Exhibit 10.1


 


AXS-ONE
INC.


 


UNIT
SUBSCRIPTION AGREEMENT


COMMON
STOCK


AND
WARRANTS


 


 


UNIT SUBSCRIPTION AGREEMENT dated as of April 1, 2004 (this “Agreement”),
among AXS-One Inc., a Delaware corporation (the “Company”), and the
persons who execute this agreement as investors (each an “Investor” and
collectively the “Investors”).


 


Background:   The
Company desires to sell to the Investors, and the Investors desire to purchase,
an aggregate of 2,580,645 shares of common stock, $.01 par value per share, of
the Company (the “Shares”) in Units (as defined below) with 3-year
warrants, in substantially the form attached hereto as Exhibit 1,
exercisable to purchase an aggregate of (i) 258,065 shares of Common Stock at
$3.98 per share (the “Class A Warrants”), and (ii) 258,064 shares of
Common Stock for an aggregate price of $4.50 (the “Class B Warrants”,
and together with the Class A Warrants, the “Warrants”).  The proceeds of the sale thereof will be
used in the development and continuance of the business of the Company and each
of its Subsidiaries.


 


In
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties agree as follows:


 


Certain Definitions:


 


“Action” has the meaning set forth in Section 2.10.


 


“Affiliate” means, as to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such Person.  As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under
common control with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise).


 


“Blue Sky Laws” has the meaning set forth in Section 2.7(b).


 


“Business Day” means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.


 


“Certificate of Incorporation” has the meaning set forth in Section 2.2(a).


 


“Closing Date” has the meaning set forth in Section 1.2.


 


“Closing” has the meaning set forth in Section 1.2.


 


“Common Stock” means the Company’s Common Stock, $.01 par value
per share, authorized as of the date hereof, and any stock of any class or
classes (however designated)


 

















 


hereafter authorized upon reclassification thereof, which, if the Board
of Directors declares a dividend or distribution, has the right to participate
in the distribution of earnings and assets of the Company after the payment of
dividends or other distributions on any shares of capital stock of the Company
entitled to a preference and in the voting for the election of directors of the
Company.


 


“Company” has the meaning set forth at the head of this
Agreement and any corporation or other entity which shall succeed to or assume,
directly or indirectly, the obligations of the Company hereunder. The term “corporation”
shall include an association, joint stock company, business trust, limited
liability company or other similar organization.


 


“Company Disclosure Letter” means the disclosure letter dated
April 1, 2004 delivered to the Investors prior to the execution of this
Agreement, which letter is incorporated in this Agreement.


 


“Company IP” has the meaning set forth in Section 2.12(a).


 


“Convertible Security” means any (i) option to purchase or right
to subscribe for Common Stock, (ii) security by its terms convertible into or
exchangeable for Common Stock or (iii) option to purchase or right to subscribe
for such convertible or exchangeable securities.


 


“Contemplated Transactions” has the meaning set forth in Section 2.1(b).


 


“Exchange Act” has the meaning set forth in Section 2.7(b).


 


“Form 10-K Financial Statements” has the meaning set forth in Section 2.9(c).


 


“Governmental Body” has the meaning set forth
in Section 2.7(b).


 


“Indemnified Party” has the meaning set forth
in Section 5.2(b).


 


“Indemnifying Party” has the meaning set forth
in Section 5.2(c).


 


“Investor Rights Agreement” has the meaning set forth in
Section 1.3(a).


 


“Knowledge” shall mean, with respect
to a particular fact or other matter, the actual current knowledge, after reasonable
investigation, of the Chief Executive Officer or Chief Financial Officer of the
Company.


 


“Legal Requirement” has the meaning set forth in Section 2.8.


 


“Losses” has the meaning set forth in Section 5.2(b).


 


“Material Adverse Effect” has the meaning set forth in Section 2.1(a).


 


“Material Agreement” has the meaning set forth in Section 2.7.


 


“Notice” has the meaning set forth in Section 6.6.


 


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“Person” means any individual, sole proprietorship, partnership,
corporation, limited liability company, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity, any
university or similar institution, or any government or any agency or
instrumentality or political subdivision thereof.


 


“Purchased Shares” has the meaning set forth in Section 1.1(a).


 


“Purchased Warrants” has the meaning set forth in Section 1.1(a).


 


“Rule 144” means Rule 144 promulgated under the Securities Act
or any successor or substitute rule, law or provision.


 


“SEC” means the Securities and Exchange Commission.


 


“SEC Documents” has the meaning set forth in Section 2.9(a).


 


“Securities” has the meaning set forth in Section 1.1(a).


 


“Securities Act” has the meaning set forth in Section 2.5.


 


“Subsidiary” means any significant subsidiary (as defined under
Rule 1.02(w) of Regulation S-X promulgated by the SEC) of the Company.


 


“Transaction Documents” has the meaning set forth in Section 1.3(a).


 


“Underlying Shares” means the shares of Common Stock issued or
from time to time issuable upon exercise of the Warrants.


 


“Unit” means (i) 10,000 Shares, (ii) Class A Warrants to
purchase 1,000 shares of Common Stock at $3.98 per share and (iii) Class B
Warrants to purchase 1,000 shares of Common Stock at $4.50 per share.


 


1.                                       Purchase
and Sale of Stock.


 


1.1.                              Sale and Issuance of
Securities.


 


(a)                                  The Company shall
sell to the Investors and the Investors shall purchase from the Company,
258.0645 Units at a price per Unit equal to $31,000.00, or a total of (i)
2,580,645 Shares (the “Purchased Shares”) and (ii) Warrants to purchase
an aggregate of 516,129 shares of Common Stock (the “Purchased Warrants”
and collectively with the Purchased Shares, the “Securities”), for an
aggregate purchase price of $8,000,000.00.


 


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(b)                                 The number of
Purchased Shares and Purchased Warrants to be purchased by each Investor from
the Company is set forth on Schedule 1.1(b) hereto, subject to acceptance,
in whole or in part, by the Company.


 


1.2.                              Closing.  The closing (the ”Closing”) of
the purchase and sale of the Securities hereunder shall take place within four
Business Days of the date of this Agreement or such other date within ten
Business Days of this Agreement as agreed to by the Company and Investors who
subscribe for at least 144 Units (the “Closing Date”).  The Closing shall take place at the offices
of Hahn & Hessen LLP, the Investors’ counsel, in New York, New York, or at
such other location as is mutually acceptable to the Investors and the Company,
subject to fulfillment of the conditions to the Closing set forth in the
Agreement.  At the Closing:


 


(a)                                  each Investor
purchasing Securities at the Closing shall deliver to the Company or its
designees by wire transfer or such other method of payment as the Company shall
approve, an amount equal to the purchase price of the Securities purchased by
such Investor hereunder, as set forth opposite such Investor’s name on the
signature pages hereof.


 


(b)                                 the Company shall
authorize its transfer agent to arrange delivery to each Investor of one or
more stock certificates registered in the name of the Investor, or in such
nominee name(s) as designated by the Investor in writing, representing the
number of Shares as set forth opposite such Investor’s name on Schedule 1.1(b)
hereto; and


 


(c)                                  the Company shall
issue and deliver to each Investor purchasing Securities at the Closing:  (i) Class A Warrants, registered in the name
of such Investor, pursuant to which such Investor shall have the right to
acquire the number of Underlying Shares as set forth opposite such Investor’s
name on Schedule 1.1(b) hereto on the terms set forth therein; and
(ii) Class B Warrants, registered in the name of such Investor, pursuant to
which such Investor shall have the right to acquire the number of Underlying
Shares as set forth opposite such Investor’s name on the Schedule 1.1(b)
hereto on the terms set forth therein.


 


1.3.                              Investors’ Conditions
to Closing.  The obligation of the
Investors to complete the purchase of the Securities at the Closing is subject
to fulfillment of the following conditions:


 


(a)                                  the Company shall
execute and deliver to the Investors an Investor Rights Agreement, dated the
Closing Date, in the form attached as Exhibit 2 with respect to the
Purchased Shares and the Underlying Shares (the “Investor Rights Agreement”,
and with the Agreement and the Warrants, the “Transaction Documents);


 


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(b)                                 the Company shall
deliver to the Investors opinions of counsel, dated the Closing Date and
reasonably satisfactory to counsel for the Investors, with respect to the
matters set forth on Exhibit 3(a) and (b);


 


(c)                                  the representation
and warranties of the Company set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except to the extent
such representations and warranties speak as of an earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date), and the Company shall have performed in all
material respects all covenants and other obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and the Investors
shall have received a certificate signed on behalf of the Company by an
authorized officer of the Company to such effect;


 


(d)                                 the Company shall
deliver to Investors a certified copy of its Certificate of Incorporation and
by-laws and a Certificate of Good Standing from the Secretary of State of the
State of Delaware; and


 


(e)                                  the Company shall
have executed and delivered all other documents reasonably requested by counsel
for the Investors.


 


1.4                                 Company’s
Conditions to Closing.  The
obligation of the Company to complete the sale of the Securities at the Closing
is subject to fulfillment of the following conditions:


 


(a)                                  the Investors shall
execute and deliver to the Company the Investor Rights Agreement; and


 


(b)                                 the representation and
warranties of the Investors set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as though
made on and as of the Closing Date (except to the extent such representations
and warranties speak as of an earlier date), in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date), and the Investors shall have performed in all material respects
all covenants and other obligations required to be performed by them under this
Agreement, if any at or prior to the Closing Date.


 


2.                                             Representations
and Warranties of the Company.  The
Company hereby represents and warrants to each of the Investors as follows:


 


2.1.                              Corporate
Organization; Authority; Due Authorization.


 


(a)                                  The Company (i) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) has the corporate power and
authority to own or lease its properties as and in the


 


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places where its business is now conducted and to carry on its business
as now conducted, and (iii) is duly qualified as a foreign corporation
authorized to do business in every jurisdiction where the failure to so
qualify, individually or in the aggregate, would have a material adverse effect
on the operations, assets, liabilities, financial condition or business of the
Company and its Subsidiaries taken as a whole (a “Material Adverse Effect”).  Set forth in Section 2.1(a) of the
Company Disclosure Letter is a complete and correct list of all
Subsidiaries.  Each Subsidiary is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is required, except
where failure to so qualify would not have, individually or in the aggregate, a
Material Adverse Effect.


 


(b)                                 The Company (i) has
the requisite corporate power and authority to execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party and
to incur the obligations herein and therein and (ii) has been authorized by all
necessary corporate action to execute, deliver and perform this Agreement and
the other Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby (the “Contemplated Transactions”).  This Agreement is and each of the other
Transaction Documents will be on the Closing Date a valid and binding
obligation of the Company enforceable in accordance with its terms except as
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting the enforcement of creditors’ rights and the
availability of equitable remedies (regardless of whether such enforceability
is considered in a proceeding at law or equity).


 


2.2.                              Capitalization.


 


(a)                                  As of March 31, 2004, the authorized
capital stock of the Company consisted of (i) 50,000,000 shares of Common
Stock, of which 25,393,982 shares of Common Stock were outstanding and (ii)
5,000,000 shares of Preferred Stock, $.01 par value, of which no shares were
outstanding.  All outstanding shares of
capital stock of the Company were issued in compliance with all applicable
Federal and state securities laws, and the issuance of such shares was duly
authorized by all necessary corporate action on the part of the Company.  Except as contemplated by this Agreement or
as set forth in the SEC Documents or in Section 2.2(a) of the Company
Disclosure Letter, there are (A) no outstanding subscriptions, warrants,
options, conversion privileges or other rights or agreements obligating the
Company to purchase or otherwise acquire or issue any shares of capital stock
of the Company (or shares reserved for such purpose), (B) no preemptive
rights contained in the Company’s Certificate of Incorporation, as amended (the
“Certificate of Incorporation”), the By-laws of the Company or contracts
to which the Company is a party or rights of first refusal with respect to the
issuance of additional shares of capital stock of the Company (other than as
set forth in the Investor Rights Agreement), including without limitation the
Securities and the Underlying Shares, and (C) no commitments or
understandings (oral or written) of the Company to issue any shares, warrants,
options or other rights to acquire any equity securities of the Company.  To the Company’s Knowledge, except as set
forth in the SEC Documents or in Section 2.2(a) of the Company Disclosure
Letter, none of the shares of Common Stock are subject to any stockholders’


 


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agreement, voting trust
agreement or similar arrangement or understanding.  Except as set forth in the SEC Documents or in
Section 2.2(a) of the Company Disclosure Letter, the Company has no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of the Company on
any matter.


 


(b)                                 With respect to each Subsidiary, except
as set forth in Section 2.2(b) of the Company Disclosure Letter,
(i) all the issued and outstanding shares of each Subsidiary’s capital
stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with applicable Federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and (ii) there
are no outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
any Subsidiary’s capital stock or any such options, rights, convertible
securities or obligations.  Except as
disclosed in the SEC Documents or Section 2.2(b) of the Company Disclosure
Letter, the Company beneficially owns 100% of the outstanding equity securities
of each Subsidiary.


 


2.3.                              Validity of Securities.  The issuance of the Securities has been duly
authorized by all necessary corporate action on the part of the Company and,
when issued to, delivered to, and paid for by the Investors in accordance with
this Agreement, the Purchased Shares will be validly issued, fully paid and
non-assessable.


 


2.4.                              Underlying Shares.  The issuance of the Underlying Shares
upon  exercise of the Purchased Warrants
has been duly authorized, and the Underlying Shares have been, and at all times
prior to such exercise will have been, duly reserved for issuance upon such
exercise and, when so issued, will be validly issued, fully paid and
non-assessable.


 


2.5.                              Private Offering.  Neither the Company nor anyone acting on its
behalf has within the last 12 months issued, sold or offered any security of
the Company (including, without limitation, any Common Stock or warrants of
similar tenor to the Purchased Warrants) to any Person under circumstances that
would cause the issuance and sale of the Securities, as contemplated by this
Agreement, to be subject to the registration requirements of Section 5 of
the Securities Act of 1933, as amended (the “Securities Act”).  The Company agrees that neither the Company
nor anyone acting on its behalf will offer the Securities or any part thereof
or any similar securities for issuance or sale to, or solicit any offer to
acquire any of the same from, anyone so as to make the issuance and sale of the
Securities subject to the registration requirements of Section 5 of the
Securities Act.


 


2.6.                              Brokers and Finders.  Except as set forth in Section 2.6 of
the Company Disclosure Letter, the Company has not retained any broker,
investment banker or finder in connection with the Contemplated Transactions.


 


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2.7.                              No
Conflict; Required Filings and Consents.


 


(a)                                  The execution,
delivery and performance of this Agreement and the other Transaction Documents
by the Company do not, and the consummation by the Company of the Contemplated
Transactions will not, (i) conflict with or violate the Certificate of
Incorporation or the By-laws of the Company or its Subsidiaries, (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to the Company or its Subsidiaries or by which any property or asset of the
Company or its Subsidiaries is bound or affected, or (iii) result in any breach
of or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, result in the loss of a material benefit
under, or give to others any right of purchase or sale, or any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Company or of any of its Subsidiaries pursuant to, any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which the Company or of any of its Subsidiaries
or any property or asset of the Company or of any of its Subsidiaries is bound
or affected (the “Material Agreements”); except, in the case of clauses
(ii) and (iii) above, for any such conflicts, violations, breaches, defaults or
other occurrences that would not prevent or delay consummation of any of the
Contemplated Transactions in any material respect or otherwise prevent the
Company from performing its obligations under this Agreement or any of the
other Transaction Documents  in any
material respect, and would not, individually or in the aggregate, have a
Material Adverse Effect.


 


(b)                                 The execution and
delivery of this Agreement and the other Transaction Documents by the Company
do not, and the performance of this Agreement and the other Transaction
Documents and the consummation by the Company of the Contemplated Transactions
will not, require, on the part or in respect of the Company, any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Body (as hereinafter defined) except for the filing of a Form D
with the SEC and applicable requirements, if any, of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) or any state securities or
“blue sky” laws (collectively, “Blue Sky Laws”), and any approval
required by applicable rules of the markets in which the Company’s securities
are traded.  For purposes of this
Agreement, “Governmental Body” shall mean any:  (i) nation, state, commonwealth, province, territory, county,
municipality, district or other jurisdiction of any nature; (ii) federal,
state, local, municipal, foreign or other government; or (iii) governmental or
quasi-governmental authority of any nature (including any governmental
division, department, agency, commission, instrumentality, official,
organization, unit, body or entity and any court or other tribunal).


 


2.8.                              Compliance.  Except as set forth in the SEC Documents or
in Section 2.8 of the Company Disclosure Letter, neither the Company nor
any Subsidiary is in conflict with, or in default or violation of (i) any law,
rule, regulation, order, judgment or decree applicable to the Company or such
Subsidiary or by which any property or asset of the 


 


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Company or such Subsidiary is bound or affected (“Legal Requirement”),
or (ii) any Material Agreement, in each case except for any such conflicts, defaults
or violations that would not, individually or in the aggregate, have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received any written
notice or other communication from any Governmental Body regarding any actual
or possible violation of, or failure to comply with, any Legal Requirement,
except any such violations or failures that would not, individually or in the
aggregate, have a Material Adverse Effect.


 


2.9.                              SEC Documents; Financial Statements.


 


(a)                                  The information
contained in the following documents, did not, as of the date of the applicable
document, include 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 in which they were made, not
misleading, as of their respective filing dates or, if amended, as so amended
(the following documents, collectively, the “SEC Documents”), provided
that the representation in this sentence shall not apply to any misstatement or
omission in any SEC Document filed prior to the date of this Agreement which
was superseded by a subsequent SEC Document filed prior to the date of this
Agreement: (i) the Company’s Annual Report on Form 10-K for the year ended December 31,
2003; and (ii) the Company’s definitive Proxy Statement with respect to its
2003 Special Meeting of Stockholders, filed with the Commission on
April 30, 2003.


 


 (b)                              In
addition, as of the date of this Agreement, the Company Disclosure Letter, when
read together with the SEC Documents and the information, qualifications and
exceptions contained in this Agreement, does not include any untrue statement
of a material fact.


 


(c)                                  The Company has filed
all forms, reports and documents required to be filed by it with the SEC for
the 12 months preceding the date of this Agreement, including without
limitation the SEC Documents.  As of
their respective dates, the SEC Documents filed prior to the date hereof
complied as to form in all material respects with the applicable requirements
of the Securities Act, the Exchange Act, and the rules and regulations
thereunder.


 


(d)                                 The Company’s Annual
Report on Form 10-K for the year ended December 31, 2003, includes
consolidated balance sheets as of December 31, 2002 and 2003 and
consolidated statements of income for the one year periods then ended
(collectively, the “Form 10-K Financial Statements”).


 


(e)                                  The Form 10-K
Financial Statements (including the related notes and schedules thereto) fairly
present in all material respects the consolidated financial position, the
results of operations, retained earnings or cash flows, as the case may be, of
the Company for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments that would not be
material in amount or effect), in each case in accordance with generally
accepted


 


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accounting principles consistently applied during the periods involved,
except as may be noted therein.


 


2.10.                        Litigation.  Except as set forth in the SEC Documents or
in Section 2.10 of the Company Disclosure Letter, there are no claims,
actions, suits, investigations, inquiries or proceedings (each, an “Action”)
pending against the Company or any of its Subsidiaries or, to the Knowledge of
the Company, threatened against the Company or any of its Subsidiaries, at law
or in equity, or before or by any court, tribunal, arbitrator, mediator or any
federal or state commission, board, bureau, agency or instrumentality, that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect.  Except as set
forth in the SEC Documents or in Section 2.10 of the Company Disclosure
Letter, neither the Company nor any of its Subsidiaries is a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.


 


2.11.                        Absence of Certain Changes.  Except as specifically contemplated by this
Agreement or as set forth in Section 2.11 of the Company Disclosure Letter
or in the SEC Documents, since December 31, 2003, there has not been (a)
any Material Adverse Effect; (b) any dividends or other distribution of assets
to stockholders of the Company; (c) any acquisition (by merger, consolidation,
acquisition of stock and/or assets or otherwise) of any Person by the Company;
or (d) any transactions, other than in the ordinary course of business,
consistent in all material respects with past practices, with any of its
officers, directors or principal stockholders or any of their respective
Affiliates.


 


2.12.                        Intellectual Property.


 


(a)                                  The Company and its
Subsidiaries own, or have the right to use, sell or license all intellectual
property reasonably required for the conduct of their respective businesses as
presently conducted collectively, the “Company IP”) except for any
failure to own or have the right to use, sell or license the Company IP that
would not have a Material Adverse Effect.


 


(b)                                 The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not constitute a breach of any instrument or agreement governing any
Company IP, will not cause the forfeiture or termination or give rise to a
right of forfeiture or termination of any Company IP or impair the right of
Company and its Subsidiaries to use, sell or license any Company IP, except for
the occurrence of any such breach, forfeiture, termination or impairment that
would not, individually or in the aggregate, result in a Material Adverse
Effect.


 


(c)                                  (i)  None of the manufacture, marketing, license,
sale and use of any product currently licensed or sold by the Company or any of
its Subsidiaries violates any license or agreement between the Company or any
of its Subsidiaries and any third party or, to the Knowledge of the Company,
infringes any


 


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intellectual property right of any other party; and (ii) there is no
pending or, to the Knowledge of the Company, threatened claim or litigation
contesting the validity, ownership or right to use, sell, license or dispose of
any Company IP; except, with respect to clauses (i) and (ii), for any
violations, infringements, claims or litigations that would not, individually
or in the aggregate, have a Material Adverse Effect.


 


2.13                           No Adverse Actions.  Except as set forth in the SEC Documents or
in Section 2.13 of the Company Disclosure Letter, there is no existing,
pending or, to the Knowledge of the Company, threatened termination,
cancellation, limitation, modification or change in the business relationship
of the Company or any of its Subsidiaries, with any supplier, customer or other
Person except such as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.


 


2.14.                        Registration Rights.  Except as set forth in the Investor Rights
Agreement, in the SEC Documents or in Section 2.14 of the Company
Disclosure Letter, the Company is not under any obligation to register under
the Securities Act any of its currently outstanding securities or any
securities issuable upon exercise or conversion of its currently outstanding securities
nor is the Company obligated to register or qualify any such securities under
any Blue Sky Laws.


 


2.15.                        Corporate Documents.  The Company’s Certificate of Incorporation
and By-laws, each as amended to date, which have been requested and previously
provided to the Investors are true, correct and complete and contain all
amendments thereto.


 


2.16.                        Disclosure.  On or before 9:00 a.m., New York City Time,
on  the
fourth Business Day after the Closing, the Company shall file with the SEC a
Current Report on Form 8-K describing the material terms of the Contemplated
Transactions, and attaching as exhibits to such Form 8-K copies of this
Agreement and the other Transaction Documents. 
Except for information that may be provided to the Investors pursuant to
this Agreement, the Company shall not, and shall use commercially reasonable
efforts to cause each of its officers, directors, employees and agents not to,
provide any Investor with any material nonpublic information regarding the
Company from and after the filing of such Form 8-K without the express written
consent of such Investor.


 


2.17.                        Use of Proceeds.  The net proceeds received by the Company
from the sale of the Securities shall be used by the Company for working
capital and general corporate purposes, including without limitation to support
the operations of each of the Subsidiaries.


 


3.                                       Representations
and Warranties of the Investors. Each Investor represents and warrants to
the Company as follows:


 


3.1.                              Authorization. If
an entity, such Investor (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, and (ii) has
the power and authority to own and hold the Units.  Such Investor (i) has full power and authority to execute,
deliver and perform this Agreement and the other Transaction 


 


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Documents to which it is a party and to incur the obligations herein
and therein and (ii) if applicable has been authorized by all necessary
corporate or equivalent action to execute, deliver and perform this Agreement
and the other Transaction Documents and to consummate the Contemplated
Transactions.  This Agreement is and
each of the other Transaction Documents will be on the Closing Date, a valid
and binding obligation of such Investor enforceable in accordance with its
terms, except as limited by applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting the enforcement of creditors’ rights and
the availability of equitable remedies (regardless of whether such
enforceability is considered in a proceeding at law or equity).


 


3.2.                              Brokers and Finders.  Such Investor has not retained any
investment banker, broker or finder in connection with the Contemplated
Transactions.


 


3.3                                 No Governmental
Review.  Such Investor understands
that no United States Federal or state agency or any other Governmental Body
has passed on or made any recommendation or endorsement of the Securities or
the fairness or suitability of the investment in the Securities nor has any
agency or other Governmental Body passed upon or endorsed the merits of the
offering of the Securities.


 


3.4.                              No
Conflict; Required Filings and Consents.


 


(a)                                  The execution,
delivery and performance of this Agreement and the other Transaction Documents
by each Investor do not, and the consummation by such Investor of the
Contemplated Transactions will not, (i) if such Investor is an entity, conflict
with or violate the Certificate of Incorporation or the By-laws (or equivalent
or comparable documents) of such Investor, (ii) conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to such Investor or
by which any property or asset of such Investor is bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, result in the loss of a
material benefit under, or give to others any right of purchase or sale, or any
right of termination, amendment, acceleration, increased payments or
cancellation of, or result in the creation of a lien or other encumbrance on
any property or asset of such Investor pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Investor is a party or by which such
Investor or any property or asset of such Investor is bound or affected;
except, for any such conflicts, violations, breaches, defaults or other
occurrences that would not prevent or delay consummation of any of the
Contemplated Transactions in any material respect or otherwise prevent such
Investor from performing its obligations under this Agreement or any of the
other Transaction Documents in any material respect.  .


 


(b)                                 The execution and
delivery of this Agreement and the other Transaction Documents by each Investor
do not, and the performance of this Agreement and the other Transaction
Documents and the consummation by such Investor of the Contemplated
Transactions will not, require, on the part or in respect


 


12

















 


of such Investor, any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Body.


 


4.                                       Securities
Laws.


 


4.1.                              Securities
Laws Representations and Covenants of Investors.


 


(a)                                  Each Investor
represents and warrants to the Company that: this Agreement is made by the
Company with such Investor in reliance upon such Investor’s representation to
the Company, which by such Investor’s execution of this Agreement such Investor
hereby confirms, that the Securities to be received by such Investor will be
acquired for investment for such Investor’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof
such that such Investors would constitute an “underwriter” under the Securities
Act; provided that this representation and warranty shall not (i) limit the
Investor’s right to sell the Underlying Shares pursuant to the Investor Rights
Agreement or in compliance with an exemption from registration under the
Securities Act and in compliance with all applicable Federal Securities laws
and Blue Sky Laws or (ii) the Investor’s right to indemnification under this
Agreement, if any or the Investor Rights Agreement, if any.


 


(b)                                 Each Investor
understands and acknowledges that (i) the offering of the Securities pursuant
to this Agreement will not be registered under the Securities Act or qualified
under any Blue Sky Laws on the grounds that the offering and sale of the
Securities are exempt from registration and qualification, respectively, under
the Securities Act and the Blue Sky Laws, (ii) nothing in this Agreement or any
of the other Transaction Documents or in any other materials presented by or on
behalf of the Company to such Investor in connection with the purchase of
Securities constitutes legal, tax or investment advice, (iii) such Investor has
consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Securities, (iv) the Company has not undertaken to register the Securities
pursuant to the Securities Act and, except as provided in the Investor Rights
Agreement, will have no obligation to effect on behalf of any Investor any
registration or qualification under the Securities Act or under any Blue Sky
Laws or to assist any Investor in complying with any exemption from
registration or qualification under the Securities Act or under any Blue Sky
Laws and (v) if the Securities have not been registered under the Securities
Act and Rule 144 is not applicable, any resale of the Securities under
circumstances in which the seller (or the Person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act
or the rules and regulations of the SEC thereunder.


 


(c)                                  Each Investor
covenants that, unless the Purchased Shares, the Purchased Warrants, the Underlying
Shares or any other shares of capital stock of the Company received in respect
of the foregoing have been registered pursuant to


 


13

















 


the Investor Rights Agreement being entered into among the Company and
the Investors, such Investor will not dispose of such securities unless and
until such Investor shall have notified the Company of the proposed disposition
and shall have furnished the Company with an opinion of counsel reasonably
satisfactory in form and substance to the Company to the effect that
(x) such disposition will not require registration under the Securities
Act and (y) appropriate action necessary for compliance with the
Securities Act, all applicable Blue Sky Laws and any other applicable state,
local or foreign law has been taken; provided, however, that an
Investor may dispose of such securities without providing the opinion referred
to above if the sale of the securities is made in reliance on, and in
accordance with the terms of Rule 144.


 


(d)                                 Each Investor
represents to the Company that: 
(i) such Investor is able to fend for itself in the Contemplated
Transactions; (ii) such Investor has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of
such Investor’s prospective investment in the Securities and has so evaluated
the merits and risks of such investment; (iii) such Investor has the
ability to bear the economic risks of such Investor’s prospective investment
and can afford the complete loss of such investment; (iv) such Investor
has been furnished with and has reviewed the SEC Documents and the Company
Disclosure Letter; (v) such Investor has been furnished with and has had access
to such information as is in the SEC Documents and in the Company Disclosure
Letter, together with the opportunity to obtain such additional information as
it requested to verify the accuracy of the information contained therein or
otherwise supplied to such Investor so that such Investor can make an informed
investment decision with respect to an investment in the Securities;
(vi) such Investor has had access to officers of the Company and an
opportunity to ask questions of and receive answers from such officers and has
had all questions that have been asked by such Investor satisfactorily answered
by the Company; and (vii) such Investor is not subscribing to purchase the
Securities as a result of or subsequent to any advertisement, article, notice
or other communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or presented at any seminar or meeting, or
any solicitation of a subscription by a Person not previously known to such
Investor in connection with investments in securities generally.


 


(e)                                  Each Investor
represents to the Company that: (i) such Investor (A) was qualified at the time
such Investor was offered the securities, (B) qualifies on the date hereof, and
(C) will qualify on the Closing Date, as an “accredited investor” as such term
is defined under Rule 501 promulgated under the Securities Act.  Any Investor that is a corporation, a
partnership, a limited liability company, a trust or other business entity
further represents to the Company that it has not been organized for the purpose
of purchasing the Securities.


 


(f)                                    By acceptance
hereof, each Investor acknowledges that the Purchased Shares, the Purchased
Warrants, the Underlying Shares and any shares of


 


14

















 


capital stock of the Company received in respect of the foregoing held
by it may not be sold by such Investor without registration under the
Securities Act or an exemption therefrom, and therefore such Investor may be
required to hold such securities for an indeterminate period.


 


(g)                                 In connection with any
transfer of Securities made by each Investor in compliance with the provisions
of this Agreement, such Investor will cause each proposed transferee of such
Securities to agree and take hold such Securities subject to the provisions of
this Agreement.


 


4.2.                              Legends.  All certificates for the Purchased Shares,
Purchased Warrants and the Underlying Shares, and each certificate representing
any shares of capital stock of the Company received in respect of the
foregoing, whether by reason of a stock split or share reclassification
thereof, a stock dividend thereon or otherwise and each certificate for any
such securities issued to subsequent transferees of any such certificate
(unless otherwise permitted herein) shall bear the following legend:


 


“THE SECURITIES REPRESENTED BY THIS
INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS.”


 


4.3.                              Certain Trading
Activities.  Each Investor agrees
that (i) except for the purchase of the Securities, during the period beginning
on the date hereof and ending on the date that the Company files with the SEC a
Current Report on Form 8-K describing the material terms of the Contemplated
Transactions, and attaching as exhibits to such Form 8-K copies of the
Transaction Documents, there will be no trades in the Common Stock entered into
in the name or on behalf of, or in conjunction with, such Investors and (ii)
during the period beginning on the Closing Date and on the earlier of 30 days
after the Closing Date or the filing of the Registration Statement (as defined
in the Investor Rights Agreement), such Investor shall not engage in any short sales
of securities of the Company.


 


5.                                       Additional
Covenants of the Company.


 


5.1.                              Reports,
Information, Shares.


 


(a) 
The Company shall cooperate with each Investor in supplying such
information as may be reasonably requested by such Investor to complete and
file any information reporting forms presently or hereafter required by the SEC
as a


 


15

















 


condition to the availability of an exemption pursuant to Rule 144 for
the sale of any of the Purchased Shares, the Purchased Warrants, the Underlying
Shares and shares of capital stock of the Company received in respect of the
foregoing.


 


(b) 
The Company shall keep reserved for issuance a sufficient number of
authorized but unissued shares of Common Stock (or other securities into which
the Purchased Warrants are then exercisable) so that the Purchased Warrants may
be converted or exercised to purchase Common Stock (or such other securities)
at any time.


 


5.2.                              Expenses;
Indemnification.


 


(a) 
The Company agrees to pay on the Closing Date and save the Investors
harmless against liability for (i) the payment of any stamp or similar taxes
(including interest and penalties, if any) that may be determined to be payable
in respect of the execution and delivery of this Agreement,  and the issue and sale of any Securities and
the Underlying Shares, (ii) the expense of preparing and issuing the
certificates for the Securities and the Underlying Shares, and (iii) the cost
of delivering the Securities and the Underlying Shares of each Investor to such
Investor’s address, insured in accordance with customary practice. Each
Investor shall be responsible for its out-of-pocket expenses arising in
connection with the Contemplated Transactions, except that the Company shall
pay fees and disbursements of counsel to the Investors as set forth in
Section 6.9.


 


(b) 
The Company hereby agrees and acknowledges that the Investors have been
induced to enter into this Agreement and to purchase the Securities hereunder,
in part, based upon the representations, warranties, agreements and covenants
of the Company contained herein.  The
Company hereby agrees to pay, indemnify and hold harmless the Investors and any
director, officer, partner, member, employee or other affiliate of any Investor
(each, an “Indemnified Party”) against all claims, losses and damages resulting
from any and all legal or administrative proceedings, including without
limitation, reasonable attorneys’ fees and expenses incurred in connection
therewith (but in no event for more than one law firm for all the
Investors)(collectively, “Losses”), resulting from a breach by the
Company of any representation or warranty of the Company contained herein or
the failure of the Company to perform any agreement or covenant made herein;
provided, however, that the Company’s liability under this Section 5.2(b)
shall be limited to the aggregate purchase price of the Securities.


 


(c) 
As soon as reasonably practicable after receipt by any Indemnified Party
of notice of any Losses in respect of which the Company (the “Indemnifying
Party”) may be required to provide indemnification thereof under this
Section 5.2, the Indemnified Party shall give written notice thereof to
the Indemnifying Party.  The Indemnified
Party may, at its option, claim indemnity under this Section 5.2 as soon
as a claim has been threatened by a third party, regardless of whether any
actual Losses have been suffered, so long as counsel for


 


16

















 


such Indemnified Party shall in good faith determine that such claim is
not frivolous and that the Indemnifying Party may be required to provide
indemnification therefor as a result thereof and shall give notice of such
determination to the Indemnifying Party. 
The Indemnified Party shall permit the Indemnifying Party at the
Indemnifying Party’s option and expense, to assume the defense of any such
claim by counsel mutually and reasonably satisfactory to the Indemnifying Party
and a majority in interest of the Indemnified Parties and to settle or
otherwise dispose of the same; provided, however, that each
Indemnified Party may at all times participate in such defense at such
Indemnified Party’s expense; and provided  further, however
that the Indemnifying Party shall not, in defense of any such claim, except
with the prior written consent of the Indemnified Party, consent to the entry
of any judgment or settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff in question to such Indemnified
Party of a release of all liabilities in respect of such claim.  If the Indemnifying Party does not promptly
assume the defense of such claim or if any such counsel is unable to represent
one or more of the Indemnified Parties due to a conflict of interest, then an
Indemnified Party may assume, to the extent separable, the defense of such
portion of the claim as to which the conflict arose (and, if not separable, the
entire claim) and be entitled to indemnification and prompt reimbursement from
the Indemnifying Party for such Indemnified Party’s reasonable costs and
expenses incurred in connection therewith, including without limitation,
reasonable attorneys’ fees and expenses (not to exceed the cost of more than
one law firm for all Investors).  Such
fees and expenses shall be reimbursed to the Indemnified Parties as soon as
practicable after submission of invoices to the Indemnifying Party.


 


5.3.                              Issuance of Certain
Securities.  Without the prior
written consent of the Investors, during the one year period following the
Closing Date, the Company shall not issue for cash any (a) Convertible
Securities or similar securities that contain a provision that provides for any
change or determination of the applicable conversion price, conversion rate, or
exercise price (or a similar provision which might have a similar effect) based
on any determination of the market price of the Company’s Common Stock, (b) any
preferred stock, debt instruments or similar securities or investment
instruments providing for (i) preferences or other payments substantially in
excess of the original investment by purchasers thereof or (ii) dividends,
interest or similar payments other than dividends, interest or similar payments
computed on an annual basis and not in excess, directly or indirectly, of the
lesser of a rate equal to (A) twice the interest rate on 10 year US Treasury
Notes and (B) 20%.


 


6.                                       Miscellaneous.


 


6.1.                              Entire Agreement;
Successors and Assigns.  This
Agreement and the other Transaction Documents constitute the entire contract
between the parties relative to the subject matter hereof and thereof, and no
party shall be liable or bound to the other in any manner by any warranties or
representations (express or implied) or agreements or covenants except as
specifically set forth herein or therein. 
This Agreement and the other Transaction Documents supersede any
previous agreement among the parties with respect to


 


17

















 


the subject matter hereof and thereof. 
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective executors, administrators, heirs, successors
and assigns of the parties.  Nothing in
this Agreement, expressed or implied, is intended to confer upon any party,
other than the parties hereto, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.


 


6.2.                              Survival of
Representations and Warranties. 
Notwithstanding any right of the Investors fully to investigate the
affairs of the Company and notwithstanding any knowledge of facts determined or
determinable by any Investor pursuant to such right of investigation, each
Investor has the right to rely fully upon the representations, warranties,
covenants and agreements of the Company contained in this Agreement or in any
documents delivered pursuant to this Agreement.  All such representations and warranties of the Company contained
in this Agreement shall survive the execution and delivery of this Agreement
and the Closing hereunder and shall continue in full force and effect until the
earlier of (a) the date that is one year after the Closing and (b) the sale of
all of the Shares pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act.  All representations and warranties of the Investors contained in
this Agreement shall survive the execution and delivery of this Agreement and
the Closing hereunder.  The covenants of
the Investors (to the extent set forth in Section 4.1(c) and (g) and 4.3)
and the Company set forth in this Agreement shall survive the Closing.


 


6.3.                              Governing Law;
Jurisdiction.  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.  Each party hereby irrevocably consents and
submits to the jurisdiction of any New York State or United States Federal
Court sitting in the State of New York, County of New York, over any action or
proceeding arising out of or relating to this Agreement and irrevocably
consents to the service of any and all process in any such action or proceeding
in the manner for the giving of Notices at its address specified in Section 6.6.  Each party further waives any objection to
venue in the State of New York, County of New York and any objection to an
action or proceeding in such state and county on the basis of forum non
conveniens.  Each party also
waives any right to trial by jury.


 


6.4.                              Counterparts.  This Agreement may be executed (including by
facsimile transmission) with counterpart signature pages or 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.


 


6.5.                              Headings.  The headings of the sections of this
Agreement are for convenience and shall not by themselves determine the
interpretation of this Agreement.


 


6.6.                              Notices.  Any notice or other communication required
or permitted to be given hereunder (each a “Notice”) shall be given in
writing and shall be made by personal delivery or sent by courier or certified
or registered first-class mail (postage prepaid), addressed to a party at its
address shown below or at such other address as such party may designate by
three days advance Notice to the other parties.


 


18

















 


Any Notice to any of the Investors shall be sent to the addresses for
such Investor set forth on the signature pages hereof, with a copy to:


 


Hahn & Hessen LLP


488 Madison Avenue


New York, New York 10022


Attention:  James Kardon, Esq.


 


Any Notice to the Company shall be sent to:


 


AXS-One Inc.


301 Route 17 North


Rutherford, New Jersey 07070


Attention:  General Counsel


 


with a copy to:


 


Proskauer Rose LLP


1585 Broadway


New York, New York 10036


Attention:  Charles E. Dropkin,
Esq.


 


Each Notice shall be deemed given and effective upon receipt (or
refusal of receipt).


 


6.7.                              Rights of Transferees.  Any and all rights and obligations of each
of the Investors herein incident to the ownership of Securities or the
Underlying Shares shall pass successively to all subsequent transferees of such
securities until extinguished pursuant to the terms hereof; provided, however,
that no Investor may transfer or assign its rights under this Agreement (other
than to an Affiliate) between the date of this Agreement and the Closing Date.


 


6.8.                              Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or any other provision of this Agreement.


 


6.9.                              Fees and Expenses


 


(a)                                  Subject to
Section 6.9(d), irrespective of whether any Closing is effected, the
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement.


 


(b)                                 Each party shall be
responsible for all costs and expenses incurred by such party in connection
with the negotiation, execution, delivery and


 


19

















 


performance of this Agreement including, but not limited to, legal fees
and expenses, except that the Company shall pay at the Closing an aggregate of
up to $30,000 for the legal fees and expenses of Hahn & Hessen LLP (the
“Legal Fee”), as counsel to the Investors.


 


(c)                                  If any action at law
or in equity is necessary to enforce or interpret any of the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorney’s
fees, costs and necessary disbursements in addition to any other relief to
which such party may be entitled.


 


6.10.                        Amendments and Waivers.  Unless a particular provision or
section of this Agreement requires otherwise explicitly in a particular
instance, any provision of this Agreement may be amended and the observance of
any provision of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the Purchased
Shares (not including for this purpose any Purchased Shares which have been
sold to the public pursuant to a registration statement under the Securities
Act or an exemption therefrom).  Any
amendment or waiver effected in accordance with this Section 6.10 shall be
binding upon each Investor, each holder of any Securities at the time
outstanding (including without limitation securities into which any such
Securities are convertible or exercisable), each future holder thereof, and the
Company.


 


6.11.                        Company Disclosure Letter.  Information disclosed in any section of
the Company Disclosure Letter shall be deemed to be disclosed with respect to
the corresponding numbered section of this Agreement, as well as to such
other sections of this Agreement to which such disclosure shall reasonably
pertain to in light of the form and substance of the disclosure made.


 


6.12.                        Construction.  Words (including capitalized terms defined
herein) in the singular shall be held to include the plural and vice versa as
the context requires.  The words
“herein,” “hereinafter,” “hereunder” and words of similar import used in this
Agreement shall, unless otherwise stated, refer to this Agreement as a whole
and not to any particular provision of this Agreement.  All references to “$” in this Agreement and
the other agreements contemplated hereby shall refer to United States dollars
(unless otherwise specified expressly). 
Any reference to any gender includes the other genders.


 


[REMAINDER OF PAGE INTENTIONALLY BLANK]


 


20

















 


SIGNATURE PAGE


TO


AXS-ONE INC.


UNIT SUBSCRIPTION AGREEMENT


Dated as of April    ,
2004


 


IF the INVESTOR is an INDIVIDUAL, please complete the following:


 


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


 


 


	
  Amount of Subscription:

  	
   

  	
   

  
	
  $                     
  

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Units to be Purchased:

  	
   

  	
   

  
	
                      ,
  including

  	
   

  	
   

  
	
                    
  Purchased Shares and related 

  	
  Signature of Investor

  	
   

  
	
  Purchased Warrants

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address and Fax Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  E-mail Address

  	
   

  



 


Accepted and Agreed to as of the date first

above written:


 


AXS-ONE INC.


 


 


	
  By:

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
					



 


21

















 


SIGNATURE PAGE


TO


AXS-ONE INC.


UNIT SUBSCRIPTION AGREEMENT


Dated as of April    ,
2004


 


IF the INTERESTS will be held as JOINT TENANTS, as TENANTS IN COMMON,
or as COMMUNITY PROPERTY, please complete the following:


 


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


 


	
  Amount of Subscription: 

  	
   

  	
   

  
	
  $                   

  	
  Print Name of Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Units to be Purchased: 

  	
   

  	
   

  
	
                      ,
  including

  	
  Signature of a Purchaser

  	
   

  
	
                      
  Purchased Shares and related 

  	
   

  	
   

  
	
  Purchased Warrants

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name of Spouse or Other Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Spouse or Other Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Fax Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  E-mail Address

  	
   

  



 


Accepted and Agreed as of the date first

above written:


 


AXS-ONE INC.


 


 


	
  By:

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
					



 


22

















 


SIGNATURE PAGE


TO


AXS-ONE INC.


UNIT SUBSCRIPTION AGREEMENT


Dated as of April    ,
2004


 


IF the INVESTOR is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY
COMPANY, TRUST or OTHER ENTITY, please complete the following:


 


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


 


	
  Amount of Subscription

  $                                        

  	
   

  
	
   

  	
   

  
	
  Number of Units to be Purchased:

  	
   

  
	
                       
  , including

  	
   

  
	
                       
  Purchased Shares and related

  	
   

  
	
  Purchased Warrants

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Full Legal Name of Partnership,

  
	
   

  	
  Company, Limited Liability Company, Trust

  or Other Entity

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  (Authorized Signatory)

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address and Fax Number:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Taxpayer Identification
  Number:

  	
   

  
	
  Date and State of Incorporation or Organization:

  	
   

  
	
  Date on which Taxable Year Ends:

  	
   

  
	
   

  
	
   

  	
  E-mail Address:

  	
   

  
												



 


Accepted and Agreed as of the date first


above written:


 


AXS-ONE INC.


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
						



 


23

















 


Schedule 1.1(b)


 


INVESTORS


 

















 


EXHIBITS AND SCHEDULES TO THE UNIT
SUBSCRIPTION AGREEMENT


 


 


	
  Schedule 1.1(b)

  	
  Investors

  
	
  Exhibit 1:

  	
  Form of Warrants

  
	
  Exhibit 2:

  	
  Form of Investor Rights Agreement

  
	
  Exhibit 3(a):

  	
  Form of Legal Opinion- General Counsel

  
	
  Exhibit 3(b):

  	
  Form of Legal Opinion- Proskauer Rose LLP

  



 

















 


Exhibit
3(a)


 


Form
of Legal Opinion- General Counsel


 


The opinion will be subject to standard qualifications and exceptions,
reasonably acceptable to counsel for the Investors.


 


1.                                       The Company has the requisite corporate
power and authority to own, lease and operate its properties and assets, and to
carry on its business as presently conducted.


 


2.                                       The execution and delivery by the Company
of the Transaction Documents, the performance by the Company of its obligations
under the Transaction Documents, and the issuance of the Securities do not
violate any provision of the Certificate of Incorporation or By-laws of the
Company, or any provision of any Federal law or State of New York law known to
me to be applicable to the Company and to be customarily applicable to
transactions of the nature set forth in the Transaction Documents.


 


3.                                       The execution and delivery by the Company
of the Transaction Documents, the performance by the Company of its obligations
under the Transaction Documents, and the issuance of the Securities do not
violate, or constitute a default under, any note, bond, mortgage, indenture,
contract, agreement, lease or other instrument filed as an exhibit to the
Company’s annual report on Form 10-K for the year ended December 31, 2003
to which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject (it
being understood that I express no opinion with respect to any financial
covenant in any such note, bond, mortgage, indenture, contract, agreement,
lease or other instrument insofar as the covenant requires a computation).


 


4.                                       To my knowledge, there are no preemptive
rights, rights of first refusal or rights of first offer with respect to the
issuance of the Securities, and the Securities, when issued and paid for, all
in compliance with the provisions of the Transaction Documents will be free of
any liens and encumbrances under the Certificate of Incorporation or By-laws of
the Company.


 

















 


Exhibit
3(b)


 


Form
of Legal Opinion- Proskauer Rose LLP


 


The opinion will be subject to standard qualifications and exceptions,
reasonably acceptable to counsel for the Investors.


 


1.                                       The Company is validly existing as a
corporation and is in good standing under the law of the State of Delaware.


 


2.                                       The Company has the requisite corporate
power and authority to execute and deliver the Transaction Documents, to sell
and issue the Securities under the Purchase Agreement, to issue Common Stock
upon exercise of the Warrants and to perform its obligations under the
Transaction Documents.


 


3.                                       The authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock.


 


4.                                       The execution, delivery and performance
by the Company of the Transaction Documents have been duly authorized by all
necessary corporate action on part of the Company.  Each of the Transaction Documents has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.


 


5.                                       The Securities, when issued and paid for
and when certificates representing the Securities have been issued to the
Investors, all in compliance with the provisions of the Purchase Agreement and
the Warrants, will be validly issued, fully paid and nonassessable and free of any
adverse claims within the meaning of Section 8-303 of the New York Uniform
Commercial Code (assuming the Investors take the Securities with no notice of
any adverse claims and obtain control of the Securities in New York), other
than any adverse claims created by or imposed upon the holders thereof; provided,
however, that the Securities may be subject to restrictions on transfer
under applicable state and federal securities laws.


 


6.                                       Based solely on a certificate of an
officer of the Company as to factual matters, the Company is not, and,
immediately after giving effect to the sale of the Securities in accordance
with the Transaction Documents and the application of the proceeds as described
in Section 2.17 of the Purchase Agreement, will not, be required to be
registered as an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.


 


7.                                       Subject to the accuracy of the Investors’
representations and warranties in the Purchase Agreement, and upon the filing
of Form D in compliance with Regulation D under the Securities Act, the
issuance of the Securities in conformity with the terms of the Purchase
Agreement constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act.


 


8.                                       Based solely upon our review of the
resolutions of the Board of Directors of the Company relating to the
Transaction Documents, the Common Stock issuable upon exercise of the Warrants
has been validly reserved for issuance.