Document:

Exhibit 10.3

 

	
  Void after April     , 2007

  	
   

  	
  Warrant No. [B- ]

  

 

 

THIS
SECURITY AND ANY SHARES ISSUED UPON THE EXERCISE OR CONVERSION OF THIS SECURITY
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.

 

AXS-ONE INC.

 

CLASS [B] COMMON STOCK PURCHASE WARRANT

 

AXS-One Inc. (the “Company”), having its principal office as of
the date hereof at 301 Route 17 North, Rutherford, New Jersey 07070, hereby
certifies that, for value received,
                        ,
or registered assigns, is entitled, subject to the terms and conditions set
forth below, to purchase from the Company at any time on or from time to time
after
                 
     , 2004 and before 5:00 P.M., New York City time,
on April      , 2007 (the “Expiration Date”),
                       
fully paid and non-assessable shares of Common Stock (as defined below), at the
initial Purchase Price per share (as defined below) of
$               .  The number of such shares of Common Stock
and the Purchase Price per share are subject to adjustment as provided in
Section 5.

 

Background.                            The
Company agreed to issue warrants, including this Warrant, to purchase an
aggregate of 516,129 shares of Common Stock (subject to adjustment as provided
in Section 5) in connection with the Company’s private placement of
258.0645 units (“Units”), each Unit consisting of (i) 10,000 shares of
Common Stock, (ii) a Class A warrant to purchase 1,000 shares of Common Stock
at $3.98 per share, and (iii) a Class B warrant to purchase 1,000 shares of
Common Stock at $4.50 per share.

 

As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:

 

“Aggregate Purchase Price” has the meaning set forth in
Section 3.1.

 

 

“AMEX” means the American Stock Exchange, Inc.

 

“Blue Sky Laws” means any state securities or “blue sky” laws.

 

“Board of Directors” means the board of directors of the
Company.

 

“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.

 

“Company” includes the Company and any corporation which shall
succeed to or assume 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.

 

“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 any dividends or
distributions, 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.

 

“Convertible Securities” means (i) options to purchase or rights
to subscribe for Common Stock, (ii) securities by their terms convertible into
or exchangeable for Common Stock or (iii) options to purchase or rights to
subscribe for such convertible or exchangeable securities.

 

“Exchange Act” means the Securities Exchange Act of 1934 as the
same shall be in effect at the time.

 

“Holder” means any record owner of Warrants or Underlying
Securities.

 

“Investor” has the meaning set forth in the Unit Subscription
Agreement.

 

“Investor Rights Agreement” has the
meaning set forth in Section 1.

 

“Market Price” means at any date (i) if the principal trading
market for such securities is AMEX or another exchange, the average of the
closing sale prices per share for the last ten previous trading days in which a
sale was reported, as officially reported on any consolidated tape, (ii) if the
principal market for such securities is the over-the-counter market, the
average of the closing sale prices per share on the last ten previous trading
days in which a sale was reported as set forth by Nasdaq or, (iii) if the
security is not listed on another exchange or Nasdaq, the average of the
closing sale prices per share on the last ten previous trading days in which a
sale was reported as set forth in the National Quotation Bureau sheet listing
such securities for such days. 
Notwithstanding the foregoing, if there is no reported closing sale
price, as the case may be, reported on any of the ten trading days preceding the
event requiring a

 

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determination of Market Price hereunder, then the Market Price shall be
the average of the high bid and asked prices for the last ten previous trading
days in which a sale was reported; and if there is no reported high bid and
asked prices, as the case may be, reported on any of the ten trading days
preceding the event requiring a determination of Market Price hereunder, then
the Market Price shall be determined in good faith by resolution of the Board
of Directors.

 

“Nasdaq” means the Nasdaq SmallCap Market or Nasdaq Stock
Market.

“Notice” has the meaning set forth in Section 21.

 

“Original Issue Date” means
April      , 2004.

 

“Other Securities” refers to any stock (other than Common Stock)
and other securities of the Company or any other Person (corporate or
otherwise) which the Holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 5 or 6.

 

“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.

 

“Purchase Price per share” means $     per
share, as may be adjusted from time to time in accordance with Section 5
or 6.

 

“registered” and “registration” refer to a registration
effected by filing a registration statement in compliance with the Securities
Act, to permit the disposition of Underlying Securities issued or issuable upon
the exercise of Warrants, and any post-effective amendments and supplements
filed or required to be filed to permit any such disposition.

 

“Securities Act” means the Securities Act of 1933 as the same
shall be in effect at the time.

 

“Underlying Securities” means any Common Stock or Other
Securities issued or issuable upon exercise of Warrants.

 

“Unit Subscription Agreement” means the Unit Subscription
Agreement, dated as of March 31, 2004, among the Company and the
Investors.

 

“Warrant” means, as applicable, (i) the Class [B] Warrants dated
as of the date hereof, originally issued by the Company pursuant to the Unit
Subscription Agreement, of which this Warrant is one, evidencing rights to
purchase up to an aggregate of 258,064 shares of Common Stock, and all Warrants
issued upon transfer, division or combination of, or in substitution for, any
thereof (all Warrants shall at all times be identical as to terms and
conditions

 

3

 

and date, except as to the number of shares of Common Stock for which
they may be exercised) or (ii) each right as set forth in this Warrant to
purchase one share of Common Stock, as adjusted from time to time in accordance
with Section 5 or 6.

 

1.                                       Registration,
etc.  The Holder shall have the
rights to registration of Underlying Securities issuable upon exercise of the
Warrants that are set forth in the Investor Rights Agreement, dated the
Original Issue Date, among the Company and each of the Investors (the “Investor
Rights Agreement”).

 

2.                                       Sale
or Exercise Without Registration. 
If, at the time of any exercise, transfer or surrender for exchange of a
Warrant or of Underlying Securities previously issued upon the exercise of
Warrants, such Warrant or Underlying Securities shall not be registered under
the Securities Act, the Company may require, as a condition of allowing such
exercise, transfer or exchange, that the Holder or transferee of such Warrant
or Underlying Securities, as the case may be, furnish to the Company an opinion
of counsel, reasonably satisfactory to the Company, to the effect that such
exercise, transfer or exchange may be made without registration under the
Securities Act and without registration or qualification under any applicable
Blue Sky Laws, provided that nothing contained in this Section 2 shall
relieve (a) the Company from complying with any request for registration
pursuant to the Registration Rights Agreement or (b) the Holder from its
obligations under the Unit Subscription Agreement.

 

3.                                       Exercise
of Warrant.

 

3.1.                              Exercise in Full.  Subject to the provisions hereof, this
Warrant may be exercised in full by the Holder hereof by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
Holder, to the Company at its the principal office of the Company set forth at
the head of this Warrant (or such other location as the Company from time to
time may advise the Holder in writing), accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company, in the
amount obtained (the “Aggregate Purchase Price”) by multiplying (a) the
number of shares of Common Stock then 
issuable upon exercise of this Warrant by (b) the Purchase Price per
share on the date of such exercise.

 

3.2.                              Partial Exercise.  Subject to the provisions hereof, this
Warrant may be exercised in part by surrender of this Warrant in the manner and
at the place provided in Section 3.1 except that the amount payable by the
Holder upon any partial exercise shall be the amount obtained by multiplying
(a) the number of shares of Common Stock designated by the Holder in the
subscription at the end hereof by (b) the Purchase Price per share on the date
of such exercise.  Upon any such partial
exercise, the Company at its expense shall forthwith issue and deliver to or
upon the order of the Holder hereof a new Warrant or Warrants of like tenor, in
the name of the Holder hereof or as such Holder (upon payment by such Holder of
any applicable transfer taxes and subject to the provisions of Section 2)
may request, calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock equal to the number of such shares issuable
prior to such partial exercise of this Warrant minus the number of such shares
designated by the Holder in the subscription at the end hereof.

 

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3.3.                              Company to Reaffirm
Obligations.  The Company shall, at
the time of any exercise of this Warrant, upon the request of the Holder
hereof, acknowledge in writing its continuing obligation to afford to such
Holder any rights (including, without limitation, any right to registration of
the Underlying Securities, if any) to which such Holder shall continue to be
entitled after such exercise in accordance with the provisions of this Warrant;
provided, however, that if the Holder of this Warrant shall fail to make
any such request, such failure shall not affect the continuing obligation of
the Company to afford such Holder any such rights.

 

3.4.                              Certain Exercises.  If an exercise of this Warrant is to be made
in connection with a registered public offering or sale of the Company, such
exercise may, at the election of the Holder, be conditioned on the consummation
of the public offering or sale of the Company, in which case such exercise
shall not be deemed effective until the consummation of such transaction.

 

4.                                       Delivery
of Stock Certificates, etc., on Exercise. 
As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within three Business Days thereafter, the Company at
its own expense (including the payment by it of any applicable issue taxes)
shall cause to be issued in the name of and delivered to the Holder hereof, or
as such Holder (upon payment by such Holder of any applicable transfer taxes
and subject to the provisions of Section 2) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Common
Stock or other Securities to which such Holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
current Market Price of one full share.

 

5.                                       Adjustment
for Dividends.

 

(a)                                  In
case at any time or from time to time after the Original Issue Date, the
Company shall at any time declare or pay a dividend upon its Common Stock
payable in shares of Common Stock, the Purchase Price per share in effect
immediately prior to such dividend shall be proportionately reduced.

 

(b)                                 If
the number of shares of Common Stock outstanding at any time after the Original
Issue Date is decreased by a combination or reverse stock split of the
outstanding shares of Common Stock, the Purchase Price per share shall be
increased in proportion to such decrease. 
If the number of shares of Common Stock outstanding at any time after
the Original Issue Date is increased by a forward stock split of the outstanding
shares of Common Stock or otherwise, the Purchase Price per share shall be
decreased in proportion to such increase.

 

(c)                                  Upon
each adjustment to the Purchase Price per share, the Holder of this Warrant
shall thereafter be entitled to purchase, at the Purchase Price per share
resulting from such adjustment, the number of shares of Common Stock obtained
by multiplying the Purchase Price per share in effect immediately prior to such
adjustment by the number of shares

 

5

 

of Common Stock purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Purchase Price per share
resulting from such adjustment.

 

6.                                       Reorganization,
Consolidation, Merger, etc.  In case
the Company after the Original Issue Date shall (a) effect a reorganization,
(b) consolidate with or merge into any other Person, or (c) transfer all or
substantially all of its properties or assets to any other Person under any
plan or arrangement contemplating the dissolution of the Company, then, in each
such case, the Holder of this Warrant, upon the exercise hereof as provided in
Section 3 at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall be entitled to receive (and the Company or its successors or
assigns shall be entitled to deliver), in lieu of the Underlying Securities
issuable upon such exercise prior to such consummation or such effective date,
the stock and other securities and property (including cash) to which such
Holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such Holder had so exercised this
Warrant immediately prior thereto.  Upon
receipt of such stock and other securities and property (including cash), if
any, the rights of the Holder under this Warrant shall terminate and cease and
this Warrant shall expire and be of no force and effect.  In any such case, the Company (or its successors
or assigns) shall be entitled to make appropriate adjustments in the
application of the provisions of this Warrant with respect to the rights and
interests of the Holder after such reorganization, merger, consolidation or
dissolution.  The Company shall not
effect any such reorganization, consolidation, merger or dissolution, unless
prior to or simultaneously with the consummation thereof, the successor
corporation resulting from such consolidation or merger or the corporation
purchasing such assets shall confirm or assume, by written instrument, the
obligation to deliver to each Holder the shares of stock, cash, other
securities or assets to which, in accordance with the foregoing provisions,
each Holder may be entitled to and all other obligations of the Company under
this Warrant.

 

7.                                       Further
Assurances; Reports.  The Company
shall take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Underlying Securities upon the exercise of all Warrants from time to time
outstanding.  For so long as the Holder
holds this Warrant, the Company shall deliver to the Holder contemporaneously
with delivery to the holders of Common Stock, a copy of each report of the Company
delivered to such holders.

 

8.                                       Certificate
as to Adjustments.  In each case of
any adjustment or readjustment in the Underlying Securities, the Company shall,
at its expense, promptly cause its Chief Financial Officer to compute such
adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, and
the number of shares of Common Stock or Other Securities outstanding or deemed to
be outstanding.  The Company shall
forthwith mail a copy of each such certificate to the Holder.

 

9.                                       Notices
of Record Date, etc.  In the event
of

 

(a)                                  any taking by the
Company of a record of its stockholders for the purpose of determining the
stockholders thereof who are entitled to receive any

 

6

 

dividend or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities
or property, or to receive any other right, or for the purpose of determining
stockholders who are entitled to vote in connection with any proposed capital
reorganization of the Company, any reclassification or recapitalization of the
capital stock of the Company or any transfer of all or substantially all the
assets of the Company to or consolidation or merger of the Company with or into
any other Person, or

 

(b)                                 any voluntary or
involuntary dissolution, liquidation or winding-up of the Company,

 

then and in each such event the Company shall mail or cause to be
mailed to each Holder of a Warrant a notice specifying (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution
or right, and stating the amount and character of such dividend, distribution
or right and (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place, and the time, if any, as of which the Holders of
record of Underlying Securities shall be entitled to exchange their shares of
Underlying Securities for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least 20 days prior to the date
therein specified.

 

10.                                 Reservation
of Stock, etc., Issuable on Exercise of Warrants.  The Company shall at all times reserve and keep available, solely
for issuance and delivery upon the exercise of the Warrants, all shares of
Common Stock (or Other Securities) from time to time issuable upon the exercise
of the Warrants.

 

11.                                 Listing
on Securities Exchanges; Registration; Issuance of Certain Securities. In
furtherance and not in limitation of any other provision of this Warrant, if
the Company at any time shall list any Common Stock (or Other Securities) on
any national securities exchange or Nasdaq, the Company shall, at its expense,
simultaneously list the Underlying Securities from time to time issuable upon
the exercise of the Warrants on such exchange or Nasdaq, upon official notice
of issuance.

 

12.                                 Exchange
of Warrants.  Subject to the
provisions of Section 2, upon surrender for exchange of this Warrant,
properly endorsed, to the Company, as soon as practicable (and in any event
within three Business Days) the Company at its own expense shall issue and
deliver to or upon the order of the Holder thereof a new Warrant or Warrants of
like tenor, in the name of such Holder or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct, calling in the aggregate
on the face or faces thereof for the number of shares of Common Stock called
for on the face of this Warrant so surrendered.

 

13.                                 Replacement
of Warrants.  Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory in
form and amount to the Company or, in the case of any such

 

7

 

mutilation, upon surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu thereof, a new
Warrant of like tenor.

 

14.                                 Warrant
Agent.  The Company may, by written
notice to each Holder of a Warrant, appoint an agent having an office in New
York, New York, for the purpose of issuing Common Stock (or Other Securities)
upon the exercise of the Warrants pursuant to Section 3, exchanging
Warrants pursuant to Section 12, and replacing Warrants pursuant to
Section 13, or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by
such agent.

 

15.                                 Remedies.  The Company stipulates that the remedies at
law of the Holder of this Warrant in the event of any default or threatened
default by the Company in the performance of or compliance with any of the
terms of this Warrant may not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction that may be sought against a violation of
any of the terms hereof or otherwise.

 

16.                                 No
Rights as Stockholder.  This Warrant
does not entitle the Holder hereof to any voting rights or other rights as a
stockholder of the Company prior to the exercise hereof.

 

17.                                 Negotiability,
etc.  Subject to Section 2,
this Warrant is issued upon the following terms, to all of which each Holder or
owner hereof by the taking hereof consents and agrees that:

 

(a)                                  subject to the
provisions of this Warrant and the Unit Subscription Agreement, title to this
Warrant may be transferred by endorsement (by the Holder hereof executing the
form of assignment at the end hereof); and

 

(b)                                 until this Warrant is
transferred on the books of the Company, the Company may treat the registered
Holder hereof as the absolute owner hereof for all purposes, notwithstanding
any notice to the contrary.

 

18.                                 Entire
Agreement; Successors and Assigns. 
This Warrant, the Unit Subscription Agreement and the Investor Rights
Agreement constitute the entire contract between the parties relative to the
subject matter hereof.  This Warrant,
the Unit Subscription Agreement and the Investor Rights Agreement supersede any
previous agreement among the parties with respect to the subject matter
hereof.  The terms and conditions of
this Warrant shall inure to the benefit of and be binding upon the respective
permitted executors, administrators, heirs, successors and assigns of the
parties.  Nothing in this Warrant,
expressed or implied, is intended to confer upon any party, other than the
Holder and the Company, any rights, remedies, obligations or liabilities under
or by reason of this Warrant.

 

19.                                 Governing
Law; Jurisdiction.  This Warrant
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 of the Holder and the Company hereby
irrevocably consents and submits

 

8

 

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 Warrant 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 21.  Each of the Holder and the Company 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 of the
Holder and the Company also waives any right to trial by jury.

 

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

 

21.                                 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 pre-paid), 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 party.

 

Any Notice to the Holder shall be sent to the address for such Holder
set forth on books and records of the Company.

 

Any Notice to the Company shall be sent to:

 

AXS-One Inc.

301 Route 17 North

Rutherford, New Jersey 07070

Attention:  General Counsel

 

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

 

22.                                 Severability.  Whenever possible, each provision of this
Warrant shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Warrant 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 Warrant.

 

23.                                 Amendments
and Waivers.  Any provision of this
Warrant may be amended and the observance of any provision of this Warrant 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 Warrants then outstanding.  Any amendment or waiver effected in
accordance with this Section 23 shall be binding upon each Holder of a
Warrant.

 

24.                                 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

 

9

 

“herein”, “hereinafter”, “hereunder” and words of
similar import used in this Warrant shall, unless otherwise stated, refer to
this Warrant as a whole and not to any particular provision of this
Warrant.  All references to “$” in this
Warrant 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.

 

25.                                 Assignability.  Subject to Section 2, this Warrant is fully
assignable at any time.

 

 

	
  Dated: April     , 2004

  
	
   

  
	
   

  	
  AXS-ONE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
						

 

10

 

FORM OF SUBSCRIPTION

 

(To be signed only upon exercise of Warrant)

 

To:  AXS-ONE INC.

 

The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase
thereunder,       *       shares
of Common Stock of AXS-One Inc., and herewith makes payment of
$                      
and requests that the certificates for such shares be issued in the name of,
and delivered to,                                   ,
whose address is                                     .

 

The undersigned represents that the undersigned is acquiring such
securities for its own account for investment and not with a view to or for
sale in connection with any distribution thereof (except for any resale
pursuant to, and in accordance with a valid registration statement effective
under the Securities Act of 1933).

	
  Dated:

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform in all respects to the name

  of the Holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  

 

 

*                               Insert here the number
of shares called for on the face of the Warrant (or, in the case of a partial
exercise, the portion thereof as to which the Warrant is being exercised).

 

11

 

FORM OF ASSIGNMENT

 

(To be signed by the Holder only upon
transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns and transfers
unto
                                                
the right represented by the within Warrant to purchase
                     
shares of Common Stock of AXS-One Inc. to which the within Warrant relates, and
hereby does irrevocably constitute and appoint
                                                     
Attorney to transfer such right on the books of AXS-One Inc. with full power of
substitution in the premises.  The
Warrant being transferred hereby is one of the Class [B] Warrants issued by
AXS-One Inc. as of April    , 2004 to purchase an aggregate
of 258,064 shares of Common Stock.

 

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform in all respects to name

  of Holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  
	
   

  	
   

  
	
  Signature guaranteed by a bank

  
	
  or trust company having its

  
	
  principal office in New York City

  
	
  or by a Member Firm of the New

  
	
  York Stock Exchange

  
	
  or American Stock Exchange

  
						

 

12Exhibit 10.4

 

INVESTOR RIGHTS AGREEMENT

 

 

This INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of
April      , 2004 by and among AXS-One Inc., a
Delaware corporation (the “Company”) and the investors listed on Exhibit
A hereto (each an “Investor” and collectively the “Investors”)

 

WHEREAS, the Company desires to sell to the Investors, and the
Investors desire to purchase from the Company, (i) an aggregate of 2,580,645
shares of Common Stock of the Company (the “Shares”), and (ii) three-year
warrants, exercisable to purchase an aggregate of (A) 258,065 shares of Common
Stock, with pricing set at $3.98 per share (the “Class A Warrants”), and (B)
258,064 shares of Common Stock at $4.50 per share (the “Class B Warrants”, and
together with the Class A Warrants, the “Purchased Warrants”), upon the terms and conditions set forth in that certain Unit
Subscription Agreement of even date herewith, among the Company and the
Investors (the “Unit Subscription Agreement”); and

 

WHEREAS, the terms of the Unit Subscription
Agreement provide that it shall be a condition precedent to the closing of the
transactions thereunder for the Company and the Investors to execute and
deliver this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:

 

1.              Definitions.  Defined terms used herein but not defined
herein shall have the respective meanings ascribed to them in the Unit
Subscription Agreement.  The following
terms shall have the meanings provided below:

 

“Board
of Directors” shall mean the board of directors of the
Company.

 

“Gross
Proceeds” has the meaning set forth in
Section 7(b).

 

 “Holder” shall mean any of the Investors
or any transferee of the Purchased Warrants or Registrable Shares.

 

“Mandatory Registration Termination Date”
has the meaning set forth in Section 3(c).

 

“Notice” has the
meaning set forth in Section 11(d).

 

“Other
Securities” refers to any stock (other than Common
Stock) and other securities of the Company or any other Person (corporate or
otherwise) which the Holders of the Purchased Warrants at any time shall be
entitled to receive, or shall have received, upon the exercise of the Purchased
Warrants, in lieu of or in addition to Common Stock, or which at any time shall
be issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities pursuant to the terms of the Purchased
Warrants.

 

1

 

“register”,
“registered” and “registration” refer to a registration of
Common Stock or other securities of the Company effected by preparing and
filing a registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of such registration statement.

 

“Registrable
Shares” shall mean any Shares or any shares of Common
Stock or Other Securities issued or issuable from time to time upon the
exercise of a Purchased Warrant; provided, however, that as to
any such securities so issued or issuable, such securities will cease to be
Registrable Shares when such securities have been sold to the public pursuant
to a registration or pursuant to Rule 144 or are eligible to be sold pursuant
to Rule 144(k).

 

“Registration
Statement” has the meaning set forth in
Section 3(a).

 

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

 

“SEC”
shall mean the Securities and Exchange Commission.

 

“Securities
Act” shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.

 

“Suspension”
has the meaning set forth in Section 9(b).

 

2.                                       Effectiveness.  This Agreement shall become effective upon
the Closing.

 

3.                                       Mandatory
Registration.

 

(a)                                  No
later than thirty (30) days after the Closing, the Company will prepare and
file with the SEC a registration statement on Form S-3 (or, if Form S-3 is not
then available to the Company, on such form of registration statement that is
then available to effect a registration of all Registrable Shares) for the
purpose of registering under the Securities Act all of the Registrable Shares
for resale by, and for the account of, the Investors as selling stockholders
thereunder (the “Registration Statement”). 
The Registration Statement shall permit the Investors to offer and sell,
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
any or all of the Registrable Shares. 
The  Registration  Statement 
also shall cover, to the extent allowable  under  the  Securities 
Act and the rules promulgated thereunder (including  Rule 
416),  such  indeterminate number of additional shares of
Common  Stock  resulting  from  stock 
splits,  stock  dividends or similar transactions with
respect to the Registrable Shares.  The
offer and sale of the Registrable Shares pursuant to the Registration Statement
shall not be underwritten.

 

(b)                                 The
Company agrees to use commercially reasonable efforts to cause the Registration
Statement to become effective within ninety (90) days after filing.

 

(c)                                  The
Company shall be required to keep the Registration Statement, as amended,
effective until such date that is the earliest to occur of (i) the second
anniversary of the Closing, (ii) the date when all of the Registrable Shares
registered thereunder shall have been sold, and (iii) such time as all the
Registrable Shares held by the Investors can be sold pursuant

 

2

 

to Rule 144(k)
under the Securities Act and without compliance with the registration
requirements of the Securities Act (such date is referred to herein as the “Mandatory
Registration Termination Date”). 
Thereafter, the Company shall be entitled to withdraw the Registration
Statement and the Investors shall have no further right to offer or sell any of
the Registrable Shares pursuant to the Registration Statement (or any
prospectus relating thereto).

 

(d)                                 During
the period beginning on the Closing Date and ending on the date of the
effectiveness of the Registration Statement, the Company shall not grant any
registration rights that are pari passu with or senior to the registration
rights of the Investors under this Agreement if such registration rights would
adversely affect the Investors’ ability to sell Registrable Shares pursuant to
the Registration Statement.  Except as
set forth in the SEC Documents or in the Company Disclosure Letter, the Company
represents and warrants to the Investors that no stockholders other than the
Investors have the right to sell any Common Stock or other securities of the
Company pursuant to the Registration Statement.

 

4.                                       Obligations
of the Company.  In
connection with the Company’s obligation under Section 3 hereof to file
the Registration Statement with the SEC and to use its reasonable efforts to
cause the Registration Statement to become effective as soon as practicable
after filing, the Company shall, as expeditiously and as reasonably as
possible, subject to Section 9 hereof:

 

(a)                                  Prepare
and file with the SEC such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith as may be necessary
to keep the Registration Statement effective until the Mandatory Registration
Termination Date;

 

(b)                                 Furnish
to the selling Investors such reasonable number of copies of the Registration
Statement, prospectus and preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents (including,
without limitation, prospectus amendments and supplements as are prepared by the
Company in accordance with Section 4(a) above) as the selling Investors
may reasonably request, in order to facilitate the disposition of such selling
Investors’ Registrable Shares pursuant to the Registration Statement;

 

(c)                                  Use
reasonable efforts to register and qualify the Registrable Shares covered by
the Registration Statement under all applicable Blue Sky Laws of all states
requiring such registration or qualification, provided, however,
that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions; and

 

(d)                                 Use
reasonable efforts to cause all such Registrable Shares registered hereunder to
be listed on each national securities exchange on which securities of the same
class issued by the Company are then listed.

 

5.                                       Furnish
Information.  (a)  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Investors shall furnish to the Company such information regarding
them and the securities held by them as the Company shall reasonably request
and as shall be required in order to effect any registration by

 

3

 

the Company pursuant to this Agreement.

 

(b)                                 The
Registration Statement will provide, at the request of the Investors, for a
plan of distribution with respect to the Registrable Shares substantially as
follows:  The Registrable Shares may be sold
from time to time by the selling Investors. 
Such sales may be made on one or more exchanges or in the
over-the-counter market, or otherwise at prices and at terms then prevailing or
at prices related to the then-current market price, or in negotiated
transactions.  The Registrable Shares
may be sold by selling Investors in one or more of the following types of
transactions: (i) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (ii) purchases by a
broker or dealer as principal and resale by such broker or dealer for its
account pursuant to the resale registration statement; (iii) an exchange
distribution in accordance with the rules of such exchange; (iv) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; and (v) transactions between sellers and purchasers without a
broker/dealer.  In addition, any
securities covered by the Registration Statement which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to the
Registration Statement.  From time to
time the selling Investors may engage in short sales, short sales versus the
box, puts and calls and other transactions in securities of the issuer or
derivatives thereof, and may sell and deliver the shares in connection
therewith.  In effecting sales, brokers
or dealers engaged by the selling Investors may arrange for other brokers or
dealers to participate.  Brokers or
dealers will receive commissions or discounts from selling Investors in amounts
to be negotiated immediately prior to the sale.

 

6.                                       Expenses
of Registration.  All
expenses incurred by the Company in connection with the registration of the
Registrable Shares pursuant to this Agreement (excluding underwriting,
brokerage and other selling commissions and discounts), including without
limitation all registration and qualification and filing fees, printing
expenses, fees and disbursements of counsel for the Company, and the reasonable
fees and disbursements of one counsel for the selling Investors selected by the
selling Investors, shall be borne by the Company; provided, however, that the
Company shall not be required to pay any fees and expenses of such counsel for
the selling Investors, which, together with the Legal Fee exceed $30,000.

 

7.                                       Indemnification.

 

(a)                                  To
the extent permitted by law, the Company will indemnify and hold harmless each
selling Investor (including the partners or officers, directors and
stockholders of such Investor), and each Person, if any, who controls such
selling Investor within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the Securities Act, the Exchange Act, and other federal or state
securities laws, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (i) arise out of or are based upon
any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, in any preliminary prospectus or final prospectus
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, (ii) arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or 

 

4

 

necessary to make the statements therein not misleading or (iii) arise
out of any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any other federal or state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any other
federal or state securities law; and the Company will reimburse such selling
Investor (including the partners, officers, directors and stockholders of such
Investor) or such controlling Person for any legal or other expenses (but in no
event for more than one law firm) reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained
in this Section 7(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company, nor shall the Company be liable in any such case
for any such loss, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in connection with the Registration Statement, any
preliminary prospectus or final prospectus relating thereto or any amendments
or supplements to the Registration Statement or any such preliminary prospectus
or final prospectus, (i) in reliance upon and in conformity with written
information furnished expressly for use in connection with the Registration
Statement or any such preliminary prospectus or final prospectus or any
amendments or supplements to the Registration Statement, preliminary prospectus
or final prospectus by the selling Investors, any broker/dealer acting on their
behalf or controlling person with respect to them or (ii) the plan of
distribution described in Section 5(b).

 

(b)                                 To
the extent permitted by law, each selling Investor will severally and not
jointly indemnify and hold harmless the Company, its Affiliates, each of their
respective directors, officers, partners, members and stockholders, each
Person, if any, who controls the Company within the meaning of the Securities
Act, any broker/dealer, any underwriter and all other selling Investors,
against any losses, claims, damages or liabilities to which the Company or any
such Affiliate, director, officer, partner, member, stockholder, controlling
Person, broker/dealer, underwriter or such other selling Investor may become
subject to, under the Securities Act, the Exchange Act, any other Federal
securities laws, Blue Sky Laws, or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (i) arise out of or are
based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement or any preliminary prospectus or final prospectus
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, (ii) arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) arise out of any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other
federal or state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any other federal or state securities law,
in each case to the extent and only to the extent (i) that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, in any preliminary prospectus or final
prospectus relating thereto or in any amendments or supplements to the
Registration Statement or any such preliminary prospectus or final prospectus,
in reliance upon and in conformity with (A) written information furnished by
the selling Investor expressly for use in connection with the Registration
Statement, or any preliminary prospectus or final prospectus or any such
amendment or supplement, or (B) the plan of distribution described in
Section 5(b), or (ii) such Investor fails to comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of

 

5

 

Registrable Shares pursuant to the Registration Statement; and such
selling Investor will reimburse any legal or other expenses reasonably incurred
by the Company or any such Affiliate, director, officer, partner, member,
stockholder, controlling Person, broker/dealer, underwriter or other selling
Investor in connection with investigating or defending any such loss, claim,
damage, liability or action, provided, however, that the
liability of each selling Investor hereunder (when aggregated with amounts
contributed, if any, pursuant to Section 7(d)) shall be limited to the
proceeds received by such Investor from the sale of the Registrable Securities
pursuant to the Registration Statement (the “Gross Proceeds”), and provided
further, however, that the indemnity agreement contained in this
Section 7(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of those selling Investor(s) against which the request for
indemnity is being made (which consent shall not be unreasonably withheld or
delayed).

 

(c)                                  Promptly
after receipt by an indemnified party under this Section 7 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in and,
to the extent the indemnifying party desires, jointly with any other indemnifying
party similarly noticed, to assume at its expense the defense thereof with
counsel mutually satisfactory to the indemnifying parties with the consent of
the indemnified party which consent will not be unreasonably withheld,
conditioned or delayed.  In the event
that the indemnifying party assumes any such defense, the indemnified party may
participate in such defense with its own counsel and at its own expense; provided,
however, that the counsel for the indemnifying party shall act as lead
counsel in all matters pertaining to such defense or settlement of such claim
and the indemnifying party shall only pay for such indemnified party’s
reasonable legal fees and expenses for the period prior to the date of its
participation in such defense; provided  further, however,
that the indemnified party (together with all indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the fees and expenses to be paid by the indemnifying
party, if the representation of the indemnified party by the counsel retained
by the indemnifying party would be inappropriate due to actual differing
interests between the indemnified party and any other party represented by such
counsel in such proceeding.  Notwithstanding
the foregoing, the indemnifying party shall not be obligated to pay the fees of
more than one separate counsel.  The
failure to notify an indemnifying party of the commencement of any such action
will not relieve such indemnifying party of any liability to the indemnified
party under this Section 7 (except to the extent that such failure
materially prejudiced the indemnifying party’s ability to defend such action),
nor shall the omission so to notify an indemnifying party relieve such indemnifying
party of any liability which it may have to any indemnified party otherwise
other than under this Section 7. 
No indemnifying party shall, without the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a general release from all liability in
respect to such claim or litigation and otherwise in form and substance
reasonably satisfactory to the indemnified party.

 

(d)                                 If
the indemnification provided in this Section 7 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect
to any loss,

 

6

 

liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that shall have resulted in such loss, liability,
claim, damage or expense, as well as any other relevant equitable
considerations; provided that in no event shall any contribution by an Investor
under this Section 7(d), when aggregated with amounts paid, if any,
pursuant to Section 7(b), exceed the Gross Proceeds.  The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission.

 

(e)                                  The
obligations of the Company and Investors under this Section 7 shall
survive the completion of any offering of Registrable Shares pursuant to the
Registration Statement under Section 3.

 

8.               Reports
Under  the Exchange Act.  With a view to making available to the
Investors the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit the Investors to sell the Registrable Shares to the
public without registration, the Company agrees to use reasonable efforts: (a)
to make and keep public information available, as those terms are understood
and defined in the General Instructions to Form S-3, or any successor or
substitute form, and in Rule 144; (b) to file with the SEC in a timely manner
all reports and other documents required to be filed by an issuer of securities
registered under the Securities Act or the Exchange Act; and (c) undertake any
additional actions reasonably necessary to maintain the availability of the
Registration Statement or the use of Rule 144.

 

9.               Selling
Procedures.  Any sale of
Registrable Shares pursuant to the Registration Statement filed in accordance
with Section 3 hereof shall be subject to the following conditions and
procedures:

 

(a)                                  Updating the
Prospectus.

 

(i)                                     If the Company
informs the selling Investor that the Registration Statement or final
prospectus then on file with the SEC is not current or otherwise does not
comply with the Securities Act, the Company shall use its reasonable best
efforts to provide to the selling Investor a current prospectus that complies
with the Securities Act as soon as practicable, but in no event later than
three (3) business days after delivery of such notice.

 

(ii)                                  If the Company
requires more than three (3) business days to update the prospectus under
Section 9(a)(i) above, the Company shall have the right to delay the
preparation of a current prospectus that complies with the Securities Act
without explanation to such Investor, subject to the limitations set forth in
Section 9(b) below, for a period of not more than sixty (60) days (or two
periods which total not more than ninety (90) days in the aggregate) during any
twelve-month period.

 

7

 

(b)                                 General.  Notwithstanding anything in this
Agreement that may be to the contrary, upon (i) any request by the SEC or any
other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to
the Registration Statement or related prospectus or for additional information
relating to the Registration Statement, (ii) the issuance by the SEC or any
other federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose, (iii) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (iv) the happening of any event which makes any statement made in the
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or which requires the making of any changes in the Registration Statement or
prospectus so that, in the case of the Registration Statement, it will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the prospectus, it will not contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (v) the determination of the Company’s
Board of Directors that it is advisable to suspend use of the prospectus for a
discrete period of time due to pending corporate developments, public filings
with the Commission or that there exists material nonpublic information about
the Company that the Board of Directors, acting in good faith, determines not
to disclose in a registration statement, the Company, in each such case, may
suspend use of the related prospectus (each a “Suspension”), in which case
the Company shall promptly so notify each Investor and each Investor shall not
dispose of Registrable Shares covered by the Registration Statement or
prospectus until copies of a supplemented or amended prospectus are distributed
to the Investors or until the Investors are advised in writing by the Company
that the use of the applicable prospectus may be resumed; provided, however,
that, notwithstanding the foregoing, the Company may suspend use of the
prospectus pursuant to Sections 9(a)(ii), 9(b)(iv) and 9(b)(v), and an Investor
may be prohibited from selling or otherwise disposing of the Registrable Shares
covered by the Registration Statement or prospectus, on not more than
two occasions in total during any twelve-month period and for no more
than ninety (90) days in the aggregate during any such twelve-month
period.  The Company shall use its
reasonable best efforts to ensure the use of the prospectus may be resumed as
soon as practicable.  The Company shall
use its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement, or the lifting of
any suspension of the qualification (or exemption from qualification) of any of
the securities for sale in any jurisdiction, at the earliest practicable
moment.  The Company shall, upon the
occurrence of any event contemplated by clause (iv), prepare a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the purchasers
of the Registrable Shares being sold thereunder, such prospectus will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

8

 

(c)                                Each
Investor agrees that it will comply with the prospectus delivery requirements
of the Securities Act as applicable to it in connection with sales of
Registrable Shares pursuant to the Registration Statement.  Each Investor further agrees that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 9(a) or 9(b), such Investor will discontinue
disposition of such Registrable Shares under the Registration Statement until
such Investor’s receipt of the copies of the supplemented prospectus or amended
Registration Statement, or until it is advised in writing by the Company that
the use of the applicable prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such prospectus or Registration
Statement.  The Company may provide
appropriate stop orders to enforce the provisions of this Section 9.

 

10.                           Entire
Agreement.  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,
representations, 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 the subject matter hereof and thereof.

 

11.                           Miscellaneous.

 

(a)                                  Amendment
and Waiver.  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
holders of the Registrable Securities. 
Any amendment or waiver effected in accordance with this
Section 11(a) shall be binding upon 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.

 

(b)                                 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 11(d).  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.

 

(c)                                  Successors
and Assigns.  Subject to the terms
and conditions of the Unit Subscription Agreement, this Agreement shall inure
to the benefit of and be binding upon the respective executors, administrators,
heirs, successors and assigns of the parties. 
Subject to the terms and conditions of the Unit Subscription Agreement,
this Agreement shall also be binding upon and inure to the benefit of and
enforceable by any transferee of any of the Registrable

 

9

 

Shares who has executed a copy of this Agreement or otherwise indicated
its agreement to be bound hereby. 
Notwithstanding anything in this Agreement to the contrary, if at any
time any Investor shall cease to own any Registrable Shares, all of such
Investor’s rights under this Agreement shall immediately terminate.

 

(d)                                 Notices

 

(i)                                     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. The
date of giving any notice shall be the date of its actual receipt.

 

(ii)                                  Any Notice to the
Company shall be sent to:

 

 

AXS-One Inc.

301 Route 17 North

Rutherford, New Jersey 07070

Attention: Chief Executive Officer

 

with a copy to:

 

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention:  Charles E. Dropkin,
Esq.

 

(iii)                               Any
Notice to any of the Investors shall be sent to the address 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.

 

(iv)                              Any
Investor may change the address to which correspondence to it is to be
addressed by notification as provided for herein.

 

(e)                                  Injunctive
Relief.  The parties acknowledge and
agree that in the event of any breach of this Agreement, remedies at law may be
inadequate, and each of the parties hereto may be entitled to seek specific
performance of the obligations of the other parties hereto and such appropriate
injunctive relief as may be granted by a court of competent jurisdiction.

 

10

 

(f)                                    Attorney’s
Fees.  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 attorneys’ fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

 

(g)                                 Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such 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.

 

(h)                                 Aggregation
of Shares.  Registrable Shares held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.

 

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

 

(j)                                     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.

 

(k)                                  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 Left Blank]

 

11

 

SIGNATURE PAGE 

TO AXS-ONE INC.

INVESTOR RIGHTS AGREEMENT

 

Dated as of April    ,
2004

 

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

 

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

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of the Investor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

12

 

SIGNATURE PAGE

TO AXS-ONE INC.

INVESTOR RIGHTS 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.

 

	
   

  	
   

  	
   

  
	
   

  	
  Print Name of Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Purchaser

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Social Security Number

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name of Spouse or Other Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Spouse or Other Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

13

 

SIGNATURE PAGE

TO AXS-ONE INC.

INVESTOR RIGHTS 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.

 

	
   

  	
   

  	
   

  
	
   

  	
  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 to as of the date

first above written:

 

AXS-ONE INC.

 

	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

14

 

EXHIBIT A

 

SCHEDULE OF INVESTORS

 

15

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