Exhibit 4.13
Master Agreement
Between
Cable & Wireless PLC and Internet Commerce Corporation
The Parties, Cable & 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.
Master Agreement
Between
Cable & Wireless PLC and Internet Commerce Corporation
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
Master Agreement
Between
Cable & Wireless PLC and Internet Commerce Corporation
only, in the case where the Parties jointly make sales calls, Parties shall
split commissions on a basis to be mutually agreed upon.
Master Agreement
Between
Cable & Wireless PLC and Internet Commerce Corporation
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.
Master Agreement
Between
Cable & Wireless PLC and Internet Commerce Corporation
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 & Wireless PLC Internet Commerce Corporation
Date: November 23, 1999 Date: November 23, 1999
By: _________________________ By:__________________________
Matthew Wolk Dr. Geoffrey S. Carroll
Vice President Strategic Business President and Chief Executive
Development Global Operations Officer