SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
July 25, 2001
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(Date of earliest event reported)
July 31, 2001
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(Date of report)
NETWORK COMMERCE INC.
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(Exact Name of Registrant as Specified in Charter)
Washington 000-26707 91-1628103
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(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
411 First Avenue South, Suite 200 North, Seattle, WA 98104
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(Address of Principal Executive Offices, including Zip Code)
(206) 223-1996
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
On July 25, 2001, Network Commerce Inc. ("NCI") and Capital Ventures
International ("CVI") entered into a Settlement Agreement (The "Settlement
Agreement") with respect to certain claims arising out of the Securities
Purchase Agreement dated as of September 28, 2000 between NCI and CVI, and all
amendments thereto, and all documents (other than the Registration Rights
Agreement) executed in connection therewith (collectively referred to as the
"Contract"). Pursuant to the Settlement Agreement, NCI paid CVI $2,200,000.00
and delivered to CVI a $1,500,000.00 promissory note (the "Settlement Note") in
the form attached to the Settlement Agreement. CVI agreed that, upon the payment
of the $2,200,000.00 and the delivery of the Settlement Note, NCI satisfied all
of its past, present and future obligations to CVI under the Contract.
Pursuant to the Settlement Agreement, CVI released NCI, and NCI released
CVI, from all claims, demands and causes of action, whether direct or indirect,
known or unknown, which either CVI or NCI owned or held against the other based
upon the Contract. However, CVI did not release (a) CVI's claim against NCI for
an alleged violation of section 10(b) of the Securities Exchange Act of 1934,
and Rule 10b-5 promulgated thereunder, stated in count I of its May 22, 2001
complaint filed in the United States District Court for the Southern District of
New York under Civil Action No. 01CV-4390 (the "Complaint"), (b) CVI's claim
against certain individual officers and current and former directors mentioned
in the Complaint (the "individual defendants") for an alleged violation of
section 20(a) of the Securities Exchange Act of 1934, stated in count II of the
Complaint, and (c) CVI's claim for fraudulent inducement set forth in count III
of the Complaint. CVI agreed that in partial consideration for its receipt of
the cash payment and Settlement Note described above, CVI would not, in
prosecuting its claims against NCI and the Individual Defendants preserved under
the Settlement Agreement, assert a claim in excess of the principal amount of
$20,000,000.00 less any value received (and not returned, paid-over or disgorged
as more fully described in the Settlement Agreement) pursuant to the Settlement
Agreement. The parties agreed to promptly execute and file a stipulated order of
dismissal with prejudice of counts IV through VI of the Complaint.
The Settlement Agreement is filed as an exhibit to this report and is
incorporated into this report by reference. This summary of the provisions of
the Settlement Agreement is not complete, and you should refer to the exhibit
for a copy of the actual Settlement Agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Information
Not applicable.
(b) Pro Forma Financial Information
Not applicable
(c) Exhibits
10.1 Settlement Agreement, dated as of July 25, 2001 between
Network Commerce Inc. and Capital Ventures International
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETWORK COMMERCE INC.
Dated: July 31, 2001 By /s/ Dwayne Walker
Dwayne Walker
Chief Executive Officer
EXHIBIT INDEX
Exhibit Number Description
10.1 Settlement Agreement, dated as of July 25, 2001,
between Network Commerce Inc. and
Capital Ventures International