EXHIBIT A
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK FOR WHICH IS IT EXERCISABLE
(THIS WARRANT AND SUCH SHARES COLLECTIVELY, THE "SECURITIES") HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF (i)
AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SECURITIES UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR (ii) AVAILABLE EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND SAID STATE LAWS PROVIDED THE COMPANY IS
GIVEN AN OPINION OF COUNSEL OR OTHER INFORMATION AND DOCUMENTATION SATISFACTORY
TO THE COMPANY THAT SUCH EXEMPTIONS ARE AVAILABLE.
No. C-14 May 11, 2004
Warrant to Purchase 352,304
Shares of Common Stock (the
"Purchasable Shares") at the
Exercise Price of $1.845 per Xxxxxx X. Xxxx Declaration of Trust ("Holder")
share
COMMON STOCK PURCHASE WARRANT of DIRECT INSITE CORP.
Void after December May 11, 2009
This Warrant ("Warrant") to purchase common stock of Direct Insite Corp., a
Delaware corporation (the "Company"), par value $0.0001 per share ("Common
Stock), is issued by the Company on the date set forth above (the "Issue Date")
to purchasers of shares of Series C Redeemable Preferred Stock of the Company
(the "Preferred Stock"). The shares of Preferred Stock purchased on the date
hereof by Xxxxxx (as defined below) is referred to herein as "Holder Preferred."
The term "Warrant" as used herein shall include this Warrant and any warrant(s)
delivered in substitution or exchange for this Warrant in accordance with the
terms hereof.
This certifies that, for value received, Xxxxxx identified above or
his/her/its registered assigns (hereinafter, "Holder") is entitled, subject to
the terms set forth below, to purchase from the Company the Purchasable Shares,
subject to adjustment as hereinafter provided, upon surrender hereof at the
principal office of the Company identified below, with the warrant exercise form
attached hereto duly executed, and simultaneous payment therefor in lawful money
of the United States or otherwise as hereinafter provided, at the Exercise Price
set forth in Section 3 below. The number, character and Exercise Price per share
of Common Stock are subject to adjustment as provided below.
1. Certain Definitions. As used herein, the following capitalized terms shall
have the respective meanings set forth below:
(a) "Common Stock" shall mean the common stock of the Company, par value
$0.0001 per share, and any other securities or property of the Company or of any
other person (corporate or
otherwise) which the Holder at any time shall be entitled to receive upon the
exercise hereof, in lieu of or in addition to such common stock, or which at any
time shall be issuable in exchange for or in replacement of such common stock.
(b) "Company" shall mean Direct Insite Corp., a Delaware corporation, and
any entity which shall succeed or assume its obligations hereunder.
(c) "Preferred Stock" shall mean the Series C Redeemable Preferred Stock of
the Company, par value $0.0001 per share, having the rights, privileges,
preferences, limitations and other terms as set forth in the Certificate of
Designation, Preferences and Rights of Series C Redeemable Preferred Stock of
the Company filed by the Secretary of State of Delaware on December 16, 2003.
2. Term of Warrant. Subject to the terms and conditions set forth herein, this
Warrant shall be exercisable, in whole or in part, commencing on the second
anniversary of the date hereof (the "Exercise Commencement Date") and continuing
until 5:00 p.m., Eastern Time, on the fifth anniversary of the date hereof (the
"Exercise Period"). This Warrant shall be void following the Exercise Period.
The term of this Warrant shall commence on the date hereof and continue until
the last day of the Exercise Period (the "Term").
3. Exercise Price. The price per share of Common Stock for which this Warrant
may be exercised shall be the Exercise Price set forth above, as adjusted from
time to time pursuant to Section 12 hereof. All shares of Common Stock or other
securities issued pursuant to this Warrant shall be fully-paid and
non-assessable.
4. Exercise of Warrant.
(a) During the Exercise Period, the purchase rights represented by this
Warrant shall be exercisable by Holder in whole or in part, but not for less
than five hundred (500) shares at a time (or such lesser number of shares which
may then constitute the maximum number purchasable pursuant to this Warrant
(such number being subject to adjustment as provided in Section 12 below), at
any time, or from time to time during the Term, by the surrender of this Warrant
and the Notice of Exercise annexed hereto duly completed and executed on behalf
of the Holder, 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 Holder at the
address of the Holder appearing on the books of the Company), upon payment in
cash or by certified or official bank check payable to the order of the Company
in the amount of the aggregate Exercise Price.
(b) This Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of its surrender for exercise as provided
above, and the person entitled to receive the shares of Common Stock issuable
upon such exercise shall be treated for all purposes as the holder of record of
such shares as of the close of business on such date. As promptly as practicable
on or after such date and in any event within ten (10) days thereafter, the
Company at its expense shall issue and deliver to the person or persons entitled
to receive the same a certificate or certificates for the number of shares
issuable upon such exercise. In the event that this Warrant is exercised in part
and it can thereafter be exercised for additional shares of Common Stock, the
Company at its expense will execute and deliver a new Warrant of like tenor
exercisable for the number of shares for which this Warrant may thereafter be
exercised.
5. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. In lieu of
any fractional share to which the Holder would otherwise be entitled, the
Company shall make a cash payment equal to the Exercise Price multiplied by such
fraction.
6. Replacement of Warrant. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction, or mutilation of this Warrant and,
in the case of loss, theft, or destruction, on delivery of an indemnity
agreement reasonably satisfactory in form and substance to the Company or, in
the case of mutilation, on surrender and cancellation of this Warrant, the
Company at its expense shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor and amount.
7. Rights of Stockholders. Subject to Sections 10 and 12 of this Warrant, the
Holder shall not be entitled to vote or receive dividends or be deemed to be a
holder of Common Stock, nor shall anything contained herein be construed to
confer upon the Holder, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, or change of stock to no par
value, consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised.
8. Transfer of Warrant.
(a) Warrant Register. The Company shall maintain a register (the "Warrant
Register") containing the names and addresses of the Holder or Holders. Any
Holder of this Warrant or any portion thereof may change such Xxxxxx's address
as shown on the Warrant Register by written notice to the Company requesting
such change. Any notice or written communication required or permitted to be
given to the Holder may be delivered or given by mail to such Holder as shown on
the Warrant Register and at the address shown on the Warrant Register. Until
this Warrant is transferred on the Warrant Register of the Company, the Company
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for all purposes, notwithstanding any notice to the contrary.
(b) Warrant Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 8.(a) above, issuing Common Stock upon exercise hereof, exchanging or
replacing this Warrant, or any or all of the foregoing. Thereafter, any such
registration, issuance, exchange, or replacement, as the case may be, shall be
made at the office of such agent.
(c) Transferability and Non-Negotiability of Warrant. This Warrant may not
be transferred or assigned in whole or in part without compliance with all
applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions reasonably satisfactory to the Company, if requested by the
Company). Subject to the provisions of this Warrant with respect to compliance
with the Securities Act of 1933, as amended (the "Act"), title to this Warrant
may be transferred by endorsement (by the Holder executing the Assignment Form
annexed hereto) and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of this Warrant for
exchange, properly endorsed on the Assignment Form and subject to the provisions
of this Warrant with respect to compliance with the Act and with the limitations
on assignments and transfers and contained in this Section 8, the Company at its
expense shall issue to or on the order of the Holder a new warrant or warrants
of like tenor, in the name of the Holder or as the Holder (on payment by the
Holder of any applicable transfer taxes) may direct, for the number of shares
issuable upon exercise thereof.
(e) Compliance with Securities Laws.
(i) The Holder of this Warrant, by acceptance hereof, acknowledges
that this Warrant and the securities to be issued upon exercise hereof are being
acquired solely for the Holder's own account and not as a nominee for any other
party, and for investment, and that the Holder will not offer, sell, or
otherwise dispose of this Warrant or any shares of Common Stock to be issued
upon exercise hereof except under circumstances that will not result in a
violation of the Act or any state securities laws. Upon exercise of this
Warrant, the Holder shall, if requested by the Company, confirm in writing, in a
form satisfactory to the Company, that the shares of Common Stock so purchased
are being acquired solely for the Holder's own account for investment and not as
a nominee for any other party, and not with a view toward the resale or
distribution thereof.
(ii) This Warrant and certificates representing any shares of Common
Stock issuable upon exercise hereof shall bear a legend in substantially the
following form (in addition to any legend required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES AND ANY SECURITIES
OR SHARES ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT AND LAWS. COPIES OF THE WARRANT COVERING THE
PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER OR SALE
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD HEREOF TO THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
9. Reservation of Stock. The Company covenants that during the Term, the
Company will reserve from its authorized Common Stock a number of shares
sufficient to provide for the issuance of such Common Stock upon the exercise of
this Warrant and, from time to time, will take all steps
necessary to amend the certificate of incorporation of the Company to ensure
that there are sufficient reserves of shares of Common Stock issuable upon
exercise of this and the other Warrants on the conditions herein provided and,
from time to time, will take all steps necessary to amend its Certificate of
Incorporation (the "Certificate") to provide sufficient reserves of shares of
Common Stock issuable upon exercise of the Warrant. The Company further
covenants that all shares that may be issued upon the exercise of rights
represented by this Warrant and payment of the Exercise Price, all as set forth
herein, will be free from all taxes, liens, and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
or otherwise specified herein). The Company agrees 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 shares of Common Stock upon the exercise of this Warrant.
10. Notices.
(a) Whenever the Company is required to issue a certificate following an
adjustment pursuant to Section 12 hereof, the Company shall issue a certificate
signed by its Chief Financial Officer or Chief Executive Officer setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Exercise
Price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by first
class mail, postage prepaid) to the Holder of this Warrant.
(b) In case:
(i) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or merger of the Company
with or into another entity, or any conveyance of all or substantially all of
the assets of the Company to another entity, or
(ii) of any voluntary dissolution, liquidation of winding-up of the
Company.
the Company shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, and in each such case, the Company
shall mail or cause to be mailed to the Holder or Holders a notice specifying,
as the case may be, (A) the date on which a 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, or (B) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up. Such notice shall be mailed
at least fifteen (15) days prior to the date therein specified.
(c) All such notices and communications shall be deemed to have been
received (i) in the case of personal delivery, on the date of such delivery, and
(ii) in the case of mailing, on the third business day following the date of
such mailing.
11. Amendments. 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), with the written
consent of the Company and the Holder. Any amendment or waiver effected in
accordance with this Section 11 shall be binding upon the Holder of this Warrant
and the Company. No waivers of or exceptions to any term, condition or provision
of this Warrant, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
12. Adjustments. The Exercise Price and the Purchasable Shares hereunder are
subject to adjustment from time to time as follows:
(a) Reclassification, etc. If the Company at any time while this Warrant,
or any portion thereof, remains outstanding and unexpired shall, by
reclassification of securities or otherwise, including, without limitation, any
merger, consolidation or similar transaction, change any of the securities as to
which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 12.
(b) Split, Subdivision or Combination of Shares. If the Company at any time
while this Warrant, or any portion thereof, remains outstanding and unexpired
shall split, subdivide or combine the securities as to which purchase rights
under this Warrant exist, into a different number of securities of the same
class, the Exercise Price for such securities shall be proportionately decreased
in the case of a split or subdivision or proportionately increased in the case
of a combination.
(c) Adjustments for Dividends in Stock or Other Securities or Property. If
while this Warrant, or any portion hereof, remains outstanding and unexpired,
the holders of the securities as to which purchase rights under this Warrant
exist at the time shall have received, or, on or after the record date fixed for
the determination of eligible stockholders, shall have become entitled to
receive, without payment therefor, other or additional stock or other securities
or property (other than cash) of the Company by way of dividend, then and in
each case, this Warrant shall represent the right to acquire, in addition to the
number of shares of the security receivable upon exercise of this Warrant, and
without payment of any additional consideration therefor, the amount of such
other or additional stock or other securities or property (other than cash) of
the Company which such holder would hold on the date of such exercise had it
been the holder of record of the security receivable upon exercise of this
Warrant on the date hereof and had thereafter, during the period from the date
hereof to and including the date of such exercise, retained such shares and/or
all other additional stock available by it as aforesaid during such period,
giving effect to all adjustments called for during such period by the provisions
of this Section 12.
(d) Certificate as to Adjustments. The Company shall, at its expense, upon
the written request any holder of this Warrant following the occurrence of each
adjustment or readjustment pursuant to this Section 12 hereof, promptly compute
such adjustment or readjustment in accordance with the terms hereof and furnish
to each holder of this Warrant a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based.
(e) No Impairment. The Company shall not, by any voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 12 and (subject
to Section 1 above) in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder(s) of this Warrant
against impairment.
13. Miscellaneous. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to the
principles thereof relating to the conflict of laws, except to the extent that
matters of due authorization and issuance of this Warrant or any other
securities of the Company or the rights, privileges and obligations of holders
of securities of the Company. Any action brought concerning the transactions
contemplated by this Warrant shall be brought only in the state courts of New
York or in the federal courts located in the state of New York. The
individual(s) executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
IN WITNESS WHEREOF, DIRECT INSITE CORP. has caused this Warrant to be
executed by a duly authorized officer as of the date first above written.
DIRECT INSITE CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
Chief Financial Officer
NOTICE OF EXERCISE
To: Direct Insite Corp.
1. The undersigned hereby elects to purchase $ of shares of common stock
-----
of Direct Insite Corp., a Delaware corporation ("Common Stock"), pursuant to the
terms of the attached Warrant, and tenders herewith payment of the Exercise
Price for such shares in full.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned for investment and not as a nominee for any other
party, and that the undersigned will not offer, sell, assign, transfer, pledge,
hypothecate, or otherwise dispose of any such shares of Common Stock except
under circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.
3. Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
---------------------------------
[Name]
---------------------------------
---------------------------------
[Name]
---------------------------------
1. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below: [Name]
---------------------------------
[Name]
---------------------------------
---------------------------------
--------------------- ---------------------------------
[Date] [Signature]
---------------------------------
ASSIGNMENT FORM
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 Warrant:
Name of Assignee Address No. of Shares
---------------------- ------------------------- -----------------------
and does hereby irrevocably constitute and appoint Attorney
--------------------
to make such transfer on the books of Direct Insite Corp., a Delaware
corporation (the "Company"), maintained for the purpose, with full power of
substitution in the premises.
DATED:
--------------------
---------------------------------
Signature of Holder
---------------------------------
---------------------------------
(Witness)
---------------------------------
The Assignee acknowledges that this Warrant and the shares of stock to be
issued upon exercise hereof are being acquired for investment for Assignee's own
account for investment and not as a nominee for any other party, not with a view
toward the resale or distribution thereof, and that the undersigned will not
offer, sell, assign, transfer, pledge, hypothecate, or otherwise dispose of this
Warrant or any shares of stock to be issued on the exercise hereof except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws. Further, the Assignee acknowledges
that upon exercise of this Warrant, the Assignee shall, if requested by the
Company, confirm in writing, in a form satisfactory to the Company, that the
shares of stock so purchased are being acquired for investment and not with a
view toward distribution or resale.
DATED:
--------------------
---------------------------------
Signature of Assignee
---------------------------------
---------------------------------
(Witness)
---------------------------------
