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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
Internet Commerce Corporation
- --------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
46059F109
- --------------------------------------------------------------------------------
(CUSIP Number)
Ken Claydon, Cable and Wireless PLC
124 Theobalds Road
London WCIX 8RX +44 020 7315 5051
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 12, 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 that is the subject of this Schedule 13D, and is filing
this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240 13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (ACT) or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Potential persons who are to respond to the collection of information contained
in this form are not required to respond unless the form displays a currently
valid OMB control number.
<PAGE>
CUSIP No. 46059F109
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Cable and Wireless PLC
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) X
----------------------------------------------------------------------
(b)
----------------------------------------------------------------------
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
________________________________________________________________________________
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND & WALES
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
5,316,821 (SEE ITEM 5)
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (SEE ITEM 5)
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
5,316,821 (SEE ITEM 5)
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 (SEE ITEM 5)
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,316,821 (SEE ITEM 5)
________________________________________________________________________________
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS)
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.94% (SEE ITEM 5)
________________________________________________________________________________
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
________________________________________________________________________________
Instructions for Cover Page
(1) Names and I.R.S. Identification Numbers of Reporting Persons - Furnish the
full legal name of each person for whom the report is filed - i.e., each
person required to sign the schedule itself - including each member of a
group. Do not include the name of a person required to be identified in
the report but who is not a reporting person. Reporting persons that are
entities are also requested to furnish the I.R.S. identification numbers,
although disclosure of such numbers is voluntary, not mandatory (see
"SPECIAL INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13D" below).
(2) If any of the shares beneficially owned by a reporting person are held as a
member of a group and the membership is expressly affirmed, please check
row 2(a). If the reporting person disclaims membership in a group or
describes a relationship with other persons but does not affirm the
existence of a group, please check row 2(b) [unless it is a joint filing
pursuant to Rule 13d-1(k)(1) in which case it may not be necessary to
check row 2(b)].
(3) The 3rd row is for SEC internal use: please leave blank.
<PAGE>
CUSIP No. 46059F109
________________________________________________________________________________
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Cable & Wireless USA, Inc.
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) X
----------------------------------------------------------------------
(b)
----------------------------------------------------------------------
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS* (SEE INSTRUCTIONS)
WC
________________________________________________________________________________
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DISTRICT OF COLUMBIA
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF
5,316,821 (SEE ITEM 5)
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0 (SEE ITEM 5)
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
5,316,821 (SEE ITEM 5)
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
0 (SEE ITEM 5)
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,316,821 (SEE ITEM 5)
________________________________________________________________________________
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS)
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.94% (SEE ITEM 5)
________________________________________________________________________________
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
________________________________________________________________________________
Instructions for Cover Page
(1) Names and I.R.S. Identification Numbers of Reporting Persons - Furnish the
full legal name of each person for whom the report is filed - i.e., each
person required to sign the schedule itself - including each member of a
group. Do not include the name of a person required to be identified in
the report but who is not a reporting person. Reporting persons that are
entities are also requested to furnish the I.R.S. identification numbers,
although disclosure of such numbers is voluntary, not mandatory (see
"SPECIAL INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13D" below).
(2) If any of the shares beneficially owned by a reporting person are held as a
member of a group and the membership is expressly affirmed, please check
row 2(a). If the reporting person disclaims membership in a group or
describes a relationship with other persons but does not affirm the
existence of a group, please check row 2(b) [unless it is a joint filing
pursuant to Rule 13d-1(k)(1) in which case it may not be necessary to
check row 2(b)].
(3) The 3rd row is for SEC internal use: please leave blank.
<PAGE>
Item 1. Security and Issuer
This statement relates to the Class A Common Stock of Internet Commerce
Corporation (the "Issuer").
The principal executive offices of the Issuer are located at 805 Third
Avenue, New York, New York 10022.
Item 2. Identity and Background
The following information is given with respect to each Reporting Person
which is a corporation:
Cable and Wireless PLC (C&W PLC) is a public limited company incorporated
under the laws of England and Wales. C&W PLC's registered office is 124
Theobalds Road, London, WC1X 8RX, United Kingdom.
Cable & Wireless USA, Inc. (C&W USA) is indirectly wholly owned by C&W PLC.
C&W USA is a corporation organized under the laws of the District of Columbia
and conducts its principal business operations in 8219 Leesburg Pike, Vienna,
Virginia 22182.
The Reporting Persons, directly and through their subsidiaries and
affiliates, offer a range of services spanning broadband data and Internet
services, fixed and mobile voice, as well as interactive entertainment and
information.
Each Reporting Person has not during the last five years been (i) convicted
in a criminal proceeding, or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to judgment, decree and 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.
The name, business address, present principal occupation or employment (and
the name, principal business and address of any corporation or other
organization in which such employment is conducted) and the citizenship of each
principal executive officer and director of C&W PLC and C&W USA is set forth in
Schedule A and incorporated herein by reference.
Item 3. Source and Amount of Funds or Other Consideration
The Reporting Persons purchased a total of 10,000 shares of Series C
Convertible Preferred Stock ("Purchased Stock") of the Issuer for an investment
of $10,000,000. Such purchase was consummated via a Master Agreement
("Agreement") between the Reporting Persons and the Issuer dated November 23,
1999.
The source of consideration under the Agreement was working capital. None
of the Purchase Stock was acquired with borrowed funds.
Item 4. Purpose of Transaction
The Reporting Persons acquired the Purchased Stock as an investment.
Subject to contractual and regulatory restrictions, the Reporting Persons may
sell shares of the Purchased Stock from time to time in the open market or in
privately negotiated transactions, and may also enter into short sales, the
purchase or sale of derivative securities or other hedging transactions with
broker-dealers or other financial institutions. Transactions in respect of the
shares of the Purchased Stock may be effected from time to time based upon
either Reporting Person's capital requirements, strategic business planning
and/or the market price of the Class A Common Stock.
Pursuant to the Agreement, the Reporting Persons and the Issuer also
entered into an arrangement whereby each party will market and sell the others'
services. Under the terms of the Agreement, the Issuer may issue on an annual
basis to the Reporting Persons additional stock for the attainment of set
quarterly revenue targets for the sales of the Issuer services. The number of
shares issued will be equal to the result of multiplying the gross amount of
sales for the Issuer's services sold by the Reporting Persons by 5%.
As further described in Item 5 pursuant to the Agreement, the Reporting
Persons have a warrant for 400,000 shares of Class A Common Stock. The Issuer
agreed also to grant the Reporting Persons certain registration rights in a
separate agreement with regard to all shares of Preferred and Common Stock
issued to the Reporting Persons pursuant to this Agreement and all shares issued
upon the conversion of the Preferred Stock and the exercise of the Warrant.
In addition, under the terms of the Agreement, in exchange for the
Reporting Persons' investment in the Issuer and for other good and valuable
consideration, the Issuer and the Reporting Persons have agreed to take certain
actions so that a nominee of the Reporting Persons will be elected to the
Issuer's Board of Directors.
Except as otherwise set forth in this Item 4, neither Reporting Person has
present intent or proposals that relate to or would result in: (i) the
acquisition by any person of additional securities of the Issuer, or the
disposition of securities of the Issuer; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Issuer or any of its subsidiaries; (iii) a sale or transfer of a material amount
of assets of the Issuer or any of its subsidiaries; (iv) any change in the
present Board of Directors or management of the Issuer, including any plans or
proposals to change the number or term of Directors or to fill any vacancies on
the Board; (v) any material change in the present capitalization or dividend
policy of the Issuer; (vi) any other material change in the Issuer 's business
or corporate structure; (vii) changes in the Issuer's Articles of Association,
By-laws or instruments corresponding thereto or other actions which may impede
the acquisition of control of the Issuer by any person; (viii) causing a class
of securities 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; (ix) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act; or (x) any action similar to those enumerated above.
Each Reporting Person reserves the right to determine in the future whether
to change the purpose or purposes described above or whether to adopt plans or
proposals of the type specified above.
Item 5. Interest in Securities of the Issuer
The Reporting Persons purchased a total of 10,000 shares of the Purchased
Stock in the Issuer for an investment of $10,000,000. Such purchase was
consummated via the Agreement between the Reporting Persons and the Issuer dated
November 23, 1999. The acquisition of the Purchased Stock closed on January 12,
2000. Currently there are 4,469,194 shares of Class A Stock outstanding and
89,595 shares of Class B Common Stock outstanding of the Issuer. The Reporting
Persons have 10,000 shares of Series C Preferred Stock which are convertible
into 447,627.57 shares of Class A Common Stock and a warrant for 400,000 shares
of Class A Common Stock with an exercise price of $22.21 per share. As a result,
following exercise of the warrant and conversion of the Series C, there will be
5,316,821 shares of Class A Common Stock outstanding of which the Reporting
Persons will own 15.94%. The shares and warrant are held in the name of C&W USA.
The Reporting Persons have sole dispositive power over the Purchased Stock.
The Reporting Persons have a right of first refusal to participate in any Issuer
equity offering, on the same terms and conditions as other purchasers, to
maintain its percentage ownership of the Issuer. The Reporting Persons have not
been a party to any transaction in the Purchased Stock, other than the
Agreement, in the last 60 days. The Reporting Persons know of no other person
that has the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, the Purchased Stock.
As of the date hereof, (i) Matthew Wolk beneficially owns 500 shares of
Class A Common Stock, 350 of which were purchased on January 29, 2000 at a price
per share of $38.50 (net of commissions) in transactions through a broker on the
New York Stock Exchange; and (ii) Arthur Medici beneficially owns 200,000 shares
of Class A Common Stock (in the form of unexercised options). Mr. Medici
transferred 14,000 shares of Series A Common Stock to a family member on
December 13, 1999. Except as described herein, neither the Reporting Persons,
nor, to the best knowledge of the Reporting Persons, any of the persons listed
in Schedule A, beneficially owns any equity securities of the Issuer.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
The Reporting Persons and the Issuer entered into the Agreement, whereby
the Reporting Persons agreed to acquire 10,000 shares of Purchased Stock for a
price of $10,000,000. The acquisition of the Purchased Stock closed January 12,
2000.
In addition to the terms of the Agreement discussed in Item 5 above, the
Issuer agreed to grant the Reporting Persons certain registration rights in a
separate agreement with regard to all shares of Preferred and Common Stock
issued to Reporting Persons pursuant to this Agreement and all shares issued
upon the conversion of the Preferred Stock and the exercise of the Warrant.
Item 7. Materials to be Filed as Exhibits
Exhibit 1 Master Agreement between Cable and Wireless PLC and Internet
Commerce Corporation
Exhibit 2 Warrant to Purchase Shares of Class A Common Stock
Exhibit 3 Registration Rights Agreement
Exhibit 4 Joint Filing Agreement
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Schedule 13D is true, complete
and correct.
CABLE AND WIRELESS PLC
By /s/ Ken Claydon
---------------------
Secretary
February 1, 2000
CABLE & WIRELESS USA, INC.
By /s/ Richard H. Goshorn
----------------------
Senior Vice-President
and General Counsel
February 1, 2000
<PAGE>
Schedule A
Set forth below are the names and positions of all of the directors and
principal executive officers of Cable and Wireless PLC and Cable & Wireless
USA, Inc., the principal occupation or employment of such person and the name,
principal business and address of any corporation or other organization in which
such employment is conducted.
CABLE AND WIRELESS PLC
Executive Officers and Members of the Board of Directors
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Business Address Principal Occupation Citizenship
- ---- ---------------- -------------------- -----------
Graham Martyn Wallace Cable and Wireless plc Chief Executive United Kingdom
124 Theobalds Road
London, WC1X 8RX
Robert Earl Lerwill Cable and Wireless plc Executive Director of United Kingdom
124 Theobalds Road Finance
London, WC1X 8RX
Stephen Raymond Pettit Cable and Wireless plc Executive Director of United Kingdom
124 Theobalds Road Corporate Development
London, WC1X 8RX
Sir Ralph Harry Robins Cable and Wireless plc Director and Chairman United Kingdom
124 Theobalds Road
London, WC1X 8RX
Sir Winfried Franz Wilhelm Cable and Wireless plc Director and Department Germany
Bischoff 124 Theobalds Road Chairman
London, WC1X 8RX
Dr. Janet Patricia Morgan Cable and Wireless plc Director United Kingdom
124 Theobalds Road
London, WC1X 8RX
David Percy Nash Cable and Wireless plc Director United Kingdom
124 Theobalds Road
London, WC1X 8RX
David Robert Varney Cable and Wireless plc Director United Kingdom
124 Theobalds Road
London, WC1X 8RX
Raymond George Hardenbergh Cable and Wireless plc Director United States
Seitz 124 Theobalds Road
London, WC1X 8RX
Linus Wing Lam Cheung Cable and Wireless plc Chief Executive Director United Kingdom
124 Theobalds Road
London, WC1X 8RX
Ken Claydon Cable and Wireless plc Secretary United Kingdom
124 Theobalds Road
London, WC1X 8RX
CABLE & WIRELESS USA, INC.
Executive Officers and Members of the Board of Directors
Name Business Address Principal Occupation Citizenship
- ---- ---------------- -------------------- -----------
Wharton B. Rivers 8219 Leesburg Pike Director and President, United States
Vienna, VA 22182 Global Operations
Richard H. Goshorn 8219 Leesburg Pike Director, Senior United States
Vienna, VA 22182 Vice President and
Secretary
Christopher Joyce 8219 Leesburg Pike Chief Financial United States
Vienna, VA 22182 Officer, Global
Operations
Robert T. Flood 8219 Leesburg Pike Chief Technology United States
Vienna, VA 22182 Officer, Global
Operations
Tina M. Corner 8219 Leesburg Pike Senior Vice President, United States
Vienna, VA 22182 Retail Sales, Large
Account Organization
Thomas E. Sterbenc 8219 Leesburg Pike Senior Vice President, United States
Vienna, VA 22182 Retail Sales
Arthur R. Medici 8219 Leesburg Pike Senior Vice President, United States
Vienna, VA 22182 Retail Marketing
Rachel J. Rothstein 8219 Leesburg Pike Senior Vice President, United States
Vienna, VA 22182 Regulatory and
Government Affairs
Matthew D. Wolk 8219 Leesburg Pike Vice President, Global United States
Vienna, VA 22182 Strategic Business
Development
William T. Comerford Jr. 8219 Leesburg Pike Vice President, National United States
Vienna, VA 22182 Industry Accounts
Vini N. Handler 8219 Leesburg Pike Vice President, Product United States
Vienna, VA 22182 Development and
Management
Todd Andrew Haven 8219 Leesburg Pike Vice President, Internet United States
Vienna, VA 22182 Protocol Special Markets
Teresa M. Jacques 8219 Leesburg Pike Vice President, Human United Kingdom
Vienna, VA 22182 Resources
Vince Gibson 8219 Leesburg Pike Treasurer United States
Vienna, VA 22182
Andrew Haire 8219 Leesburg Pike Assistant Secretary United Kingdom
Vienna, VA 22182
Jonathan Spencer 8219 Leesburg Pike Assistant Secretary United States
Vienna, VA 22182
</TABLE>
Exhibit I
---------
Master Agreement
Between
Cable and Wireless PLC and Internet Commerce Corporation
The Parties, Cable and Wireless PLC (C&W) and Internet Commerce Corporation
(ICC), have determined that there exists substantial synergies between both
organizations to expand their respective market efforts for Internet-based
services. As such, the Parties have agreed to this Master Agreement as the basis
for a resulting commercial relationship. This Master Agreement is subject to
both Parties obtaining their respective Management or Supervisory Board
approval, and, if relevant, regulatory approvals. Notwithstanding delays due to
public holidays, the Parties respective Board approvals will be obtained within
30 days after the execution of this Master Agreement. Other than those terms
explicitly outlined herein, no representations or warranties are expressed or
implied. All co-signed Addendums shall be agreed upon within 30 days of the
execution of this Agreement and will be deemed integral to this Master
Agreement.
1) STOCK PURCHASE AND RELATED TRANSACTIONS
a) C&W shall invest US ten million ($10,000,000.00) dollars in ICC. For
good and valuable consideration of this investment, ICC shall issue to
C&W 10,000 Shares of Series C Convertible Preferred Stock in ICC. The
closing of the transaction will occur within 10 days after receiving
Board approvals.
b) The Series C Preferred Stock issued to C&W by ICC shall be convertible
into Class A Common Stock. Each share of Series C Preferred Stock is
convertible into a number of shares of Class A Common Stock determined
by the following formula: $1,000.00 divided by the daily average of the
closing bid price of ICC Common Stock for the five (5) trading days
prior to the execution of this Master Agreement plus $0.13 per share
(the "Conversion Price").
The Series C Preferred Stock has a value of $1,000.00. The conversion
price will be adjusted for stock splits, dividends and combinations,
mergers and consolidations.
c) The per share voting rights of the Series C Preferred Stock shall be
equal to that of the number of shares of Class A Common Stock into
which the Series C Preferred Stock is convertible. At all times the
Series C Preferred Stock held by C&W shall vote as one class with ICC
Class A Common Stock. The Series C Preferred Stock shall be entitled to
receive cumulative dividends at a rate equal to 4% per share (as
adjusted for subsequent stock dividends, splits, recapitalizations and
similar transactions). Such dividends shall accrue whether or not
declared and shall be paid in either cash or shares of ICC Class A
Common Stock at ICC's option; provided, that such dividends are paid
prior to and in preference to any distribution with respect to the
shares of Common Stock.
d) The Series C Preferred Stock issued to C&W shall have liquidation
priority and preference over any and all classes and series of ICC
Capital Stock. The liquidation value shall equal $1,000.00 per share
plus accrued and unpaid dividends.
e) At the closing, ICC shall issue 400,000 warrants for ICC Class A
Common. The exercise price for such warrants shall be the Conversion
Price, less $0.13 per share, as may be adjusted (the "Warrant Price"),
and the warrants shall have an initial term of 5 years from the date of
issuance.
f) ICC agrees to issue to C&W additional stock for the attainment of
set quarterly revenue targets for the sales of ICC services. The number
of Shares in connection with this section 1(f) shall be equal to the
result of multiplying the gross amount of sales for ICC services sold
by C&W by 5%. The shares will be priced by the daily average of the
closing bid price of ICC stock for the 5 days prior to the end of each
quarter. The basis for the revenue calculation will be derived from the
commissionable revenue figure to be negotiated in the Reseller
Addendums. Each outstanding share of the Series C Preferred Stock is
redeemable by ICC at a price of $1,000.00 per share, plus any accrued
and unpaid dividends (the "Redemption Price"), commencing on the fifth
anniversary of the date of issuance thereof upon written notice to the
holders of Series C Preferred Stock. No such redemption shall diminish
C&W's right to convert the Series C Preferred Stock prior to the
redemption date.
g) C&W shall have right of first refusal to participate in any ICC equity
offering, on the same terms and conditions as other purchasers, to
maintain its percentage ownership of ICC.
h) In exchange for C&W investment in ICC and for other good and valuable
consideration, ICC shall grant C&W one seat on ICC's Board. ICC's
approval of the C&W candidate will not be unreasonably withheld. In the
event ICC's Board increases to more than nine members, ICC shall grant
C&W an additional seat on ICC's Board. ICC agrees that C&W's Board
representation shall at no time be less than one seat and shall
increase roughly proportionate to C&W's percentage ownership of ICC as
such percentage ownership may increase.
i) At the time of the issuance of the shares provided for in section 1,
the parties will enter into a Registration Rights Agreement providing
demand and piggyback registration rights with respect to all shares of
Preferred and Common Stock issued to C&W pursuant to this Master
Agreement and all shares issued upon the conversion of the Preferred
Stock and the exercise of the Warrants.
j) ICC represents and warrants that the information contained in its
private placement memorandum dated October 1999 is true and correct in
all material respects; that such private placement memorandum does not
contain any untrue statements of material fact or omit to state any
material fact required to make the statements therein not misleading;
and that there has been no material changes in the business,
properties, financial condition or results of operations of ICC. In
addition, ICC represents and warrants that the products described
therein are all currently available for sale. However, statements
included in such private placement memorandum which are not historical
in nature are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995 including, without limitation, statements regarding the ability to
obtain financing, the hiring of new personnel, the Company's ability to
secure new business, and those factors highlighted in Internet Commerce
Corporation's Annual Reports on Form 10-K and Quarterly Reports on Form
10-Q, which could cause the Company's actual results to materially
differ from forward-looking statements made by the Company.
2) COMMERCIAL ACTIVITIES
a) The scope of this Agreement is intended to be global in nature and as
such, ICC and C&W shall endeavor to address the global markets
together. Therefore, ICC will utilize C&W IP and data networks and
other services (including hosting) to the greatest extent possible,
consistent with ICC's needs for redundant facilities, at rates no
higher than C&W lowest rates to comparable customers. C&W intention is
to use ICC EDI services on a global basis.
b) The Parties agree that the initial focus shall be on North America,
Western Europe, and Japan, with other C&W market activities to follow
as resources allow.
c) C&W will serve as a sales channel for ICC, and ICC will serve as a
sales channel for C&W, as either a reseller or as an agent and as C&W
and ICC shall mutually agree. ICC, at ICC's sole expense, shall
co-locate dedicated sales and support personnel at mutually determined
C&W facilities as requested by C&W Global Markets and which is
reasonably required to attain the sales goals referred to in section
2(e) herein. C&W shall seek to provide office space and related support
to ICC as may be required for these activities. For the first 12 months
of this Master Agreement, C&W agrees to consider the provision of these
services to be in-kind funding. Thereafter, the cost associated with
office provision and support shall be negotiated country by country.
d) ICC shall compensate C&W for each sale of ICC services made by C&W
sales representatives as will C&W compensate ICC for each sale of C&W
services made by ICC sales representatives. For compensation purposes
only, in the case where the Parties jointly make sales calls, Parties
shall split commissions on a basis to be mutually agreed upon.
e) The Parties shall jointly develop a Global Schedule of Services and
Compensation (GSSC) that shall determine the service offerings, MFN
pricing structures and resulting compensation values. Subject to mutual
prior consent, which consent will not be unreasonably withheld, the
Parties shall be entitled to bundle the other's products with any
product offer either Party may develop. The GSSC shall include bundled
service offerings wherein the Parties will determine the percentage of
revenues attributable to each Party's contribution to the offering in
order to calculate the applicable compensation. The GSSC shall be
incorporated into this Agreement by reference and the Parties shall
agree on any deviation from the terms of the GSSC in advance.
f) ICC shall cooperate with C&W Global Operations to jointly develop and
agree upon a sales and market plan (SMP) for each global region
enumerated above in section 2(b) herein. The SMP shall include
reasonable sales goals, existing customer lead activity, new customer
acquisition targets, co-located ICC support headcount requirements and
other issues that may be required for the Parties to reach their sales
goals during the first year of the Agreement. The SMP shall be reviewed
by the Parties on a quarterly basis and measured against performance.
Modifications mutually agreed upon as a result of such reviews shall be
incorporated into the SMP as appropriate from time to time. The SMP
shall be incorporated into this Agreement by reference and the Parties
shall agree on any deviation from the terms of the SMP in advance.
g) Where additional product development efforts are necessary to launch
and/or support bundled offerings, the Parties will cooperate in
performing such additional efforts in a professional and timely manner.
C&W may at its sole option decline such request and ICC may decline
such request if C&W is not meeting sales targets established and agreed
to in the SMP referenced in section 2(e) above.
3) LENGTH OF TERM
a) The Initial Period of this Master Agreement shall commence upon the
date that both Parties receive the executed Master Agreement and shall
continue for a period of one (1) year. At C&W sole discretion, the
Agreement shall automatically renew on each anniversary thereof for
additional one (1) year Periods. Should C&W wish to terminate this
Master Agreement, a 60 day written notification is required.
b) During all Periods, C&W shall be ICC's exclusive Tier 1 provider for
the regions described in section 2(b) herein. The Parties shall develop
a Tier 1 and Global Competitor List (GCL) that shall name those
competitors identified and agreed by the Parties. ICC agrees that it
will not enter into an agreement with any entity identified and
incorporated into the GCL. The GCL shall be incorporated into this
Agreement by reference and the Parties shall agree any modifications to
the GCL in advance.
c) Following the expiration of the Initial Period, either Party, upon 60
days written notice prior to the expiration of any subsequent Period,
may terminate the Agreement for cause as shall be described in an
Addendum to the Master Agreement. The Parties may at anytime mutually
agree to an earlier termination date. In the event that either party is
notified of a cause for discontinuance, the other party will have 60
days to cure the alleged fault. Should the cure be deemed inadequate,
the 60 day period for termination of service will begin.
d) Notwithstanding any other provision after termination of the Agreement
should C&W desire to continue selling ICC's services, ICC agrees to
provide C&W with MFN terms and conditions for all ICC's services.
4) MISCELLANEOUS
a) The Parties will co-develop relevant MARCOM materials. C&W shall retain
right of advance approval of any and all materials bearing reference to
C&W. As well, ICC shall retain right of advance approval of any and all
materials bearing reference to ICC. The Parties shall bear their
individual costs of the production of their own materials. Should ICC
desire to use C&W MARCOM materials, such materials in reasonable
quantities shall be provided to ICC at C&W cost. Should C&W wish to use
or incorporate any ICC MARCOM materials, it may do so with ICC's
consent, such consent not to be unreasonably denied.
b) The Parties will jointly develop and mutually agree upon a press
announcement pertaining to this Master Agreement. Additionally, it is
agreed that both parties shall jointly prepare a PR Strategy for the
next 30, 60, 90 days of this relationship.
c) C&W will endeavor to provide in-kind support to ICC. The Parties shall
agree on pricing and terms ICC shall be required to pay to C&W before
commencement of such services will begin. A separate purchase agreement
for such services will be executed as appropriate.
d) This Master Agreement shall be governed by the laws and subject to the
jurisdiction of the Commonwealth of Virginia.
Cable and Wireless PLC Internet Commerce Corporation
Date 23 November 1999 Date 23 November 1999
By: /S/ MATTHEW WOLK By: /S/ DR. GEOFFREY S. CARROLL
---------------- ---------------------------
Matthew Wolk Dr. Geoffrey S. Carroll
Vice President Strategic Business President and Chief Executive
Development Officer
Global Operations
Exhibit II
----------
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") NOR UNDER ANY STATE SECURITIES LAW AND NEITHER THIS WARRANT NOR ANY
SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF MAY BE PLEDGED, SOLD,
ASSIGNED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME EFFECTIVE WITH RESPECT
THERETO, OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE EFFECT
THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAW IS NOT
REQUIRED IN CONNECTION WITH THE PROPOSED TRANSFER.
No. 2000W- 1 400,000 Shares
Dated: January 12, 2000
WARRANT TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
INTERNET COMMERCE CORPORATION
This is to Certify That, FOR VALUE RECEIVED, Cable and Wireless PLC
("Holder") is entitled to purchase, subject to the provisions of this Warrant,
from Internet Commerce Corporation, a Delaware corporation ("Company"), four
hundred thousand (400,000) fully paid, validly issued and nonassessable shares
of Class A Common Stock, par value $0.01 per share, of the Company ("Common
Stock") at a price of $22.21 per share (subject to adjustment pursuant to
Paragraph (b)(i) hereof) at any time or from time to time during the period
beginning on the date hereof (the "Commencement Date"), until the date which is
sixty (60) months after such date (the "Expiration Date"). The shares of Common
Stock deliverable upon such exercise are hereinafter sometimes referred to as
"Warrant Shares" and the exercise price of this Warrant to purchase one share of
Class A Common stock, as the same may from time to time be adjusted pursuant to
the provisions hereof, is hereinafter sometimes referred to as the "Exercise
Price."
(a) EXERCISE OF WARRANT. This Warrant may be exercised in whole at any time
or in part from time to time on or after the Commencement Date and until 5:00
p.m., New York City Time, on the Expiration Date; provided, however, that if
such day is a day on which banking institutions in the State of New York are
authorized by law to close, then on the next succeeding day which shall not be
such a day. This Warrant may be exercised by presentation and surrender hereof
to the Company at its principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly executed and
accompanied by payment of the Exercise Price in the form of a wire transfer or
Federal funds check for the number of Warrant Shares specified in such form. As
soon as practicable after each such exercise hereof, but not later than five (5)
days from the date of such exercise, the Company shall issue and deliver to the
Holder a certificate or certificate for the Warrant Shares issuable upon such
exercise, registered in the name of the Holder or its designee. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder. Upon receipt by the Company of this Warrant at its
office, or by the stock transfer agent of the Company at its office, if any, in
proper form for exercise, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such shares of Common Stock shall not then be
physically delivered to the Holder.
(b) ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. (i) In the
event the Company shall, at any time or from time to time after the date hereof,
issue any shares of Common Stock as a stock dividend to the holders of Common
Stock, or subdivide or combine the outstanding shares of Common Stock into a
greater or lesser number of shares (any such issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter upon
each further Change of Shares, the Exercise Price in effect immediately prior to
such Change of Shares shall be changed to a price (including any applicable
fraction of a cent) determined by multiplying the Exercise Price in effect
immediately prior thereto by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such Change of
Shares and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after giving effect to such Change of Shares. Such
adjustment shall be made successively whenever such an issuance is made.
(ii) Upon each adjustment of the Exercise Price pursuant to Paragraph
(b)(i) hereof, the total number of shares of Common Stock purchasable upon
the exercise of this Warrant shall be such number of shares (calculated to
the nearest tenth) purchasable at the Exercise Price in effect immediately
prior to such adjustment multiplied by a fraction, the numerator of which
shall be the Exercise Price in effect immediately prior to such adjustment
and the denominator of which shall be the Exercise Price in effect
immediately after giving effect to such adjustment.
(iii) In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock, or in case of any
consolidation or merger of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of Common
Stock), or in case of any sale or conveyance to another corporation of the
property of the Company as, or substantially as, an entirety (other than a
sale/leaseback, mortgage or other financing transaction), the Company shall
cause effective provision to be made so that Holder of this Warrant shall
have the right thereafter, by exercising this Warrant, to purchase the kind
and number of shares of stock or other securities or property (including
cash) receivable upon such reclassification, capital reorganization or
other change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock that would have been purchased upon
exercise in full of this Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation,
merger, sale or conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Paragraph (b). The Company shall not
effect any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof the successor (if other than
the Company) resulting from such consolidation or merger or the corporation
purchasing assets or other appropriate corporation or entity shall assume,
by written instrument executed and delivered to the Company, the obligation
to deliver to the Holder of this Warrant such shares of stock, securities
or property (including cash) as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase and the other
obligations of the Company under this Warrant. The foregoing provisions
shall similarly apply to successive reclassifications, capital
reorganizations and other changes of outstanding shares of Common Stock and
to successive consolidations, mergers, sales or conveyances.
(iv) Irrespective of any adjustments or changes in the Exercise Price
or the number of shares of Common Stock purchasable upon exercise of this
Warrant, this Warrant certificate shall continue to express the Exercise
Price per share and the number of shares of Common Stock purchasable
hereunder as the Exercise Price per share and the number of shares of
Common stock purchasable therefor as were expressed in this Warrant
certificate when the same was originally issued.
(v) After each adjustment of the Purchase Price pursuant to this
Paragraph (b), the Company will promptly prepare a certificate signed by
the Chairman or President, and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary, of the Company setting forth:
(1) the Exercise Price as so adjusted, (2) the number of shares of Common
Stock purchasable upon exercise of this Warrant after such adjustment, and
(3) a brief statement of the facts accounting for such adjustment. The
Company will promptly cause a copy of such certificate to be sent by
ordinary first class mail to the Holder of this Warrant at his or its last
address as it shall appear on the registry books of the Company. No failure
to mail such notice nor any defect therein or in the mailing thereof shall
affect the validity of any such adjustment.
(c) RESERVATION OF SHARES. The Company shall at all times reserve for
issuance and/or delivery upon exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance and delivery upon exercise of
this Warrant.
(d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other warrants of like tenor and of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to
the Company at its principal office or at the office of its stock transfer
agent, if any, with the assignment form annexed hereto duly executed and funds
sufficient to pay any transfer tax the Company shall, without charge, execute
and deliver a new Warrant in the name of the assignee named in such instrument
of assignment and this Warrant shall promptly be canceled. As a condition of
such assignment, however, such assignee shall deliver to the Company an opinion
of counsel to the effect that registration of such transfer under the Securities
Act of 1933, as amended, and applicable state securities laws is not required.
This Warrant may be divided or combined with other warrants which carry the same
rights upon presentation hereof at the principal office of the Company or at the
office of its stock transfer agent, if any, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
and signed by the Holder hereof. The term "Warrant" as used herein includes any
Warrants into which this Warrant may be divided or exchanged. Upon receipt by
the Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed or mutilated shall be at
any time enforceable by anyone.
(e) HOLDER REPRESENTATIONS; RESTRICTIVE LEGEND. Holder hereby acknowledges
and agrees that: (i) Holder is an "accredited" investor within the meaning of
the Securities Act of 1933, as amended (the "Securities Act"); (ii) upon the
exercise of this Warrant the Holder will acquire the Warrant Shares for its
account, for investment, and not in connection with the offer, sale or
distribution of the Warrant Shares, or any portion thereof or interest therein,
to others; (iii) Holder will not sell, transfer or otherwise dispose of any of
the Warrant Shares, or any interest therein, in violation of the registration
requirements of the Securities Act and will not engage in conduct which may
violate the registration requirements of any federal or state securities laws;
and (iv) Holder consents to the placing of a legend in substantially the
following form on the certificates representing the Warrant Shares, when issued,
to reflect the foregoing: THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") NOR UNDER ANY STATE SECURITIES LAW AND MAY
NOT BE PLEDGED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW HAS BECOME
EFFECTIVE WITH RESPECT THERETO, OR (2) RECEIPT BY THE COMPANY OF AN OPINION OF
COUNSEL TO THE EFFECT THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAW IS NOT REQUIRED IN CONNECTION WITH THE PROPOSED TRANSFER.
(f) HOLDER NOT DEEMED STOCKHOLDERS. The Holder of this Warrant shall not,
as such, be entitled to vote or to receive dividends or be deemed the holder of
Common Stock that may at any time be issuable upon exercise of this Warrant for
any purpose whatsoever, nor shall anything contained herein be construed to
confer upon the Holder of this Warrant, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issue or reclassification of stock, change of par value or change of stock to no
par value, consolidation, merger or conveyance or otherwise), or to receive
notice of meetings, or to receive dividends or subscription rights, until the
Holder shall have exercised this Warrant in accordance with the provisions
hereof.
(g) AGREEMENT OF WARRANT HOLDERS. The Holder of this Warrant, by his or its
acceptance thereof, consents and agrees with the Company that:
(i) This Warrant is transferable only on the registry books of the
Company by the Holder thereof in person or by his or its attorney duly
authorized in writing and only if this Warrant certificate is surrendered
at the office of the Company, duly endorsed or accompanied by a proper
instrument of transfer satisfactory to the Company in its sole discretion,
together with payment of any applicable transfer taxes; and
(ii) The Company may deem and treat the person or entity in whose or
which entity's name this Warrant certificate is registered as the holder
and as the absolute, true and lawful owner of this Warrant for all
purposes, and the Company shall not be affected by any notice or knowledge
to the contrary.
(h) GOVERNING LAW. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York, without reference to
principles of conflict of laws.
(i) BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and the registered Holder
from time to time of this Warrant certificate. Nothing in this Warrant is
intended or shall be construed to confer upon any other person any right, remedy
or claim, in equity or at law, or to impose upon any other person any duty,
liability or obligation.
(j) NOTICE OF CERTAIN EVENTS. In case at any time:
(i) the Company shall pay any dividend or make any other distribution,
payable in cash, property or securities (other than Common Stock) of the
Company, to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the holders
of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any reclassification, capital reorganization or
other change of outstanding shares of Common Stock of the Company, or
consolidation or merger of the Company with, or sale of all or
substantially all its assets to, another corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give written notice,
by first class mail, postage prepaid, addressed to the holder of this Warrant at
the address of such holder as shown on the books of the Company, of the date on
which (x) the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights, or (y) such
reclassification, reorganization, change, consolidation, merger, sale,
dissolution, liquidation or winding up shall take place, as the case may be.
Such notice shall also specify the date as of which the holders of Common Stock
of record shall participate in said dividend, distribution or subscription
rights, or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification, reorganization, change,
consolidation, merger, sale, dissolution, liquidation, or winding up, as the
case may be. Such written notice shall be given not less than ten (10) days
prior to the record date or the date on which the transfer books of the Company
are closed in respect thereto in the case of an action specified in clause (x)
and at least ten (10) days prior to the date the action in question in the case
of an action specified in clause (y) is expected to occur.
INTERNET COMMERCE CORPORATION
By: /s/ Geoffrey S. Carroll
-------------------------------------
Dr. Geoffrey S. Carroll
President and Chief Executive Officer
Attest:
/s/ Walter M. Psztur
- -------------------------------
Walter M. Psztur, Secretary
<PAGE>
PURCHASE FORM
-------------
The undersigned hereby irrevocably elects to exercise the attached Warrant
to the extent of purchasing ____ shares of Class A Common Stock and hereby makes
payment of _________ in payment of the full exercise price therefor.
INSTRUCTIONS FOR REGISTRATION OF STOCK
--------------------------------------
Name _______________________________________________________
(Please typewrite or print in block letters)
Address_____________________________________________________
Social Security No./Taxpayer ID No.
____________________________________________________________
Signature___________________________________________________
Dated_______________________________________________________
<PAGE>
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns and
transfers unto
Name____________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________
the right to purchase shares Class A Common Stock represented by this Warrant to
the extent of _______ shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint _________________________________
Attorney, to transfer the same on the books of the Company with full power of
substitution in the premises.
Date_______________________________
Signatures_______________________________
Exhibit III
-----------
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of January
12, 2000, by and among Internet Commerce Corporation, a Delaware corporation
(the "Company"), and Cable and Wireless PLC, a District of Columbia corporation
(the "Stockholder").
WHEREAS, the Stockholder is purchasing 10,000 shares of the Company's
Series C Convertible Preferred Stock for $10,000,000, receiving warrants to
purchase 400,000 shares of the Common Stock (the "Warrants") and has the right
to acquire additional shares of the Company's Common Stock based on the
attainment of set annual revenue targets for the sales of the Company's
services, all pursuant to that certain Master Agreement, dated as of November
22, 1999, by and among the Stockholder and the Company (the "Master Agreement").
NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations hereinafter set forth, the Company and the Stockholder, intending
legally to be 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.
"Delay Notice" shall have the meaning set forth in Section 6(b) hereof.
"Demand Registration" shall have the meaning set forth in Section 3(a)
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.
"Other Holders" shall have the meaning set forth in Section 3(c) 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 Common Stock which has been or may
be issued, from time to time, and the Common Stock which may be issued upon (i)
conversion of the Series C Convertible Preferred Stock, or (ii) upon exercise of
the Warrants to the Stockholder pursuant to the Master Agreement, including any
addendum thereto or amendment thereof, 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 definition set forth in Section 7
hereof.
"Registration Period" shall have the definition set forth in Section 3(b)
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.
"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.
"Master Agreement" shall have the definition set forth in the recitals to
this Agreement.
"Underwritten Offering" shall mean a registered offering in which
securities of the Company are sold to an underwriter for reoffering to the
public.
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 Registrable
Securities held by the Stockholder or its Affiliates continue to be Restricted
Securities. 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 Stockholder
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. DEMAND REGISTRATION.
(a) DEMAND. The Stockholder may at any time commencing three (3) months
after the date hereof request the Company, in writing, to effect the
registration of all or such portion of the Registrable Securities as the
Stockholder shall specify; PROVIDED, that such request covers registrable
securities having a then Current Market Value or at least two million dollars
($2,000,000) and that only one demand may be made pursuant to this Section 3(a).
The Company shall use its commercially reasonable efforts to file, as
expeditiously as possible, but in any event no later than forty-five (45) days
after receipt of such notice, 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 Registration"). The Demand Registration
effected pursuant to this Agreement shall be pursuant to an Underwritten
Offering if so requested by the Stockholders; provided, however, that if the
Stockholders does not so request an Underwritten Offering, the Company may
request one.
(b) EFFECTIVENESS OF REGISTRATION STATEMENT. Subject to the provisions of
Sections 6(b) and (c) hereof, the Company agrees to use its commercially
reasonable efforts to (i) cause the Registration Statement(s) relating to the
Demand Registration described in Section 3(a) hereof to become effective as
promptly as practicable, and (ii) thereafter keep such Registration Statement
effective continuously for the period (the "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 sixty (60) 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.
(c) 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 Demand Registration effected pursuant to this Section 3;
PROVIDED, HOWEVER, that if the managing underwriter or underwriters of any such
Demand Registration which is an Underwritten Offering advises the Stockholder
that the total amount or kind of securities which the Stockholder and the
Company or such Other Holders is sufficiently large to adversely affect the
success of 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 Stockholder is so reduced.
(d) No registration of Registrable Securities which shall not have become
effective and remained effective for the 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
Stockholder the opportunity to have any or all of the Registrable Securities
held by the Stockholder included in such registration statement. The Stockholder
shall advise the Company in writing within ten (10) days after the date of
receipt of such notice of the amount of Registrable Securities for which
registration is requested, and the Company shall use its commercially reasonable
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
advises the Company that the total amount or kind of securities which the
Stockholder, the Company and any other Persons intended to be included in such
proposed public 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 Stockholder and the Other Holders shall be
reduced pro rata, based upon the aggregate number of securities to be offered
for the accounts of the Stockholder and all Other Holders (except the Company
and the Requesting Securityholder) of securities intended to be included in such
offering and the number or kind of securities to be offered for the account of
the Stockholder and each Other Holder, to the extent necessary to reduce the
total amount or kind of securities to be included in such proposed public
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
obligation to the Stockholder.
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 Section 3(b) hereof, 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 practicable, but in no event later than
three (3) Business Days before filing such Registration Statement, the
Company shall furnish to the Stockholder and the underwriters, if any,
copies of all such documents proposed to be filed, which documents shall be
subject to the review of the Stockholder and underwriters and their
respective counsel;
(ii) notify the Stockholder 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 (and to reply thereto as promptly
as reasonably practicable), (4) of any stop order suspending the
effectiveness of any Registration Statement or the initiation of any
proceedings for that purpose (and use commercially reasonable efforts to
obtain the withdrawal of such order), (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 Stockholder, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Stockholder 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 Stockholder and each managing underwriter, if any,
and their respective counsel, without charge, as many conformed copies as
may 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 Stockholder 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 efforts to register or qualify or
cooperate with the Stockholder, 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 Stockholder or any 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 Stockholder 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 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 Stockholder 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 Stockholder to furnish to the Company
such information regarding the Stockholder 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 Stockholder agrees 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 Stockholder will forthwith
discontinue disposition of Registrable Securities pursuant to the then current
Prospectus until (1) the Stockholder is 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 Stockholder receives
copies of any required supplemented or amended Prospectus, or until the
Stockholder is 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 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 Stockholder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in the Stockholder's 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 underwritten
primary 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 underwritten secondary
offering initiated at the request of a Requesting Securityholder, the
Stockholder agrees that if it is reasonably requested to do so by the managing
underwriter or the underwriters, then the Stockholder shall not effect any
public sale or distribution of securities of the Company, except as part of such
underwritten registration, 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); PROVIDED, HOWEVER, that
the hold-back period applicable to the Stockholder shall be no longer than the
hold-back period applicable to any director or executive officer of the Company
or any stockholder owning more than five percent (5%) of the Company's Common
Stock.
(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
or any subsidiary or its stockholders for such a Material Development Condition
to be publicly disclosed, 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 Stockholder, (i) to cause sales of Registrable
Securities by the Stockholder 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
Stockholder). Notwithstanding the foregoing provisions of this Section 6(b): (1)
in no event may such cessation or delay be for a period of more than ninety (90)
consecutive days from the giving of its Delay Notice to The Stockholder 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 ninety (90) day period, and the
Registration Period for such new Registration Statement shall be the greater of
thirty (30) days or the number of days that remained in such 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
Stockholder to refrain from selling Registrable Securities for any period during
the Registration Period, the Registration Period shall be extended by the number
of days during the Registration Period that the Stockholder is required to
refrain from selling Registrable Securities.
(c) LIMITATION ON DEMAND AND PIGGYBACK REGISTRATION RIGHTS. Anything to the
contrary contained in this Agreement notwithstanding, when in the opinion of
counsel for the Company, registration of the Registrable Securities is not
required by the Securities Act and other applicable securities laws in
connection with a proposed sale of such Registrable Securities, the Stockholder
shall have no rights pursuant to Sections 3 and 4 hereof to request a Demand
Registration or a Piggyback Registration in connection with such proposed sale
and the Company shall promptly provide to the transfer agent and the
Stockholder's broker in connection with any sale transaction an opinion to the
effect set forth above, reasonably sufficient in form and substance to permit
the transfer agent to issue stock certificates for such Registrable Securities
without any legend restricting transfer thereof.
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
Stockholder, out-of-pocket expenses incurred by the Stockholder and underwriting
discounts, commissions or fees attributable to the sale of the Registrable
Securities.
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
Stockholder, its officers, directors, stockholders, employees, advisors and
agents, and each Person who controls the Stockholder (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 Stockholder 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 Stockholder, if so requested.
(b) INDEMNIFICATION BY STOCKHOLDER. In connection with any Registration
Statement in which the Stockholder is participating, the Stockholder 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 Stockholder 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 Stockholder shall not be required to provide
indemnification or contribution hereunder in excess of an amount equal to the
net proceeds to the Stockholder from the disposition of the Registrable
Securities disposed of by the Stockholder 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 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 Stockholder may
not participate in any Underwritten Offering hereunder unless the Stockholder
(i) agrees to sell its Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (ii) completes and executes 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 a Demand Registration, subject
to the consent of the Stockholder which shall not be unreasonably withheld or
delayed.
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 Stockholder, at the most current address given by the
Stockholder to the Company, in accordance with the provisions of this
Section 11, which address (including facsimile number) initially is 8219
Leesburg Pike, Vienna, Virginia 22182, attention: General Counsel,
facsimile No.: (703) 760-3746, with a copy to Cable and Wireless PLC, 124
Theobalds Road, London WC1X 8RX England, attention: Company Secretary,
facsimile No.: 011-44-171-315-5073.
(b) If to the Company, initially at 805 Third Avenue, New York, NY
10022, attention: 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 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 successors of each of 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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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
INTERNET COMMERCE CORPORATION
By: /s/ Geoffrey S. Carroll
------------------------------
Name: Dr. Geoffrey S. Carroll
Title: President and Chief
Executive Officer
CABLE AND WIRELESS PLC
By: /s/ Matthew Wolk
------------------------------
Name: Matthew Wolk
Title: Vice President
Global Business Department
Exhibit IV
----------
February 3, 2000
Joint Filing Agreement
We, the undersigned, hereby express our agreement that the attached
Schedule 13D is, and any future amendments thereto may be, filed on behalf of
each of us.
CABLE AND WIRELESS PLC
By: /s/ Ken Claydon
---------------
Title: Secretary
CABLE & WIRELESS USA, INC.
By: /s/ Richard H. Goshorn
----------------------
Title: Senior Vice President
and General Counsel
