EXHIBIT 10.47
AMENDMENT
THIS AMENDMENT ("Amendment"), dated as of January 24, 2001, by and between
AXS-One Inc. ("AXO" or the "Company") and Stonegate Securities, Inc.
("Stonegate"), hereby amends that certain agreement, dated as of November 1,
2000, whereby AXO engaged Stonegate as its non-exclusive financial advisor and
to furnish certain investment banking services (the "Agreement").
1. Paragraph 2 (Term of the Engagement) of the Agreement is amended by
striking therefrom the reference to paragraph 3.
2. Paragraph 3 (Compensation for Initial Engagement) of the Agreement is
hereby deleted in its entirety and replaced with the following:
"For providing services hereunder, the Company agrees to pay Stonegate the
following compensation:
(a) A quarterly retainer of $25,000, pro-rata payment of the first of
which is due concurrently with the execution of the Amendment and
payment of the remainder of which are due on each April 15, July 15,
October 15 and January 15, respectively, during the term of
Stonegate's engagement.
(b) Upon execution of this Amendment, AXO shall deliver to Stonegate, or
to Stonegate's designated assignees, a warrant or warrants granting
the holders thereof the right, in the aggregate, to purchase 200,000
shares of AXO's Common Stock, in the form attached to the Amendment
as EXHIBIT A' (collectively, the "Warrant"). This Warrant shall
replace and supersede the warrant, dated November 2, 2000 issued by
AXO to Stonegate.
(c) Such additional compensation as provided in paragraph 4 below.
Notwithstanding the foregoing, in the event that, pursuant to paragraph 2
above, either party terminates this Agreement, then (i) AXO's obligation
to pay the quarterly retainer pursuant to subparagraph (a) above shall
immediately terminate, and (ii) any portion of the Warrant not then vested
(in accordance with the Warrant's terms) shall terminate and be of no
further force and effect."
3. Except as otherwise expressly provided herein, the Agreement shall remain in
full force and effect in accordance with its terms and conditions.
STONEGATE SECURITIES, INC. AXS-ONE INC.
Signature: Signature:
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Name: Name: Michael R. Jorgensen
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Title: Title: EVP & CFO
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Date: Date:
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November __, 2000 CONFIDENTIAL
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AXS-One Inc.
Meadows Office Complex 301 Rt. 17 North
Rutherford, NJ 07070
Attention: John A. Rade
President/ Chief Executive Officer
Gentlemen:
The purpose of this letter (the "Agreement") is to set forth the terms of the
engagement by AXS-One Inc. ("AXO" or the "Company") with Stonegate Securities,
Inc. ("Stonegate") to serve as its non-exclusive financial advisor and to
furnish certain investment banking services to AXO as described below.
1) SERVICES PROVIDED BY STONEGATE
(a) Familiarize itself to the extent it deems appropriate and feasible
with the business, operations, properties, financial condition,
management, and strategic direction of AXO, as well as make any
suggestions on how the Company might enhance any of the above;
(b) Evaluate the possible sale of equity interests in the Company,
including potentially raising capital for the Company in the form of
a private placement of common stock, convertible preferred stock, or
convertible debt securities with Stonegate's institutional clients
and others; such an evaluation could include a restructuring and/or
a refinancing of the Company's current levels of debt, or assistance
in restructuring the Company's existing bank financing; and
(c) Evaluate potential acquisitions, mergers, or joint ventures by the
Company, or other strategic alternatives available to the Company.
2) TERM OF ENGAGEMENT
The term of Stonegate's engagement shall be for the twenty-four-month
period from the date of this Agreement (the "Initial Term") and may be
extended beyond the Initial Term by mutual written consent of AXO and
Stonegate. Notwithstanding the foregoing, either party may terminate this
Agreement at any time upon ten (10) days written notice to the other
party, in which event neither party will have any further obligations
hereunder,
AXS-One Inc.
November __, 2000
Page 2
except for any unpaid amounts under paragraphs 3, 4, and 5 below, and
except for any obligations set forth in paragraph 7 below, which shall
survive any such termination.
3) COMPENSATION FOR INITIAL ENGAGEMENT
For providing services hereunder, the Company agrees to pay Stonegate the
following compensation:
(a) Upon execution of this Agreement, AXO shall deliver to Stonegate a
warrant, in the form attached hereto as EXHIBIT A (the "Warrant").
(b) Such additional compensation as provided in paragraph 4 below.
Notwithstanding the foregoing, in the event that, pursuant to paragraph 2
above, Stonegate gives the Company, within sixty (60) days following the
date of this Agreement, written notice of Stonegate's intention to
terminate this Agreement, then Stonegate shall surrender the Warrant back
to the Company, unexercised, and the Company, in lieu thereof, shall pay
Stonegate the sum of $50,000 as Stonegate's exclusive compensation
hereunder except for such additional consideration as provided in
paragraph 4 below.
4) COMPENSATION FOR FUTURE TRANSACTIONS
If Stonegate provides services to the Company in addition to those set
forth in paragraph 1 above, Stonegate shall be separately compensated for
such services pursuant to a separate agreement between, and as mutually
agreeable by, the parties. Such other transactions could include, but are
not limited to, a sale, financing, restructuring, joint venture, private
placement, merger, or acquisition; providing or making available, upon
request by AXO, an advisor or advisors who will accompany officers,
directors, or employees of AXO on any trips involving potential corporate
finance or merger/acquisition activities; or generating fairness opinions,
completing corporate valuations, conducting due diligence investigations,
and completing background checks of the management of potential
acquisition targets.
5) REIMBURSEMENT OF EXPENSES
In addition to the engagement fees in paragraph 3, the Company agrees to
reimburse Stonegate on a monthly basis for reasonable travel and
out-of-pocket expenses incurred by Stonegate with regard to rendering
investment banking services hereunder, including but not limited to,
airfare, hotel, and other expenses in connection with visiting the
Company, and expenses incurred in connection with any road show or other
presentations or marketing efforts made on behalf of the Company by
Stonegate, with such expenses
AXS-One Inc.
November __, 2000
Page 3
not exceeding $15,000 during the term of this Agreement without the prior
written consent of the Company.
6) REPRESENTATION BY THE COMPANY
The Company agrees to make available to Stonegate all information relating
to the Company, and the Company acknowledges that Stonegate may rely on
the completeness and accuracy of such information without undertaking
independent verification. To the extent consistent with legal
requirements, all information given to Stonegate by the Company, unless
publicly available or otherwise available to Stonegate without restriction
or breach of any confidentiality agreement, will be held by Stonegate in
confidence and will not be disclosed to anyone, including, without
limitation, a potential acquiror, other than Stonegate's agents and
advisors without the Company's prior approval or used for any purpose
other than those referred to in this Agreement.
7) INDEMNIFICATION OF STONEGATE BY THE COMPANY
If in connection with any services or matters that are the subject of or
arise out of this Agreement or Stonegate's engagement hereunder, Stonegate
becomes involved (whether or not as a named party) in any action, claim,
investigation, or legal proceeding (including any governmental inquiry or
investigation and including, but not limited to, actions, claims or legal
proceedings arising out of or based upon any breach by the Company of any
agreement or representation or warranty of the Company contained herein,
or any untrue statement or alleged untrue statement of a material fact by
the Company in any release or communication to an offeree of the Company's
securities or an omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements
contained therein, not misleading), the Company agrees to indemnify and
hold Stonegate, and its officers, directors, employees, agents, and
affiliates (collectively, the "Stonegate Indemnitees"), harmless against
any losses, claims, costs, damages, or liabilities as they are incurred,
to which any Stonegate Indemnitee may incur or suffer in connection
therewith, provided that such Stonegate Indemnitee promptly notifies the
Company of any such action, claim, investigation, or legal proceeding and
provides the Company with an opportunity to defend against or settle such
matter with counsel of its choice. Stonegate shall provide reasonable
assistance to the Company in any such matter, at the Company's expense.
The Company shall promptly reimburse Stonegate for any legal action or
other costs or expenses reasonably incurred by such Stonegate Indemnitee
in connection with the investigation, contest or defense of any such loss,
claim, damage, liability or action. Notwithstanding the above, the Company
shall not be liable under the indemnity provisions hereof in respect of
any loss, claim, cost, damage, or liability pertaining to such matter to
the extent, but only to the extent, that it is found in a final judgement
by a court of competent jurisdiction that such loss, claim, cost, damage,
or liability resulted from such Stonegate Indemnitee's gross negligence,
bad faith, or willful
AXS-One Inc.
November __, 2000
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misconduct. The foregoing agreements shall apply to any modification of
Stonegate's engagement hereunder, and shall remain in full force and
effect following the completion or termination of Stonegate's engagement
hereunder and the sale of any securities, and shall be in addition to any
rights that any Stonegate Indemnitee may have, at common law or otherwise.
If for any reason the foregoing indemnification is judicially determined
to be unavailable, or insufficient to hold any Stonegate Indemnitee
harmless, then the Company agrees to contribute to the losses, claims,
costs, damages, or liabilities for which such indemnification is held
unavailable in such proportion as is appropriate to reflect not only the
relative benefits received by the Company and such Stonegate Indemnitee,
but also the relevant fault of each such person or entity, as well as any
relevant equitable considerations.
8) COMPANY NOT RESPONSIBLE FOR CONTENT OF PUBLISHED RESEARCH BY STONEGATE
The Company recognizes that Stonegate may follow, and may continue to
follow the Company and its Common Stock and, from time to time, Stonegate
may issue research reports concerning the Company and its Common Stock. It
is understood between the Company and Stonegate that such reports are not
issued on behalf, or with the authorization, of the Company, and Stonegate
shall have sole responsibility for their content. It is also understood
that Stonegate is under no obligation to issue any research reports on the
Company, and any such research shall be conducted at the sole discretion
of Stonegate's research department. Neither the Company, nor its officers,
directors, employees or affiliates, shall have any responsibility for any
information contained in such reports or other information disseminated by
Stonegate concerning the Company, regardless of whether or not the Company
reviews or comments upon such reports or information.
9) GENERAL
This Agreement (together with the Exhibit) represents the entire agreement
of the parties concerning the subject matter hereof and supersedes all
prior agreements or understandings, oral or written, between the parties
hereto with respect to the subject matter hereof. This Agreement may not
be amended or modified except in writing and signed by Stonegate and the
Company, and shall be governed by and construed in accordance with the
laws of the State of Texas. This Agreement may not be assigned by either
party without the prior written consent of the other party, and is binding
upon and inures to the benefit of the parties hereto and the Stonegate
Indemnitees. Delivered herewith are two identical copies of this
Agreement. If the foregoing is in accordance with your understanding of
the terms of our engagement, please confirm your agreement by signing both
enclosed copies of this Agreement and returning to Stonegate one executed
copy of this Agreement, along with an executed Warrant, to the
undersigned; it
AXS-One Inc.
November __, 2000
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being understood and agreed that the failure to deliver the foregoing to
Stonegate on or before November __, 2000 shall render this Agreement null
and void.
Very truly yours,
STONEGATE SECURITIES, INC.
By: _______________________________________
Scott R. Griffith,
President
Agreed to and accepted as of the date first
set forth above:
AXS-ONE INC.
By:_____________________________
John A. Rade,
President/ Chief Executive Officer