THIS
SECURITY AGREEMENT AMENDMENT AND THE RIGHTS PROVIDED HEREIN ARE
SUBJECT IN ALL RESPECTS TO THE TERMS OF AN AMENDED AND RESTATED
SUBORDINATION AGREEMENT OF EVEN DATE HEREWITH BETWEEN THE AGENT OF
THE SECURED PARTIES AND SAND HILL FINANCE, LLC.
SECOND SECURITY AGREEMENT
AMENDMENT
This SECOND
SECURITY AGREEMENT AMENDMENT (the “ Amendment
”) is made as of July 24, 2008 between 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, Attention: President
(the “ Debtor ”).
WHEREAS,
on May 29, 2007, the Debtor issued in favor of certain of the
Secured Parties (the “ May 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 between the Debtor
and the May Secured Parties;
WHEREAS,
on November 16, 2007, the Debtor issued in favor of certain of
the Secured Parties (the “ November 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 Notes were issued pursuant
to the terms of a Convertible Note and Warrant Purchase Agreement
(the “ November Purchase Agreement ”) dated as
of November 13, 2007, between the Debtor and the November
Secured Parties (such transaction, the “ November
Financing ”);
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, between the Debtor, the Agent and the Secured
Parties described therein, which agreement was amended in
connection with the issuance of the November 2007 Notes
pursuant to a Security Agreement Amendment dated November 16,
2007 between the Company, the Agent and certain of the Secured
Parties (such amendment, the “ First Amendment ”
and such security agreement as amended pursuant to the First
Amendment, the “ Security Agreement
”);
WHEREAS,
on the date hereof, the Debtor has issued in favor of certain of
the Secured Parties (the “ July 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
the July 2008 Notes have been issued pursuant to the terms of a
Convertible Note and Warrant Purchase Agreement (the “
July Purchase Agreement ”) as of July 24, 2008,
between the Debtor and the July Secured Parties (such transaction,
the “ July 2008 Financing ”);
WHEREAS ,
it is a condition precedent to the July Secured Parties’
making any loans under the July Purchase Agreement and the
July 2008 Notes or otherwise extending credit to the Debtor
that the Debtor 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 secure the Debtor’s
obligations pursuant to the July 2008 Notes;
NOW,
THEREFORE , in consideration of the premises and to induce the
July Secured Parties to extend the loans to the Debtor pursuant to
the July 2008 Notes, the Debtor 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 amending clause
(viii) of the defined term “Permitted
Encumbrances” as follows: “(viii) the security
interests of Sand Hill Finance, LLC as set forth in the Amended and
Restated Subordination Agreement of even date herewith between Sand
Hill Finance, LLC and the Agent for the Secured
Parties.”
(b) Section 1(c)
of the Security Agreement is hereby amended by deleting the
following defined terms and replacing them with amended definitions
set forth below:
“
Note ” and “ Notes ”
means the May 2007 Notes, the November 2007 Notes and/or
the July 2008 Notes. This definition shall supersede the
definition of such terms set forth in the recitals to this
Agreement.
“
Purchase Agreement ” means the May Purchase
Agreement, the November Purchase Agreement, and/or the July
Purchase Agreement as applicable. This definition shall supersede
the definition of such term in the recitals to this
Agreement.
“
Secured Parties ” shall mean the holders of the
May 2007 Notes that executed this Agreement, the holders of
the November 2007 Notes that are made party to this Agreement
pursuant to the Security Agreement Amendment dated as of
November 16, 2007 between the Company, the Agent and certain
of the Secured Parties and the holders of the July 2008 Notes
that are made party to the Security Agreement pursuant to the
Second Security Agreement Amendment dated as of July 24, 2008,
between the Debtor, the Agent and the other parties set forth
therein.
“
Warrants ” shall mean the warrants to purchase
Common Stock of the debtor issued pursuant to the May Purchase
Agreement, the November Purchase Agreement, or the July Purchase
Agreement as applicable.
(c) Section 1(c)
of the Security Agreement is hereby amended by inserting the
following defined terms in appropriate alphabetical order
therein:
2
“
July 2008 Notes ” means the Series D
6% Secured Convertible Promissory Notes of the Debtor in the
aggregate principal amount of Two Million One Hundred Thousand
Dollars ($2,100,000) issued pursuant to the July Purchase
Agreement.
“ July
Purchase Agreement ” means the Convertible Note and
Warrant Purchase Agreement dated as of July 24, 2008 among the
Debtor and certain of the Secured Parties.
|
