Document:

ex10-3.htm

    Exhibit
10.3

     

    THIRD
AMENDED AND RESTATED SUBORDINATION AGREEMENT

     

    This
Third Amended and Restated Subordination Agreement is made as of June 26, 2009
by and among BlueLine Capital Partners, LP, a Delaware limited partnership, as
agent (“PIPE
Agent”) for the secured parties under the PIPE Security Agreement (as
defined below), BlueLine Capital Partners, LP, a Delaware limited partnership,
as agent (“Debt
Agent”, and together with the PIPE Agent, the “Agents”) for the
secured parties under the Debt Security Agreement (as defined below), and Sand
Hill Finance, LLC (“SHF”).

     

    Recitals

     

    Pursuant
to a Security Agreement dated as of May 29, 2007, as amended on November 16,
2007, July 24, 2008, October 30, 2008 and June 26, 2009 (the “PIPE Security
Agreement”), among AXS-One Inc. (“Borrower”), PIPE
Agent and the other secured parties set forth therein (PIPE Agent and such other
secured parties together, the “PIPE Creditors”),
Borrower granted a security interest in certain of its assets to PIPE Agent for
the benefit of the PIPE Creditors.

     

    Pursuant
to a Security Agreement dated as of June 26, 2009 (the “Debt Security
Agreement”), among Borrower, Debt Agent and the other secured parties set
forth therein (Debt Agent and such other secured parties together, the “Debt Creditors”, and
together with the PIPE Creditors, the “Creditors”), Borrower
granted a security interest in certain of its assets to Debt Agent for the
benefit of the Debt Creditors.

     

    The Pipe
Agent entered into a Subordination Agreement dated as of May 29, 2007, as
amended and restated as of July 24, 2008 by Pipe Agent and SHF, and as further
amended and restated as of October 30, 2008 by Pipe Agent and SHF (such
Subordination Agreement, as amended and restated, the “Existing Subordination
Agreement”).

     

    To induce
SHF to purchase accounts and extend credit to Borrower, from time to time, or to
grant such renewals or extension of any such credit or purchase, the Agents, on
behalf of the Creditors, are willing to subordinate:  (a) all of
Borrower’s indebtedness and obligations to the Creditors, whether presently
existing or arising in the future (the “Subordinated Debt”)
to all of Borrower’s indebtedness and obligations to SHF; and (b) all of the
Creditors’ security interests, if any, in the Borrower’s property, to all of
SHF’s security interests in Borrower’s property.

     

    To induce
the Debt Creditors to purchase promissory notes (the “2009 Promissory
Notes”) from Borrower, the PIPE Agent, on behalf of the PIPE Creditors,
is willing to subordinate:  (a) all of Borrower’s indebtedness and
obligations to the PIPE Creditors in such capacity, whether presently existing
or arising in the future (the “PIPE Subordinated
Debt”) to all of Borrower’s indebtedness and obligations to the Debt
Creditors in such capacity; and (b) all of the PIPE Creditors’ security
interests, if any, in the Borrower’s property, to all of the Debt Creditor’s
security interests in Borrower’s property.

     

    The
Borrower has entered into the Agreement and Plan of Merger, dated as of April
16, 2009, by and among Unify Corporation (“Unify”), a
wholly-owned subsidiary of Unify (“Merger Sub”) and the
Borrower, which provides for the merger (the “Merger”) of Merger
Sub with and into the Borrower, subject to the terms and conditions set forth
therein.

     

    To induce
Unify to consent to the issuance of the 2009 Promissory Notes, SHF and the
Agents (collectively, the “Borrower Creditors”),
on behalf of the Debt Creditors and the PIPE Creditors, are willing to
subordinate as of and from the closing of the Merger:  (a) all of
Borrower’s indebtedness and obligations to the Borrower Creditors in such
capacity, whether presently existing or arising in the future (the “Borrower Debt”) to
all of Unify’s indebtedness and obligations to ComVest Capital LLC (“ComVest”) in
connection with the Revolving Credit and Term Note Agreement, dated as of
November 20, 2006, by and between ComVest and Unify (such agreement, including
any amendments thereto, the “Revolving Credit
Agreement”), and the transactions contemplated thereby; and (b) all of
their respective security interests, if any, in the Borrower’s property, to all
of ComVest’s security interests in Borrower’s property that may arise upon the
closing of the Merger.

     

    The
Agents and SHF desire to amend and restate the Existing Subordination Agreement
as set forth in herein.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    NOW,
THEREFORE, THE PARTIES AGREE AS FOLLOWS:

     

    1. Subordination of the
Subordinated Debt.

     

    (a)           The
Creditors subordinate any security interest or lien that the Creditors may have
in any property of Borrower to SHF.  Notwithstanding the respective
dates of attachment or perfection of the security interest of the Creditors and
the security interest of SHF, the security interest of SHF in the Collateral, as
defined in the Financing Agreement between Borrower and SHF, dated as of May 22,
2008, as amended from time to time (the “Financing
Agreement”), shall at all times be prior to the security interest of the
Creditors.  Capitalized terms not otherwise defined herein shall have
the same meaning as in the Financing Agreement for purposes of this Section
1.

     

    (b)           All
Subordinated Debt is subordinated in right of payment to all obligations of
Borrower to SHF 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 Financing Agreement (the “Senior
Debt”).

     

    (c)           The
Creditors shall not demand or receive from Borrower (and Borrower shall not pay
to the Creditors) all or any part of the Subordinated Debt, by way of payment,
prepayment, setoff, lawsuit or otherwise, nor shall the Creditors exercise any
remedy with respect to the Collateral, nor shall the Creditors commence, or
cause to commence, prosecute or participate in any administrative, legal or
equitable action against Borrower, for so long as any portion of the Senior Debt
remains outstanding.  Notwithstanding the foregoing, each Creditor
shall be entitled to receive each regularly scheduled payment of interest under
any promissory note issued by Borrower to the Creditor evidencing the
Subordinated Debt, provided that no Event of Default has occurred under the
Financing Agreement that is continuing or would exist immediately after giving
effect to such payment.  The Creditors shall promptly deliver to SHF
in the form received (except for endorsement or assignment by the Creditors
where required by SHF) for application to the Senior Debt any payment,
distribution, security or proceeds received by the Creditors with respect to the
Subordinated Debt other than in accordance with this Agreement.

     

    (d)           This
Section 1 shall remain effective for so long as SHF has any obligation to make
credit extensions to Borrower or Borrower owes any amounts to SHF under the
Financing Agreement.  If, at any time after payment in full of the
Senior Debt any payments of the Senior Debt must be disgorged by SHF 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 the Creditors shall immediately pay over to SHF 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 the Creditors, SHF may take such actions with respect to
the Senior Debt as SHF, 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
SHF’s rights hereunder.

     

    (e)           Notwithstanding
any provision herein to the contrary, nothing contained in this Agreement shall
apply to or restrict any portion of the Subordinated Debt from being converted
into Borrower’s equity securities in accordance with its existing terms, as
applicable.

     

    2. Subordination of the PIPE
Subordinated Debt.

     

    (a)           The
PIPE Creditors subordinate any security interest or lien that the PIPE Creditors
may have in any property of Borrower to the Debt
Creditors.  Notwithstanding the respective dates of attachment or
perfection of the security interest of the PIPE Creditors and the security
interest of the Debt Creditors, the security interest of the Debt Creditors in
the Collateral, as defined in the Debt Security Agreement, shall at all times be
prior to the security interest of the PIPE Creditors.  Capitalized
terms not otherwise defined herein shall have the same meaning as in the Debt
Security Agreement for purposes of this Section 2.

     

    (b)           All
PIPE Subordinated Debt is subordinated in right of payment to all obligations of
Borrower to the Debt Creditors 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 Debt Security Agreement (the “Mezzanine
Debt”).

     

    (c)           The
PIPE Creditors shall not demand or receive from Borrower (and Borrower shall not
pay to the PIPE Creditors) all or any part of the PIPE Subordinated Debt, by way
of payment, prepayment, setoff, lawsuit or otherwise, nor shall the PIPE
Creditors exercise any remedy with respect to the Collateral, nor shall the PIPE
Creditors commence, or cause to commence, prosecute or participate in any
administrative, legal or equitable action against Borrower, for so long as any
portion of the Mezzanine Debt remains outstanding.  Notwithstanding
the foregoing, each PIPE Creditor shall be entitled to receive each regularly
scheduled payment of interest under any promissory note issued by Borrower to
the PIPE Creditor evidencing the PIPE Subordinated Debt, provided that no Event
of Default has occurred under the Debt Security Agreement that is continuing or
would exist immediately after giving effect to such payment.  The PIPE
Creditors shall promptly deliver to the Debt Creditors in the form received
(except for endorsement or assignment by the PIPE Creditors where required by
the Debt Creditors) for application to the Mezzanine Debt any payment,
distribution, security or proceeds received by the PIPE Creditors with respect
to the PIPE Subordinated Debt other than in accordance with this Agreement,
subject to the rights of SHF set forth in Section 1 above.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (d)           This
Section 2 shall remain effective for so long as Borrower owes any amounts to the
Debt Creditors under the promissory notes secured by the Debt Security
Agreement.  If, at any time after payment in full of the Mezzanine
Debt any payments of the Mezzanine Debt must be disgorged by the Debt Creditors
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 the PIPE Creditors shall immediately pay over to the Debt
Creditors all payments received with respect to the PIPE Subordinated Debt to
the extent that such payments would have been prohibited hereunder, subject to
the rights of SHF set forth in Section 1 above.  At any time and from
time to time, without notice to the PIPE Creditors, the Debt Creditors may take
such actions with respect to the Mezzanine Debt as the Debt Creditors, in their
sole discretion, may deem appropriate, including, without limitation, 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 Mezzanine Debt and any collateral securing the Mezzanine
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 the Debt Creditors’ rights hereunder.

     

    (e)           Notwithstanding
any provision herein to the contrary, nothing contained in this Agreement shall
apply to or restrict any portion of the PIPE Subordinated Debt from being
converted into Borrower’s equity securities in accordance with its existing
terms, as applicable.

     

    3. Subordination of the
Borrower Debt.

     

    The
Borrower Creditors hereby agree to the following provisions of this Section 3 as
of and from the closing of the Merger.

     

    (a)           The
Borrower Creditors subordinate any security interest or lien that the Borrower
Creditors may have in any property of Borrower to
ComVest.  Notwithstanding the respective dates of attachment or
perfection of the security interest of the Borrower Creditors and the security
interest of ComVest, the security interest of ComVest in the Collateral, as
defined in the Revolving Credit Agreement, shall at all times be prior to the
security interest of the Borrower Creditors.

     

    (b)           All
Borrower Debt is subordinated in right of payment to all obligations of Unify to
ComVest 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 Unify of any bankruptcy,
reorganization or similar proceeding, and all obligations under the Revolving
Credit Agreement (the “Acquiror
Debt”).

     

    (c)           The
Borrower Creditors shall not demand or receive from Borrower (and Borrower shall
not pay to the Borrower Creditors) all or any part of the Borrower Debt, by way
of payment, prepayment, setoff, lawsuit or otherwise, nor shall the Borrower
Creditors exercise any remedy with respect to the Collateral, as defined in the
Revolving Credit Agreement, nor shall the Borrower Creditors commence, or cause
to commence, prosecute or participate in any administrative, legal or equitable
action against Borrower, for so long as any portion of the Acquiror Debt remains
outstanding.  Notwithstanding the foregoing, each Borrower Creditor
shall be entitled to receive each regularly scheduled payment of interest under
any promissory note issued by Borrower to the Borrower Creditor evidencing the
Borrower Debt, provided that no Event of Default has occurred under the
Revolving Credit Agreement that is continuing or would exist immediately after
giving effect to such payment.  The Borrower Creditors shall promptly
deliver to ComVest in the form received (except for endorsement or assignment by
the Borrower Creditors where required by ComVest) for application to the
Acquiror Debt any payment, distribution, security or proceeds received by the
Borrower Creditors with respect to the Borrower Debt other than in accordance
with this Agreement.

     

    (d)           This
Section 3 shall remain effective for so long as ComVest has any obligation to
make credit extensions to Unify or Unify owes any amounts to ComVest under the
Revolving Credit Agreement.  If, at any time after payment in full of
the Acquiror Debt any payments of the Acquiror Debt must be disgorged by ComVest
for any reason (including, without limitation, the bankruptcy of Unify), 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 the Borrower Creditors shall immediately pay over to ComVest all
payments received with respect to the Borrower Debt to the extent that such
payments would have been prohibited hereunder.  At any time and from
time to time, without notice to the Borrower Creditors, ComVest may take such
actions with respect to the Acquiror Debt as ComVest, in its sole discretion,
may deem appropriate, including, without limitation, terminating advances to
Unify, 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 Acquiror Debt and any
collateral securing the Acquiror Debt, and enforcing or failing to enforce any
rights against Unify or any other person.  No such action or inaction
shall impair or otherwise affect ComVest’s rights hereunder.

     

    (e)           Notwithstanding
any provision herein to the contrary, nothing contained in this Agreement shall
apply to or restrict any portion of the Borrower Debt from being converted into
Borrower’s equity securities in accordance with its existing terms, as
applicable.

     

    4. Amendment and Restatement of
Existing Subordination Agreement.  The Existing Subordination
Agreement is hereby amended and restated in its entirety and superceded by this
Agreement.  All provisions of, rights granted and covenants made in
the Existing Subordination Agreement are hereby waived, released and amended in
their entirety and shall have no further force or effect.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    5. Successors and
Assigns.  This Agreement shall bind any successors or assignees
of the Borrower Creditors and shall benefit any successors or assigns of
ComVest, Unify, SHF and the Debt Creditors.  This Agreement is solely
for the benefit of the Creditors, SHF, Unify and ComVest and not for the benefit
of Borrower or any other party, and Unify and ComVest, and their respective
successors or assignees, are express third party beneficiaries of this
Agreement.  This Agreement may be executed and delivered (including by
facsimile or electronic transmission) in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
instrument.  This Agreement represents the entire agreement with
respect to the subject matter hereof, and supersedes all prior negotiations,
agreements and commitments.  The Borrower Creditors are not relying on
any representations by ComVest or Unify in entering into this
Agreement.  The Creditors are not relying on any representations by
SHF or Borrower in entering into this Agreement (and the PIPE Creditors are not
relying on any representations by the Debt Creditors in entering into this
Agreement).  The Borrower Creditors shall keep fully apprised of the
financial and other condition of Unify.  The Creditors have kept and
shall continue to keep fully apprised of the financial and other condition of
Borrower.  Subject to the interests of ComVest and Unify provided
herein, this Agreement may be amended only by written instrument signed by the
Agents and SHF.

     

    6. Miscellaneous.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to conflicts of laws
principles.  The Creditors and SHF submit to the jurisdiction of the
state and federal courts located in Santa Clara County,
California.  THE CREDITORS AND SHF 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.  If the jury
waiver set forth in this Section 6 is not enforceable, then any dispute,
controversy or claim arising out of or relating to this Agreement or any of the
transactions contemplated herein shall be settled by final and binding
arbitration held in San Jose, California in accordance with the then applicable
Commercial Arbitration Rules of the American Arbitration
Association.  Judgment upon any award resulting from arbitration may
be entered into and enforced by any state of federal court having jurisdiction
thereof.  In the event of any legal action to enforce the rights of a
party under this Agreement, the party prevailing in such action shall be
entitled, in addition to such other relief as may be granted, all reasonable
costs and expenses, including reasonable attorneys’ fees, incurred in such
action.

     

    [Signature page
follows.]

     

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

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

     

    “Agent on
behalf of the PIPE Creditors”

     

    BLUELINE
CAPITAL PARTNERS, LP,

    as
Agent

     

    By:
BlueLine Partners LLC, its GP

     

    By: /s/ Scott A.
Shuda                                                      

     

    Title:
Managing
Director                                                                

     

    

     

    “Agent on
behalf of the Debt Creditors”

     

    BLUELINE
CAPITAL PARTNERS, LP,

    as
Agent

     

    By:
BlueLine Partners LLC, its GP

     

    By: /s/ Scott A.
Shuda                                                      

     

    Title:
Managing
Director                                                                

     

    

     

    “SHF”

     

    SAND HILL
FINANCE, LLC

     

    By:     /s/ Mark
Cameron                                                      

     

    Title:  Partner                                                                

     

    

     

    The
undersigned approves of the terms of this Agreement.

    

     

    “Borrower”

     

    AXS-ONE
INC.

     

    By:     /s/ William P.
Lyons                                                                

     

    Title:  CEO                                                                

     

     

    
      
         

      

      
        5ex10-4.htm

    Exhibit
10.4

     

    THIS
SECURITY AGREEMENT AMENDMENT AND THE RIGHTS PROVIDED HEREIN ARE SUBJECT IN ALL
RESPECTS TO THE TERMS OF A THIRD AMENDED AND RESTATED SUBORDINATION AGREEMENT OF
EVEN DATE HEREWITH AMONG THE AGENT OF THE SECURED PARTIES, THE AGENT OF THE
HOLDERS OF THE SERIES 2009 5% SECURED PROMISSORY NOTES AND SAND HILL FINANCE,
LLC (THE “SUBORDINATION AGREEMENT”).

    

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

    

    This FOURTH SECURITY AGREEMENT
AMENDMENT (this “Amendment”) is made as of
June 26, 2009 among 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 (the “Debtor”).

    

    WHEREAS, on May 29, 2007, the
Debtor issued in favor of certain of the Secured Parties (the “May 2007 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, by and among the Debtor and the
May 2007 Secured Parties;

    

    WHEREAS, on November 16,
2007, the Debtor
issued in favor of certain of the Secured Parties (the “November 2007 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 2007 Notes were issued pursuant to the
terms of a Convertible Note and Warrant Purchase Agreement, dated as of November
13, 2007, by and among the Debtor and the November 2007 Secured
Parties;

    

    WHEREAS, on July 24,
2008, the Debtor
issued in favor of certain of the Secured Parties (the “July 2008 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 such July 2008 Notes were issued pursuant to the terms of a
Convertible Note and Warrant Purchase Agreement, dated as of July 24, 2008, by
and among the Debtor and the July 2008 Secured Parties;

    

    WHEREAS, on October 30,
2008, the Debtor
issued in favor of certain of the Secured Parties (the “October 2008 Secured
Parties”), promissory notes (collectively, the “October 2008 Notes”), in the
aggregate principal amount of One Million One Hundred Thousand Dollars
($1,100,000), and such October 2008 Notes were issued pursuant to the terms of a
Convertible Note and Warrant Purchase Agreement, dated as of October 30, 2008,
by and among the Debtor and the October 2008 Secured Parties;

    

    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, among the Debtor, the Agent and
the Secured Parties described therein, which agreement was amended (a) in
connection with the issuance of the November 2007 Notes pursuant to a Security
Agreement Amendment dated November 16, 2007 among the Debtor, the Agent and
certain of the Secured Parties (such amendment, the “First Amendment”), (b) in
connection with the issuance of the July 2008 Notes pursuant to a Second
Security Agreement Amendment dated July 24, 2008 among the Debtor, the Agent and
certain of the Secured Parties (such amendment, the “Second Amendment”) and (c) in
connection with the issuance of the October 2008 Notes pursuant to a Third
Security Agreement Amendment dated October 30, 2008 among the Debtor, the Agent
and certain of the Secured Parties (such amendment, the “Third Amendment”) (such
security agreement as amended pursuant to the First Amendment, the Second
Amendment and the Third Amendment, the “Security
Agreement”);

    

    WHEREAS, on the date
hereof, the Debtor
has issued in favor of certain of the Secured Parties (the “June 2009 Secured Parties”),
promissory notes (collectively, the “June 2009  Notes”),
in the aggregate principal amount of up to Two Hundred and Fifty Thousand
Dollars ($250,000), and such June 2009 Notes have been issued pursuant to the
terms of a Standby Convertible Note Purchase Agreement, (the “June 2009 Purchase
Agreement”) dated as of the date hereof, by and among the Debtor and the
June 2009 Secured Parties (such transaction, the “June 2009
Financing”);

    

    WHEREAS, it is a condition
precedent to the June 2009 Secured Parties’ purchase of the June 2009 Notes
under the June Purchase Agreement that the parties hereto 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 permit the issuance of the June 2009 Notes.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
 

    NOW, THEREFORE, in
consideration of the premises and to induce the June 2009 Secured Parties to
extend the loans to the Debtor pursuant to the June 2009 Notes, the Debtor, the
Agent 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 inserting the following
defined terms in appropriate alphabetical order therein:

    

    “June 2009
Notes” means the Series 2009 5% Secured Convertible Promissory Notes of
the Debtor in the aggregate principal amount of up to Two Hundred and Fifty
Thousand Dollars ($250,000) issued pursuant to the June 2009 Purchase
Agreement.

    

    “June 2009
Purchase Agreement” means the Standby Convertible Note Purchase Agreement
dated as of June 26, 2009 by and among the Debtor and certain of the Secured
Parties.

    

    (b)           Section
1(c) of the Security Agreement is hereby amended by inserting in the place of
clause (viii) of the defined term “Permitted Encumbrances” the
following:  “(viii) the security interests of Sand Hill Finance, LLC
(“SHF”)
as set forth in the Third Amended and Restated Subordination Agreement dated as
of June 26, 2009 (the “Subordination
Agreement”) among SHF, the Agent for the Secured Parties and the agent
for the holders of the June 2009 Notes or (ix) the security interests of the
holders of the June 2009 Notes as set forth in the Subordination
Agreement.”

    

    3.           Consent to June 2009
Financing.  The Secured Parties hereby consent to the June 2009
Financing and, in connection therewith, the Debtor’s execution, delivery and
performance of the June 2009 Purchase Agreement, the sale of the June 2009 Notes
and the consummation of the other transactions and execution and performance of
the other agreements and documents contemplated by the June 2009 Purchase
Agreement, including, without limitation, the execution and delivery of the
Subordination Agreement and related agreements and documents by the Agent on
behalf of the Secured Parties.

    

    4.           Consent to Senior
Rank.  The Secured Parties hereby acknowledge and agree that
the security interests granted in connection with the June 2009 Notes shall rank
senior in priority of payment and in all other respects with the security
interests granted in connection with the May 2007 Notes, November 2007 Notes,
July 2008 Notes and October 2008 Notes, and the Secured Parties hereby consent
to such senior ranking for all purposes under the Security Agreement, the May
2007 Notes, the November 2007 Notes, July 2008 Notes, October 2008 Notes, the
Subordination Agreement and the related transaction documents.

    

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

    

    6.           Governing
Law.  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.

    

    7.           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 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.]

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
 

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

    

    

    AXS-ONE
INC.

    

    

    By:  /s/ William P.
Lyons                                                                           

    Name:  William
P. Lyons

    Title:   CEO

    

    

    

    BLUELINE CAPITAL PARTNERS, LP, as
Agent

    

    
      	
               
      

            	
              By:  BlueLine
      Partners, LLC,

            

    

    
      	
               
      

            	
                       its
      General Partner

            

    

    

                                                                          

     

    
      
        	 	By:  /s/ Scott A.
      Shuda     
	 	Name:  Scott
      A. Shuda
	
                 
      

              	
                Title:  Managing
      Director

              

      

    

    

    

    

    [Signature Page to Fourth Security
Agreement Amendment]

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    Print
Name:  Aston
Assets, S.A.

    

    

    By:        /s/ Alejandro
Gonzalez                                                               

    Name:  Alejandro
Gonzalez                                                   

    Title:  Secretary                                                                           

    

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    Print
Name:  BlueLine Capital Partners,
LP

    

    By:      BlueLine
Partners, LLC,

               
Its
General Partner

    

    By:      /s/ Scott A.
Shuda                                                       

    Name: Scott A.
Shuda                                                       

    Title:  
Managing
Director                                                       

    

    

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    Print
Name: BlueLine
Capital Partners II, LP

    

    By:     
BlueLine Partners, LLC,

               
Its
General Partner

    

    By:      /s/ Scott A.
Shuda                                                       

    Name: Scott A.
Shuda                                                       

    Title:   Managing
Director                                                       

    

    

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    

    

    

    

    

    

    

    

    

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    Print
Name:  BlueLine Capital Partners
III, LP

    

    By:     BlueLine
Partners, LLC,

               
Its
General Partner

    

    By:      /s/ Scott A.
Shuda                                                       

    Name: Scott A.
Shuda                                                       

    Title:   Managing
Director                                                       

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    

    

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    Print
Name: Daniel
Burch

    

    

    By:     
/s/ Daniel
Burch                                                       

    Name: Daniel
Burch                                                       

    Title:                   

    

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    

    

    

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    

    Print
Name:  Harold D.
Copperman

    

    

    By:      /s/ Harold D.
Copperman                                                       

    Name: Harold D.
Copperman                                                       

    Title:                   

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
 

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    Print
Name:  Jurika Family Trust U/A
1989

    

    

    By:     
/s/ William K.
Jurika                                                       

    Name: William K.
Jurika                                                       

    Title:   Trustee                                                       

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
 

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    

    Print
Name:  William P.
Lyons

    

    

    By:      /s/ William P.
Lyons                                                       

    Name: William P.
Lyons                                                       

    Title:                   

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
 

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    

    Print
Name:  Robert J.
Migliorino

    

    

    By:      /s/ Robert J.
Migliorino                                                       

    Name: Robert J.
Migliorino                                                       

    Title:                   

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    

    Print
Name: Philip L.
Rugani

    

    

    By:     
/s/ Philip L.
Rugani                                                       

    Name: Philip L.
Rugani                                                       

    Title:                   

    

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    OMNIBUS
SIGNATURE PAGE TO

    AXS-ONE,
INC.

    FOURTH
SECURITY AGREEMENT AMENDMENT

    

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

     

    

    
      	
               
      

            	
              Print
      Name:

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

            

    

    

    By:      /s/ N.
Mijsud      /s/ P. DeSalis

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

    Title:   Directors                                                       

    

    

    

    
      
         

      

      
        14

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