Document:

Exhibit 10.58  

April 2,
2003 

Mr. Alex
L. Karakozoff

1502 Linden Hurst Avenue

McLean, VA 22101 

Dear
Alex: 

        This
letter is to confirm our offer of employment to you under the following terms and conditions to join AXS-One as Senior Vice President, Sales & Marketing, North
America, reporting to Gennaro Vendome. This position is based out of our Rutherford, NJ office, starting employment on Monday, April 7, 2003. You understand that due to a prior commitment you
will not be compensated for the period of April 11th through April 18th. 

        Salary:    Starting salary will be $7,291.66 semi-monthly, paid on the 15th and last
business day of each month, which equates to 24 pay periods. 

        Bonus:    You will be eligible for a bonus potential of over $220,000.00 for on-target
earnings in 2003. Attached you will find your Compensation Plan. 

        Other Compensation:    For 2003, you will receive a minimum cash flow per pay period of $8,333.33. This
includes your base salary plus a maximum salary supplement of $1,041.66 per pay period. The salary supplement is subject to change based upon commissions earned. This will give you a minimum cash flow
of $200,000 per year. 

        Stock Options:    We will recommend to the Board of Directors of AXS-One Inc. that
you be awarded a stock option grant of 100,000 shares at fair market value, to be submitted to the
Compensation Committee at their next monthly meeting. 50,000 options will vest over a four (4) year period, 25,000 to vest four (4) years from date of grant with acceleration possible
upon achievement of cumulative net license revenue goal of $10,000,000 in any four (4) consecutive quarters during the next two years, and 25,000 to vest four (4) years from date of
grant with acceleration possible upon achievement of 2003 license revenue goal of $6,000,000. The options, if approved, are subject to the terms and conditions as outlined in the AXS-One
Stock Option Plan. 

        Commuting/Accommodations:    Given the fact that you will need to work out of the Rutherford, NJ office,
AXS-One will reimburse you travel expenses to and from Virginia. We will also reimburse you for the cost of your accommodations during the week. The maximum combined total for commuting
and accommodations should not exceed $2,500.00 per month for six months. 

        Relocation:    If you relocate to New Jersey within one (1) year from your date of hire,
AXS-One will reimburse for actual expenses not to exceed $10,000.00. We will also reimburse you for dislocation expenses not to exceed $10,000.00. If you resign within the first year
following the date the relocation is paid to you, monies paid towards relocation costs will be off-set against any monies owed to you. 

 

AXS-ONE
  

Mr. Alex L. Karakozoff

April 2, 2003

Page 2 

        Change of Control:    Upon the occurrence of a Change of Control of the Company (as defined in the Stock
Option Plan), all Options which are unvested at the time of the Change of Control will be immediately vested. 

        As
used herein, a "Change of Control" of the Company shall be deemed to have occurred: 

	I.
	Upon
the consummation, in one transaction or a series of related transactions, (A) of the sale or other transfer of voting power (including voting power exercisable on a
contingent of deferred basis as well as immediately exercisable voting power) representing control of over 30% of the total voting power of the Company to a person or a group of related persons, who,
on the date of this Agreement, does not have effective voting control of the Company, whether such sale or transfer results from a tender offer or otherwise; or (B) by which any person or group
of related persons who becomes, after the Commencement Date, the "beneficial owner" of more than 70% of the total voting power of the Company, whether as a result of a tender offer or otherwise; or

	II.
	Upon
the consummation of a merger or consolidation in which the Company is a constituent corporation and in which the Company's shareholders immediately prior thereto will
beneficially own, immediately thereafter, securities of the Company or any surviving or new corporation resulting therefrom having less than a majority of the voting power of the Company or any such
surviving or new corporation: or

	III.
	Upon
the consummation of a sale, lease, exchange or other transfer or disposition by the Company of all or substantially all of its assets to any person or group or related persons. 

        Severance Package:    If, at any time, the Company decides to terminate your position for any reason
other than for cause, then the Company will provide you a written statement of the reason for termination and severance as follows: a) equal to 3 months of your base salary payable in 6
semi-monthly installments during the first six months of employment, b) equal to 4.5 months of your base salary payable in 9 semi-monthly installments during six
to twelve months of employment and c) equal to 6 months of your base salary payable in 12 semi-monthly installments after one year of employment. 

        Benefits:    AXS-One provides its employees with medical, dental, vision and prescription
insurance coverage effective date of hire. Optional dependent coverage is available as well. Life insurance, long term disability and short term disability are also effective date of hire. Please see
attached Outline of Benefit Summary for details, which includes all benefits offered at this time, including holidays, vacation and other time off. In addition, the Company offers a 401(k) savings
plan which includes a 25% employer match (subject to certain restrictions), also explained in the Summary. 

2

 

AXS-ONE
  

Mr. Alex L. Karakozoff

April 2, 2003

Page 3 

        Employment:    AXS-One is an equal opportunity employer. In addition, it should be
understood that employment is "at will", as defined under the laws of New Jersey, and thus such employment can be terminated with or without cause, at the option of either party. 

        Confidentiality:    You agree that any confidential information that becomes available to you in the
course of employment is the sole property of AXS-One and shall not be used by you for any purpose other than fulfilling your position's objectives. This applies while an active or inactive
employee. A partial list of items covered by Confidentiality include: 

	•    Employee Lists	 	•    Technical Product Knowledge
	•    Customer Lists	 	•    Confidential Financial Data
	•    Prospect Lists	 	•    Product Price Lists
	•    Product Materials	 	•    Sales/Marketing Strategy

        The above information and any other confidential material will remain confidential for a period of two years after employment at AXS-One, except for
customer lists and possible other technical data, which remains confidential in perpetuity unless AXS-One makes it available to the public. 

        Please
countersign this offer of employment, Non-Disclosure Agreement and your Compensation Plan and return them to Human Resources to officially indicate your acceptance. 

        This
offer is contingent upon your review and acceptance of our Offer Letter, a favorable response from your references and our review of verification of your identity and employment
authorization documents as set forth in the Immigration Reform and Control Act. Please see the attached list of acceptable documents. You must bring these documents with you on your first day of
employment. It is understood that legal fees associated with obtaining these documents are solely your responsibility. 

	Sincerely,	 	 	 	 
	

/s/ JOHN A. RADE
 John A. Rade

Chief Executive Officer	
 	

 	
 	

 
	

	

I ACCEPT:	 	 	 	 
	/s/ ALEX L. KARAKOZOFF
 Alex L. Karakozoff	 	Date	 	April 23, 2003

	

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EXHIBIT 10.10.AR  

DEBT CONVERSION AGREEMENT  

        THIS DEBT CONVERSION AGREEMENT (the "Agreement") is made and entered into effective as of the 15th day of April, 2003, by and between ANTHONY M. FRANK KEOGH PLAN
UTA CHARLES SCHWAB & CO., INC. (hereinafter referred to as "Buyer") and ELECTROPURE, INC., a California corporation (hereinafter referred to as "Electropure" or the "Company"). 

 
 

R E C I T A L S    
    

        WHEREAS,
Buyer loaned the Company One Million Dollars ($1,000,000) under the terms of that certain 8% Three-Year Convertible Term Note dated January 17, 2001 (the
"Term Note"). 

        WHEREAS,
on or about September 16, 2002, the Company repaid Four Hundred Thousand Dollars ($400,000) of the principal balance due on said Term Note to Buyer and issued an 8%
Convertible Term Note to Buyer for the remaining principal sum of Six Hundred Thousand Dollars ($600,000). 

        WHEREAS,
as of March 31, 2003, a total of $24,000.00 in interest accrued on the above loan is due and payable to Buyer by the Company. 

        WHEREAS,
Buyer wishes to convert all of the interest accrued on the Term Note through March 31, 2003 into shares of Electropure, Inc. Common Stock and the Company wishes to
issue such shares to extinguish the debt owed Buyer. 

        NOW,
THEREFORE, in consideration of the foregoing and of the mutual obligations herein contained, it is agreed as follows: 

        1.    CONVERSION    

        (a)   On
the effective date set forth above, Buyer hereby converts all of the $24,000.00 in interest accrued on the Term Note into Shares of Electropure, Inc. Common
Stock, $0.01 par value, at an effective conversion rate of $0.13 per share, for a total of 184,615 Shares (the "Shares"). 

        (b)   The
Shares shall have the rights, preferences, privileges, restrictions and other terms set forth in the By-laws of the Company. 

        (c)   Upon
conversion hereby and pursuant to the Debt Conversion Agreements previously entered into between the parties, Buyer acknowledges that all interest accrued and due
through March 31, 2003 pursuant to the terms of the 8% Three-Year Convertible Term Note and the 8% Convertible Term Note entered into between the parties on January 17, 2001
and September 16, 2002, respectively, (the "Notes") has been satisfied in full by the Company. Buyer also acknowledges that pursuant to these Debt Conversion Agreements any default by
Electropure for failure to pay interest due on the Notes through March 31, 2003 has been cured. 

        2.    REPRESENTATIONS AND WARRANTIES OF BUYER    Buyer represents and warrants to the Company: 

        (a)   The
Shares are being acquired by Buyer for investment for an indefinite period, for Buyer's own account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and the Buyer has no present intention of selling, granting participations in, or otherwise distributing the same except as may be permitted by the Securities Act of
1933, as amended (the "Act"). 

1

 

        (b)   Buyer
does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer, or grant participation to such person or to any third person,
with respect to the Shares. 

        (c)   That
Buyer understands that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), in reliance upon the exemptions from the
registration provisions of the Act contained in Section 4 (2) thereof, and any continued reliance on such exemption is predicated on the representations of the Buyer set forth herein. 

        (d)   Buyer
understands that the Shares must be held indefinitely unless the sale or other transfer thereof is subsequently registered under the Act, as amended, or an
exemption from such registration is available. Buyer further understands that the Company is under no obligation to register the Securities on its behalf or to assist him in complying with any
exemption from registration except as otherwise provided herein. 

        (e)   Buyer
(i) has adequate means of providing for his current needs and possible contingencies, (ii) has no need for liquidity in this investment,
(iii) is able to bear the substantial economic risks of an investment in the Shares for an indefinite period, (iv) at the present time, can afford a complete loss of such investment, and
(v) does not have an overall commitment to investments which are not readily marketable that is disproportionate to Buyer's net worth, and Buyer's investment in the Shares will not cause such
overall commitment to become excessive. 

        (f)    Buyer
is an "accredited investor" (as defined in Regulation D promulgated under the Act) and the undersigned's
total investment in the Shares does not exceed 10% of the Buyer's net worth. 

        (g)   Buyer
recognizes that the Company has had only limited revenues to date and that the Shares as an investment involve significant risks. 

        (h)   Buyer
will not transfer the Shares without registering them under applicable federal and state securities laws unless the transfer is exempt from registration. Buyer
realizes that the Company may not allow a transfer of Shares unless the transferee is also an "accredited investor". Buyer understands that legends will be placed on certificates representing the
Shares, with respect to the above restrictions on resale or other disposition of the Shares and that stop transfer instructions have or will be placed with respect to the Shares so as to restrict the
assignment, resale or other disposition thereof. 

        (i)    The
Company will direct its transfer agent to, or will itself, place such a stop transfer order in its books respecting transfer of the Shares, and the certificate or
certificates representing the Shares will bear the following legend or a legend substantially similar thereto: 

"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF: (1) AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT, OR (2) AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

        (j)    That
Buyer understands that Rule 144, promulgated by the Securities and Exchange Commission under the Act, may not be currently available for sale of the Shares,
and there is no assurance that it will be available at any particular time in the future. If and when Rule 144 is available for sale of the Common Stock underlying the Shares, such sales in
reliance upon Rule 144 may only be (i) in limited quantities after the Shares have been held for one (1) year after being sold by the Company, or (ii) in unlimited
quantities by non-affiliates after the Shares have been held for two (2) years after being sold by the Company, in each case in accordance with the conditions of the Rule, all of
which must be met (including the requirement, if applicable, that adequate information concerning the Company is then available to the public). The Company and Buyer acknowledges that the Company has
no obligation to supply the information required for sales under Rule 144. 

2

 

        (k)   The
Purchase Price to be paid by Buyer to Company for the Shares has been determined by Buyer as fair and appropriate based solely upon Buyer's independent investigation
and due diligence of the Company, and neither Buyer nor the Company nor any of their agents, including, without limitation, any of their officers, directors, employees, accountants and attorneys, has
made any representations or warranties whatsoever in connection with the sale of the Shares by the Company to Buyer. Buyer has had sufficient opportunity in connection with the sale of the Shares to
review the Company's business and affairs (including, without limitation, the Company's financial statements and other information). The Buyer has had answered to his satisfaction any questions with
respect to the Company's business and affairs. Buyer further has had the opportunity to obtain independent financial, legal, accounting, business, tax and other appropriate advice with respect to the
transactions contemplated by this Agreement, and is not relying upon the Company or any of its agents in any manner in connection with same. 

        3.    REGISTRATION RIGHTS    The Company agrees to include for registration under the Act all of the Shares issued
hereby in the next Registration Statement filed by the Company with the Securities and Exchange Commission. 

        4.    REPRESENTATIONS AND WARRANTIES OF ELECTROPURE    

        (a)   Electropure
is a corporation duly organized and validly existing under the laws of the State of California without limit as to duration of its existence, and is
authorized and in good standing to do business in no other state; Electropure has the corporate power and adequate authority, rights and franchise to own its property and to carry on its business as
now conducted; and, subject to ratification by its Board of Directors, Electropure has the corporate power and adequate authority to enter into this Agreement. 

        (b)   The
execution and delivery of this Agreement and subject to (1) ratification by the Board of Directors of the Company and (2) filing the Certificate with
the California Secretary of State, the performance of the provisions of this Agreement are not in contravention of or in conflict with any law or regulation or any term or provision of Electropure's
Articles of Incorporation or By-Laws and are duly authorized and do not require the consent or approval of any governmental body or other regulatory authority; and this Agreement is a
valid, binding and legal obligation of Electropure, enforceable in accordance with the terms herein. 

        5.    ENTIRE AGREEMENT    This Agreement embodies the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings relating to such subject matter. 

        6.    AMENDMENT    This Agreement may not be amended except by written document executed by the parties. 

        7.    SUBJECT HEADINGS    Subject headings are included for convenience only and shall not be deemed part of this
Agreement. 

        8.    SEVERABILITY    If any provision of this Agreement shall be held unenforceable as applied to any circumstance,
the remainder of this Agreement and the application of such provision to other circumstances shall be interpreted so as best to effect the intent of the parties. The parties further agree to replace
any such unenforceable provision with an enforceable provision (and to take such other action) which will achieve, to the extent possible, the purposes of the unenforceable provision. 

        9.    GOVERNING LAW    This Agreement shall be governed by and construed under the laws of the State of California in
force from time to time. 

        10.    PARTIES BOUND    This Agreement is binding on and shall inure to the benefit of the parties and their
respective successors, assign, heirs, and legal representatives. 

3

 

        11.    SURVIVAL    The representations, warranties, covenants, and agreements contained in this Agreement shall
survive the consummation of the transactions contemplated hereby. 

        12.    COUNTERPARTS    This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument. 

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

	 
	 	 

	COMPANY:	 	BUYER:
	

ELECTROPURE, INC.	
 	

ANTHONY M. FRANK KEOGH PLAN

UTA CHARLES SCHWAB & CO., INC.
	

/s/  CATHERINE PATTERSON      
 Catherine Patterson, Chief Financial Officer

23456 South Pointe Drive

Laguna Hills, CA 92653-1512	
 	

/s/  ANTHONY M. FRANK      
 Anthony M. Frank, Trustee

101 Montgomery Street

San Francisco, CA 94104

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