Hi @vkrishna,
when the SAS 9.4 M3 was deployed, did you selected to deployed the web application servers manually or automatically?
Also and fyi, the error you get is
Caused by: java.lang.IllegalArgumentException: Parameter 'directory' is not a directory
at org.apache.commons.io.FileUtils.listFiles(FileUtils.java:293)
My best advise would be to restore the server to the previous version before upgrade and then rerun the upgrade but with -loglevel 2, to get debug messages on the logs.