Exhibit 10.2
INVESTOR RIGHTS AGREEMENT
     This Investor Rights Agreement (this “Agreement”) is made and entered into
as of October 30, 2008 among AXS-One Inc., a Delaware corporation (the
“Company”), and each of the purchasers executing this Agreement and listed on
Schedule 1 attached hereto (collectively, the “Purchasers”).
     This Agreement is being entered into pursuant to the Convertible Note and
Warrant Purchase Agreement, dated as of the date hereof, by and among the
Company and the Purchasers (the “Purchase Agreement”).
     The Company and the Purchasers hereby agree as follows:
     1. Definitions.
     Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
     “Advice” shall have the meaning set forth in Section 3(m).
     “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, “control,” when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of “affiliated,” “controlling” and “controlled” have meanings
correlative to the foregoing.
     “Blackout Period” shall have the meaning set forth in Section 3(n).
     “Board” shall have the meaning set forth in Section 3(n).
     “Business Day” means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New Jersey generally are authorized or required by law or other government
actions to close.
     “Commission” means the Securities and Exchange Commission.
     “Common Stock” means the Company’s Common Stock, par value $0.01 per share.
     “Conversion Shares” means the shares of Common Stock issuable upon
conversion of the Notes purchased by the Purchasers pursuant to the Purchase
Agreement.
     “Effectiveness Date” means, with respect to the Initial Registration
Statement required to be filed hereunder, the 60th calendar day following the
Filing Date (or, in the event of a “review” by the Commission, the 90th calendar
day following the Filing Date) and with respect to any additional Registration
Statements which may be required pursuant

 

--------------------------------------------------------------------------------

 

to Section 3(b), the 60th calendar day following the date on which an additional
Registration Statement is required to be filed hereunder; provided, however,
that in the event the Company is notified by the Commission that one or more of
the above Registration Statements will not be reviewed or is no longer subject
to further review and comments, the Effectiveness Date as to such Registration
Statement shall be no later than the fifth trading day following the date on
which the Company is so notified if such date precedes the dates otherwise
required above.
     “Effectiveness Period” shall have the meaning set forth in Section 2.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended.
     “Filing Date” means May 29, 2009 and, with respect to any additional
Registration Statements which may be required pursuant to Section 3(b), the
earliest practical date on which the Company is permitted by SEC Guidance to
file such additional Registration Statement related to the Registrable
Securities.
     “Holder” or “Holders” means the holder or holders, as the case may be, from
time to time of Registrable Securities, including without limitation the
Purchasers and their assignees.
     “Indemnified Party” shall have the meaning set forth in Section 5(c).
     “Indemnifying Party” shall have the meaning set forth in Section 5(c).
     “Initial Registration Statement” means the initial Registration Statement
which includes the Initial Shares filed pursuant to this Agreement.
     “Initial Shares” means a number of Registrable Securities equal to the
lesser of (i) the total number of Registrable Securities, (ii) one-third of the
number of issued and outstanding shares of Common Stock that are held by
non-affiliates of the Company on the day immediately prior to the filing date of
the Initial Registration Statement and (iii) such lesser amount of Registrable
Securities as may be required by SEC Guidance.
     “Losses” shall have the meaning set forth in Section 5(a).
     “Notes” means the Series E 6% Secured Convertible Promissory Notes issued
to the Purchasers pursuant to the Purchase Agreement.
     “Person” means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
     “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
     “Prospectus” means the prospectus included in any Registration Statement

2

--------------------------------------------------------------------------------

 

(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
     “Registrable Securities” means (a) the Conversion Shares and the Warrant
Shares (without regard to any limitations on beneficial ownership contained in
the Note or the Warrants) or other securities issued or issuable to each
Purchaser or its transferee or designee (i) upon conversion of the Notes and/or
upon exercise of the Warrants, or (ii) upon any dividend or distribution with
respect to, any exchange for or any replacement of such Notes, Conversion
Shares, Warrants or Warrant Shares or (iii) upon any conversion, exercise or
exchange of any securities issued in connection with any such distribution,
exchange or replacement; (b) securities issued or issuable upon any stock split,
stock dividend, recapitalization or similar event with respect to the foregoing;
and (c) any other security issued as a dividend or other distribution with
respect to, in exchange for, in replacement or redemption of, or in reduction of
the liquidation value of, any of the securities referred to in the preceding
clauses; provided, however, that such securities shall cease to be Registrable
Securities when such securities have been sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction or
when such securities may be sold without any volume limitations pursuant to
Rule 144 as determined by the counsel to the Company pursuant to a written
opinion letter, addressed to the Company’s transfer agent to such effect as
described in Section 2 of this Agreement.
     “Registration Statement” means the registration statements and any
additional registration statements contemplated by Section 2, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference in such registration
statement.
     “Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
     “Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
     “Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

3

--------------------------------------------------------------------------------

 

     “SEC Guidance” means (i) any written or oral guidance, comments,
requirements or requests of the Commission staff and (ii) the Securities Act.
     “Securities Act” means the Securities Act of 1933, as amended.
     “Warrants” means the Common Stock purchase warrants issued pursuant to the
Purchase Agreement.
     “Warrant Shares” means the shares of Common Stock issuable upon the
exercise of the Warrants issued or to be issued to the Purchasers or their
assignees or designees in connection with the offering consummated under the
Purchase Agreement.
     2. Registration. Not later than the Filing Date, the Company shall prepare
and file with the Commission an Initial Registration Statement for the resale of
all or such maximum portion of the Registrable Securities as permitted by SEC
Guidance (provided that the Company shall use diligent efforts to advocate with
the Commission for the registration of all of the Registrable Securities in
accordance with the SEC Guidance, including without limitation, the Manual of
Publicly Available Telephone Interpretations D.29) that are not then registered
on an effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be on
Form S-3 (or if such form is not available to the Company on another form
appropriate for such registration in accordance herewith). The Company shall use
its reasonable best efforts to cause the Registration Statement to be declared
effective under the Securities Act not later than the Effectiveness Date
(including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days of the date that the Company is notified (orally
or in writing, whichever is earlier) by the Commission that a Registration
Statement will not be “reviewed,” or not be subject to further review) and to
keep such Registration Statement continuously effective under the Securities Act
until such date as is the earlier of (x) the date when all Registrable
Securities covered by such Registration Statement have been sold or (y) with
respect to such Holder, such time as all Registrable Securities held by such
Holder may be sold without volume limitations pursuant to Rule 144 as determined
by the counsel to the Company pursuant to a written opinion letter, addressed to
the Company’s transfer agent to such effect (the “Effectiveness Period”). For
purposes of the obligations of the Company under this Agreement, no Registration
Statement shall be considered “effective” with respect to any Registrable
Securities unless such Registration Statement lists the Holders of such
Registrable Securities as “Selling Stockholders” and includes such other
information as is required to be disclosed with respect to such Holders to
permit them to sell their Registrable Securities pursuant to such Registration
Statement, unless any such Holder is not included as a “Selling Stockholder”
pursuant to Section 3(m). Such Registration Statement also shall cover, to the
extent allowable under the Securities Act and the Rules promulgated thereunder
(including Securities Act Rule 416), such indeterminate number of additional
shares of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities. Notwithstanding the
foregoing or any other provision of this Agreement, if any SEC Guidance sets
forth a limitation on the number of Registrable Securities permitted to be
registered on a particular Registration Statement (and notwithstanding that the
Company used diligent efforts to advocate with the Commission for

4

--------------------------------------------------------------------------------

 

the registration of all or a greater portion of Registrable Securities), unless
otherwise directed in writing by a Holder as to its Registrable Securities or
unless otherwise required by SEC Guidance, the number of Registrable Securities
to be registered on such Registration Statement will first be reduced by
Registrable Securities represented by Conversion Shares (on a pro rata basis
based on the total number of unregistered Conversion Shares held by the Holders,
to the extent permitted by SEC Guidance) and next by Registrable Securities
represented by Warrant Shares (applied, in the case that some Warrant Shares may
be registered, to the Holders on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Holders, to the extent permitted by SEC
Guidance); provided, however, that, prior to any reduction in the number of
Registrable Securities included in a Registration Statement as set forth in this
sentence, the number of shares of Common Stock that are not Registrable
Securities and which shall have been included on such Registration Statement
shall be reduced by up to 100%, if such reduction will permit the registration
of additional Registrable Securities.
     3. Registration Procedures.
     In connection with the Company’s registration obligations hereunder, the
Company shall:
     (a) Prepare and file with the Commission on or prior to the Filing Date, a
Registration Statement on Form S-3 (or if such form is not available to the
Company on another form appropriate for such registration in accordance
herewith) (which shall include a Plan of Distribution substantially in the form
of Exhibit A attached hereto), and cause the Registration Statement to become
effective and remain effective as provided herein; provided, however, that not
less than three (3) Business Days prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall (i) furnish to the Holders or their counsel, copies of all such
documents proposed to be filed, which documents (other than those incorporated
by reference) will be subject to the review of the Holders or their counsel, and
(ii) at the request of any Holder cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of counsel to such Holders, to conduct a
reasonable investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or any
amendments or supplements thereto to which the Holders of a majority of the
Registrable Securities or their counsel shall reasonably object within three
(3) Business Days after their receipt thereof. In the event of any such
objection, the Holders shall provide the Company with any requested revisions to
such prospectus or supplement within two (2) Business Days of such objection.
     (b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and to the extent any
Registrable Securities are not included in such Registration Statement for
reasons other than the failure of the Holder to comply with Section 3(m) hereof,
shall prepare and file with the Commission such amendments to the Registration
Statement or such additional Registration Statements as are appropriate in order

5

--------------------------------------------------------------------------------

 

to register for resale under the Securities Act all Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as reasonably practicable to any
comments received from the Commission with respect to the Registration Statement
or any amendment thereto and as promptly as reasonably practicable provide the
Holders true and complete copies of all correspondence from and to the
Commission relating to the Registration Statement, but not, without the prior
written consent of the Holders, any comments that would result in the disclosure
to the Holders of material and non-public information concerning the Company;
and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement during the applicable period in
accordance with the intended methods of disposition by the Holders thereof set
forth in the Registration Statement as so amended or in such Prospectus as so
supplemented.
     (c) Notify Holders of Registrable Securities to be sold as promptly as
reasonably practicable (A) when a Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement; and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective, and after
the effectiveness thereof: (i) of any request by the Commission or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (iv) if the financial statements included in the Registration
Statement become ineligible for inclusion therein or of the occurrence of any
event that makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Without limitation to any remedies to which the Holders may be entitled under
this Agreement, if any of the events described in Section 3(c)(C)(i),
3(c)(C)(ii), 3(c)(C)(iii) or 3(c)(C)(iv) occur, the Company shall use its
reasonable best efforts to respond to and correct the event.
     (d) Use its reasonable best efforts to avoid the issuance of, or, if
issued, use reasonable best efforts to obtain the withdrawal of, (i) any order
suspending the effectiveness of the Registration Statement or (ii) any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable
time.

6

--------------------------------------------------------------------------------

 

     (e) If requested by any Holder of Registrable Securities, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company reasonably agrees should
be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as reasonably practicable
after the Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
     (f) Furnish to each Holder, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto, including financial
statements and schedules, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
     (g) Promptly deliver to each Holder, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
     (h) Prior to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate with the selling
Holders in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder requests in writing, to keep each such registration
or qualification (or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by a Registration Statement; provided, however, that the Company shall
not be required to qualify generally to do business in any jurisdiction where it
is not then so qualified or to take any action that would subject it to general
service of process in any jurisdiction where it is not then so subject or
subject the Company to any material tax in any such jurisdiction where it is not
then so subject.
     (i) Cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement, which certificates shall be free, to the extent
permitted by applicable law and the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any Holder may request at least two (2) Business
Days prior to any sale of Registrable Securities.
     (j) Following the occurrence of any event contemplated by
Section 3(c)(C)(iv), as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material

7

--------------------------------------------------------------------------------

 

fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
     (k) Cause all Registrable Securities relating to such Registration
Statement to be listed on any United States securities exchange, quotation
system, market or over-the-counter bulletin board on which similar securities
issued by the Company are then listed.
     (l) Comply in all material respects with all applicable rules and
regulations of the Commission with respect to the Registration Statement.
     (m) Request each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities as is
required by law or the Commission to be disclosed in the Registration Statement,
and the Company may exclude from such registration the Registrable Securities of
any such Holder who fails to furnish such information within a reasonable time
prior to the filing of each Registration Statement, supplemented Prospectus
and/or amended Registration Statement.
     If the Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have the
right to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar federal statute then in force) the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
     Each Holder agrees by its acquisition of such Registrable Securities that,
upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c)(C)(i), 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv), or
3(n), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
     (n) If (i) there is material non-public information regarding the Company
which the Company’s Board of Directors (the “Board”) reasonably determines not
to be in the Company’s best interest to disclose and which the Company is not
otherwise required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer or other similar transaction) available to the
Company which the Board reasonably determines not to be in the Company’s best
interest to disclose and which the Company would be required to disclose under
the Registration Statement, then the Company may (i) postpone or suspend filing
or effectiveness of a registration statement or (ii) notify the Holders that the
Registration Statement may not be used in connection with any sales of the
Company’s securities, in each case, for a period not to exceed 30 consecutive
days, provided that the Company may not postpone or suspend its

8

--------------------------------------------------------------------------------

 

obligation under this Section 3(n) for more than 60 days in the aggregate during
any 12 month period (each, a “Blackout Period”).
     4. Registration Expenses.
     All fees and expenses incident to the performance of or compliance with
this Agreement by the Company shall be borne by the Company whether or not the
Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with each
securities exchange, quotation system, market or over-the-counter bulletin board
on which Registrable Securities are required hereunder to be listed, (B) with
respect to filings required to be made with the Commission, and (C) in
compliance with state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing or photocopying prospectuses),
(iii) messenger, telephone and delivery expenses, (iv) Securities Act liability
insurance, if the Company so desires such insurance, and (v) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement, including, without
limitation, the Company’s independent public accountants (including, in the case
of an underwritten offering, the expenses of any comfort letters or costs
associated with the delivery by independent public accountants of a comfort
letter or comfort letters) and legal counsel. In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder. The Company shall
reimburse the Holders for the reasonable fees and disbursements of one firm or
counsel designated by the Holders of at least a majority of the Registrable
Securities to act as counsel for the Holders in connection with the Registration
Statements filed pursuant hereto or any piggyback registrations under
Section 7(d); provided, that the Company’s reimbursement obligation for such
reasonable fees and disbursements shall not exceed $5,000 in the aggregate.
Notwithstanding the foregoing or anything in this Agreement to the contrary,
each Holder shall pay all underwriting discounts and commissions with respect to
any Registrable Securities sold by it.
     5. Indemnification.
     (a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, brokers (including brokers who offer and sell
Registrable Securities as principal as a result of a pledge or any failure to
perform under a margin call of Common Stock), investment advisors and employees
of each of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses,

9

--------------------------------------------------------------------------------

 

claims, damages, liabilities, costs (including, without limitation, costs of
preparation and reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to any untrue or alleged
untrue statement of a material fact contained or incorporated by reference in
the Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or amendment or supplement thereto, in the
light of the circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, which information was
reasonably relied on by the Company for use therein or to the extent that such
information relates to (x) such Holder and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus or in any amendment or supplement thereto
or (y) such Holder’s proposed method of distribution of Registrable Securities
as set forth in Exhibit A (or as such Holder otherwise informs the Company in
writing); or (ii) in the case of an occurrence of an event of the type described
in Section 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv) or 3(n), the use by a Holder
of an outdated or defective Prospectus after the delivery to the Holder of
written notice from the Company that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 3(m);
provided, however, that the indemnity agreement contained in this Section 5(a)
shall not apply to amounts paid in settlement of any Losses if such settlement
is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of an
Indemnified Party (as defined in Section 5(c) to this Agreement) and shall
survive the transfer of the Registrable Securities by the Holders.
     (b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents and employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising solely
out of or based solely upon any omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, to the extent, but
only to the extent, that (i) such untrue statement or omission is contained in
or omitted from any information so furnished in writing by such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus and that such information was reasonably relied upon by the Company
for use in the Registration Statement, such Prospectus, or in any amendment or
supplement thereto, or to the extent that such information relates to (x) such
Holder and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus, or such form
of prospectus or in any amendment or supplement thereto or (y) such Holder’s

10

--------------------------------------------------------------------------------

 

proposed method of distribution of Registrable Securities as set forth in
Exhibit A (or as such Holder otherwise informs the Company in writing), (ii) in
the case of an occurrence of an event of the type described in
Section 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv) or 3(n), the use by a Holder of
an outdated or defective Prospectus after the delivery to the Holder of written
notice from the Company that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated in Section 3(m) or
(iii) such Holder’s failure to comply with the Prospectus delivery requirements
of the Securities Act through no fault of the Company; provided, however, that
the indemnity agreement contained in this Section 5(b) shall not apply to
amounts paid in settlement of any Losses if such settlement is effected without
the prior written consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, the Holder
shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
     (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party promptly shall notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all reasonable fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.
     An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised in writing by counsel that a conflict of interest is
likely to exist if the same counsel were to represent such Indemnified Party and
the Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the reasonable
expense of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the

11

--------------------------------------------------------------------------------

 

subject matter of such Proceeding and does not impose any monetary or other
obligation or restriction on the Indemnified Party.
     All reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party, which notice shall be delivered no more frequently than on a
monthly basis (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).
     (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party because of a failure or refusal of a
governmental authority to enforce such indemnification in accordance with its
terms (by reason of public policy or otherwise), then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions, statements or
omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.
Notwithstanding anything to the contrary contained herein, the Holder shall be
required to contribute under this Section 5(d) for only that amount as does not
exceed the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
     The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
     The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties. The indemnity and contribution agreements herein are in
addition to and not in diminution or

12

--------------------------------------------------------------------------------

 

limitation of any indemnification provisions under the Purchase Agreement.
     6. Rule 144.
     As long as any Holder owns Notes, Conversion Shares, Warrants or Warrant
Shares, the Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. As long as any Holder owns Notes, Conversion Shares, Warrants
or Warrant Shares, if the Company is not required to file reports pursuant to
Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the
Holders and make publicly available in accordance with Rule 144(c)(2)
promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act, as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
such Person to sell Notes, Conversion Shares, Warrants and Warrant Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities Act, including
compliance with the provisions of the Purchase Agreement relating to the
transfer of the Notes, Conversion Shares, Warrants and Warrant Shares. Upon the
request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
     7. Miscellaneous.
     (a) Remedies. In the event of a breach by the Company or by a Holder, of
any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
     (b) No Inconsistent Agreements. Except as otherwise disclosed in the
Purchase Agreement, neither the Company nor any of its subsidiaries is a party
to an agreement currently in effect, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
     (c) Notice of Effectiveness. Within two (2) Business Days after the
Registration Statement which includes the Registrable Securities is ordered
effective by the Commission,

13

--------------------------------------------------------------------------------

 

the Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies to
the Holders whose Registrable Securities are included in such Registration
Statement) confirmation that the Registration Statement has been declared
effective by the Commission.
     (d) Piggy-Back Registrations. If at any time when there is not an effective
Registration Statement covering all of the Registrable Securities, the Company
shall determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, the Company shall
send to each Holder of Registrable Securities written notice of such
determination and, if within seven (7) Business Days after receipt of such
notice, any such Holder shall so request in writing (which request shall specify
the Registrable Securities intended to be disposed of by the Holder), the
Company will cause the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the Holder, to
the extent required to permit the disposition of the Registrable Securities so
to be registered, provided that if at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to such Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay expenses in accordance with Section 4 hereof), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities being registered pursuant to this Section 7(d) for the
same period as the delay in registering such other securities. The Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered. In the case of an underwritten
public offering, if the managing underwriter(s) or underwriter(s) should
reasonably object to the inclusion of the Registrable Securities in such
registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable
Securities, would materially adversely affect the offering contemplated in such
registration statement, and based on such determination recommends inclusion in
such registration statement of fewer or none of the Registrable Securities of
the Holders, then (x) the number of Registrable Securities of the Holders
included in such registration statement shall be reduced pro-rata among such
Holders (based upon the number of Registrable Securities requested to be
included in the registration), if the Company after consultation with the
underwriter(s) recommends the inclusion of fewer Registrable Securities, or
(y) none of the Registrable Securities of the Holders shall be included in such
registration statement, if the Company after consultation with the
underwriter(s) recommends the inclusion of none of such Registrable Securities;
provided, however, that if securities are being offered for the account of other
persons or entities as well as the Company, such reduction shall not represent a
greater fraction of the number of Registrable Securities intended to be offered
by the Holders than the fraction of similar reductions

14

--------------------------------------------------------------------------------

 

imposed on such other persons or entities (other than the Company).
     (e) Consent to Jurisdiction. Each of the Company and the Holders (i) hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts located in New York City, New York for the purposes of any suit, action
or proceeding arising out of or relating to this Agreement and (ii) hereby
waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such court, that
the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper. Each of the Company and the
Holders consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing in this Section 7(e)
shall affect or limit any right to serve process in any other manner permitted
by law.
     (f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders of
at least a majority of the Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
     (g) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., New York City time, on
a Business Day, (ii) the next Business Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Business Day or later than 5:00
p.m., New York City time, on any date and earlier than 11:59 p.m., New York City
time, on such date, (iii) the Business Day following the date of mailing, if
sent by nationally recognized overnight courier service such as Federal Express
or (iv) actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be with respect to each Holder at
its address set forth under its name on Schedule 1 attached hereto, or with
respect to the Company, addressed to:
AXS-One Inc.
301 Route 17 North
Rutherford, New Jersey 07070
Attention: Chief Financial Officer
Facsimile No.: (201) 935-5230
or to such other address or addresses or facsimile number or numbers as any such
party may

15

--------------------------------------------------------------------------------

 

most recently have designated in writing to the other parties hereto by such
notice. Copies of notices to the Company shall be sent to:
Wiggin and Dana LLP
400 Atlantic Street
Stamford, Connecticut 06901
Attention: Michael Grundei
Facsimile No.: (203) 363-7676
Copies of notices to any Holder shall be sent to the addresses, if any, listed
on Schedule 1 attached hereto.
     (h) Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns and
shall inure to the benefit of each Holder and its successors and assigns;
provided, that the Company may not assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of each Holder; and
provided, further, that each Holder may assign its rights hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.
     (i) Assignment of Registration Rights. The rights of each Holder hereunder,
including the right to have the Company register for resale Registrable
Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any transferee of such Holder of all
or a portion of the Notes, the Warrants or the Registrable Securities if:
(i) the Holder agrees in writing with the transferee or assignee to assign such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment, (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned,
(iii) following such transfer or assignment the further disposition of such
securities by the transferee or assignees is restricted under the Securities Act
and applicable state securities laws, (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section 7(i),
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions of this Agreement, and (v) such transfer shall have been made
in accordance with the applicable requirements of the Purchase Agreement. The
rights to assignment shall apply to the Holders (and to subsequent) successors
and assigns.
     The Company may require, as a condition of allowing such assignment in
connection with a transfer of Notes, Warrants or Registrable Securities (i) that
the Holder or transferee of all or a portion of the Notes, the Warrants or the
Registrable Securities as the case may be, furnish to the Company a written
opinion of counsel that is reasonably acceptable to the Company to the effect
that such transfer may be made without registration under the Securities Act,
(ii) that the Holder or transferee execute and deliver to the Company an
investment letter in form and substance acceptable to the Company and (iii) that
the transferee be an “accredited investor” as defined in Rule 501(a) promulgated
under the Securities Act.

16

--------------------------------------------------------------------------------

 

     (j) Counterparts; Facsimile. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by electronic means or
facsimile transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original
thereof.
     (k) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law thereof.
     (l) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
     (m) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable in any respect, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
     (n) Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
     (o) Registrable Securities Held by the Company and its Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
     (p) Obligations of Purchasers. The Company acknowledges that the
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under this Agreement. The decision of each Purchaser to enter into to
this Agreement has been made by such Purchaser independently of any other
Purchaser. The Company further acknowledges that nothing contained in this
Agreement, and no action taken by any Purchaser pursuant hereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in
any way acting in concert or as a group with

17

--------------------------------------------------------------------------------

 

respect to such obligations or the transactions contemplated hereby. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose.
     Each Purchaser has been represented by its own separate legal counsel in
their review and negotiation of this Agreement and with respect to the
transactions contemplated hereby. The Company acknowledges that such procedure
with respect to this Agreement in no way creates a presumption that the
Purchasers are in any way acting in concert or as a group with respect to this
Agreement or the transactions contemplated hereby or thereby.
[signature page follows]

18

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.
COMPANY:

          AXS-ONE INC.
      By:   /s/ William P. Lyons         Name:   William P. Lyons      Title:  
CEO     

19

--------------------------------------------------------------------------------

 

         

PURCHASERS:
Print Exact Name: Jurika Family Trust U/A 1989

                By:   /s/ William K. Jurika         Name:   William K. Jurika   
    Title:   Trustee       

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

20

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name: BlueLine Capital Partners L.P.

                By:   /s/ Timothy P. Bacci         Name:   Timothy P. Bacci     
  Title:   Managing Partner       

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

21

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name: BlueLine Capital Partners II L.P.

                By:   /s/ Timothy P. Bacci         Name:   Timothy P. Bacci     
  Title:   Managing Partner       

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

22

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name: BlueLine Capital Partners III L.P.

                By:   /s/ Timothy P. Bacci         Name:   Timothy P. Bacci     
  Title:   Managing Partner       

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

23

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name: Harold D. Copperman

                By:   /s/ Harold D. Copperman         Name:           Title:    
     

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

24

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name Primafides (Suisse) SA & Earl Trust AG
as Co-Trustees of the Sirius Trust

                    By:   /s/ N. Mifsud  /s/ M. Garcia         /s/ L. Spencer
     /s/ P. Palmiero        
 
  Name:   N. Mifsud / M. Garcia   L. Spencer   P. Palmiero    
 
  Title:   Primafides (Suisse) SA
Directors   Earl Trust AG        

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

25

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name: William P. Lyons

                By:   /s/ William P. Lyons         Name:   William P. Lyons     
  Title:   Chief Executive Officer       

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

26

--------------------------------------------------------------------------------

 

PURCHASERS:
Print Exact Name: Philip L. Rugani

                By:   /s/ Philip L. Rugani         Name:   Philip L. Rugani     
  Title:   Executive VP, Field Operations       

[Omnibus AXS-One Inc. October 2008 Investor Rights Agreement Signature Page]

27

--------------------------------------------------------------------------------

 

SCHEDULE 1
PURCHASERS

      Name and Address   Copy of Notice to: BlueLine Capital Partners, LP
402 Railroad Avenue, Suite 202
Danville, CA 94526
Attn: Scott Shuda
(925) 988-0287 (fax)           BlueLine Capital Partners II, LP
402 Railroad Avenue, Suite 202
Danville, CA 94526
Attn: Scott Shuda
(925) 988-0287 (fax)           BlueLine Capital Partners III, LP
402 Railroad Avenue, Suite 202
Danville, CA 94526
Attn: Scott Shuda
(925) 988-0287 (fax)           Harold D. Copperman
2804 Tarflower Way
Naples, FL 34105
(239) 659-4473 (fax)           Jurika Family Trust U/A 3/17/1989
42 Glen Alpine Road
Piedmont, CA 94611
Attn: William Jurika
(510) 985 1197 (fax)           William P. Lyons
301 Rt. 17 North
Rutherford, NJ 07070
(201) 939-6955 (fax)           Phillip L. Rugani
459 Old Woods Road
Wyckoff, NJ 07481
(201) 939-6955 (fax)    

 

--------------------------------------------------------------------------------

 

      Name and Address   Copy of Notice to: Sirius Trust
c/o Stonehage SA
Rue du Puits-Godet 12
2002 Neuchatel, Switzerland
Attn: Anthony Bloom
(44) 32 723 1001 (fax)    

29

--------------------------------------------------------------------------------

 

EXHIBIT A
PLAN OF DISTRIBUTION
     We are registering the shares of common stock on behalf of the selling
security holders. Sales of shares may be made by selling security holders,
including their respective donees, transferees, pledgees or other
successors-in-interest directly to purchasers or to or through underwriters,
broker-dealers or through agents. Sales may be made from time to time on the
                         , any other exchange or market upon which our shares
may trade in the future, in the over-the-counter market or otherwise, at market
prices prevailing at the time of sale, at prices related to market prices, or at
negotiated or fixed prices. The shares may be sold by one or more of, or a
combination of, the following:

•   a block trade in which the broker-dealer so engaged will attempt to sell the
shares as agent but may position and resell a portion of the block as principal
to facilitate the transaction (including crosses in which the same broker acts
as agent for both sides of the transaction);   •   purchases by a broker-dealer
as principal and resale by such broker-dealer, including resales for its
account, pursuant to this prospectus;   •   ordinary brokerage transactions and
transactions in which the broker solicits purchases;   •   through options,
swaps or derivatives;   •   in privately negotiated transactions;   •   in
making short sales or in transactions to cover short sales; and   •   put or
call option transactions relating to the shares.

     The selling security holders may effect these transactions by selling
shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling security holders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling security holders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities.
     The selling security holders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with those
transactions, the broker-dealers or other financial institutions may engage in
short sales of the shares or of securities convertible into or exchangeable for
the shares in the course of hedging positions they assume with the selling
security holders. The selling security holders may also enter into options or
other transactions with broker-dealers or other financial institutions which
require the delivery of

30

--------------------------------------------------------------------------------

 

shares offered by this prospectus to those broker-dealers or other financial
institutions. The broker-dealer or other financial institution may then resell
the shares pursuant to this prospectus (as amended or supplemented, if required
by applicable law, to reflect those transactions).
     The selling security holders and any broker-dealers that act in connection
with the sale of shares may be deemed to be “underwriters” within the meaning of
Section 2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.
     The selling security holders will be subject to the prospectus delivery
requirements of the Securities Act. We have informed the selling security
holders that the anti-manipulative provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in the market.
     Selling security holders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
     Upon being notified by a selling security holder that a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:

•   the name of each such selling security holder and of the participating
broker-dealer(s);   •   the number of shares involved;   •   the initial price
at which the shares were sold;   •   the commissions paid or discounts or
concessions allowed to the broker-dealer(s), where applicable;   •   that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus; and   •   other facts
material to the transactions.

     In addition, if required under applicable law or the rules or regulations
of the

31

--------------------------------------------------------------------------------

 

Commission, we will file a supplement to this prospectus when a selling security
holder notifies us that a donee or pledgee intends to sell more than 500 shares
of common stock.
     We are paying all expenses and fees customarily paid by the issuer in
connection with the registration of the shares. The selling security holders
will bear all brokerage or underwriting discounts or commissions paid to
broker-dealers in connection with the sale of the shares.

32