subsequent periods through the Termination Date by Agent, each of the Lenders 

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and the Companies based upon the projections and unaudited (or, if available, audited) financial statements of Parent and its consolidated Subsidiaries for the fiscal year ending January  31,  2009 (delivered pursuant to Section 7.2(h)), but in no event shall the periods be of different durations or the amounts be less than the amounts for the periods corresponding to the periods set forth above for the prior year unless the Agent determines (in its reasonable discretion) that such periods and amounts warrant adjustment based upon such projections or unaudited (or, if available, audited) financial statements or other information as Agent shall reasonably determine. The determination of the Revolving Line of Credit shall become effective after receipt and satisfactory review by the Agent of the unaudited (or, if available, audited) financial statements for the fiscal year ending January  31,  2009.

In the event of a Permitted Acquisition, the Revolving Line of Credit shall be increased dollar for dollar by the cash component of the consideration for the Permitted Acquisition; provided, however, that if after giving effect to any such increase the Revolving Line of Credit exceeds the sum of $165,000,000 the Companies shall execute and deliver to the Agent, for the benefit of each of the Lenders, such additional Promissory Notes as the Agent shall then request to reflect the increased Revolving Line of Credit, together with such resolutions, lien searches, opinions of counsel and other documents and instruments as the Agent may then reasonably request.’’

(f)    The definition of the ‘‘Supplemental Amount’’ appearing in Section 1 of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘Supplemental Amount shall mean the following amounts during the following time periods (in each case, minus all Supplemental Amount Reductions):

							
	Period			Supplemental Amount
	Closing Date through and including July  31,  2005				$	35,000,000	

	August  1,  2005 through and including September  15,  2005				$	35,000,000	

	September  16,  2005 through and including October  15,  2005				$	15,000,000	

	October  16,  2005 through and including April  30,  2006				$	0	

	May  1,  2006 through and including May  31,  2006				$	20,000,000	

	June  1,  2006 through and including June  30,  2006				$	35,000,000	

	July  1,  2006 through and including July  31,  2006				$	35,000,000	

	August  1,  2006 through and including September  15,  2006				$	35,000,000	

	September  16,  2006 through and including October  15,  2006				$	15,000,000	

	October  16,  2006 through and including April  30,  2007				$	0	

	May  1,  2007 through and including May  31,  2007				$	15,000,000	

	June  1,  2007 through and including June  30,  2007				$	17,000,000	

	July  1,  2007 through and including July  31,  2007				$	10,000,000	

	August  1,  2007 through and including September  15,  2007				$	10,000,000	

	September  16,  2007 through and including October  15,  2007				$	10,000,000	

	October  16,  2007 through and including the Termination Date				$	0	

	

In the event of a Permitted Acquisition, the Supplemental Amount shall be increased for each period set forth above, dollar for dollar, by (i) the cash component of the consideration of the Permitted Acquisition and (ii) the amount of any Permitted Distributions distributed prior to the periods listed above; provided, however, that in no event shall such increase in the Supplemental Amount (x) exceed the sum of $15,000,000 in the aggregate with respect to all Permitted Acquisitions and Permitted Distributions or (y) be effective at any time when the Supplemental Amount for such period as listed above is $0.’’

(g)    Definitions for the new terms ‘‘Amendment No. 4’’ and ‘‘Amendment No. 4 Closing Date’’ are inserted into Section 1 of the Financing Agreement as follows:

‘‘Amendment No. 4 shall mean Amendment No. 4 to this Financing Agreement, dated as of March  5, 2007.’’

‘‘Amendment No. 4 Closing Date shall mean March  5, 2007.’’

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(h)    Subsections (a), (b), (c) and (d) of Section 7.3 of the Financing Agreement are hereby amended and restated in their entireties as follows:

‘‘(a)    Effective Net Worth. Maintain as of the end of each fiscal quarter Effective Net Worth in an amount of not less than: (i) actual Effective Net Worth of the Companies for the fiscal quarter ending January  31,  2007, plus (ii) the net proceeds of any public offering received by the Companies subsequent to January  31,  2007, plus or minus, as applicable, (iii) (w) for the fiscal quarter ending April  30,  2007, minus the sum of $7,180,000, (x) for the two fiscal quarters ending July  31,  2007, minus the sum of $8,302,000, (y) for the three fiscal quarters ending October  31,  2007, plus the sum of $12,915,000 and (z) for the four fiscal quarters ending January  31,  2008, plus the sum of $14,328,000, minus (iv) Permitted Distributions distributed subsequent to January  31,  2007, minus (v) the sum of $7,000,000, minus (vi) an amount equal to all good will and other intangible assets (each determined in accordance with GAAP) attributable to Permitted Acquisitions during such fiscal period which was subtracted in the calculation of Effective Net Worth and the respective amounts for the end of each fiscal quarter subsequent to January  31,  2008 shall be determined by the Agent, the Required Lenders and the Companies based on the projected financial statements and cash flows of Parent and its consolidated Subsidiaries (the ‘‘Projections’’) for the fiscal year ending January  31,  2009, respectively (in each case delivered pursuant to Section 7.2(h)(iv)), after receipt and satisfactory review by the Agent of the respective Projections, but in no event shall Effective Net Worth be tested other than at the end of each fiscal quarter, or the required amounts be less than $55,000,000, unless the Agent determines (in its reasonable discretion) that such minimum amounts warrant downward adjustment based upon the applicable Projections or other information as Agent shall reasonably determine.’’

‘‘(b)    EBITDA. Not permit trailing twelve month EBITDA as of the end of each fiscal quarter set forth below to be less than the following for the applicable test period:

							
	Twelve Months Ending			EBITDA
	October  31,  2006				$	18,000,000	

	January  31,  2007				$	21,000,000	

	April  30,  2007				$	26,000,000	

	July  31,  2007				$	27,000,000	

	October  31,  2007				$	25,700,000	

	January  31,  2008				$	27,000,000	

	

and the respective amounts for each twelve month period subsequent to January  31,  2008 shall be determined by the Agent, the Required Lenders and the Companies based on the Projections of Parent and its consolidated Subsidiaries for the fiscal year ending January  31,  2009 (delivered pursuant to Section 7.2(h)(iv)), after receipt and satisfactory review by the Agent of the respective Projections, but in no event shall the periods be of other than twelve (12) months in duration, or the amounts be less than $15,000,000, unless the Agent determines (in its reasonable discretion) that such minimum amounts warrant downward adjustment based upon such Projections or other information as Agent shall reasonably determine.’’

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‘‘(c)    Fixed Charge Coverage.    Maintain a Fixed Charge Coverage Ratio, calculated for each of the periods set forth below, of not less than the following for the applicable test period:

				
	Fiscal Period			Ratio
	3 months ending October  31,  2005			1.35 to 1.00
	6 months ending January  31,  2006			1.30 to 1.00
	9 months ending April  30,  2006			1.05 to 1.00
	12 months ending July  31,  2006			0.85 to 1.00
	12 months ending October  31,  2006			1.00 to 1.00
	12 months ending January  31,  2007			1.00 to 1.00
	12 months ending April  30,  2007			1.00 to 1.00
	12 months ending July  31,  2007			1.00 to 1.00
	12 months ending October  31,  2007			1.00 to 1.00
	12 months ending January  31,  2008			1.00 to 1.00
	

and the respective amounts for each period subsequent to January  31,  2008 shall be determined by the Agent, the Required Lenders and the Companies based on the Projections of Parent and its consolidated Subsidiaries for the fiscal year ending January  31,  2009 (delivered pursuant to Section 7.2(h)(iv)), after receipt and satisfactory review by the Agent of the respective Projections. Notwithstanding the foregoing, if the actual Fixed Charge Coverage Ratio with respect to any period listed above is below 1.00 to 1.00, but not less than 0.90 to 1.00, the Companies will be considered in compliance with the Fixed Charge Coverage Ratio covenant if the Companies have more than $10,000,000 in Net Availability, not including the Supplemental Amount, as of the end of the applicable test period.’’

‘‘(d)    Capital Expenditures.    Not contract for, purchase, make expenditures for, lease pursuant to a Capitalized Lease or otherwise incur obligations with respect to Capital Expenditures (whether subject to a security interest or otherwise) during any fiscal year of the Companies in the aggregate amount in excess of $5,000,000; provided, however, that Capital Expenditures of up to an aggregate amount of $5,000,000 may be incurred during the term of this Agreement in connection with warehouse and showroom construction and renovation in addition to the annual permitted amount.’’

(i)    Section 7.4(g) of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘(g)    Investments.    (i) Create any new subsidiary, or (ii) make any advance or loan to, or any investment in, any firm, entity, person or corporation other than Permitted Intercompany Loans and Other Permitted Investments, or (iii) acquire any assets of (other than purchases of Inventory in the ordinary course of business), or any capital stock or any equity interests in, any firm, entity or corporation, other than current investments of such Company, any Guarantor and any subsidiary of such Company, as the case may be, in existing subsidiaries of such entities; provided, however that the Companies may consummate a ‘‘Permitted Acquisition,’’ which shall mean any acquisition of assets, capital stock or other equity interests of any firm, entity, person or corporation engaged in any retail or wholesale consumer products business and/or related services business, subject to the following conditions:

(i)    the aggregate consideration in respect of all acquisitions contemplated by this clause (g) shall not exceed (x) the sum of (A) $15,000,000 in cash (whether payable on or prior to the closing thereof or at any time thereafter through and including the Termination Date, but excluding any contingent ‘‘earn out’’ payments relating to such Permitted Acquisition) minus (B) the aggregate amount of any Permitted Distributions distributed during the term of this Agreement (reduced, but not below zero, by the net proceeds of any public offering received by the Companies subsequent to January  31,  2007), plus (y) an amount equal to $10,000,000 payable in the form of additional capital stock of Parent issued to the applicable seller in connection with such acquisition;

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(ii)    the relevant Company shall give the Agent and the Lenders not less than one (1) Business Day prior written notice of its intention to make a Permitted Acquisition, such notice (A) to include the proposed amounts, date and form of the proposed Permitted Acquisition, a reasonable description of the assets or stock to be acquired and the location of the relevant assets and (B) to be accompanied by a certificate executed by the chief executive officer, president, chief operating officer or chief financial officer of the relevant Company to the effect that: (1) as of the effective date of the Permitted Acquisition, no Default or Event of Default under this Agreement shall exist or would exist after giving effect to the action intended to be taken by the relevant Company as described in such certificate, including, without limitation, that the covenants set forth in Section 7.3 would not be breached after giving effect to such action, together with a calculation in reasonable detail, and in form and substance satisfactory to the Agent and the Lenders, of such compliance, and (2) the representations and warranties contained in this Agreement are true and correct with the same effect as though such representations and warranties were made on the date of such Permitted Acquisition, except for changes in the ordinary course of business none of which, either singly or in the aggregate, have had a material adverse effect on the business, operations or financial conditions of the relevant Company;

(iii)    concurrently with the making of a Permitted Acquisition, the relevant Company shall, as additional collateral security for the Obligations, grant to the Agent, for the ratable benefit of the Agent and the Lenders, prior liens on and security interests in all of its right, title and interest in and to any of the acquired stock and assets, by the execution and delivery to the Agent of such agreements, instruments and documents as shall be satisfactory in form and substance to the Agent; and

(iv)    the Companies shall not make any acquisition at any time during which an Event of Default shall exist and be continuing or would exist after giving effect to such acquisition.

The parties hereto acknowledge and agree that the Agent may impose limitations upon the inclusion in the Borrowing Base of any assets acquired in a Permitted Acquisition.

(j)    Section 7.4(k) of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘Retail Stores.    Open any additional retail stores during the period from the date hereof through the Termination Date; provided however, that the Companies may open full time stores so long as not more than four (4) such stores are open at any time.’’

(k)    Section 10.1(k) of the Financing Agreement is hereby amended and restated in its entirety as follows:

‘‘(k)    Morris Goldfarb (or, in the event of his death, his estate, legal representative or heirs) shall at any time beneficially own less than 15% in the aggregate of all of the issued and outstanding shares of capital stock of the Parent having ordinary voting rights for the election of directors;’’

3.    Conditions of Effectiveness.    This Amendment No. 4 shall become effective as of the date upon which Agent shall have received nine (9) copies of this Amendment No. 4 duly executed by the Companies, Agent and Lenders, and consented to by each Guarantor.

4.    Representations and Warranties.    Each of the Companies hereby represents, warrants and covenants as follows:

(a)    This Amendment No. 4 and the Loan Documents are and shall continue to be legal, valid and binding obligations of each of the Companies and Guarantors, respectively, and are enforceable against each Company and each Guarantor in accordance with their respective terms.

(b)    Upon the effectiveness of this Amendment No. 4, each Company and each Guarantor hereby reaffirms all covenants, representations and warranties made in the Loan Documents and agree that all such covenants, representations and warranties shall be deemed to have been remade 

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and are true and correct in all material respects as of the Amendment No. 4 Closing Date, after giving effect to this Amendment No. 4; provided, however, that the information contained in the Schedules attached to the Financing Agreement continues to be true, correct and complete as of the Closing Date, and there have been no changes to such matters as of the Amendment No. 4 Closing Date except to the extent any such change would not have a Material Adverse Effect, constitute a Default or Event or Default, or otherwise require notice to the Agent in accordance with the terms of the Financing Agreement.

(c)    Each Company and each Guarantor has the corporate and/or limited liability company power, and has been duly authorized by all requisite corporate and/or limited liability company action, to execute and deliver this Amendment No. 4 and to perform its obligations hereunder. This Amendment No. 4 has been duly executed and delivered by each Company and consented to by each Guarantor.

(d)    No Company or Guarantor has any defense, counterclaim or offset with respect to the Loan Documents.

(e)    The Loan Documents are in full force and effect, and are hereby ratified and confirmed.

(f)    The recitals set forth in the Background section above are truthful and accurate and are an operative part of this Amendment No. 4.

(g)    Agent and Lenders have and will continue to have a valid first priority lien and security interest in all Collateral except (as to priority) for liens expressly permitted to have priority under the Financing Agreement, and each Company and each Guarantor expressly reaffirms all guarantees, security interests and liens granted to Agent and Lenders pursuant to the Loan Documents.

(h)    No Defaults or Events of Default are in existence.

5.    Effect of Agreement.

(a)    Except as specifically amended herein, the Financing Agreement, and all other documents, instruments and agreements executed and/or delivered under or in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.

(b)    The execution, delivery and effectiveness of this Amendment No. 4 shall not operate as a waiver of any right, power or remedy of Agent or any Lender, or, except as specifically provided herein, constitute a waiver of any provision of the Financing Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.

6.    Reaffirmation.    Each Company hereby acknowledges and agrees that (a) the principal amount of the Term Loan outstanding on the Amendment No. 4 Closing Date is $21,750,000, (b)  the aggregate principal amount of the Revolving Loans outstanding on the Amendment No. 4 Closing Date is zero, (c) the aggregate principal amount of the Letters of Credit, Bankers Acceptances, Steamship Guaranties and Airway Releases outstanding on the Amendment No. 4 Closing Date is $5,092,603 and (d) the amounts referred to in the foregoing clauses (a), (b) and (c) are enforceable obligations of the Companies payable to Agent and the Lenders pursuant to the provisions of the Financing Agreement and the other Loan Documents without any deduction, offset, defense or counterclaim.

7.    Release.    Each Company and Guarantor hereby acknowledges and agrees that: (a) neither it nor any of its Affiliates has any claim or cause of action against Agent or any Lender (or any of their respective Affiliates, officers, directors, employees, attorneys, consultants or agents) and (b) Agent and each Lender has heretofore properly performed and satisfied in a timely manner all of its obligations to the Companies and their Affiliates under the Financing Agreement and the other Loan Documents. Notwithstanding the foregoing, Agent and the Lenders wish (and the Companies and Guarantors agree) to eliminate any possibility that any past conditions, acts, omissions, events or circumstances would impair or otherwise adversely affect any of the Agent’s and the Lenders’ rights, interests, security and/or remedies under the Financing Agreement and the other Loan Documents. Accordingly, for and in consideration of the agreements contained in this Amendment and other good 

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and valuable consideration, each Company and each Guarantor (for itself and its Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the ‘‘Releasors’’) does hereby fully, finally, unconditionally and irrevocably release and forever discharge Agent and each Lender and each of their respective Affiliates, officers, directors, employees, attorneys, consultants and agents (collectively, the ‘‘Released Parties’’) from any and all debts, claims, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done on or prior to the Amendment No. 4 Closing Date arising out of, connected with or related in any way to this Amendment No. 4, the Financing Agreement or any other Loan Document, or any act, event or transaction related or attendant thereto, or the agreements of Agent or any Lender contained therein, or the possession, use, operation or control of any of the assets of any Company or any Guarantor, or the making of any Loan or other advance, or the management of such Loan or advance or the Collateral.

8.    Governing Law.    This Amendment No. 4 shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.

9.    Headings.    Section headings in this Amendment No. 4 are included herein for convenience of reference only and shall not constitute a part of this Amendment No. 4 for any other purpose.

10.    Counterparts; Facsimile.    This Amendment No. 4 may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission, or in ‘‘pdf’’ format circulated by electronic means, shall be deemed to be an original signature hereto.

[remainder of page intentionally left blank]

[signature pages follow]

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IN WITNESS WHEREOF, this Amendment No. 4 to Financing Agreement has been duly executed as of the day and year first written above.

		G-III LEATHER FASHIONS, INC.

		By: /s/ Wayne S. Miller                    

			
		 	Name: Wayne S. Miller
Title:     Senior Vice President

		J. PERCY FOR MARVIN RICHARDS, LTD.

		By: /s/ Wayne S. Miller                    

			
		 	Name: Wayne S. Miller
Title:     Vice President

		CK OUTERWEAR, LLC

		By: /s/ Wayne S. Miller                    

			
		 	Name: Wayne S. Miller
Title:     Vice President

		THE CIT GROUP/COMMERCIAL SERVICES, INC., as Agent and Lender

		By: /s/ Edward J. Ahearn                

			
		 	Name: Edward J. Ahearn
Title:     Senior Vice President

		Revolving Credit Commitment $48,541,312
Revolving Credit Pro Rata Percentage: 29.4190%
Term Loan Commitment $3,938,185
Term Loan Pro Rata Percentage: 18.1066%

		[signatures continued on succeeding page]

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		HSBC BANK USA, NATIONAL ASSOCIATION, as Lender

		By: /s/ Michael P. Behuniak                   

			
		 	Name: Michael P. Behuniak
Title:     Vice President

		Revolving Credit Commitment $26,654,260
Revolving Credit Pro Rata Percentage: 16.1541%
Term Loan Commitment $3,864,888
Term Loan Pro Rata Percentage: 17.7696%

		WEBSTER BUSINESS CREDIT, as Lender

		By: /s/ Joseph Zautra                            

			
		 	Name: Joseph Zautra
Title:     Senior Vice President

		Revolving Credit Commitment $11,276,884
Revolving Credit Pro Rata Percentage: 6.8345%
Term Loan Commitment $1,486,439
Term Loan Pro Rata Percentage: 6.8342%

		COMMERCE BANK, N.A., as Lender

		By: /s/ Robert G. Maichin                    

			
		 	Name: Robert G. Maichin
Title:     Vice President

		Revolving Credit Commitment $15,992,556
Revolving Credit Pro Rata Percentage: 9.6925%
Term Loan Commitment $3,864,888
Term Loan Pro Rata Percentage: 17.7696%

		[signatures continued on succeeding page]

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		BANK LEUMI USA, as Lender

		By: /s/ John Koenigsberg                    

			
		 	Name: John Koenigsberg
Title:     First Vice President

		By: /s/ Iris Steinhardt                         

			
		 	Name: Iris Steinhardt
Title:     Vice President

		Revolving Credit Commitment $13,327,130
Revolving Credit Pro Rata Percentage: 8.0770%
Term Loan Commitment $1,757,748
Term Loan Pro Rata Percentage: 8.0816%

		ISRAEL DISCOUNT BANK OF NEW YORK, as Lender

		By: /s/ Juan C. Zaino                          

			
		 	Name: Juan C. Zaino
Title:     First Vice President

		By: /s/ Dina Tourloukis                      

			
		 	Name: Dina Tourloukis
Title:    Assistant Vice President

		Revolving Credit Commitment $26,654,260
Revolving Credit Pro Rata Percentage: 16.1541%
Term Loan Commitment $3,864,888
Term Loan Pro Rata Percentage: 17.7696%

		[signatures continued on succeeding page]

11

		JPMORGAN CHASE BANK, N.A., as Lender

		By: /s/ Joseph J. Nastri                        

			
		 	Name: Joseph J. Nastri
Title:     Senior Vice President

		Revolving Credit Commitment $9,021,433
Revolving Credit Pro Rata Percentage: 5.4675%
Term Loan Commitment $1,189,181
Term Loan Pro Rata Percentage: 5.4675%

		SIGNATURE BANK, as Lender

		By: /s/ R. David Pontius                    

			
		 	Name: R. David Pontius
Title:     Senior Vice President

		Revolving Credit Commitment $13,532,165
Revolving Credit Pro Rata Percentage: 8.2013%
Term Loan Commitment $1,783,783
Term Loan Pro Rata Percentage: 8.2013%

12

The foregoing Amendment No. 4
is hereby acknowledged
 and consented to:

G-III APPAREL GROUP, LTD.

By: /s/ Neal S. Nackman                    

		
	 	Name: Neal S. Nackman
Title:     Chief Financial Officer

G-III RETAIL OUTLETS INC.

By: /s/ Neal S. Nackman                    

		
	 	Name: Neal S. Nackman
Title:     Vice President – Finance

G-III LICENSE COMPANY LLC

By: /s/ Neal S. Nackman                    

		
	 	Name: Neal S. Nackman
Title:     Chief Financial Officer

G-III BRANDS, LTD.

By: /s/ Neal S. Nackman                    

		
	 	Name: Neal S. Nackman
Title:     Vice President – Finance

13FOURTH LOAN MODIFICATION AGREEMENT
	 

	 
		This Fourth Loan Modification Agreement (this “Loan Modification
		Agreement”) is entered into as of March 6, 2007, and is effective as of
		February 15, 2007, 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 535 Fifth Avenue, 27th Floor, 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 September 13,
		2005, evidenced by, among other documents, a certain Amended and Restated Loan
		and Security Agreement dated as of September 13, 2005, between Borrower and
		Bank, as amended by a certain First Loan Modification Agreement dated as of
		March 14, 2006, between Borrower and Bank, as further amended by a certain
		Second Loan Modification Agreement dated as of October 31, 2006, between
		Borrower and Bank, and as further amended by a certain Third Loan Modification
		Agreement dated as of November 11, 2006, 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 and the
		Intellectual Property Collateral as described in a certain Intellectual
		Property Security Agreement dated as of October 31, 2006 (the “IP Security
		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, appearing
		as Section 1 of the Schedule to the Loan Agreement:
	 

	 
		“Section 1
	 

	 
		Credit Limit
	 

	 
		(Section 1.1):
	 

	 
		An amount not to exceed the lesser of (A) or (B), below:  
	 

	 
		

	 

	 
		(A)
	 

	 
		(i)
	 

	 
		$4,000,000.00 (the “Maximum Credit Limit”); minus
	 

	 
		

	 

	 
		(ii)
	 

	 
		the aggregate amounts then undrawn on all outstanding letters of credit,
		foreign exchange contracts, or any other accommodations issued or incurred, or
		caused to be issued or incurred by Silicon for the account and/or benefit of
		the Borrower.
	 

	 
		

	 

	 
		(B)
	 

	 
		(i)
	 

	 
		70.0% of the amount of the Borrower’s Eligible Accounts;
		minus
	 

	 
		

	 

	 
		(ii)
	 

	 
		the aggregate amounts then undrawn on all outstanding letters of credit,
		foreign exchange contracts, or any other accommodations
	 

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		issued or incurred, or caused to be issued or incurred by Silicon for the
		account and/or benefit of the Borrower.
	 

	 
		

	 

	 
		Silicon may, from time to time, modify the advance rate(s) set forth
		herein in its good faith business judgment upon notice to Borrower based on
		changes in collection experience with respect to the Accounts or other issues
		or factors relating to the Accounts or the Collateral.
	 

	 
		

	 

	 
		Letter of Credit/Foreign Exchange Contract/Cash Management Services
		Sublimit
	 

	 
		(Section 1.6, 1.7, 1.8):
	 

	 
		$1,000,000.00”
	 

	 
		and inserting in lieu thereof the following:
	 

	 
		“Section 1
	 

	 
		Credit Limit
	 

	 
		(Section 1.1):
	 

	 
		An amount not to exceed the lesser of (A) or (B), below:  
	 

	 
		

	 

	 
		(A)
	 

	 
		(i)
	 

	 
		$2,500,000.00 (the “Maximum Credit Limit”); minus
	 

	 
		

	 

	 
		(ii)
	 

	 
		the aggregate amounts then undrawn on all outstanding letters of credit,
		foreign exchange contracts, or any other accommodations issued or incurred, or
		caused to be issued or incurred by Silicon for the account and/or benefit of
		the Borrower.
	 

	 
		

	 

	 
		(B)
	 

	 
		(i)
	 

	 
		80.0% of the amount of the Borrower’s Eligible Accounts;
		minus
	 

	 
		

	 

	 
		(ii)
	 

	 
		the aggregate amounts then undrawn on all outstanding letters of credit,
		foreign exchange contracts, or any other accommodations issued or incurred, or
		caused to be issued or incurred by Silicon for the account and/or benefit of
		the Borrower.
	 

	 
		

	 

	 
		Silicon may, from time to time, modify the advance rate(s) set forth
		herein in its good faith business judgment upon notice to Borrower based on
		changes in collection experience with respect to the Accounts or other issues
		or factors relating to the Accounts or the Collateral.
	 

	 
		

	 

	 
		Letter of Credit/Foreign Exchange Contract/Cash Management Services
		Sublimit
	 

	 
		(Section 1.6, 1.7, 1.8):
	 

	 
		$1,000,000.00”
	 

	 
		2
	 

	 
		The Loan Agreement shall be amended by deleting the following, appearing
		as Section 2 of the Schedule to the Loan Agreement:
	 

	 
		“
	 

	 
		Section 2.
	 

	 
		INTEREST.
	 

	 
		

	 

	 
		

	 

	 
		Interest Rate (Section 1.2):
	 

	 
		

	 

	 
		Prior to the occurrence of the Transition Event, a rate equal to the
		Prime Rate in effect from time to time, plus 1.50% per annum.
	 

	 
		

	 

	 
		
 
 

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		Upon the occurrence of the Transition Event and thereafter, a rate equal
		to the Prime Rate plus 2.50% per annum.  
	 

	 
		

	 

	 
		Interest shall be calculated on the basis of a 360-day year for the
		actual number of days elapsed.  “Prime Rate” means the rate
		announced from time to time by Silicon as its “prime rate;” it is a
		base rate upon which other rates charged by Silicon are based, and it is not
		necessarily the best rate available at Silicon.  The interest rate
		applicable to the Obligations shall change on each date there is a change in
		the Prime Rate.
	 

	 
		

	 

	 
		Minimum Monthly Interest (Section 1.2):
		  $7,500.00.”
	 

	 
		and inserting in lieu thereof the following:
	 

	 
		“
	 

	 
		Section 2.
	 

	 
		INTEREST.
	 

	 
		

	 

	 
		Interest Rate (Section 1.2):
	 

	 
		

	 

	 
		Prior to the occurrence of the Transition Event, a rate equal to the
		Prime Rate in effect from time to time, plus 1.50% per annum.
	 

	 
		

	 

	 
		Upon the occurrence of the Transition Event and thereafter, a rate equal
		to the Prime Rate plus 1.50% per annum; provided, however, if Borrower’s
		Liquidity (as defined in Section 5 of this Schedule) is less than $2,500,000 at
		any time during any month, then, during such month and during each month
		thereafter in which Borrower’s Liquidity is less than $2,500,000 at any
		time, the interest rate shall be a rate equal to the Prime Rate plus 2.0% per
		annum.
	 

	 
		

	 

	 
		Interest shall be calculated on the basis of a 360-day year for the
		actual number of days elapsed.  “Prime Rate” means the rate
		announced from time to time by Silicon as its “prime rate;” it is a
		base rate upon which other rates charged by Silicon are based, and it is not
		necessarily the best rate available at Silicon.  The interest rate
		applicable to the Obligations shall change on each date there is a change in
		the Prime Rate.
	 

	 
		3
	 

	 
		The Loan Agreement shall be amended by deleting the following text,
		appearing in Section 3 of the Schedule to the Loan Agreement:
	 

	 
		“
	 

	 
		Collateral Handling Fee:   Upon the occurrence of a Transition
		Event, Borrower shall pay Silicon a collateral handling fee of $1,000.00 per
		month, payable in arrears on the last day of each month, commencing with the
		month in which the Transition Event occurs.
	 

	 
		

	 

	 
		Unused Line Fee:   Prior to the occurrence of the Transition
		Event, in the event, in any calendar month (or portion thereof at the beginning
		and end of the term hereof), the average daily principal balance of the Loans
		outstanding during the month is less than the amount of the Maximum Credit
		Limit, Borrower shall pay Silicon an unused line fee in an amount equal to
		0.375% per annum on the difference between the amount of the Maximum Credit
		Limit and the average daily principal balance of the Loans outstanding during
		the month, which unused line fee shall be computed and paid monthly, in
		arrears, on the last day of each month.”
	 

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		and inserting in lieu thereof the following:
	 

	 
		“
	 

	 
		Collateral Handling Fee:    Upon the occurrence of a Transition
		Event, Borrower shall pay Silicon a collateral handling fee of $500.00 per
		month ($250.00 if Borrower is on “non-borrowing reporting status”, as
		described in Section 6 of this Schedule), payable in arrears on the last day of
		each month, commencing with the month in which the Transition Event occurs.
	 

	 
		

	 

	 
		Unused Line Fee:   In the event, in any calendar month (or
		portion thereof at the beginning and end of the term hereof), the average daily
		principal balance of the Loans outstanding during the month is less than the
		amount of the Maximum Credit Limit, Borrower shall pay Silicon an unused line
		fee in an amount equal to 0.75% per annum on the difference between the amount
		of the Maximum Credit Limit and the average daily principal balance of the
		Loans outstanding during the month, which unused line fee shall be computed and
		paid monthly, in arrears, on the last day of each month.”
	 

	 
		4
	 

	 
		The Loan Agreement shall be amended by deleting the following, appearing
		as Section 4 of the Schedule to the Loan Agreement:
	 

	 
		“Section 4
	 

	 
		MATURITY DATE
	 

	 
		(Section 6.1):
	 

	 
		February 15, 2007.”
	 

	 
		and inserting in lieu thereof the following:
	 

	 
		“Section 4
	 

	 
		MATURITY DATE
	 

	 
		(Section 6.1):
	 

	 
		April 1, 2008.”
	 

	 
		5
	 

	 
		The Loan Agreement shall be am ended by deleting the following, appearing
		as Section 5 of the Schedule to the Loan Agreement:
	 

	 
		“
	 

	 
		Section 5
	 

	 
		FINANCIAL COVENANTS
	 

	 
		

	 

	 
		(Section 5.1):
	 

	 
		Borrower shall comply with each of the following covenant(s).  
	 

	 
		

	 

	 
		Compliance shall be determined as of the end of each month, except as
		otherwise specifically provided below:
	 

	 
		

	 

	 
		a. Adjusted Quick Ratio:
	 

	 
		

	 

	 
		Borrower shall maintain, at all times, to be tested monthly, an Adjusted
		Quick Ratio of at least 1.35 to 1.00 as of the last day of each month during
		the term of this Agreement.
	 

	 
		

	 

	 
		b. EBITDAS.  Borrower shall have, to be tested as of
		the last day of each quarter, EBITDAS of at least:
	 

	 
		

	 

	 
		(i)
	 

	 
		($4,133,999) for the quarter ending September 30, 2005; and
	 

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		(ii)
	 

	 
		for the quarter ending December 31, 2005 and for each subsequent quarter
		ending, either (A) at least $1.00 greater than Borrower’s EBITDAS for the
		immediately preceding quarter, or (B) EBITDAS of at least $1.00.
	 

	 
		

	 

	 
		

	 

	 
		Definitions.
	 

	 
		For purposes of the foregoing financial covenants, the following term
		shall have the following meaning:
	 

	 
		

	 

	 
		“Adjusted Quick Ratio” is the ratio of (i) Quick Assets to (ii)
		Current Liabilities minus Deferred Revenue.
	 

	 
		

	 

	 
		“Current Liabilities” are all obligations and liabilities of
		Borrower to Bank, plus, without duplication, the aggregate amount of
		Borrower’ s Total Liabilities which mature within one (1) year.
	 

	 
		

	 

	 
		“EBITDAS” means earnings before interest expense (excluding
		interest income), taxes, depreciation, amortization and stock compensation
		expense in accordance with GAAP.
	 

	 
		

	 

	 
		“Quick Assets” is, on any date, the Borrower’s
		unrestricted cash and net billed accounts receivable.”
	 

	 
		and inserting in lieu thereof the following:
	 

	 
		“
	 

	 
		Section 5
	 

	 
		FINANCIAL COVENANTS
	 

	 
		

	 

	 
		(Section 5.1):
	 

	 
		Borrower shall comply with each of the following covenants.  
	 

	 
		

	 

	 
		Compliance shall be determined as of the end of each month, except as
		otherwise specifically provided below:
	 

	 
		

	 

	 
		a. Tangible Net Worth:  Borrower shall maintain a Tangible
		Net Worth of at least (i) $1,700,000 as of the months ending January 31, 2007,
		February 28, 2007 and March 31, 2007, (ii) $600,000 as of the months ending
		April 30, 2007, May 31, 2007 and June 30, 2007, (iii) ($150,000) as of the
		months ending July 31, 2007, August 31, 2007 and September 30, 2007, and (iv)
		$1.00 as of the month ending October 31, 2007 and as of the last day of each
		month thereafter.  Notwithstanding the foregoing, the numbers listed above
		shall increase by 70% of issuances of equity after March 6, 2007 and the
		principal amount of Subordinated Debt.
	 

	 
		

	 

	 
		b. Liquidity.  Borrower shall have, at all times, to
		be tested by Silicon as of any day, Liquidity of at least $1,000,000.
	 

	 
		

	 

	 
		Definitions.
	 

	 
		For purposes of the foregoing financial covenants, the following term
		shall have the following meaning:
	 

	 
		

	 

	 
		“Contingent Obligation” is, for any Person, any direct or
		indirect liability, contingent or not, of that Person for (a) any indebtedness,
		capital lease, dividend, letter of credit or other obligation of another such
		as an obligation directly or indirectly guaranteed, endorsed, co-made,
		discounted or sold with recourse by that Person, or for which that Person is
		directly or indirectly liable; (b) any obligations for undrawn letters of
		credit for the account of that Person;
	 

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		and (c) all obligations from any interest rate, currency or commodity
		swap agreement, interest rate cap or collar agreement, or other agreement or
		arrangement designated to protect a Person against fluctuation in interest
		rates, currency exchange rates or commodity prices; but “Contingent
		Obligation” does not include endorsements in the ordinary course of
		business.  The amount of a Contingent Obligation is the stated or
		determined amount of the primary obligation for which the Contingent Obligation
		is made or, if not determinable, the maximum reasonably anticipated liability
		for it determined by the Person in good faith; but the amount may not exceed
		the maximum of the obligations under any guarantee or other support
		arrangement.
	 

	 
		

	 

	 
		“Indebtedness” is (a) indebtedness for borrowed money or the
		deferred price of property or services, such as reimbursement and other
		obligations for surety bonds and letters of credit, (b) obligations evidenced
		by notes, bonds, debentures or similar instruments, (c) capital lease
		obligations, and (d) Contingent Obligations.
	 

	 
		

	 

	 
		“Liquidity” means the amount of unrestricted cash of Borrower
		at Silicon plus Borrower’s unused availability as determined by Silicon
		pursuant to Section 1 of this Schedule.
	 

	 
		

	 

	 
		“Subordinated Debt” is indebtedness incurred by Borrower
		subordinated to all of Borrower’s now or hereafter indebtedness to Silicon
		(pursuant to a subordination, intercreditor, or other similar agreement in form
		and substance satisfactory to Silicon entered into between Silicon and the
		other  creditor), on terms acceptable to Silicon.
	 

	 
		

	 

	 
		“Tangible Net Worth” is, on any date, the total assets of
		Borrower minus (a) any amounts attributable to (i) goodwill, (ii)
		intangible items including unamortized debt discount and expense, patents,
		trade and service marks and names, copyrights and research and development
		expenses except prepaid expenses, (iii) notes, accounts receivable and other
		obligations owing to Borrower from its officers or other Affiliates, and (iv)
		reserves not already deducted from assets, minus (b) Total Liabilities
		(excluding non-cash charges to stock options and restricted stock in the
		ordinary course of business and up to $200,000 in foreign exchange contract
		fluctuations), plus (c) Subordinated Debt.
	 

	 
		

	 

	 
		“Total Liabilities” is on any day, obligations that should,
		under GAAP, be classified as liabilities on Borrower’s consolidated
		balance sheet, including all Indebtedness, and current portion of Subordinated
		Debt permitted by Silicon to be paid by Borrower, but excluding all other
		Subordinated Debt.”
	 

	 
		

	 

	 
		6
	 

	 
		The Loan Agreement shall be amended by deleting the following text,
		appearing in Section 6 of the Schedule to the Loan Agreement:
	 

	 
		“
	 

	 
		(b)
	 

	 
		After the occurrence of the Transition Event, weekly (bi-weekly if
		Borrower’s unrestricted cash plus amounts available to be borrowed
		hereunder exceeds $1,000,000.00, and monthly if Borrower’s unrestricted
		cash plus amounts available to be borrowed hereunder exceeds $5,000,000.00, and
		monthly, if no amounts are outstanding under this Agreement and Borrower has
		advised Silicon in writing that it has elected to be on “non-borrowing
		reporting status”, provided Borrower has provided sufficient advance
		notification to Silicon to perform a field examination), and upon each loan
		request, borrowing base certificates and transaction reports.”
	 

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		and inserting in lieu thereof the following:
	 

	 
		“
	 

	 
		(b)
	 

	 
		weekly, or monthly, if no amounts are outstanding under this Agreement
		(except with respect to letters of credit) and Borrower has advised Silicon in
		writing that it has elected to be on “non-borrowing reporting
		status”, provided Borrower has provided sufficient advance notification to
		Silicon to perform a field examination, and upon each loan request, borrowing
		base certificates and transaction reports.”
	 

	 
		7
	 

	 
		The Loan Agreement shall be amended by deleting the following, appearing
		as Section 6 of the Schedule to the Loan Agreement:
	 

	 
		“
	 

	 
		(g)
	 

	 
		Annual audited financial statements, as soon as available, and in
		any event within 120 days following the end of Borrower’s fiscal year,
		prepared under GAAP, consistently applied, together with an unqualified
		opinion on the financial statements from an independent certified public
		accounting firm reasonably acceptable to Silicon.”
	 

	 
		

	 

	 
		and inserting in lieu thereof the following:
	 

	 
		

	 

	 
		“
	 

	 
		(g)
	 

	 
		Annual audited financial statements, as soon as available, and in
		any event within 180 days following the end of Borrower’s fiscal year,
		prepared under GAAP, consistently applied, together with an unqualified
		opinion on the financial statements from an independent certified public
		accounting firm reasonably acceptable to Silicon.”
	 

	 
		

	 

	 
		B.
	 

	 
		Waiver.  Bank hereby waives Borrower’s existing defaults
		under the Loan Agreement by virtue of Borrower’s failure to comply with
		(i) the financial covenant set forth in subsection (a) of Section 5 of the
		Schedule to the Loan Agreement (relative to Borrower’s Adjusted Quick
		Ratio) (required prior to this Loan Modification Agreement) as of the months
		ended July 31, 2006, August 31, 2006 and September 30, 2006, and (ii) the
		financial covenant set forth in subsection (b) of Section 5 of the Schedule to
		the Loan Agreement (relative to Borrower’s EBITDAS) (required prior to
		this Loan Modification Agreement) as of the quarter ended September 30, 2006.
		 Bank’s waiver of Borrower’s compliance of said affirmative
		covenants shall apply only to the foregoing specific periods.
	 

	 
		

	 

	 
		4.
	 

	 
		FEES.  Borrower shall pay to Bank a modification fee equal to
		Twenty Thousand Dollars ($20,000.00) which fee shall be due on the date hereof
		and shall be deemed fully earned as of the date hereof.  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 IP SECURITY AGREEMENT.  Borrower hereby
		ratifies, confirms and reaffirms, all and singular, the terms and conditions of
		the IP Security Agreement and acknowledges, confirms and agrees that the IP
		Security Agreement contains an accurate and complete listing of all
		Intellectual Property Collateral as defined therein.
	 

	 
		6.
	 

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

	 
		
 

	 

	 
		

	 

	 
		

	 

	 
	 
		

	 

	 
		

	 

	 
		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 of the date first written
		above.
	 

	 
		BORROWER:
	 

	 
		BANK:
	 

	 
		AXS-ONE INC.
	 

	 
		SILICON VALLEY BANK
	 

	 
		By:   /S/ Joseph P. Dwyer
	 

	 
		By:   /S/ Jay T. Tracy
	 

	 
		Name:   Joseph P. Dwyer
	 

	 
		Name:   Jay T. Tracy
	 

	 
		Title:   Chief Financial Officer
	 

	 
		Title:   Vice President

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