**EXHIBIT10.28**

 

**THISWARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGEDHYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVEREGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND APPLICABLE STATESECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO PURCHASESOFT, INC. THATSUCH REGISTRATION IS NOT REQUIRED.**

 

 

October 16, 2003

 

 

**PURCHASESOFT, INC.**

 

**COMMON STOCK PURCHASE WARRANT**

 

Void after April 15st, 2004

 

This Warrant (the “Warrant”) entitles **Steven A.Flagg** (the “Holder”), for value received, to purchase from **PURCHASESOFT,INC.**, a Delaware corporation (the “Company”), at any time during theperiod starting from **October 16, 2003 (the “Commencement Date”)**,to 5:00 p.m., Delaware time, on **April 15st, 2004 (the “ExpirationDate”)**, at which time this Warrant shall expire and become void, **75,000shares** of the Company’s common stock, $0.01 par value per share (the“Stock”), subject to adjustment as set forth herein (the “WarrantShares”).  This Warrant shall beexercisable at the price per share as determined in Section 1 hereof,subject to adjustment as set forth herein (the “Exercise Price”).  This Warrant also is subject to thefollowing terms and conditions:

 

**1.****                                      WarrantExercise Price. **This Warrant shallbe exercisable at **$0.01 per share**, subject to adjustment asset forth herein (the “Exercise Price”).

 

**2.****                                      Exerciseof Warrant.**Subject to the terms and conditions hereof, this Warrant may beexercised in whole or in part at any time from and after the Commencement Dateand before the Expiration Date. Exercise shall be by presentation and surrender to the Company at its principaloffice of this Warrant and the subscription form annexed hereto, executed bythe Holder, together with payment to the Company in accordance withSection 3 or 4 hereof in an amount equal to the product of the ExercisePrice multiplied by the number of Warrant Shares being purchased upon suchexercise.  It shall be a conditionprecedent to the exercise of this Warrant, in whole or in part, that the Holdershall deliver to the Company a certificate certifying that the representationsset forth in Section 10 hereof are true and correct as of the date of suchexercise.  If this Warrant is exercisedin part only, the Company shall, as soon as practicable after presentation ofthis Warrant upon such exercise, execute and deliver a new Warrant, dated the datehereof, evidencing the right of the Holder to purchase the balance of theWarrant Shares purchasable hereunder upon the same terms and conditions hereinset forth.  Upon and as of receipt bythe Company of such properly completed and duly executed purchase formaccompanied by payment as herein provided, the Holder shall be deemed to be theHolder of record of the Warrant Shares issuable upon such exercise,notwithstanding that the stock transfer books of the Company shall then beclosed or that certificates representing such Warrant Shares shall not thenactually be delivered to the Holder.

 

**3.****                                      Paymentof Exercise Price.**  The ExercisePrice for the Warrant Shares being purchased may be paid in cash, by check orwire transfer.

 

**4.****                                      NetIssue Exercise.**  Notwithstanding anyprovision other than Section 2.2 to the contrary, in lieu of exercisingthis Warrant for cash or cancellation of indebtedness, the Holder may elect bythe surrender of this Warrant, or a portion of this Warrant, to the Company atthe principal office of the Company, with the net issue exercise notice annexedhereto duly executed, to receive, without the payment by the Holder of anyadditional consideration, such number of fully paid and nonassessable WarrantShares as is computed using the following formula:

 
| ***X =*** | ***Y(A-B)*** |   |
|-----------|--------------|--------|
|      | ***A***      |   |

 
| where: |   | X =    |   | the number of Warrant Shares to be issued  to the Holder pursuant to this Section 4.                                                                                                                 |
|--------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                                                                                      |
|   |   | Y =    |   | the number of shares of Stock covered by  this Warrant or, if only a portion of the Warrant is being  exercised, the number of shares of Stock for which the Warrant is then being  exercised pursuant to |

 

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|   |   |   |   | the net issue exercise election made  pursuant to this Section 4 (at the date of such calculation).                               |
|--------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |                                                                                                                                   |
|   |   | A =    |   | the fair market value of one share of Stock  (at the date of such calculation).                                                        |
|   |   |   |   |                                                                                                                                   |
|   |   | B =    |   | the Exercise Price in effect under this  Warrant at the time the net issue exercise election is made  pursuant to this Section 4. |

 

For the purposes of this Section 4, the fair market value of oneshare of Stock as of a particular date (the “Determination Date”) shall bedetermined by the Company’s Board of Directors in good faith; provided,however, that (i) if, as of the Determination Date, there has been apublic market for the Stock for at least 11 trading days, the fair market valueper share shall be the average of the closing prices (or bid prices if thereare no such closing prices) of the Stock quoted in the over-the-counter marketsummary or the closing price quoted on the Nasdaq National Market or on theprimary national securities exchange on which the Stock is then listed,whichever is applicable, as published in the New York City Edition of the WallStreet Journal (or, if not so reported, as otherwise reported by the NasdaqNational Market) for the 10 trading days prior to the Determination Date; and(ii) if the Determination Date is the date on which the Stock is firstsold by the Company in a firm commitment public offering under the SecuritiesAct of 1933, as amended (the “Act”), or if there has been a public market forthe Stock for fewer than 11 trading days, the fair market value shall be theinitial public offering price (before deducting commissions, discounts orexpenses).

 

**5.****                                      Adjustmentof Exercise Price**.  The ExercisePrice shall be subject to adjustment from time to time upon the happening ofcertain events as follows:

 

**5.1.****                            Subdivisionor Combination of Stock.**  If at anytime or from time to time after the Commencement Date, the Company shallsubdivide its outstanding shares of Stock, the Exercise Price in effectimmediately prior to such subdivision shall be reduced proportionately and thenumber of Warrant Shares (calculated to the nearest whole share) shall beincreased proportionately, and conversely, in the event the outstanding sharesof Stock shall be combined into a smaller number of shares, the Exercise Pricein effect immediately prior to such combination shall be increasedproportionately and the number of Warrant Shares (calculated to the nearestwhole share) shall be decreased proportionately.

 

**5.2****                               Adjustmentfor Stock Dividends.**  If at any timeafter the Commencement Date the Company shall declare a dividend or make anyother distribution upon any class or series of stock of the Company payable inshares of Stock or securities convertible into shares of Stock, the ExercisePrice and the number of shares to be obtained upon exercise of this Warrantshall be adjusted proportionately to reflect the issuance of any shares ofStock or convertible securities, as the case may be, issuable in payment ofsuch dividend or distribution.

 

**5.3****                               Reorganization,Reclassification, Consolidation, Merger or Sale.**  In the event of any reorganization of the capital stock of theCompany, a consolidation or merger of the Company with another corporation(other than a merger in which the Company is the surviving corporation), thesale of all or substantially all of the Company’s assets or any transactioninvolving the transfer of a majority of the voting power over the capital stockof the Company effected in a manner such that holders of Stock shall beentitled to receive stock, securities, or other assets or property, in eachcase, at any time after the Commencement Date, then, as a condition of suchreorganization, reclassification, consolidation, merger, sale or transaction,lawful and adequate provision shall be made whereby the Holder hereof shallhave the right to purchase and receive (in lieu of the shares of the Stockof the Company immediately theretofore purchasable and receivable upon theexercise of the rights represented hereby) such shares of stock, securities orother assets or property as may be issued or payable with respect to or inexchange for a number of outstanding shares of such Stock equal to the numberof shares of such Stock immediately theretofore purchasable and receivable uponthe exercise of the rights represented hereby. In any such reorganization, consolidation, merger, sale or transaction,including successive events of such nature, appropriate provision shall be madewith respect to the rights and interests of the Holder such that the provisionshereof (including, without limitation, provisions for adjustments of theExercise Price and of the number of shares purchasable and receivable upon theexercise of this Warrant) thereafter shall be applicable, as nearlypracticable, in relation to any shares of stock, securities or assetsthereafter deliverable upon the exercise hereof.

 

**5.4****                               Issuanceof Additional Shares**.  The ExercisePrice shall be subject to adjustment upon the issuance of Stock or ConvertibleSecurities so long as any Warrant is then issued and outstanding.

 

**(a)****                                  SpecialDefinitions.**  For purposes of thisSection 5.4, the following definitions shall apply:

 

(**1)**                                 “Option” shall meancontractual rights, options or warrants to subscribe for, purchase or otherwiseacquire either Stock or Convertible Securities.

 

**(2)**                                 “ConvertibleSecurities” shall mean any evidences of indebtedness, shares (other than Stockand Options) or other securities directly or indirectly convertible into orexchangeable for Stock.

 

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**(3)**                                 “Additional Shares ofStock” shall mean all shares of Stock issued (or, pursuant toSection 5.4(c), deemed to be issued) by the Company after the CommencementDate, other than shares of Stock issued or issuable:

 

**(i)****                                   **pursuantto Options or Convertible Securities outstanding on the Commencement Date;

 

**(ii)****                               **todirectors, officers or employees of, or consultants to, the Corporationpursuant to a stock grant or option plan or other employee stock incentiveprogram (collectively, the “Plans”) approved by the Board of Directors, subjectto adjustment for all subdivisions and combinations;

 

**(iii)****                           **asa dividend or distribution on the Warrant or any event for which adjustment ismade pursuant to Section 5 hereof; or

 

**(iv)****                              **byway of dividend or other distribution on shares excluded from the definition ofAdditional Shares of Stock by the foregoing clauses (i), (ii) or (iii) or thisclause (iv) or on shares of Stock so excluded.

 

**(b)****                                  NoAdjustment of Exercise Price.**  Noadjustment of the Exercise Price shall be made in respect of the issuance ofAdditional Shares of Stock unless the consideration per share for an AdditionalShare of Stock issued or deemed to be issued by the Company is less than theExercise Price in effect on the date of, and immediately prior to, the issue ofsuch Additional Shares of Stock.

 

**(c)****                                  Issuanceof Securities Deemed to be an Issuance of Additional Shares of Stock.**

 

**(1)****                                 Optionsand Convertible Securities.**  In theevent the Company at any time or from time to time after the Commencement Dateshall issue any Options or Convertible Securities or shall fix a record datefor the determination of holders of any class of securities entitled to receiveany such Options or Convertible Securities, then the maximum number of shares(as set forth in the instrument relating thereto without regard to anyprovisions contained therein for a subsequent adjustment of such number) ofStock issuable upon the exercise of such Options or, in the case of ConvertibleSecurities and Options therefor, the conversion or exchange of such ConvertibleSecurities, shall be deemed to be Additional Shares of Stock issued as of thetime of such issue or, in case such a record date shall have been fixed, as ofthe close of business on such record date, provided that in any such case inwhich Additional Shares of Stock are deemed to be issued:

 

**(i)**                                    nofurther adjustment in the Exercise Price shall be made upon the subsequentissue of Convertible Securities or shares of Stock upon the exercise of suchOptions or conversion or exchange of such Convertible Securities;

 

**(ii)****                               **ifsuch Options or Convertible Securities by their terms provide, with the passageof time or otherwise, for any increase or decrease in the consideration payableto the Company or in the number of shares of Stock issuable upon the exercise,conversion or exchange thereof, the applicable Exercise Price computed upon theoriginal issue thereof (or upon the occurrence of a record date with respectthereto), and any subsequent adjustments based thereon, shall, upon any suchincrease or decrease becoming effective, be recomputed to reflect such increaseor decrease insofar as it affects such Options or the rights of conversion orexchange under such Convertible Securities.

**(2)**                                 Upon the expiration ofany such Options or any rights of conversion or exchange under such ConvertibleSecurities which shall not have been exercised, the Exercise Price computedupon the original issue thereof (or upon the occurrence of a record date withrespect thereto), and any subsequent adjustments based thereon, shall, uponsuch expiration, be recomputed as if:

 

**(i)**                                    inthe case of Convertible Securities or Options for Stock, the only AdditionalShares of Stock issued were the shares of Stock, if any, actually issued uponthe exercise of such Options or conversion or exchange of such ConvertibleSecurities and the consideration received therefor was the considerationactually received by the Company for the issue of all such Options, whether ornot exercised, plus the consideration actually received by the Company uponsuch exercise, or for the issue of all such Convertible Securities which wereactually converted or exchanged, plus the additional consideration, if any,actually received by the Company upon such conversion or exchange, and

 

**(ii)**                                inthe case of Options for Convertible Securities, only the ConvertibleSecurities, if any, actually issued upon the exercise thereof were issued atthe time of issue of such Options, and the consideration received by theCompany for the Additional Shares of Stock actually deemed to have been thenissued was the consideration actually received by the Company for the issue ofall such Options, whether or not exercised, plus the consideration actuallyreceived by the Company upon the issue of the Convertible Securities withrespect to which such Options were actually exercised.

 

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**(3)**                                 Noreadjustment pursuant to clause (2) above shall have the effect of increasingthe Exercise Price to an amount which exceeds the lower of (x) suchExercise Price on the original adjustment date, or (y) such Exercise Pricethat would have resulted from any issuance of Additional Shares of Stockbetween the original adjustment date and such readjustment date.

 

**(4)**                                 Inthe case of any Options which expire by their terms not more than 30 days afterthe date of issue thereof, no adjustment of the Exercise Price shall be madeuntil the expiration or exercise of all such Options; provided, however, thatthis clause (4) shall not apply to Options that are issued within 30 days of atransaction described under Section 5.4(c)(1) or (2) hereof.

 

**(d)****                                  Adjustmentof Exercise Price Upon Issuance of Additional Shares of Stock.**  In the event the Company shall issueAdditional Shares of Stock (including Additional Shares of Stock deemed to beissued pursuant to Section 5.4(c)) without consideration or for aconsideration per share less than the Exercise Price, then and in such event,such Exercise Price, shall be reduced, concurrently with such issue, to a price(calculated to the nearest cent) determined by multiplying the Exercise Priceby a fraction:

 

**(1)****                                **thenumerator of which shall be (i) the number of shares of Stock outstandingimmediately prior to the issuance of such Additional Shares of Stock(calculated on a fully diluted basis assuming the exercise or conversion of allOptions or Convertible Securities which are exercisable or convertible at thetime such calculation is being made), plus (ii) the number of shares of Stockwhich the net aggregate consideration, if any, received by the Company for thetotal number of such Additional Shares of Stock so issued would purchase at theExercise Price in effect immediately prior to such issuance, and

 

**(2)****                                **thedenominator of which shall be (i) the number of shares of Stock outstandingimmediately prior to the issuance of such Additional Shares of Stock(calculated on a fully diluted basis assuming the exercise or conversion of allOptions or Convertible Securities which are exercisable or convertible at thetime such calculation is being made), plus (ii) the number of such AdditionalShares of Stock so issued.

 

**(e)****                                  Determinationof Consideration.**  For purposes ofthis Section 5.4, the consideration received by the Company for the issueof any Additional Shares of Stock shall be computed as follows:

 

**(1)****                                 Cashand Property.**  Such considerationshall:

 

**(i)**                                    insofaras it consists of cash, be computed at the aggregate amount of cash received bythe Company excluding amounts paid or payable for accrued interest or accrueddividends;

 

**(ii)**                                insofaras it consists of property other than cash, be computed at the fair valuethereof at the time of such issue, as determined in good faith by the Board ofDirectors; and

 

**(iii)**                            in theevent Additional Shares of Stock are issued together with other shares orsecurities or other assets of the Company for consideration which covers both,be the proportion of such consideration so received, computed as provided inclauses (i) and (ii) above, as determined in good faith by the Board ofDirectors.

 

**(2)****                                 Optionsand Convertible Securities.**  Theconsideration per share received by the Company for Additional Shares of Stockdeemed to have been issued pursuant to Section 5.4(c)(1), relating toOptions and Convertible Securities, shall be determined by dividing:

 

**(i)**                                    thetotal amount, if any, received or receivable by the Company as considerationfor the issue of such Options or Convertible Securities, plus the minimumaggregate amount of additional consideration (as set forth in the instrumentsrelating thereto, without regard to any provision contained therein for asubsequent adjustment of such consideration) payable to the Company upon theexercise of such Options or the conversion or exchange of such ConvertibleSecurities, or in the case of Options for Convertible Securities, the exerciseof such Options for Convertible Securities and the conversion or exchange ofsuch Convertible Securities, by

 

**(ii)**                                themaximum number of shares of Stock (as set forth in the instruments relatingthereto, without regard to any provision contained therein for a subsequentadjustment of such number) issuable upon the exercise of such Options or theconversion or exchange of such Convertible Securities.

 

**5.5****                               MinimalAdjustments.**  No adjustment in theExercise Price subject to this Warrant shall be made if such adjustment wouldresult in a change in the number of shares represented by this Warrant of lessthan one share (the 

 

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“Adjustment Threshold Amount”). Any adjustment not made because the Adjustment Threshold Amount is notsatisfied shall be carried forward and made, together with any subsequent adjustments,at such time as (a) the aggregate amount of all such adjustments is equal to atleast the Adjustment Threshold Amount or (b) the Warrant is exercised.

 

**5.6****                               Certificateas to Adjustments.**  Upon theoccurrence of each adjustment or readjustment of the Exercise Price pursuant tothis Section 5, the Warrant shall, without any action on the part of theholder thereof, be adjusted in accordance with this Section 5, and theCompany promptly shall compute such adjustment or readjustment in accordancewith the terms hereof and prepare and furnish to the Holder a certificatesetting forth such adjustment or readjustment, showing in detail the facts uponwhich such adjustment or readjustment is based.

 

**6.****                                      Noticesof Record Date.**  Upon (a) anyestablishment by the Company of a record date of the holders of any class ofsecurities for the purpose of determining the holders thereof who are entitledto receive any dividend or other distribution, or right or option to acquiresecurities of the Company, or any other right, or (b) any capitalreorganization, reclassification, recapitalization, merger or consolidation ofthe Company with or into any other corporation, any transfer of all orsubstantially all the assets of the Company, or any voluntary or involuntary dissolution,liquidation or winding up of the Company, the Company shall mail to the Holderat least 10 days, or such longer period as may be required by law, prior to therecord date specified therein, a notice specifying (i) the date established asthe record date for the purpose of such dividend, distribution, option or rightand a description of such dividend, distribution, option or right, (ii) thedate on which any such reorganization, reclassification, transfer,consolidation, merger, dissolution, liquidation or winding up is expected tobecome effective and (iii) the date, if any, fixed as to when the holders ofrecord of Stock (or other securities at that time receivable upon exercise ofthe Warrant) shall be entitled to exchange their shares of Stock (or such otherstock or securities) for securities or other property deliverable upon suchreorganization, reclassification, transfer, consolidation, merger, dissolution,liquidation or winding up.

 

**7.****                                      NoDilution or Impairment**.  The Companywill not, by amendment of its Certificate of Incorporation or By-Laws orthrough any reorganization, transfer of assets, consolidation, merger,dissolution, issue or sale of securities or any other voluntary action, avoidor seek to avoid the observance or performance of any of the terms of thisWarrant, but will at all times in good faith assist in the carrying out of allsuch terms and in the taking of all action as may be necessary or appropriatein order to protect the rights of the Holder against dilution, or otherimpairment.

 

**8.****                                      FractionalShares.**  The Company shall not issueany fractional shares nor scrip representing fractional shares upon exercise ofany portion of this Warrant.

 

**9.****                                      Representations,Warranties and Covenants**.  ThisWarrant is issued and delivered by the Company and accepted by each Holder onthe basis of the following representations, warranties and covenants made bythe Company:

 

**9.1****                               Authority. **The Company has all necessary authorityto issue, execute and deliver this Warrant and to perform its obligationshereunder.  This Warrant has been dulyauthorized, issued, executed and delivered by the Company and is the valid andbinding obligation of the Company, enforceable in accordance with its terms.

 

**9.2**  **Reservation of Warrant Shares. **The Warrant Shares issuable uponthe exercise of this Warrant have been (and any securities issuable ordeliverable upon conversion of such Warrant Shares, upon issuance or delivery,will be) duly authorized and reserved for issuance by the Company and, whenissued in accordance with the terms hereof, will be validly issued, fully paidand nonassessable.

 

**10.****                               InvestmentRepresentations.**

 

**10.1****                        Purchasefor Investment.**  The Holderrepresents and warrants that it is acquiring the Warrant, and upon exercisewill hold the Warrant Shares, solely for its account for investment and notwith a view to or for sale or distribution of said Warrant or Warrant Shares orany part thereof.  The Holder alsorepresents that the entire legal and beneficial interests of the Warrant and WarrantShares the Holder is acquiring is being acquired for, and will be held for, itsaccount only.

 

**10.2****                        SecuritiesNot Registered.**  The Holderunderstands that the Warrant has not been registered under the Act on the basisthat no distribution or public offering of the stock of the Company is to beeffected.  The Holder realizes that thebasis for the exemption may not be present if, notwithstanding itsrepresentations, it has in mind merely acquiring the securities for a fixed ordeterminable period in the future, or for a market rise, or for sale if themarket does not rise.  The Holder has nosuch intention.

 

**10.3****                        Securitiesto be Held Indefinitely.**  The Holderrecognizes that the Warrant and Warrant Shares being acquired by it must beheld indefinitely unless they are subsequently registered under the Act or anexemption from such registration is available. The Holder recognizes that the Company has no obligation to register theWarrant or to comply with any exemption from such registration.

 

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**10.4****                        Rule144.**  The Holder is aware thatneither the Warrant nor Warrant Shares may be sold pursuant to Rule 144 adoptedunder the Act unless certain conditions are met and until the Holder has heldthe Warrant Shares for at least one year. Among the conditions for use of the Rule is the availability of currentinformation to the public about the Company.

 

**10.5****                        AccreditedInvestor.**  The Holder represents andwarrants that it is a “accredited investor” (as such term is defined inRegulation D of the Securities Act of 1933, as amended) and understands therisks associated with an investment in the Company.

 

**11.****                               Transfer,Exchange, Assignment or Loss of Warrant.**

 

**11.1****                        Restrictionson Transfer.**  This Warrant may be transferred,in whole or in part, subject to the following restrictions.  This Warrant and the Warrant Shares or anyother securities (“Other Securities”) received upon exercise of this Warrantshall be subject to restrictions on transferability until registered under theAct, unless an exemption from registration is available.  Until this Warrant and the Warrant Shares orOther Securities are so registered, this Warrant and any certificate forWarrant Shares or Other Securities issued or issuable upon exercise of thisWarrant shall contain a legend on the face thereof, in form and substancesatisfactory to counsel for the Company, stating that this Warrant, the WarrantShares or Other Securities may not be sold, transferred or otherwise disposedof unless, in the opinion of counsel (which counsel and which opinion shall besatisfactory to the Company), the Warrant, the Warrant Shares or OtherSecurities may be transferred without such registration.

 

**11.2****                        Procedurefor Transfer.**  Any transferpermitted hereunder shall be made by surrender of this Warrant to the Companyat its principal office or to the Transfer Agent at its offices with a dulyexecuted request to transfer the Warrant, which shall provide adequateinformation to effect such transfer and shall be accompanied by fundssufficient to pay any transfer taxes applicable.  Upon satisfaction of all transfer conditions, the Company orTransfer Agent shall, without charge, execute and deliver a new Warrant in thename of the transferee named in such transfer request, and this Warrantpromptly shall be canceled.

 

**11.3****                        Lost,Stolen or Destroyed Warrant.**  Uponreceipt by the Company of evidence satisfactory to it of loss, theft,destruction or mutilation of this Warrant and, in the case of loss, theft ordestruction, of reasonably satisfactory indemnification, or, in the case ofmutilation, upon surrender of this Warrant, the Company will execute anddeliver, or instruct the Transfer Agent to execute and deliver, a new Warrantof like tenor and date, and any such lost, stolen or destroyed Warrantthereupon shall become void.

 

**11.4****                        WarrantBinding Upon Assignee or Successor.** The terms and conditions of this Warrant shall be binding upon anypermitted assignee and successor of the Holder.  Any such successor or assignee shall be obligated to and shallimmediately execute an instrument which provides that such party is bound underthe terms of this Warrant.  Anytransfer, assignment or other disposition without such execution by theproposed transferee, assignee or successor shall be null and void.

 

**12.****                               IssueTax.**   The issuance of certificatesfor shares of Stock upon the exercise of this Warrant shall be made withoutcharge to the Holder of the Warrant for any issue tax (other than applicableincome taxes) in respect thereof; provided, however, that the Company shall notbe required to pay any tax that may be payable in respect of any transferinvolved in the issuance and delivery of any certificate in a name other thanthat of the then Holder of the Warrant being exercised.

 

**13.****                               Amendment**.  The terms of this Warrant may be amended,modified or waived only with the written consent of the parties hereto.

 

**14.****                               GoverningLaw.**  This Warrant shall be governedby and construed in accordance with the laws of the State of California, assuch laws are applied to contracts entered into and wholly to be performedwithin the State of California and without giving effect to any principles ofconflicts or choice of law that would result in the application of the laws ofany other jurisdiction.

 

 

**INWITNESS WHEREOF,** the Company and Holder have executedthis Warrant as of October 16, 2003.

 
| **HOLDER** |   | **PURCHASESOFT, INC.** |
|------------|--------|------------------------|
|       |   |                   |
|       |   |                   |   |   |
| By:        |   | /s/ Steven A. Flagg    |   | By: |   | /s/ Thomas B. Marsh |   |
|       |   | Steven A. Flagg        |   |   |   | Thomas B. Marsh |
|       |   |                   |   |   | Secretary and Treasurer |

 

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