Exhibit 10.23
AMENDMENT AND NOTICE
AMENDMENT AND NOTICE, dated January 13, 2003 (this "Agreement"), is by and
among Direct Insite Corp., a Delaware corporation having an address at 00
Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000 (the "Company"), Metropolitan Venture
Partners II, L.P., a Delaware limited partnership having an address at 000 Xxxx
Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("MetVP") and Tall Oaks Group
L.L.C., a New Jersey limited liability company having an address at 00 Xxxxxxx
Xxxxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("Tall Oaks").
WHEREAS, the Company and MetVP entered into that certain Stock Purchase and
Registration Rights Agreement, dated as of December 24, 2002 (the "December 2002
Agreement"), and that certain Stock Purchase and Registration Rights Agreement,
dated as of September 25, 2002 (the "September 2002 Agreement" and, together
with the December 2002 Agreement, the "Stock Purchase Agreements"), pursuant to
which MetVP purchased an aggregate of 116,823 shares of the Company's Series A
Convertible Preferred Stock, par value $0.0001 per share (the "Preferred
Stock"); and
WHEREAS, pursuant to Section 5.2 of each respective Stock Purchase
Agreement, under certain circumstances specified therein, MetVP was granted a
right of first refusal to provide funds to the Company in the event the Company
desired to incur indebtedness other than Senior Indebtedness (as defined
therein); and
WHEREAS, the Company and MetVP desire to amend Section 5.2 of each Stock
Purchase Agreement to provide that in the event the right of first refusal
provided therein shall be exercised by MetVP, MetVP shall have the right, but
not the obligation, to assign the obligation to provide funds to the Company to
any of MetVP's direct Affiliates (as defined in the Stock Purchase Agreements)
(the "MetVP Affiliates"); and
WHEREAS, the Company has provided MetVP with notice that it desires to
incur indebtedness (other than Senior Indebtedness) in the amount of $500,000
(the "Indebtedness"); and
WHEREAS, MetVP has elected to exercise the right of first refusal in
respect of the Indebtedness and pursuant to the amendment being made in this
Agreement to Section 5.2 of the Stock Purchase Agreements (as set forth below),
MetVP has elected to assign its obligation to provide funds to the Company in
respect of the Indebtedness to Tall Oaks, a MetVP Affiliate, which Indebtedness
is to be evidenced by a promissory note substantially in the form of Exhibit A
attached hereto (the "Note").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions contained herein, the parties hereto, intending to be legally
bound, do hereby agree as follows:
1. Amendment to Stock Purchase Agreements. Section 5.2 of the September
2002 Agreement and the December 2002 Agreement are each hereby amended and
restated in their entirety by the language set forth on Exhibit B hereto.
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2. Assignment of Funding Obligations to Tall Oaks. By executing this
Agreement, MetVP hereby notifies the Company that pursuant to Section 5.2 of the
Stock Purchase Agreements (as amended by Section 1 above), MetVP hereby elects
to exercise the right of first refusal in respect of the Indebtedness pursuant
to clause (b)(ii) of Section 5.2 of the Stock Purchase Agreements (as amended by
Section 1 above) and assigns its obligation to provide funds in respect of the
Indebtedness to Tall Oaks and Tall Oaks hereby accepts such assignment of the
obligation to provide said funds to the Company.
3. Consent of the Company. The Company hereby expressly consents to the
assignment being made by MetVP pursuant to Section 2 above and acknowledges and
agrees that the obligation of MetVP to provide a Funding Notice pursuant to
Section 5.2 of the Stock Purchase Agreements has been timely fulfilled by this
Agreement, in all respects.
4. Representations and Warranties.
(a) The Company hereby represents and warrants to MetVP and Tall Oaks as
follows:
(i) the Company is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(ii) the Company has full power and authority to execute, deliver and
perform its obligations under this Agreement;
(iii) the execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of the
Company;
(iv) this Agreement constitutes the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors; and
(v) the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby by the
Company do not and will not, with or without the giving of notice or the passage
of time or both, when duly executed and delivered by MetVP, violate or conflict
with or result in a breach or termination of any provision of, or constitute a
default under any organizational instrument of the Company or any order,
judgment, decree, statute, regulation, contract, agreement or any other
restriction of any kind or description to which the Company is a party or by
which the Company is or may be bound.
(b) MetVP hereby represents and warrants to the Company as follows:
(i) MetVP is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware;
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(ii) MetVP has full power and authority to execute, deliver and perform its
obligations under this Agreement; and
(iii) the execution, delivery and performance by MetVP of this Agreement
and the consummation by it of the transactions contemplated hereby have been
duly authorized by all necessary partnership action on the part of MetVP.
(c) Tall Oaks hereby represents and warrants to the Company as follows:
(i) Tall Oaks is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of New Jersey;
(ii) Tall Oaks has full power and authority to execute, deliver and perform
its obligations under this Agreement; and
(iii) the execution, delivery and performance by Tall Oaks of this
Agreement and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary limited liability company action on
the part of Tall Oaks.
(iv) Tall Oaks represents and warrants that it is aware of the
confidentiality restrictions set forth in Section 5.6 of the December 2002
Agreement, a copy of which is annexed hereto as Exhibit C, and agrees to comply
with the provisions set forth therein, to the extent applicable.
5. Entire Agreement; Amendments. This Agreement and the Stock Purchase
Agreements, as modified and amended by the terms of this Agreement, constitute
the entire agreement of the parties with respect to the subject matter hereof,
and supersede all other prior agreements and understandings with respect
thereto, whether written or oral. This Agreement may not be modified or amended
except as provided in the December 2002 Purchase Agreement. All terms of the
Stock Purchase Agreements, except as modified hereby, remain in full force and
effect and shall apply to the terms hereof.
6. Execution in Counterparts. This Agreement may be executed in two or more
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, taken together, shall constitute one and the same
Agreement.
7. Successors and Assigns. All covenants and other agreements contained in
this Agreement by or on behalf of any of the parties hereto bind and inure to
the benefit of their respective successors and assigns whether so expressed or
not.
8. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
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9. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
DIRECT INSITE CORP.
By: /s/ Xxxxxx Xxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxx
Title: CFO
METROPOLITAN VENTURE PARTNERS II, L.P.
By: METROPOLITAN VENTURE PARTNERS
(Advisors), L.P., as general partner
By: METROPOLITAN VENTURE PARTNERS
CORP., as general partner
By: /s/ Xxxxxxx Xxxxx
-------------------------
Xxxxxxx Xxxxx
Vice President of Finance
TALL OAKS GROUP L.L.C.
By: /s/ Xxxxxxxx X. Xxxx
-------------------------
Name: Xxxxxxxx X. Xxxx
Title: Manager
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EXHIBIT A
PROMISSORY NOTE
See attached.
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EXHIBIT B
SECTION 5.2
5.2 Incurrence of Indebtedness; Right of First Refusal.
(a) If, at any time when the Purchaser owns the Threshold Percentage and at
least 25% of the Preferred Stock outstanding immediately following the Closing,
the Company desires to incur any indebtedness (other than Senior Indebtedness),
the Company shall deliver a written notice to the Purchaser of the Company's
good faith desire to incur such indebtedness, specifying the amount of
indebtedness the Company desires to incur and a detailed explanation for the
reason it desires to incur such indebtedness (the "Offer Notice"). The Offer
Notice shall set forth the principal amount of the desired indebtedness, the
term, the facilities for payment, schedule of payments, interest rate, and any
other material terms and conditions of the desired indebtedness.
(b) As promptly as practicable but in no event later than 15 calendar days
after receipt of an Offer Notice (the "Offer Period"), the Purchaser shall have
the right, but not the obligation, to elect to (i) provide the Company with all
the financing so desired, (ii) assign its obligation to provide the Company with
all the financing so desired to one or more of the Company's direct Affiliates
or (iii) provide the Company with less than all of the financing so desired and
assign its obligation to provide the Company with any remaining portion of the
financing so desired and not provided by the Company to one or more of the
Company's direct Affiliates, and whether in the case of clause (i), (ii) or
(iii) above, in accordance with such Offer Notice. If the Purchaser makes an
election pursuant to this clause (b), the Purchaser shall give written notice to
the Company, prior to the expiration of the Offer Period, of the Purchaser's
election and indicate whether the Purchaser has made such election in accordance
with clause (i), (ii) or (iii) of this clause (b) (a "Funding Notice"). In the
event such election is made in accordance with clause (ii) or (iii) of this
clause (b), the Funding Notice shall state the name or names of the direct
Affiliates to whom the Purchaser has assigned its obligation hereunder (the
"Specified Affiliates").
(c) Any financing to be provided by the Purchaser and/or any of its direct
Affiliate(s) pursuant to this Section 5.2 shall close within fifteen (15)
calendar days after the date of the applicable Funding Notice. The Company and
the Purchaser and/or the Specified Affiliate(s) shall enter into an agreement to
effect such transaction on the terms and conditions set forth in the Offer
Notice and with such representations, warranties, covenants, conditions and
indemnities as are customary under the circumstances and otherwise commercially
reasonable.
(d) In the event the Purchaser declines (by written notice declining the
offer pursuant to the Offer Notice) or shall fail to provide a Funding Notice
prior to the expiration of the Offer Period (the "Date of Rejection"), then the
Company shall have the right to engage in a transaction pursuant to the terms
set forth in the Offer Notice at any time within 45 days after the Date of
Rejection (the "Sale Period") upon terms and conditions no more favorable to
such party than those specified in the Offer Notice.
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(e) For the purposes of this Section 5.2, "terms and conditions no more
favorable" shall mean that the price, facilities for payment, schedule of
payments, interest rates, indemnification provisions and any other material
terms and conditions of the agreement pursuant to which such financing is
obtained by the Company shall not, in the aggregate, be economically more
favorable to such Person than the terms and conditions offered to the Purchaser.
(f) If such financing is not obtained by the Company within the Sale
Period, any proposed incurrence of indebtedness (other than Senior Indebtedness)
shall again be subject to the notice requirements and rights of first refusal
set forth in this Section 5.2.
(g) For purposes of this Section 5.2 only, the term "the Company" shall be
deemed to include the Company and any of its subsidiaries.
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EXHIBIT C
SECTION 5.6
5.6 Confidentiality. The Purchaser covenants and agrees to keep
confidential any and all material non-public information which it has heretofore
obtained or shall hereafter obtain, directly or indirectly, from the Company
pursuant to this Agreement or otherwise, and agrees not to use the same except
for the purpose of this Agreement or to disclose the same to any party except as
provided below, without the Company's prior written consent; provided that the
terms of this Section 5.6 shall not extend to any such information that:
(a) is already publicly known;
(a) has become publicly known without any fault of the Purchaser or
anyone to whom the Purchaser has made disclosure in compliance
with the terms of this Section 5.6; or
(b) is required to be disclosed to any governmental authorities or
courts of law as a result of operation of law, regulation, or
court order; provided, however, that the Purchaser shall have
first given prompt written notice of such requirement to the
Company (if permissible) and cooperates with the Company to
restrict such disclosure and/or obtain confidential treatment
thereof.
The foregoing notwithstanding, the Purchaser may disclose such information to
each of its directors, officers, employees, partners (including its limited
partners), members, managers and representatives, which representatives have a
need to know such information; provided that the Purchaser informs such persons
of the restrictions set forth in this Section 5.6 with respect to such
information and such persons agree to comply with the provisions of this Section
5.6. The Purchaser further agrees to give prompt notice to the Company of any
disclosure made by the Purchaser or any of its directors, officers, employees,
partners (including limited partners), members, managers or representatives in
breach of this Section 5.6, to the extent the Purchaser has knowledge of such
disclosure; provided that the Purchaser shall have no liability for losses
incurred by the Company or any of its directors, officers, employees,
stockholders or representatives solely as the result of the Company's failure,
following its actual receipt of notice from the Purchaser of disclosure of
information in breach of this Agreement, to make prompt public disclosure of the
information so disclosed. For purposes of this Section 5.6, the knowledge of the
Purchaser shall mean the actual knowledge of Xxxxx X. Xxxxxx or any successors
to him as Managing Partner of the Purchaser.
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