Exhibit 4.1
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION 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 ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
INTERNET COMMERCE CORPORATION
WARRANT TO PURCHASE ______ SHARES OF CLASS A COMMON STOCK
(SUBJECT TO ADJUSTMENT)
(Void after October ___, 2009)
PPW - __
THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
_____________ (the "Holder"), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, at any time on
or after October ___, 2004 (the "Exercise Date") and on or prior to the close of
business on October __, 2009 (the "Termination Date"), but not thereafter, to
subscribe for and purchase from Internet Commerce Corporation, a Delaware
corporation (the "Company"), up to ____________ shares (the "Warrant Shares"),
of Class A common stock, par value $.01 per share, of the Company (the "Common
Stock"). The initial purchase price of one (1) share of Common Stock under this
Warrant shall be equal to $2.22 (the "Exercise Price"). The Exercise Price and
the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided elsewhere herein.
Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in that certain Securities Purchase Agreement dated the date
hereof between the Company and the Purchasers set forth on Schedule 1 thereto
(the "Purchase Agreement").
1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person
or by duly authorized attorney, upon surrender of this Warrant together with the
Assignment Form annexed hereto properly endorsed. The transferee shall sign an
investment letter in form and substance reasonably satisfactory to the Company.
2. Authorization of Shares. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such issue and liens
and charges incurred by the Holder).
3. Exercise of Warrant
-------------------
(a) Exercise of the purchase rights represented by this Warrant may
be made at any time or times on or after the Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company), and upon payment of the Exercise Price of the Warrant Shares (subject
to Section 3(d) below), thereby purchased by wire transfer or cashier's check
drawn on a United States bank or by means of a cashless exercise pursuant and
subject to Section 3(d) (if applicable), the Holder shall be entitled to receive
a certificate for the number of Warrant Shares so purchased. Certificates for
Warrant Shares purchased hereunder shall be delivered to the Holder within three
(3) Trading Days after the date on which this Warrant shall have been exercised
as aforesaid; provided, however, that (i) if the Company elects (and the Holder
is able to receive electronic delivery in such manner), or (ii) if the Holder
requests, and provided that the Company's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer (or FAST)
program, the Company may or shall, as the case may be, cause its transfer agent
to electronically transmit the Warrant Shares by crediting the account of the
Purchaser's Prime Broker with DTC through its Deposit Withdrawal Agent
Commission (or DWAC) system.
This Warrant shall be deemed to have been exercised and such Warrant Shares
shall be deemed to have been issued, and the Holder or any other person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been properly
exercised by receipt by the Company of the Notice to Exercise and payment to the
Company of the Exercise Price and all taxes required to be paid by the Holder,
if any, pursuant to Section 5 have been paid. If such conditions by the Holder
have been met, and the Company fails to deliver to the Holder the Warrant Shares
pursuant to this Section 3(a) by the close of business on the third (3nd )
Trading Day after the date of such conditions being met by the Holder, then the
Holder will have the right to rescind such exercise. In addition to any other
rights available to the Holder, if the Company fails to deliver to the Holder
the Warrant Shares pursuant to a proper exercise, by the Holder, by the close of
business on the third (3nd) Trading Day after the date of exercise, and if after
such third (3rd) Trading Day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares which the Holder anticipated receiving
2
upon such exercise (a "Buy-In"), then the Company shall, upon receipt of
reasonably satisfactory documentation (from the Holder, the broker, its clearing
firm or similar organization) stating the amount of the Buy-In, (1) pay in
immediately available funds to the Holder the amount, if any, by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares purchased pursuant to the Buy-In exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $100 to cover a Buy-In with respect to an
attempted exercise of Warrant Shares with an aggregate exercise price giving
rise to such purchase obligation of $80, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $20. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In, together with applicable confirmations
and other evidence reasonably requested by the Company. Nothing herein shall
limit a Holder's right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company's failure to
timely deliver the Warrant Shares as required pursuant to the terms hereof.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased Warrant
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.
(c) The Company shall not effect any exercise of this Warrant, and
the Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 3(a) or otherwise, to the extent that after giving effect to
such issuance after exercise, the Holder (together with the Holder's
Affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own 4.9% percent or greater of the number of shares of the Common
Stock issued and outstanding immediately after giving effect to such issuance.
For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its Affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 3(c), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act. For
purposes of this Section 3(c), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company's most recent Form 10-Q or
3
Form 10-K, as the case may be, (y) a more recent public announcement by the
Company or (z) any other notice by the Company or the Company's transfer agent
setting forth the number of shares of Common Stock outstanding. Upon the written
or oral request of the Holder, the Company shall within three (3) Trading Days
confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Company
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 3(c) may be waived by
the Holder upon, at the election of the Holder, not less than 61 days' prior
notice to the Company, and the provisions of this Section 3(c) shall continue to
apply until such 61st day (or such later date, as determined by the Holder, as
may be specified in such notice of waiver). The Holder is solely responsible for
all calculations required in this Section 3(c).
(d) If, but only if, at the time of exercise of this Warrant (in
whole or in part) at any time after the Effectiveness Date there is no effective
Registration Statement which is then available registering the resale of the
Warrant Shares by the Holder or the Holder is otherwise prohibited from
reselling its Warrant Shares pursuant to an effective Registration Statement,
this Warrant may also be exercised at such time by means of a "cashless
exercise" in which the Holder shall be entitled to receive the number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = the Closing Price on the Trading Day preceding the date of
such election;
(B) = the Exercise Price of the Warrants, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise of the
Warrants in accordance with the terms of this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of the Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of
which taxes and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event the Warrant Shares
are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the payment of a sum sufficient for any
transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
4
7. Transfer, Division and Combination.
-----------------------------------
(a) Subject to compliance with any applicable securities laws and the
conditions set forth in Section 1 and Section 7(e) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.
(d) The Company agrees to maintain, at its aforesaid office, books
for the registration and the registration of transfer of the Warrants.
(e) If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
reasonably satisfactory to the Company) to the effect that such transfer may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an "accredited investor" as defined
in Rule 501(a) promulgated under the Securities Act.
8. No Rights as Stockholder Until Exercise. This Warrant does not entitle
the Holder to any voting rights or other rights as a stockholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price (or by means of a cashless exercise), the
Warrant Shares so purchased shall be and be deemed to be
5
issued to such Holder as the record owner of such shares as of the close of
business on the later of the date of such surrender or payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday in the State of New York,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday in the State of New York.
11. Certain Adjustments to Exercise Price and Number of Warrant Shares.
------------------------------------------------------------------
(a) Stock Splits, Etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder pursuant to this Section 11(a), the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
(b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock (other than as set forth in Section 11(a)), merge
with or into or consolidate with another corporation or other entity (where the
Company is not the surviving corporation or where there is a change in or
6
distribution with respect to any class of common stock of the Company), or sell,
transfer or otherwise dispose of all or substantially all its property, assets
or business to another corporation or other entity and, pursuant to the terms of
such reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation or
other entity, or any cash, shares of stock or other securities or property of
any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
corporation or other entity ("Other Property"), are to be received by or
distributed to the holders of common stock of the Company, then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the number
of shares of common stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
and, if an entity different from the successor or acquiring corporation, the
entity whose common stock or Other Property the holders of the Common Stock are
entitled to receive as a result of such transaction, shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 11(b). For purposes
of this Section 11(b), "common stock of the successor or acquiring corporation"
shall include stock of such corporation of any class which is not preferred as
to dividends or assets over any other class of stock of such corporation and
which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 11(b) shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
12. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
7
14. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same is expected to take place.
Such notice in accordance with the foregoing clause also shall specify (i) the
date on which the holders of Common Stock shall be entitled to receive any such
dividend, distribution or right, and the amount and character thereof, and (ii)
the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Xxxxxx appearing on the books of the Company and
delivered in accordance with Section 16(d). Failure to give such notice, or any
defect therein, shall not affect the validity of such action, so long as such
failure does not materially prejudice the rights of the Holders.
15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for (or facilitate
electronic delivery of) the Warrant Shares upon the exercise of the purchase
rights under this Warrant. The Company will take reasonable commercial action to
assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the
principal Trading Market upon which the Common Stock may be listed.
(a) Except and to the extent as waived or consented to by the Holder,
the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid
8
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Warrant against impairment. Without
limiting the generality of the foregoing, the Company will (a) not increase the
par value of any Warrant Shares above the amount payable therefor upon such
exercise immediately prior to such increase in par value, (b) take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise
of this Warrant, and (c) use commercially reasonable best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant. (b) Before taking any action which would
result in an adjustment in the number of Warrant Shares for which this Warrant
is exercisable or in the Exercise Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.
16. Miscellaneous.
(a) Jurisdiction. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York without regard to
the conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
Company, and by its acceptance of this Warrant, the Holder, hereby covenant and
irrevocably submit to the in personam jurisdiction of the federal and state
courts located in the City, County and State of New York and agree that any
process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in New York City. The parties hereto waive any claim that any such jurisdiction
is not a convenient forum for any such suit or proceeding and any defense or
lack of in personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment
from the other party hereto of its reasonable counsel fees and disbursements.
(b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant will have legends imprinted upon any
stock certificates evidencing such Warrant Shares and the Company will notify
its transfer agent of restrictions upon resale imposed by the applicable state
and federal securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Xxxxxx's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company
9
shall pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement;
provided, however, upon any permitted assignment of this Warrant, the assignee
shall promptly provide the Company with its contact information.
(e) Limitation of Liability. No provision hereof, in the absence of
any affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
[Remainder of page intentionally left blank]
10
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: April __, 2004
INTERNET COMMERCE CORPORATION
By:
-------------------------------
Name:
Title:
11
NOTICE OF EXERCISE*
To: Internet Commerce Corporation
The undersigned hereby elects to purchase ________ Warrant Shares of
Internet Commerce Corporation pursuant to the terms of the attached Warrant, and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
1. Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares as is
necessary, in accordance with and pursuant to Section 3(d) (but only if, at the
time of exercise of this Warrant at any time after the Effectiveness Date (as
defined in the Registration Rights Agreement) there is no effective Registration
Statement registering the resale of the Warrant Shares by the Holder or the
Holder is otherwise prohibited from reselling its Warrant Shares pursuant to an
effective Registration Statement), to exercise this Warrant with respect to the
number of Warrant Shares specified above purchasable pursuant to the cashless
exercise procedures set forth in Section 3(d).
2. Please issue a certificate or certificates representing (or
facilitate electronic delivery of) said Warrant Shares in the name of the
undersigned or in such other name as is specified below:
------------------
The Warrant Shares shall be delivered to the following:
------------------
3. The undersigned is an "accredited investor" as defined in Regulation
D promulgated under the Securities Act of 1933, as amended, and reaffirms the
representations and warranties set forth in Section 3.2 of the Purchase
Agreement as if made on the date hereof.
[PURCHASER]
By:
--------------------------------
Name:
Title:
--------
* All capitalized terms not otherwise defined herein shall have the meanings set
forth in or incorporated by reference in the Warrant.
12
FORM OF ASSIGNMENT*
-------------------
FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under the within the Warrant, with respect to the number of
Warrant Shares of Common Stock set forth below:
Name of Assignee Address No. of Warrant Shares
---------------- ------- ---------------------
and does hereby irrevocably constitute and appoint______________________
Attorney to make such transfer on the books of Internet Commerce Corporation,
maintained for the purpose, with full power of substitution in the premises.
Dated:
------------------------------
-------------------------------------------
(Signature)
-------------------------------------------
(Witness)
The undersigned Assignee of the Warrant hereby makes to Internet Commerce
Corporation, as of the date hereof, with respect to the Assignee, all of the
representations and warranties made by the Holder in the Registration Rights
Agreement and the Purchase Agreement, and the undersigned Assignee agrees to be
bound by all the terms and conditions of the Purchase Agreement, the Warrant and
the Registration Rights Agreement.
Dated:
------------------------
------------------------------------
(Signature)
--------
* All capitalized terms not otherwise defined herein shall have the meanings set
forth in or incorporated by reference in the Warrant.
13
