Document:

EXHIBIT 10.35

 

CORNERSTONE
BUSINESS DEVELOPMENT AGREEMENT

 

 

This LETTER AGREEMENT (the “Letter”) is entered into effective
11/20/2003 (the “Effective Date”) between PURCHASESOFT,
INC., a Delaware corporation  (“PurchaseSoft”),
and CORNERSTONE COMMUNICATIONS L.L.C., a
Delaware limited liability company (“CORNERSTONE”).  In consideration of Cornerstone beginning the Business
Development efforts contemplated hereby, the obligations in this letter,
including without limitation the equity and revenue sharing compensation to
Cornerstone, are intended to be binding. 
The parties intend to further specify these agreements in more detailed,
written definitive agreements incorporating the terms and other provisions
customary for transactions of this type to be entered into by the parties with
respect to the subject matter of this Letter (the “Agreements”) within 30 days
of the Effective Date, unless otherwise agreed upon in writing.

 

PurchaseSoft and CORNERSTONE
contemplate entering into an Agreement, which is intended to include joint
BUSINESS DEVELOPMENT.  This Letter and
the Strategic Partnership Agreement entered into on 11/20/2003 establishes the
initial basic relationship between PurchaseSoft and CORNERSTONE in marketing
and selling the PurchaseSoft products and services.  Beginning with the US Mexico Chamber of Commerce (USMCOC),
Cornerstone will continue to develop and expand the US/Mexico territory as
mutually agreed.

 

CORNERSTONE
COMPENSATION

 

•                  In
consideration, Cornerstone Communications shall receive 400,000 shares of
PurchaseSoft common stock.  The
distribution of the 400,000 shares will be structured as follows;

 

•                  Effective upon execution of the
Strategic Partnership Agreement between PurchaseSoft, the USMCOC, and
Cornerstone Communications, LLC, 400,000 shares in stock
will be in the form of warrants and will be issued in 100,000 share increments
to the following four individuals representing Cornerstone Communications;
Virgil Horton, Joe Lopez, Albert Zapanta, and John Zuch.  The warrants will be priced at .02 cents per
share, and exercisable until May 31, 2004.

 

•                  Cornerstone will
receive 25% of PurchaseSoft revenue generated within a “territory” to be
mutually defined as all participating companies in the USMCOC community.  This percent of revenue will apply to
additional “territories” to be defined and agreed to by both parties.

 

	
  Agreed and accepted by;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Cornerstone Communications, LLC

  	
   

  	
  PurchaseSoft, Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Virgil K. Horton Jr.

  	
   

  	
   

  	
  By:

  	
  /s/ Steven A. Flagg

  	
   

  
	
  Title:

  	
  Chairman, President, CEO

  	
   

  	
  Title:

  	
  President & CEO

  
	
  Date:

  	
  12/01/2003

  	
   

  	
  Date:

  	
  11/20/2003

  
							

 

1EXHIBIT
10.36

 

STRATEGIC
PARTNERSHIP AGREEMENT

 

The following describes the companies, duties and responsibilities of
the Strategic Partnership between PurchaseSoft Inc, The United States Mexico
Chamber of Commerce (USMCOC) and Cornerstone Communications, LLC.

 

Upon execution of this agreement by all parties, each shall work
diligently to ensure overall approval for the “Wiring the Border” project. Each
party shall individually and collectively acknowledge their duties and
responsibilities to the project and their respective commitments thereto, as
outlined below.  Each executive agrees
to make himself reasonably available for interviews and meetings regarding the
aspects of the project which pertain to his company’s duties and
responsibilities.

 

Upon project funding and based upon the current business model for the
e-Marketplace, a revenue sharing agreement for the sharing of ongoing revenues
from the e-Marketplace will be developed. 
The revenue sharing agreement will be drafted and executed by all
parties within 30 days of project funding. 
This revenue sharing agreement would be considered an attachment to this
Strategic Partnership Agreement.

 

Definitions

 

1.              PurchaseSoft, Inc.

PurchaseSoft, Inc., a Delaware
corporation, is a software company, which has specialized in procurement
software and has been in operation for 24 years.

 

2.              USMCOC

A group of distinguished Mexican
and U.S. businessmen established the United States-Mexico Chamber of Commerce
(USMCOC) in 1973 as a 501 (c) (6) non-profit business association chartered in
Washington D.C.  The coalition of
businessmen created a bilateral organization to promote trade, investment, and
joint ventures on both sides of the border. 
Now in its third decade of operation, the Chamber has grown into a
unique non-profit corporation operating through 12 offices in Mexico and the
United States. All chapters and offices, with strong local membership and
international contacts, help businesses bridge differences in legal, regulatory
and economic systems, as well as language and culture.

 

3.              Cornerstone Communications, LLC

Cornerstone Communications is a
business development organization.  The
partners that comprise Cornerstone bring domain knowledge in the areas of
print/graphic arts, financial services, and government among others and have
acted in senior advisory roles and leadership positions for various
corporations and agencies. 
Additionally, each of these individuals has acquired and maintained
valuable business relationships during the normal course of business, including
deep corporate and governmental relationships in Mexico and Latin America.  Cornerstone’s objective is to create value
for its clients by leveraging these capabilities in an advisory and business
development role.  Cornerstone is
currently under contract with the U.S. – Mexican Chamber of Commerce.

 

Duties and Responsibilities

 

1.              PurchaseSoft,
Inc.

PurchaseSoft’s duties and
responsibilities will be primarily that of a “Solutions/Technology”
provider.  Contingent upon securing at
least $24,000 in funding for the project (“Project Funding”), PurchaseSoft will
provide their products and product knowledge, free of charge, to create an
e-marketplace environment for the Partnership. 
The products utilized will be V3, and/ or Source Smart if required, as
update or improved from time to time. 
Contingent upon Project Funding, PurchaseSoft will be first to recoup
expenses associated with this project at $24,000.00 for the expense of the
support and maintenance of V3 and/or Source Smart software, as outlined in Attachment A – PurchaseSoft, Inc. Software Maintenance
Agreement.

 

2.              USMCOC

The
USMCOC will essentially provide the membership community for the e-marketplace
environment. USMCOC will promote and diligently facilitate usage of the
marketplace among its membership and other affiliate organizations.

 

1

 

3.              Cornerstone
Communications, LLC

Cornerstone
Communications will facilitate communications and mange the overall
relationship between PurchaseSoft and the USMCOC.  This project includes but is not limited to the e-marketplace
which PurchaseSoft, USMCOC, and Cornerstone will create. Cornerstone will
provide business development and marketing expertise to diligently promote the
“Wiring the Border” project through activities that may include developing and
managing seminars, mailings, and additional promotional activities to be paid
for and supported by the Chamber and/or PurchaseSoft as agreed to from time to
time.

 

 

	
  Agreed and
  accepted by;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Cornerstone Communications, LLC

  	
   

  	
  PurchaseSoft, Inc.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Virgil K. Horton Jr.

  	
   

  	
   

  	
  By:

  	
  /s/ Steven A. Flagg

  	
   

  
	
  Title:

  	
  Chairman, President, CEO

  	
   

  	
  Title:

  	
  President & CEO

  
	
  Date:

  	
  12/01/2003

  	
   

  	
  Date:

  	
  11/20/2003

  
	
   

  	
   

  	
   

  
	
  USMCOC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Al Zapanta

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  	
   

  
	
  Date:

  	
  12/02/2003

  	
   

  	
   

  
								

 

2EXHIBIT 10.37

 

THIS
WARRANT 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, PLEDGED
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO PURCHASESOFT, INC. THAT
SUCH REGISTRATION IS NOT REQUIRED.

 

December 1st, 2003

 

 

PURCHASESOFT, INC.

 

COMMON STOCK PURCHASE WARRANT

 

Void
after May 31st , 2004

 

This Warrant (the “Warrant”) entitles Virgil
Horton (the “Holder”), for value received, to purchase from PURCHASESOFT,
INC., a Delaware corporation (the “Company”), at any time during the
period starting from December 1st, 2003 (the “Commencement Date”),
to 5:00 p.m., Delaware time, on May 31st   , 2004 (the “Expiration Date”), at
which time this Warrant shall expire and become void, 100,000 shares of the
Company’s common stock, $0.01 par value per share (the “Stock”), subject to
adjustment as set forth herein (the “Warrant Shares”).  This Warrant shall be exercisable 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 the following terms and conditions:

 

1.                                      Warrant Exercise Price. 
This Warrant shall be
exercisable at $0.02 per share, subject to adjustment as set forth herein
(the “Exercise Price”).

 

2.                                      Exercise of Warrant. Subject to the terms and conditions hereof, this Warrant may be
exercised in whole or in part at any time from and after the Commencement Date
and before the Expiration Date. 
Exercise shall be by presentation and surrender to the Company at its
principal office of this Warrant and the subscription form annexed hereto,
executed by the Holder, together with payment to the Company in accordance with
Section 3 or 4 hereof in an amount equal to the product of the Exercise
Price multiplied by the number of Warrant Shares being purchased upon such
exercise.  It shall be a condition
precedent to the exercise of this Warrant, in whole or in part, that the Holder
shall deliver to the Company a certificate certifying that the representations
set forth in Section 10 hereof are true and correct as of the date of such
exercise.  If this Warrant is exercised
in part only, the Company shall, as soon as practicable after presentation of
this Warrant upon such exercise, execute and deliver a new Warrant, dated the date
hereof, evidencing the right of the Holder to purchase the balance of the
Warrant Shares purchasable hereunder upon the same terms and conditions herein
set forth.  Upon and as of receipt by
the Company of such properly completed and duly executed purchase form
accompanied by payment as herein provided, the Holder shall be deemed to be the
Holder of record of the Warrant Shares issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such Warrant Shares shall not then
actually be delivered to the Holder.

 

3.                                      Payment of Exercise Price.  The Exercise Price for the
Warrant Shares being purchased may be paid in cash, by check or wire transfer.

 

4.                                      Net Issue Exercise.  Notwithstanding any provision
other than Section 2.2 to the contrary, in lieu of exercising this Warrant
for cash or cancellation of indebtedness, the Holder may elect by the surrender
of this Warrant, or a portion of this Warrant, to the Company at the principal
office of the Company, with the net issue exercise notice annexed hereto duly
executed, to receive, without the payment by the Holder of any additional
consideration, such number of fully paid and nonassessable Warrant Shares 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

 

1

 

exercised, the number of shares of Stock for which
the Warrant is then being exercised pursuant to 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 one share of
Stock as of a particular date (the “Determination Date”) shall be determined by
the Company’s Board of Directors in good faith; provided, however, that
(i) if, as of the Determination Date, there has been a public market for
the Stock for at least 11 trading days, the fair market value per share shall
be the average of the closing prices (or bid prices if there are no such
closing prices) of the Stock quoted in the over-the-counter market summary or
the closing price quoted on the Nasdaq National Market or on the primary
national securities exchange on which the Stock is then listed, whichever is
applicable, as published in the New York City Edition of the Wall Street
Journal (or, if not so reported, as otherwise reported by the Nasdaq National
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 first
sold by the Company in a firm commitment public offering under the Securities
Act of 1933, as amended (the “Act”), or if there has been a public market for
the Stock for fewer than 11 trading days, the fair market value shall be the
initial public offering price (before deducting commissions, discounts or
expenses).

 

5.                                      Adjustment of Exercise Price.  The
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events as follows:

 

5.1.                            Subdivision or Combination of Stock.  If
at any time or from time to time after the Commencement Date, the Company shall
subdivide its outstanding shares of Stock, the Exercise Price in effect immediately
prior to such subdivision shall be reduced proportionately and the number of
Warrant Shares (calculated to the nearest whole share) shall be increased
proportionately, and conversely, in the event the outstanding shares of Stock
shall be combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be increased proportionately and
the number of Warrant Shares (calculated to the nearest whole share) shall be
decreased proportionately.

 

5.2                               Adjustment for Stock Dividends.  If
at any time after the Commencement Date the Company shall declare a dividend or
make any other distribution upon any class or series of stock of the Company
payable in shares of Stock or securities convertible into shares of Stock, the
Exercise Price and the number of shares to be obtained upon exercise of this
Warrant shall be adjusted proportionately to reflect the issuance of any shares
of Stock or convertible securities, as the case may be, issuable in payment of
such dividend or distribution.

 

5.3                               Reorganization, Reclassification, Consolidation, Merger or
Sale.  In the event of any reorganization of the
capital stock of the Company, a consolidation or merger of the Company with
another corporation (other than a merger in which the Company is the surviving
corporation), the sale of all or substantially all of the Company’s assets or
any transaction involving the transfer of a majority of the voting power over
the capital stock of the Company effected in a manner such that holders of
Stock shall be entitled to receive stock, securities, or other assets or
property, in each case, at any time after the Commencement Date, then, as a
condition of such reorganization, reclassification, consolidation, merger, sale
or transaction, lawful and adequate provision shall be made whereby the Holder
hereof shall have the right to purchase and receive (in lieu of the shares
of the Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock, securities or other assets or property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Stock
equal to the number of shares of such Stock immediately theretofore purchasable
and receivable upon the 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 made with respect to the rights and interests of
the Holder such that the provisions hereof (including, without limitation,
provisions for adjustments of the Exercise Price and of the number of shares
purchasable and receivable upon the exercise of this Warrant) thereafter shall
be applicable, as nearly practicable, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.

 

5.4                               Issuance of Additional Shares.  The
Exercise Price shall be subject to adjustment upon the issuance of Stock or
Convertible Securities so long as any Warrant is then issued and outstanding.

 

(a)                                  Special Definitions.  For purposes of this
Section 5.4, the following definitions shall apply:

 

(1)                                 “Option” shall mean contractual rights,
options or warrants to subscribe for, purchase or otherwise acquire either
Stock or Convertible Securities.

 

(2)                                 “Convertible Securities” shall mean any
evidences of indebtedness, shares (other

 

2

 

than Stock and Options) or other securities directly or indirectly
convertible into or exchangeable for Stock.

 

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

 

(i)                                    pursuant to Options or Convertible Securities
outstanding on the Commencement Date;

 

 

(ii)                                to directors, officers or employees of, or
consultants to, the Corporation pursuant to a stock grant or option plan or
other employee stock incentive program (collectively, the “Plans”) approved by
the Board of Directors, subject to adjustment for all subdivisions and
combinations;

 

(iii)                            as a dividend or distribution on the Warrant
or any event for which adjustment is made pursuant to Section 5 hereof; or

 

(iv)                               by way of dividend or other distribution on
shares excluded from the definition of Additional Shares of Stock by the
foregoing clauses (i), (ii) or (iii) or this clause (iv) or on shares of Stock
so excluded.

 

(b)                                  No Adjustment of Exercise Price.  No
adjustment of the Exercise Price shall be made in respect of the issuance of
Additional Shares of Stock unless the consideration per share for an Additional
Share of Stock issued or deemed to be issued by the Company is less than the
Exercise Price in effect on the date of, and immediately prior to, the issue of
such Additional Shares of Stock.

 

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

 

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

 

(i)                                    no further adjustment in the Exercise Price
shall be made upon the subsequent issue of Convertible Securities or shares of Stock
upon the exercise of such Options or conversion or exchange of such Convertible
Securities;

 

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

 

(2)                                 Upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Exercise Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon such expiration, be
recomputed as if:

 

(i)                                    in the case of Convertible Securities or
Options for Stock, the only Additional Shares of Stock issued were the shares
of Stock, if any, actually issued upon the exercise of such Options or
conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Company for
the issue of all such Options, whether or not exercised, plus the consideration
actually received by the Company upon such exercise, or for the issue of all
such Convertible Securities which were actually converted or exchanged, plus
the additional consideration, if any, actually received by the Company upon
such conversion or exchange, and

 

(ii)                                in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the consideration
received by the Company for the Additional Shares of Stock actually deemed to
have been then issued was the consideration actually received by the Company
for the issue of all such Options, whether or not exercised, plus the
consideration actually received by the

 

3

 

Company upon the issue of the Convertible Securities with respect to
which such Options were actually exercised.

 

(3)                                 No readjustment pursuant to clause (2) above
shall have the effect of increasing the Exercise Price to an amount which
exceeds the lower of (x) such Exercise Price on the original adjustment
date, or (y) such Exercise Price that would have resulted from any
issuance of Additional Shares of Stock between the original adjustment date and
such readjustment date.

 

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

 

(d)                                  Adjustment of Exercise Price Upon Issuance of Additional
Shares of Stock.  In the event the Company shall issue
Additional Shares of Stock (including Additional Shares of Stock deemed to be
issued pursuant to Section 5.4(c)) without consideration or for a
consideration 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 Price
by a fraction:

 

(1)                                 the numerator of which shall be (i) the
number of shares of Stock outstanding immediately prior to the issuance of such
Additional Shares of Stock (calculated on a fully diluted basis assuming the
exercise or conversion of all Options or Convertible Securities which are
exercisable or convertible at the time such calculation is being made), plus
(ii) the number of shares of Stock which the net aggregate consideration, if
any, received by the Company for the total number of such Additional Shares of
Stock so issued would purchase at the Exercise Price in effect immediately
prior to such issuance, and

 

(2)                                 the denominator of which shall be (i) the
number of shares of Stock outstanding immediately prior to the issuance of such
Additional Shares of Stock (calculated on a fully diluted basis assuming the
exercise or conversion of all Options or Convertible Securities which are
exercisable or convertible at the time such calculation is being made), plus
(ii) the number of such Additional Shares of Stock so issued.

 

(e)                                  Determination of Consideration.  For
purposes of this Section 5.4, the consideration received by the Company
for the issue of any Additional Shares of Stock shall be computed as follows:

 

(1)                                 Cash and Property.  Such consideration shall:

 

(i)                                    insofar as it consists of cash, be computed
at the aggregate amount of cash received by the Company excluding amounts paid
or payable for accrued interest or accrued dividends;

 

(ii)                                insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and

 

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

 

(2)                                 Options and Convertible Securities.  The
consideration per share received by the Company for Additional Shares of Stock
deemed to have been issued pursuant to Section 5.4(c)(1), relating to
Options and Convertible Securities, shall be determined by dividing:

 

(i)                                    the total amount, if any, received or
receivable by the Company as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Company upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities, by

 

(ii)                                the maximum number of shares of Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.

 

5.5                               Minimal Adjustments.  No adjustment in the Exercise
Price subject to this Warrant shall be

 

4

 

made if such adjustment would result in a change in the number of
shares represented by this Warrant of less than one share (the “Adjustment
Threshold Amount”).  Any adjustment not
made because the Adjustment Threshold Amount is not satisfied 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 at least the
Adjustment Threshold Amount or (b) the Warrant is exercised.

 

5.6                               Certificate as to Adjustments.  Upon
the occurrence of each adjustment or readjustment of the Exercise Price
pursuant to this Section 5, the Warrant shall, without any action on the
part of the holder thereof, be adjusted in accordance with this Section 5,
and the Company promptly shall compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to the Holder a
certificate setting forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based.

 

6.                                      Notices of Record Date.  Upon (a) any
establishment by the Company of a record date of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or right or option to acquire
securities of the Company, or any other right, or (b) any capital reorganization,
reclassification, recapitalization, merger or consolidation of the Company with
or into any other corporation, any transfer of all or substantially 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 Holder at least 10
days, or such longer period as may be required by law, prior to the record date
specified therein, a notice specifying (i) the date established as the record
date for the purpose of such dividend, distribution, option or right and a
description of such dividend, distribution, option or right, (ii) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective
and (iii) the date, if any, fixed as to when the holders of record of Stock (or
other securities at that time receivable upon exercise of the Warrant) shall be
entitled to exchange their shares of Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up.

 

7.                                      No Dilution or Impairment.  The Company will not, by
amendment of its Certificate of Incorporation or By-Laws 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 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 action as may be necessary or appropriate in order to protect the
rights of the Holder against dilution, or other impairment.

 

8.                                      Fractional Shares.  The Company shall not issue
any fractional shares nor scrip representing fractional shares upon exercise of
any portion of this Warrant.

 

9.                                      Representations, Warranties and Covenants. 
This Warrant is issued and delivered by the Company and accepted by each
Holder on the basis of the following representations, warranties and covenants
made by the Company:

 

9.1                               Authority.  The Company has all necessary authority to
issue, execute and deliver this Warrant and to perform its obligations
hereunder.  This Warrant has been duly
authorized, issued, executed and delivered by the Company and is the valid and
binding obligation of the Company, enforceable in accordance with its terms.

 

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

 

10.                               Investment Representations.

 

10.1                        Purchase for Investment.  The Holder represents and
warrants that it is acquiring the Warrant, and upon exercise will hold the
Warrant Shares, solely for its account for investment and not with a view to or
for sale or distribution of said Warrant or Warrant Shares or any part
thereof.  The Holder also represents
that the entire legal and beneficial interests of the Warrant and Warrant
Shares the Holder is acquiring is being acquired for, and will be held for, its
account only.

 

10.2                        Securities Not Registered.  The Holder understands that
the Warrant has not been registered under the Act on the basis that no
distribution or public offering of the stock of the Company is to be
effected.  The Holder realizes that the
basis for the exemption may not be present if, notwithstanding its
representations, it has in mind merely acquiring the securities for a fixed or
determinable period in the future, or for a market rise, or for sale if the
market does not rise.  The Holder has no
such intention.

 

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

 

5

 

exemption from such registration.

 

10.4                        Rule 144.  The Holder is aware that neither the Warrant
nor Warrant Shares may be sold pursuant to Rule 144 adopted under the Act
unless certain conditions are met and until the Holder has held the Warrant
Shares for at least one year.  Among the
conditions for use of the Rule is the availability of current information to
the public about the Company.

 

10.5                        Accredited Investor.  The Holder represents and
warrants that it is a “accredited investor” (as such term is defined in
Regulation D of the Securities Act of 1933, as amended) and understands the
risks associated with an investment in the Company.

 

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

 

11.1                        Restrictions on Transfer.  This Warrant may be
transferred, in whole or in part, subject to the following restrictions.  This Warrant and the Warrant Shares or any
other securities (“Other Securities”) received upon exercise of this Warrant
shall be subject to restrictions on transferability until registered under the
Act, unless an exemption from registration is available.  Until this Warrant and the Warrant Shares or
Other Securities are so registered, this Warrant and any certificate for
Warrant Shares or Other Securities issued or issuable upon exercise of this
Warrant shall contain a legend on the face thereof, in form and substance
satisfactory to counsel for the Company, stating that this Warrant, the Warrant
Shares or Other Securities may not be sold, transferred or otherwise disposed
of unless, in the opinion of counsel (which counsel and which opinion shall be
satisfactory to the Company), the Warrant, the Warrant Shares or Other
Securities may be transferred without such registration.

 

11.2                        Procedure for Transfer.  Any transfer permitted
hereunder shall be made by surrender of this Warrant to the Company at its
principal office or to the Transfer Agent at its offices with a duly executed
request to transfer the Warrant, which shall provide adequate information to
effect such transfer and shall be accompanied by funds sufficient to pay any
transfer taxes applicable.  Upon
satisfaction of all transfer conditions, the Company or Transfer Agent shall,
without charge, execute and deliver a new Warrant in the name of the transferee
named in such transfer request, and this Warrant promptly shall be canceled.

 

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

 

11.4                        Warrant Binding Upon Assignee or Successor.  The
terms and conditions of this Warrant shall be binding upon any permitted
assignee and successor of the Holder. 
Any such successor or assignee shall be obligated to and shall
immediately execute an instrument which provides that such party is bound under
the terms of this Warrant.  Any
transfer, assignment or other disposition without such execution by the
proposed transferee, assignee or successor shall be null and void.

 

12.                               Issue Tax.   The issuance of certificates for shares of
Stock upon the exercise of this Warrant shall be made without charge to the
Holder of the Warrant for any issue tax (other than applicable income taxes) in
respect thereof; provided, however, that the Company shall not be required to
pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that 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.                               Governing Law.  This Warrant shall be governed
by and construed in accordance with the laws of the State of California, as
such laws are applied to contracts entered into and wholly to be performed
within the State of California and without giving effect to any principles of
conflicts or choice of law that would result in the application of the laws of
any other jurisdiction.

 

 

IN WITNESS
WHEREOF, the Company
and Holder have executed this Warrant as of December 1st, 2003.

 

	
  HOLDER

  	
  PURCHASESOFT,
  INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Virgil K. Horton Jr.

  	
   

  	
   

  	
  By:

  	
  /s/ Thomas B. Marsh

  	
   

  
	
   

  	
  Virgil Horton

  	
   

  	
   

  	
  Thomas B.
  Marsh

  
	
   

  	
   

  	
   

  	
   

  	
  Secretary
  and Treasurer

  
							

 

6

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