SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Internet Commerce Corporation
(Name of Issuer)
Class A Common Stock, par value $.01
(Title of Class of Securities)
46059F109
(CUSIP Number)
Kim D. Cooke, Managing Director of
Blue Water Capital II, L.L.C., Managing Member of
Blue Water Venture Fund II, L.L.C.
1420 Beverly Road, Suite 300
McLean, Virginia 22101
(703) 790-8821
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
with a copy to:
Richard K. A. Becker, Esq.
Hogan & Hartson L.L.P.
8300 Greensboro Drive
McLean, Virginia 22102-3606
(703) 610-6100
November 6, 2000
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: |_|
Page 1 of 23 Pages
Exhibit Index appears on page 9
<PAGE>
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Schedule 13D Page 2 of 23
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1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blue Water Venture Fund II, L.L.C.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_|
(b)|_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO (see Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 763,637
OWNED BY ---------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
0
---------------------------------------
9 SOLE DISPOSITIVE POWER
763,637
---------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
763,637
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.12%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
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<PAGE>
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Schedule 13D Page 3 of 23
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1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Blue Water Capital II, L.L.C.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_|
(b)|_|
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3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO (see Item 3)
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) |_|
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 763,637
OWNED BY ---------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
0
---------------------------------------
9 SOLE DISPOSITIVE POWER
763,637
---------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
763,637
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES
|_|
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.12%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
<PAGE>
Schedule 13D
Item 1. Security and Issuer.
This statement on Schedule 13D (this "Schedule 13D") relates to the
Class A Common Stock, par value $.01 per share (the "Common Stock"), of Internet
Commerce Corporation, a Delaware Corporation (the "Company"). The principal
executive office of the Company is located at 805 Third Avenue, New York, New
York 10022.
Item 2. Identity and Background.
This Schedule 13D is being filed on behalf of Blue Water Venture Fund
II, L.L.C., a Delaware limited liability company engaged in private equity
investments ("Blue Water Venture Fund"), and Blue Water Capital II, L.L.C., a
Delaware limited liability company ("Blue Water Capital"), which is the Managing
Member of Blue Water Venture Fund (collectively, the "Reporting Persons").
Michael H. Acheson, Henry D. Barratt, Jr., Kim D. Cooke, Reid R. Miles and
Wilbur M. Priester are each Managing Directors of Blue Water Capital
(collectively, Messrs. Acheson, Barratt, Cooke, Miles and Priester are the
"Managing Directors"). The principal business address and the principal office
address of each of the Reporting Persons and the Managing Directors is 1420
Beverly Road, Suite 300, McLean, Virginia 22101. Each of the Managing Directors
is a United States citizen.
Neither of the Reporting Persons and none of the Managing Directors
has, during the five years prior to the date of this Schedule 13D, been
convicted in a criminal proceeding.
Neither of the Reporting Persons and none of the Managing Directors
has, during the five years prior to the date of this Schedule 13D, been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction, as a result of which such Reporting Person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or State securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On June 14, 2000, the Company entered into an Agreement and Plan of
Merger among the Company, ICC Acquisition Corporation, Inc., a wholly-owned
subsidiary of the Company, RTCI, Jeffrey W. LeRose and Blue Water Venture Fund
(such Agreement, the "Merger Agreement").
On November 6, 2000, the transactions contemplated by the Merger
Agreement were consummated and ICC Acquisition Corporation, Inc. merged with and
into RTCI (the "Merger") with RTCI surviving the Merger as a wholly-owned
subsidiary of the Company. Blue Water Venture Fund received 763,637 shares of
Common Stock and approximately $663,000 in cash pursuant to the Merger in
exchange for all of its ownership interest in RTCI.
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<PAGE>
Item 4. Purpose of Transaction.
Blue Water Venture Fund acquired the shares of Common Stock for
investment in consideration for its ownership interest in RTCI at the time of
the Merger.
(a) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in the
acquisition by any person of additional securities of the Company or the
disposition of securities of the Company.
(b) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries.
(c) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in a sale
or transfer of a material amount of assets of the Company or any of its
subsidiaries.
(d) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in any
change in the present board of directors or management of the Company, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board.
(e) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in any
material change in the present capitalization or dividend policy of the Company.
(f) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in any
other material change in the Company's business or corporate structure.
(g) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in changes
in the Company's charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Company by any
person.
(h) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in causing
a class of securities of the Company to be delisted from a national securities
exchange or to cease to be authorized to be quoted in an inter-dealer quotation
system of a registered national securities association.
(i) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in a class
of equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended.
(j) Neither of the Reporting Persons and none of the Managing Directors
currently has any plans or proposals which relate to or would result in any
action similar to any of those enumerated above.
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<PAGE>
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Persons beneficially own 763,637 shares of Common Stock, which
represents approximately 8.12% of the issued and outstanding shares of Common
Stock based on information provided by the Company. Each of the Managing
Directors disclaims any beneficial ownership of such shares except to the extent
of his pecuniary interest therein.
(b) The Reporting Persons have sole power to vote or to direct the vote and sole
power to dispose or to direct the disposition of all 763,637 shares of Common
Stock reported in Item 5(a) of this Schedule 13D. The Managing Directors have
collective, but not individual, power to vote or to direct the vote and power to
dispose or to direct the disposition of such shares.
(c) Neither of the Reporting Persons and none of the Managing Directors has had
any transactions in the Common Stock (besides the Merger) that were effected
during the past sixty days.
(d) No other person has the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of, such shares of Common
Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to the Securities of the Issuer.
Blue Water Venture Fund, Jeffrey W. LeRose and the Company have entered
into a Registration Rights Agreement with respect to the shares of Common Stock
held by Blue Water Venture Fund and Jeffrey W. LeRose which were issued pursuant
to the Merger Agreement. Under the terms of the Registration Rights Agreement,
the Company shall use its commercially reasonable best efforts to file no later
than forty-five days after the effective time of the Merger and use its
commercially reasonable best efforts to cause to become effective within one
hundred and twenty days after filing, a Registration Statement on Form S-3
covering the resale of all of the shares of Common Stock covered by the
Registration Rights Agreement (the "Registrable Securities") and to remain
effective continuously for the period ending on the earlier of (A) one year
after the effective time of the Merger and (B) the date on which all of the
shares of Common Stock covered by such Registration Statement have been sold and
the distribution contemplated by such Registration Statement has been completed.
In addition, holders of at least 20% of the Registrable Securities are entitled
to two demand registration rights at the expense of the Company. All holders of
Registrable Securities have unlimited piggyback rights. All registrations of
Registrable Securities pursuant to the Registration Rights Agreement are subject
to standard cut-backs, and hold-backs and may be suspended based on the
occurrence of a material development condition.
Except as disclosed in this Schedule 13D, the Reporting Persons and the
Managing Directors do not have any other contracts, arrangements, understandings
or other relationships with respect to the securities of the Company.
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<PAGE>
Item 7. Material to be Filed as Exhibits.
Exhibit A: Merger Agreement. Incorporated by reference to the Company's
Periodic Report on Form 8-K filed with the Securities and
Exchange Commission on June 15, 2000.
Exhibit B: Registration Rights Agreement.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: November 16, 2000
BLUE WATER VENTURE FUND II, L.L.C.
By: Blue Water Capital II, L.L.C.,
its Managing Member
By: /s/ Kim D. Cooke
-------------------------------
Kim D. Cooke
Managing Director
Blue Water Capital II, L.L.C.
BLUE WATER CAPITAL II, L.L.C.
By: /s/ Kim D. Cooke
-------------------------------
Kim D. Cooke
Managing Director
Blue Water Capital II, L.L.C.
<PAGE>
Exhibit Index
Exhibit Description Page
------- ----------- ----
A Merger Agreement Incorporated by reference
B Registration Right Agreement 10
<PAGE>
Exhibit B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as
of November 6, 2000, by and among Internet Commerce Corporation, a Delaware
corporation (the "Company"), and the Persons set forth on the signature pages to
this Agreement (the "Stockholders").
WHEREAS, the Company, ICC Acquisition Corporation, Inc., a
North Carolina corporation, all of whose capital stock is owned directly by the
Company, Research Triangle Commerce, Inc., a North Carolina corporation ("RTC"),
and the Persons listed on the signature pages thereto have entered into an
Agreement and Plan of Merger (the "Merger Agreement") whereby the Company will
acquire RTC by merger (the "Merger") and will issue the Registrable Securities
to the Stockholders;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth, the Company and the
Stockholders, intending to be legally bound, hereby agree as follows.
Section 1. Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" of any Person means any other Person who either,
directly or indirectly, is in control of, is controlled by, or is under common
control with such Person. For purposes of this definition, the term "control"
(including the terms "controlling" "controlled by" and under "common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Business Day" shall mean any day which is not a Saturday or
Sunday or legal holiday on which banks are authorized or required to be closed
in New York, New York.
"Capital Stock" shall mean all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"Common Stock" shall mean the Class A Common Stock, par value
$.01 per share, of the Company.
"Current Market Value" shall mean the average closing price on
The Nasdaq SmallCap Market of the Company's Common Stock for the ten (10)
consecutive trading days ending one (1) day prior to the date of any
calculation; provided, however, that if there are no trades on any such trading
day, the closing price shall be the average of the closing bid and asked prices
for such day; provided, further, however, that if the Common Stock is not then
listed on The Nasdaq SmallCap Market, the Current Market Value shall mean the
average closing price either of the principal stock exchange on which the Common
Stock is listed, or of the quotation system, operated by a national securities
association, on which the Common Stock is quoted, for the ten (10) consecutive
trading days ending one (1) day prior to the date of any calculation; however,
if there are no trades on any such trading day, the closing price shall be the
average of the closing bid and asked prices for such day.
<PAGE>
"Delay Notice" shall have the meaning set forth in Section
6(b) hereof.
"Demand Registration Period" shall have the meaning set forth
in Section 3(c) hereof.
"Demand Registrations" shall have the meaning set forth in
Section 3(b) hereof.
"Encumbrance" means any lien, pledge, mortgage, security
interest, charge, restriction, adverse claim or other encumbrance of any kind or
nature whatsoever.
"Hold-Back Election" shall have the meaning set forth in
Section 6(a) hereof.
"Material Development Condition" shall have the meaning set
forth in Section 6(b) hereof.
"Merger Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Merger Registration" shall have the meaning set forth in
Section 3(a) hereof.
"Merger Registration Period" shall have the meaning set forth
in Section 3(a) hereof.
"Other Holders" shall have the meaning set forth in Section
3(d) hereof.
"Person" shall mean an individual, partnership, corporation,
limited liability company, joint venture, trust or unincorporated organization
or a government or agency or political subdivision thereof or any other similar
entity.
"Prospectus" shall mean the prospectus included in any
Registration Statement, as amended or supplemented by a prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Registrable Securities" shall mean the shares of Common Stock
issued to the Stockholders by the Company pursuant to the Merger Agreement and
any other securities issued or issuable as a result of or in connection with any
stock dividend, stock split or reverse stock split, combination,
recapitalization, reclassification, merger or consolidation, exchange or
distribution or otherwise in respect of such Common Stock.
"Registration Expenses" shall have the meaning set forth in
Section 7 hereof.
"Registration Statement" shall mean any registration statement
which covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus included therein, all amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
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<PAGE>
"Requesting Securityholder" shall have the meaning set forth
in Section 4 hereof.
"Restricted Securities" shall have the meaning set forth in
Section 2 hereof.
"Rule 144" shall mean Rule 144 promulgated under the
Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the SEC.
"Rule 903" shall mean Rule 903 promulgated under the
Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the SEC.
"Rule 904" shall mean Rule 904 promulgated under the
Securities Act, as amended from time to time, or any similar successor rule
thereto that may be promulgated by the SEC.
"SEC" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended (or any similar successor federal statute), and the rules and
regulations thereunder, as the same are in effect from time to time.
"Underwritten Offering" shall mean an offering registered
under the Securities Act in which securities of the Company are sold to an
underwriter for reoffering to the public.
Other capitalized terms not defined herein shall have the
meaning given such terms in the Merger Agreement.
Section 2. Securities Subject to this Agreement. The
securities entitled to the benefits of this Agreement are the Registrable
Securities but, with respect to any particular Registrable Security, only so
long as such security continues to be a Restricted Security. A Registrable
Security that has ceased to be a Registrable Security cannot thereafter become a
Registrable Security. As used herein, a Restricted Security is a Registrable
Security which has not been effectively registered under the Securities Act and
distributed in accordance with an effective Registration Statement and which has
not been distributed by the Stockholders pursuant to Rule 144, Rule 903 or Rule
904, unless, in the case of a Registrable Security distributed pursuant to Rule
903 or 904, any applicable restricted period has not expired or the SEC or its
staff have taken the position in a published release, ruling or no-action letter
that securities distributed under Rule 903 or 904 are ineligible for resale in
the United States under Section 4(1) of the Securities Act notwithstanding
expiration of the applicable restricted period.
Section 3. Merger and Demand Registrations.
(a) Merger Registration. The Company shall use its
commercially reasonable best efforts to file no later than the later of (i)
forty-five (45) days after the Effective Time of the Merger and (ii) fifteen
(15) days after the Company receives all information from the Stockholders which
it deems reasonably necessary to file (provided the Company requests such
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<PAGE>
information in writing not more than thirty (30) days after the Effective Time
of the Merger), and use its commercially reasonable best efforts to cause to
become effective within one hundred and twenty (120) days after filing, a
Registration Statement on Form S-3 (or any successor form), covering the resale
of all of the Registrable Securities and to remain effective, subject to clauses
(2) and (3) of the last sentence of Section 6(b) hereof, continuously for the
period (the "Merger Registration Period") ending on the earlier of (A) one year
after the Effective Time of the Merger, and (B) the date on which all
Registrable Securities covered by such Registration Statement have been sold and
the distribution contemplated thereby has been completed (the "Merger
Registration"). In the event either the registration statement is not filed by
the later of (i) and (ii) of this Section 3(a) or does not become effective
within one hundred and twenty (120) days after filing, the Company shall issue
to the Stockholders an additional number of shares of Common Stock equal to five
percent (5%) of the number of shares of Registrable Securities then held by each
Stockholder for each period of thirty (30) days or part of thirty (30) days the
Company is late.
(b) Demand. Any Stockholder then holding in excess of twenty
percent (20%) of the Registrable Securities may request the Company, in writing,
to effect the registration of all or such portion of the Registrable Securities
as such Stockholders shall specify; provided, that only two (2) demands may be
made pursuant to this Section 3(b). The Company shall promptly give notice of
such request to the other holders of Registrable Securities, who may then
request, in writing, within ten (10) days after the giving of such notice by the
Company to have any or all of their Registrable Securities included in the
Demand Registration. The Company shall use its commercially reasonable best
efforts to file, as promptly as reasonably practicable, but in any event no
later than forty-five (45) after receipt of such written request pursuant to
this Section 3(b), a Registration Statement on Form S-3 (or any successor form)
covering all Registrable Securities which the Company has been so requested to
register (the "Demand Registrations"). Each of the Demand Registrations effected
pursuant to this Agreement shall be pursuant to an Underwritten Offering if so
requested by the Stockholders; provided, however, that if the Stockholders do
not so request an Underwritten Offering, the Company may require one.
(c) Effectiveness of Demand Registration Statement. Subject to
the provisions of Sections 6(b) and (c) hereof, the Company agrees to use its
commercially reasonable best efforts to (i) cause the Registration Statement(s)
relating to each Demand Registration described in Section 3(b) hereof to become
effective as promptly as reasonably practicable, and (ii) thereafter keep each
such Registration Statement effective continuously for the period (the "Demand
Registration Period") ending, subject to the second sentence of Section 5(b)
hereof and clauses (2) and (3) of the last sentence of Section 6(b) hereof, on
the earlier of (A) thirty (30) days and (B) the date on which all Registrable
Securities covered by each such Registration Statement have been sold and the
distribution contemplated thereby has been completed.
(d) Inclusion of Other Securities. The Company and any other
holder of the Company's securities who has registration rights ("Other Holders")
may include its securities in the Merger Registration and either of the Demand
Registrations effected pursuant to this Section 3; provided, however, that if
the managing underwriter or underwriters of any such Merger Registration or
Demand Registration which is an Underwritten Offering advises the Stockholders
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<PAGE>
that the total amount or kind of securities which the Stockholders and the
Company or such Other Holders propose to include in such registration is
sufficiently large to adversely affect the success of such Merger Registration
or such proposed Demand Registration, then the amount or kind of securities to
be offered for the account of the Company or any Other Holders shall be reduced
pro rata based upon the aggregate number of securities to be offered by the
Company and the Other Holders to the extent necessary before the Registrable
Securities offered by the Stockholders are so reduced.
(e) No registration of Registrable Securities which shall not
have become effective and remained effective for the Demand Registration Period
shall be deemed to be a Demand Registration for any purpose of this Section 3.
Section 4. Piggyback Registration. If the Company at any time
proposes to file a registration statement with respect to its Common Stock,
whether (i) for its own account (other than a registration statement on Forms
S-4 or S-8 (or any successor or substantially similar form), and other than in
connection with (A) an employee stock option, stock purchase or compensation
plan or of securities issued or issuable pursuant to any such plan, (B) a
dividend reinvestment plan, or (C) a "shelf" registration pursuant to Rule 415
under the Securities Act) or (ii) for the account of an Other Holder or Other
Holders that have requested such registration (a "Requesting Securityholder"),
then the Company shall in each case give written notice of such proposed filing
to the Stockholders at least twenty (20) days before the anticipated filing date
of any such registration statement by the Company, and such notice shall offer
to the Stockholders the opportunity to have any or all of the Registrable
Securities held by the Stockholders included in such registration statement. If
the Stockholders desire to have their Registrable Securities registered under
this Section 4 they shall so advise the Company in writing within ten (10) days
after the date of receipt of such notice (which requests shall set forth the
amount of Registrable Securities for which registration is requested), and the
Company shall use its commercially reasonable best efforts to include in such
Registration Statement all such Registrable Securities so requested to be
included therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of any such proposed public offering that is an Underwritten
Offering advises the Company that the total amount or kind of securities which
the Stockholders, the Company and any other Persons intended to be included in
such proposed Underwritten Offering is sufficiently large to adversely affect
the success of such proposed public offering, then the amount or kind of
securities to be offered for the accounts of the Stockholders and the Other
Holders shall be reduced pro rata, based upon the aggregate number of securities
to be offered for the accounts of the Stockholders and all Other Holders (except
the Company and the Requesting Securityholder) of securities intended to be
included in such Underwritten Offering and the number or kind of securities to
be offered for the account of the Stockholders, to the extent necessary to
reduce the total amount or kind of securities to be included in such proposed
Underwritten Offering to the amount or kind recommended by such managing
underwriter or underwriters before the securities offered by the Company or any
Requesting Securityholder are so reduced. Anything to the contrary in this
Agreement notwithstanding, the Company may withdraw or postpone a Registration
Statement referred to in this Section 4 at any time before it becomes effective
or withdraw, postpone or terminate the offering after it becomes effective
without any obligation or liability to the Stockholders.
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<PAGE>
Section 5. Registration Procedures.
(a) General. In connection with the Company's registration
obligations pursuant to Section 3 and, to the extent applicable, Section 4
hereof, the Company will:
(i) prepare and file with the SEC a new Registration
Statement or such amendments and post-effective amendments to an
existing Registration Statement as may be necessary to keep such
Registration Statement effective for the time periods set forth in
Sections 3(a) and 3(c), provided that no Registration Statement shall
be required to remain in effect after all Registrable Securities
covered by such Registration Statement have been sold and distributed
as contemplated by such Registration Statement, and provided, further,
that as soon as reasonably practicable, but in no event later than
three (3) Business Days before filing such Registration Statement, the
Company shall furnish to the Stockholders and the underwriters, if any,
copies of all such documents proposed to be filed, which documents
shall be subject to the review of Stockholders and underwriters and
their respective counsel;
(ii) notify the Stockholders and the managing
underwriters and their respective counsel, if any, promptly (1) when a
new Registration Statement, Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any new
Registration Statement or post-effective amendment, when it has become
effective, (2) of any request by the SEC for amendments or supplements
to any Registration Statement or Prospectus or for additional
information, (3) of the issuance by the SEC of any comments with
respect to any filing, (4) of any stop order suspending the
effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose, (5) of any suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and (6) if there is a misstatement or omission of a
material fact in any Registration Statement, Prospectus or any document
incorporated therein by reference or if any event occurs which requires
the making of any changes in any Registration Statement, Prospectus or
any document incorporated therein by reference in order to make the
statements therein (in the case of any Prospectus, in the light of the
circumstances under which they were made) not misleading;
(iii) if reasonably requested by the managing
underwriter or underwriters or the Stockholders, promptly incorporate
in a Prospectus supplement or post-effective amendment such information
as the managing underwriters and the Stockholders agree should be
included therein relating to the sale of the Registrable Securities,
including, without limitation, information with respect to the
aggregate number of shares of Registrable Securities being sold to such
underwriters, the purchase price being paid therefor by such
underwriters and with respect to any other terms of the Underwritten
Offering of the Registrable Securities to be sold in such offering; and
promptly make all required filings of such Prospectus supplement or
post-effective amendment;
(iv) furnish to the Stockholders and each managing
underwriter, if any, and their respective counsel, without charge, as
many conformed copies as may
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<PAGE>
reasonably be requested of the then effective Registration Statement
and any post-effective amendments thereto, including financial
statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(v) deliver to the Stockholders and the underwriters,
if any, and their respective counsel, without charge, as many copies of
the then effective Prospectus (including each prospectus subject to
completion) and any amendments or supplements thereto as such Persons
may reasonably request;
(vi) use commercially reasonable best efforts to
register or qualify or cooperate with the Stockholders, the
underwriters, if any, and their respective counsel in connection with
the registration or qualification of such Registrable Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions as the Stockholders or underwriter reasonably requests in
writing; provided, however, that the Company will not be required to
(1) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify, but for this paragraph (vi), (2)
subject itself to general taxation in any such jurisdiction or (3) file
a general consent to service of process in any such jurisdiction;
(vii) cooperate with the Stockholders and the
managing underwriters, if any, and their respective counsel, to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any
restrictive legends; and enable such Registrable Securities to be in
such denominations and registered in such names as the managing
underwriters may request at least two (2) Business Days prior to any
sale of Registrable Securities to the underwriters;
(viii) otherwise use its commercially reasonable best
efforts to comply in all material respects with all applicable rules
and regulations of the SEC relating to such registration and the
distribution of the securities being offered and make generally
available to its securities holders an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act;
(ix) cooperate and assist in any filings required
to be made with the National Association of Securities Dealers, Inc.;
(x) in the event of any Underwritten Offering, enter
into and perform its obligations under an underwriting agreement, in
which the Company addresses its representations and warranties to the
underwriters participating in such offering, with the managing
underwriter of such offering; and
(xi) upon reasonable notice and during normal
business hours, provide reasonable access to Company's personnel and
auditors for the purpose of permitting the Stockholders to conduct due
diligence in connection with any such Registration Statement.
As a condition precedent to the participation in any
registration hereunder, the Company may require the Stockholders as to which any
such registration is being effected to
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furnish to the Company such information regarding such Stockholders and the
distribution of such securities as the Company may from time to time reasonably
request to comply with the applicable provisions of the Securities Act.
(b) The Stockholders agree by the holding of such Registrable
Securities that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 5(a)(ii) hereof, the Stockholders
will forthwith discontinue disposition of Registrable Securities pursuant to the
then current Prospectus until (1) the Stockholders are advised in writing by the
Company that a new Registration Statement covering the offer of Registrable
Securities has become effective under the Securities Act or (2) the Stockholders
receive copies of any required supplemented or amended Prospectus, or until the
Stockholders are advised in writing by the Company that the use of the
Prospectus may be resumed; provided, however, that the Company shall use its
commercially reasonable best efforts to cure any such misstatement, omission or
event that is applicable to the Registration Statement as soon as reasonably
practicable after delivery of such notice pursuant to clause (6) of Section
5(a)(ii) hereof. If the Company shall have given any such notice during a period
when a Demand Registration is in effect, the Company shall extend the period
during which such Registration Statement shall be maintained effective pursuant
to this Agreement by the number of days during which any such disposition of
Registrable Securities is discontinued pursuant to this Section 5(b). If so
directed by the Company, on the happening of such event, the Stockholders will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in the Stockholders' possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
Section 6. Holdback Agreements.
(a) Hold-Back Election. In the case of the registration of any
primary Underwritten Offering initiated by the Company (other than any
registration by the Company on Form S-4 or Form S-8 (or any successor or
substantially similar form), and other than in connection with (A) an employee
stock option, stock purchase or compensation plan or of securities issued or
issuable pursuant to any such plan or (B) a dividend reinvestment plan) or any
secondary Underwritten Offering initiated at the request of a Requesting
Securityholder, the Stockholders agree that if they are reasonably requested to
do so by the managing underwriter or the underwriters, then the Stockholders
shall not effect any public sale or distribution of securities of the Company,
except as part of such Underwritten Offering, during the period beginning ten
(10) days prior to the closing date of such Underwritten Offering and ending
ninety (90) days after such closing date (or such longer period as may be
reasonably requested by the Company or by the managing underwriter or
underwriters).
(b) Material Development Condition. With respect to any
Registration Statement filed or to be filed pursuant to Section 3, if the
Company determines that, in its good faith judgment, it would (because of the
existence of, or in reasonable anticipation of, any acquisition or corporate
reorganization or other transaction, financing activity, stock repurchase or
other development involving the Company or any subsidiary, or the unavailability
for reasons beyond the Company's control of any required financial statements,
or any other event or condition of similar significance to the Company or any
subsidiary) be materially disadvantageous (a "Material Development Condition")
to the Company to proceed with such
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Registration Statement, then the Company shall, notwithstanding any other
provisions of this Agreement, be entitled, upon the giving of a written notice
that a Material Development Condition has occurred (a "Delay Notice") from an
officer of the Company to the Stockholders, (i) to cause sales of Registrable
Securities by the Stockholders pursuant to such Registration Statement to cease,
(ii) to cause such Registration Statement to be withdrawn and the effectiveness
of such Registration Statement terminated, or (iii) in the event no such
Registration Statement has yet been filed or declared effective, to delay filing
or effectiveness of any such Registration Statement until, in the good faith
judgment of the Company, such Material Development Condition shall be disclosed
or no longer exists (notice of which the Company shall promptly deliver to the
Stockholders). Notwithstanding the foregoing provisions of this Section 6(b):
(1) in no event may such cessation or delay be, for each such Registration
Statement, for a period of more than one hundred and twenty (120) consecutive
days from the giving of its Delay Notice to the Stockholders with respect to
such Material Development Condition, as above provided; (2) in the event a
Registration Statement is filed and subsequently withdrawn by reason of any
existing or anticipated Material Development Condition as provided above, the
Company shall cause a new Registration Statement covering the Registrable
Securities to be filed with the Commission as soon as practicable after such
Material Development Condition ceases to exist or, if sooner, as soon as
practicable after the expiration of such one hundred and twenty (120) day
period, the Demand Registration Period for such new Registration Statement shall
be thirty (30) days and the Merger Registration Period for such new Registration
Statement shall be the number of days that remained in such Merger Registration
Period with respect to the withdrawn Registration Statement at the time it was
withdrawn; and (3) in the event the Company elects not to withdraw or terminate
the effectiveness of any such Registration Statement but to cause the
Stockholders to refrain from selling Registrable Securities for any period
during the Demand Registration Period or the Merger Registration Period, (a) the
Demand Registration Period shall be extended by the number of days during the
Registration Period that the Stockholders are required to refrain from selling
Registrable Securities and (b) the Merger Registration Period shall remain the
same.
Section 7. Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and disbursements of
counsel in connection with blue sky qualifications or registrations (or the
obtaining of exemptions therefrom) of the Registrable Securities), printing
expenses (including expenses of printing Prospectuses), messenger and delivery
expenses, fees and disbursements of its counsel and its independent certified
public accountants, securities acts liability insurance (if the Company elects
to obtain such insurance), fees and expenses of any special experts retained by
the Company in connection with any registration hereunder and fees and expenses
of other Persons retained by the Company (all such expenses being referred to as
"Registration Expenses"), shall be borne by the Company; provided, that
Registration Expenses shall not include any fees and expenses of counsel for the
Stockholders, out-of-pocket expenses incurred by the Stockholders and
underwriting discounts, commissions or fees attributable to the sale of the
Registrable Securities.
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Section 8. Indemnification.
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, but without
duplication, the Stockholders, their officers, directors, stockholders,
employees, advisors and agents, and each Person who controls the Stockholders
(within the meaning of the Securities Act), against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
reasonable legal fees and expenses) resulting from any untrue statement of a
material fact in, or any omission of a material fact required to be stated in,
any Registration Statement or Prospectus or necessary to make the statements
therein (including any such statements or omissions incorporated by reference
therein) (in the case of a Prospectus, in light of the circumstances under which
they were made) not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by the
Stockholders or any underwriters expressly for use therein. The Company will
also indemnify underwriters participating in the distribution, their officers,
directors, employees, partners and agents, and each Person who controls such
underwriters (within the meaning of the Securities Act), to the same extent as
provided above with respect to the indemnification of the Stockholders, if so
requested.
(b) Indemnification by the Stockholders. In connection with
any Registration Statement in which the Stockholders are participating, the
Stockholders will furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with any
such Registration Statement or Prospectus and agrees to indemnify and hold
harmless, severally and not jointly, to the full extent permitted by law, but
without duplication, the Company, its officers, directors, stockholders,
employees, advisors and agents, and each Person who controls the Company (within
the meaning of the Securities Act), against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
reasonable legal fees and expenses) resulting from any untrue statement of
material fact in, or any omission of a material fact required to be stated in,
the Registration Statement or Prospectus or necessary to make the statements
therein (in the case of a Prospectus in light of the circumstances under which
they were made) not misleading to the extent that such untrue statement or
omission is caused by or contained in any information or affidavit so furnished
in writing by the Stockholders to the Company. The Company and the other persons
described above shall be entitled to receive indemnities from underwriters
participating in the distribution, to the same extent as provided above with
respect to information so furnished in writing by such Persons specifically for
inclusion in any Prospectus or Registration Statement. The Stockholders shall
not be required to provide indemnification or contribution hereunder in excess
of an amount equal to the net proceeds to the Stockholders from the disposition
of the Registrable Securities disposed of by the Stockholders pursuant to such
registration.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder will (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel of such indemnifying party's choice; provided, however, that any Person
entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in (but not control) the defense of such claim, but
the fees and expenses of such counsel shall be at the expense of such
indemnified Person unless (A) the
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indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to the indemnified party in a timely
manner or (B) in the reasonable judgment of any such Person, based upon a
written opinion of its counsel, a conflict of interest may exist between such
person and the indemnifying party with respect to such claims (in which case, if
the Person notifies the indemnifying party in writing that such Person elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person, provided such separate counsel is reasonably
satisfactory to the indemnifying party). The indemnifying party will not be
subject to any liability for any settlement made without its consent. No
indemnified party will be required to consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation. An indemnifying party who
is not entitled to, or elects not to, assume the defense of the claim will not
be obligated to pay the fees and expenses of more than one counsel (except one
(1) local counsel if required in a specific instance) for all parties
indemnified by such indemnifying party with respect to such claim.
(d) Contribution. If for any reason the indemnification
provided for in Section 8(a) or Section 8(b) is unavailable to an indemnified
party or is insufficient to hold it harmless as contemplated by Section 8(a) and
Section 8(b), then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such loss, claim, damage,
liability or expense in such proportion as is appropriate to reflect not only
the relative benefits received by the indemnifying party and the indemnified
party, but also the relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement or the omission or alleged omission relates
to information supplied by the indemnifying party or parties on the one hand, or
the indemnified party or parties on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentations.
(e) Notwithstanding the foregoing, to the extent that the
indemnification and contribution provisions contained in any underwriting
agreement entered into in connection with any Underwritten Offering conflict
with the foregoing, the provisions of such underwriting agreement shall control.
Section 9. Participation in Underwritten Registrations. The
Stockholders may not participate in any Underwritten Offering hereunder unless
they (i) agree to sell the Registrable Securities included therein on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (ii) complete and execute all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
Nothing in this Section 9 shall be construed to create any additional rights
regarding the registration of Registrable Securities in any Person otherwise
than as set forth herein. The Company may designate the managing underwriter of
the Merger Registration or a Demand Registration, subject to the consent of a
majority of the Stockholders which shall not be unreasonably withheld or
delayed.
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Section 10. Amendments and Waivers. The provisions of this
Agreement, including the provisions of this Section 10, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless such amendment, modification or
waiver is in writing and duly executed by the party or parties against which it
is to be enforced. No waiver of any provision of this Agreement shall constitute
a waiver of any other provision of this Agreement and no waiver on one occasion
shall constitute a waiver on any future occasion with respect to the same or any
other provision of this Agreement.
Section 11. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telecopier, or air-courier guaranteeing overnight
delivery:
(a) If to the Stockholders, at the most current
address given by the Stockholders to the Company, in accordance with
the provisions of this Section 11, which addresses (including facsimile
number) initially are set forth next to each Stockholder's signature on
the signature page hereto.
(b) If to the Company, initially at 805 Third
Avenue, New York, NY 10022, attention: Walter M. Psztur, Chief
Financial Officer, facsimile No.: (212) 271-8580, and thereafter at
such other address as may be designated from time to time by notice
given in accordance with the provisions of this Section 11, with copies
to Kramer Levin Naftalis & Frankel LLP, 919 Third Avenue, New York, New
York 10022, attention: Peter S. Kolevzon, Esq., facsimile No.: (212)
715-8000.
(c) All such notices and other communications shall
be deemed to have been delivered and received (i) in the case of
personal delivery, facsimile, telecopier or telegram, on the date of
such delivery, (ii) in the case of air courier, on the Business Day
after the date when sent and (iii) in the case of mailing, on the third
(3rd) Business Day following such mailing.
Section 12. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Section 13. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
Section 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE PRINCIPLES OF THE CONFLICT OF LAWS THEREOF.
Section 15. Jurisdiction; Forum; Waiver of Trial by Jury. Each
party hereto consents and submits to the jurisdiction of any state court sitting
in the County of New York or federal court sitting in the Southern District of
the State of New York in connection with any dispute arising out of or relating
to this Agreement. Each party hereto waives any objection to
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the laying of venue in such courts and any claim that any such action has been
brought in an inconvenient forum. To the extent permitted by law, any judgment
in respect of a dispute arising out of or relating to this Agreement may be
enforced in any other jurisdiction within or outside the United States by suit
on the judgment, a certified copy of such judgment being conclusive evidence of
the fact and amount of such judgment. Each party hereto agrees that personal
service of process may be effected by any of the means specified in Section 11
hereof, addressed to such party. The foregoing shall not limit the rights of any
party to serve process in any other manner permitted by law. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
Section 16. Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
Section 17. Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the parties hereto. Except as otherwise
expressly provided in Section 8, hereof, this Agreement shall not confer any
rights or remedies upon any Person other than the parties hereto and their
respective heirs, personal representatives, legatees, successors and permitted
assigns.
Section 18. Entire Agreement. This Agreement is intended by
the parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
INTERNET COMMERCE CORPORATION
By:_____________________________________
Name:
Title:
JEFFREY W. LeROSE
_________________________________________
Address:
c/o Research Triangle Commerce, Inc.
201 Shannon Oaks Circle, Suite 100
Cary, NC 27511
Facsimile Number:
(919) 657-1502
BLUE WATER VENTURE FUND II, L.L.C.
By:_____________________________________
Kim Cooke
Title:
Address:
8300 Greensboro Drive, Suite 440
McLean, VA 22102
Facsimile Number:
(703) 448-1849
