Exhibit 10.18
THIS SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of
__________________, 2001, is among Internet Commerce Corporation, a Delaware
corporation (the "Company"), and ________________________________, residing at
(the
"Purchaser").________________________________________________________________.
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WHEREAS, the Company desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Company, (a) ______________ shares of the
Company's Class A Common Stock, par value $0.01 per share (the "Common Stock"),
and (b) ______________ five-year warrants to purchase one share of Common Stock,
at a price of $_______ per share (the "Warrants"), in substantially in the form
annexed hereto as Exhibit I (the "Warrant Agreement");
NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Purchaser, intending to be legally bound, hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF COMMON STOCK AND WARRANTS
SECTION 1.1. Authorization of Common Stock and Warrants. The Company
has authorized the issuance, as of the date hereof, of (a) an aggregate of
______________ shares of Common Stock and (b) an aggregate of approximately
______________ Warrants and has reserved approximately ______________ shares of
Common Stock for issuance upon exercise of the Warrants in accordance with the
terms of the Warrant Agreement (such reserved shares of Common Stock sometimes
hereinafter referred to as the "Warrant Common Stock").
SECTION 1.2. Agreement to Purchase the Common Stock and Warrants.
Subject to the terms and conditions hereof, the Company is issuing and selling
to the Purchaser and the Purchaser is purchasing from the Company (the
"Offering"), at the Closing (as defined below), shares of Common Stock (the
"Shares") and __________ Warrants for a purchase price of $3.00 per Share, for
an aggregate purchase price of $ _____________ (the "Purchase Price"), payable
in cash at the Closing.
SECTION 1.3. Delivery of Common Stock; Legend.
(a) At the Closing, the Company shall deliver to the Purchaser one
or more certificates, registered in the name of the Purchaser, representing the
Shares and the Warrant Agreement. Delivery of certificates representing the
Shares and the Warrant Agreement shall be made against receipt by the Company of
a check payable to the order of the Company or a wire transfer of U.S. funds to
an account designated by the Company in the full amount of the Purchase Price.
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(b) The Company will prepare and issue one or more certificates for
the Shares and the Warrant Agreement registered in such name or names as
specified by the Purchaser. Such certificate(s) shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
HYPOTHECATED OR OFFERED FOR SALE, TRANSFER OR HYPOTHECATION
UNLESS A REGISTRATION STATEMENT UNDER THAT ACT AND OTHER
APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES IS
THEN IN EFFECT OR, IN THE OPINION OF COUNSEL, SUCH REGISTRATION
IS NOT REQUIRED.
The certificates representing the Shares, the Warrant Common Stock and the
Warrant Agreement shall bear the legend set forth above until and unless a
resale thereof is effected pursuant to an effective registration statement
covering such resale or such resale is effected pursuant to and in accordance
with an exemption from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the securities laws of any
individual State or such resale is effected pursuant to Rule 144 promulgated
under the Securities Act.
SECTION 1.4. The Closing. The closing (the "Closing") hereunder with
respect to the transactions contemplated by Sections 1.2 and 1.3 is taking place
on the date hereof at the offices of Kramer Levin Naftalis & Frankel LLP, 919
Third Avenue, New York, New York 10022.
ARTICLE II
THE PURCHASER REPRESENTATIONS AND WARRANTIES; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION
SECTION 2.1. The Purchaser Representations and Warranties. The
Purchaser represents and warrants to the Company as follows:
(a) the Purchaser is an "accredited investor" as such term is
defined in Rule 501(a) promulgated under the Securities Act. The Purchaser is
not affiliated or associated with any NASD member firm and agrees to furnish any
additional information requested to assure compliance with applicable federal
and state securities laws in connection with the acquisition and sale of the
Shares, the Warrants and the Warrant Common Stock;
(b) the Purchaser has such knowledge, skill and experience in
financial, investment and business matters to be capable of evaluating the
merits and risks of an investment in the Shares and Warrants, to make an
informed decision relating thereto and to protect its own interests in
connection with the transaction;
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(c) the Purchaser has all requisite power and authority to enter
into this Agreement and the Registration Rights Agreement in the form annexed
hereto as Exhibit II (the "Registration Rights Agreement") and to perform all of
the obligations required to be performed by it hereunder and thereunder;
(d) the execution, delivery and performance by the Purchaser of this
Agreement and the Registration Rights Agreement have been duly authorized by all
requisite action by the Purchaser and this Agreement and the Registration Rights
Agreement each constitutes the valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with their respective terms,
except as enforcement may be limited by general principles of equity and by
bankruptcy, insolvency and similar laws affecting creditors' rights and remedies
generally;
(e) the execution, delivery and performance of this Agreement and
the Registration Rights Agreement, and the consummation of the transactions
contemplated hereby and thereby, by the Purchaser will not (a) violate any law
or governmental order applicable to the Purchaser or any of its properties or
assets or (b) with or without due notice or lapse of time, or both, violate,
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, or result in the
creation of any lien upon any of the properties or assets of the Purchaser under
its organizational documents, if applicable, or any contract or obligation to
which the Purchaser is a party or by which the Purchaser or any of its
properties is bound;
(f) the Purchaser is a resident of the State set forth above and is
not acquiring the Shares, the Warrants or the Warrant Common Stock as an agent
or otherwise for any other person;
(g) the Purchaser is purchasing and acquiring the Shares and the
Warrants, and will acquire the Warrant Common Stock, for its own account, for
investment purposes only and not with an intent or view towards the further sale
or distribution thereof, or any part thereof or interest therein, within the
meaning of the Securities Act in any transaction that would violate the
registration requirements of the securities laws of the United States of
America, or any state, without prejudice, however, to the right of the Purchaser
at all times to sell or otherwise dispose of the Shares, the Warrants and the
Warrant Common Stock under an effective registration statement or applicable
exemption from registration under the Securities Act and any applicable state
securities law, subject to this Agreement, and has not pre-arranged any sale
with any other purchaser;
(h) the Shares, the Warrants and the Warrant Common Stock have not
been registered under the Securities Act, are deemed to be "restricted
securities" as defined in Rule 144(a)(3) promulgated under the Securities Act,
and may not be transferred, sold, assigned, hypothecated or otherwise disposed
of, unless such transaction is the subject of a registration statement filed
with and declared effective by the Securities and Exchange Commission (the
"SEC") or unless an exemption from the registration requirements under the
Securities Act is available. The Purchaser represents and warrants and hereby
agrees that all offers and sales of the Shares, the Warrants and the Warrant
Common Stock shall be made only pursuant to such registration or to an exemption
from registration;
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(i) the Purchaser acknowledges that the purchase of the Shares, the
Warrants and the Warrant Common Stock involves a high degree of risk, is aware
of the risks and further acknowledges that the Purchaser can bear the economic
risk of the Shares, the Warrants and the Warrant Common Stock, including the
total loss of its investment;
(j) the Purchaser understands that the Shares, the Warrants and the
Warrant Common Stock are being offered and sold to the Purchaser in reliance on
exemptions from the registration requirements of the Securities Act and state
securities laws, and that the Company is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and understandings
of the Purchaser set forth herein in order to determine the applicability of
such exemptions and the suitability of the Purchaser to acquire the Shares, the
Warrants and the Warrant Common Stock;
(k) in evaluating its investment, the Purchaser has consulted its
own investment and/or legal and/or tax advisors; and
(l) the Purchaser is not an underwriter of, or dealer in, the
Shares, the Warrants or the Warrant Common Stock, and the Purchaser is not
participating in a distribution of the Shares, the Warrants or the Warrant
Common Stock.
SECTION 2.2. Current Public Information. The Purchaser has been
furnished with or has acquired copies of the Company's most recent Annual Report
on Form 10-KSB as filed with the SEC, each Quarterly Report on Form 10-Q and
Current Report on Form 8-K filed thereafter (collectively, the "SEC Filings").
SECTION 2.3. Independent Investigation; Access. The Purchaser
acknowledges that the Purchaser, in making the decision to acquire the Shares
and the Warrants, has relied upon independent investigations made by it and the
Purchaser, prior to any sale to it, has been given access and the opportunity to
examine all material contracts and documents relating to the purchase of the
Shares and the Warrants and an opportunity to ask questions of, and to receive
answers from, the Company concerning the terms and conditions of the purchase of
the Shares and the Warrants. The Purchaser and its advisors, if any, have been
furnished with access to all publicly available materials relating to the
business, finances and operation of the Company and materials relating to the
offer and sale of the Shares and the Warrants which have been requested. The
Purchaser and its advisors, if any, have received complete and satisfactory
answers to all such inquiries. Except as set forth in this Agreement, the
Company has made no representation or warranty to the Purchaser on which the
Purchaser has relied to enter into this Agreement and acquire the Shares and the
Warrants.
SECTION 2.4. No Government Recommendation or Approval. The Purchaser
understands that no federal or state agency has passed on or made any
recommendation or endorsement of the Shares, the Warrants or the Offering or
made any finding or determination concerning the fairness or advisability of
this investment.
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SECTION 2.5. Entity the Purchasers. The person executing this Agreement
on behalf of the Purchaser represents and warrants that:
(a) He or she has made due inquiry to determine the truthfulness of
the representations and warranties made pursuant to this Agreement; and
(b) He or she is duly authorized to enter into and execute this
Agreement and the Registration Rights Agreement on behalf of the Purchaser.
SECTION 2.6. Non-Affiliate. The Purchaser is not an affiliate of the
Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1. Reporting Company Status. The Common Stock is registered
as a class under Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and is currently admitted for quotation on the
Nasdaq National Market of The Nasdaq Stock Market, Inc. ("Nasdaq"). The Company
has filed all reports required to be filed pursuant to Section 13(a) of the
Exchange Act and is eligible to file a Registration Statement on Form S-3 in
connection with a secondary shelf offering by securityholders.
SECTION 3.2. Legality. The Company has the requisite corporate power
and authority to enter into this Agreement, the Warrant Agreement and the
Registration Rights Agreement and to issue and deliver the Shares and the
Warrants, and upon exercise of the Warrants in accordance with the terms of the
Warrant Agreement, the Warrant Common Stock; the execution and delivery of this
Agreement, the Warrant Agreement and the Registration Rights Agreement and the
issuance and delivery of the Shares and the Warrants hereunder and thereunder
and the consummation of the transactions contemplated hereby and by the Warrant
Agreement and the Registration Rights Agreement have been duly and validly
authorized by all necessary corporate action by the Company; this Agreement, the
Warrant Agreement and the Registration Rights Agreement have been duly and
validly executed and delivered by and on behalf of the Company and are the valid
and binding agreements of the Company, enforceable against the Company in
accordance with their respective terms, except as enforceability may be limited
by general equitable principles, bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting creditors' rights generally.
Upon delivery thereof at the Closing, the Shares and the Warrants will be duly
authorized, validly issued, fully paid and non-assessable. Upon issuance of the
Warrant Common Stock upon the exercise of the Warrants in accordance with the
terms of the Warrant Agreement, the Warrant Common Stock will be duly
authorized, validly issue, fully paid and non-assessable. The Shares and the
Warrants, and upon exercise of the Warrants in accordance with the terms of the
Warrant Agreement, the Warrant Common Stock, does not subject the holders
thereof to personal liability by reason of being such holders.
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SECTION 3.3. Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and is duly qualified as a foreign corporation in all
jurisdictions where the failure to be so qualified would have a materially
adverse effect on its business, taken as whole.
SECTION 3.4. No Legal Proceedings. There is no action, suit or
proceeding before or by any court or any governmental agency or body, domestic
or foreign, now pending or, to the knowledge of the Company, threatened against
or affecting the Company, or any of its properties or assets, which is
reasonably likely to result in any material adverse change in the condition
(financial or otherwise) or in the earnings or business affairs of the Company,
or which is reasonably likely to materially and adversely affect the properties
or assets thereof, except as described in the SEC Filings.
SECTION 3.5. Non-Default. The Company, except as described in the SEC
Filings, is not in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust or other material instrument or agreement to which it is
a party or by which it or its property may be bound.
SECTION 3.6. No Misleading Statements. None of the SEC Filings, as of
their respective dates, contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
SECTION 3.7. No Adverse Change. Except as disclosed or contemplated in
the SEC Filings, there has been no material adverse change in the financial
condition, earnings, business affairs or business prospects of the Company since
the date of the Company's most recent Quarterly Report on Form 10-Q.
SECTION 3.8. Non-Contravention. Neither the execution and delivery of
this Agreement, the Warrant Agreement or the Registration Rights Agreement, the
issuance of the Shares and the Warrants nor the consummation of the transactions
contemplated by this Agreement, the Warrant Agreement and the Registration
Rights Agreement conflicts with or results in a breach by the Company of any of
the terms or provisions of, or constitutes a default under, the Certificate of
Incorporation or by-laws of the Company, or any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company is a party
or by which it or any of its properties or assets are bound, or any existing
applicable Federal or State law, rule, or regulation or any applicable decree,
judgment or order of any court, Federal or State regulatory body, administrative
agency or other domestic governmental body having jurisdiction over the Company
or any of its properties or assets, except for such conflicts, breaches or
defaults as would not have a material adverse effect on the Company's business
taken as a whole.
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ARTICLE IV
Covenants
SECTION 4.1. Reservation of Warrant Common Stock. For so long as any
Warrants held by the Purchaser shall remain outstanding, the Company covenants
and agrees with the Purchaser that it will at all times fully reserve from its
authorized but unissued shares of Common Stock such sufficient number of shares
thereof to permit the exercise in full of the Warrants in accordance with the
terms of the Warrant Agreement.
SECTION 4.2. Registration of Shares and the Warrant Common Stock. The
Company agrees to register the Shares and the Warrant Common Stock for resale in
accordance with the terms and conditions of the Registration Rights Agreement.
Regardless of whether the Company registers the resale of the Common Stock, the
Company will, upon the presentation of an opinion of the Purchaser's counsel,
allow the Purchaser to offer and sell the Shares and the Warrant Common Stock in
reliance on the provisions of Rule 144 or other exemption from the registration
provisions of state or federal law, at the option of the Purchaser.
ARTICLE V
CONDITIONS TO CLOSING
SECTION 5.1. Conditions to the Company's Obligation to Sell the Shares
and the Warrants. The Purchaser understands that the Company's obligation to
issue and sell the Shares and the Warrants is conditioned upon:
(a) Delivery by the Purchaser to the Company of a duly executed copy
of this Agreement and the Registration Rights Agreement and the Purchase Price,
in cash, in full;
(b) The accuracy as of the date hereof of the representations and
warranties of the Purchaser contained in this Agreement, and performance by the
Purchaser of all covenants and agreements of the Purchaser required to be
performed by it on or before the date hereof; and
(c) The continued listing of the Common Stock on the Nasdaq National
Market through the date hereof.
SECTION 5.2. Conditions to the Purchaser's Obligation to Purchase the
Shares and the Warrants. The Company understands that the Purchaser's obligation
to purchase the Shares and the Warrants is conditioned upon:
(a) Delivery by the Company to the Purchaser of a duly executed copy
of this Agreement, the Warrant Agreement and the Registration Rights Agreement;
(b) Delivery of certificates evidencing the Shares to the Purchaser;
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(c) The accuracy as of the date hereof of the representations and
warranties of the Company contained in this Agreement and the performance by the
Company on or before the date hereof of all covenants and agreements of the
Company required to be performed by it on or before the date hereof; and
(d) The continued listing of the Common Stock on the Nasdaq National
Market through the date hereof.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Confidentiality.
(a) The Purchaser undertakes to keep in strict confidence, and not
to use for any purpose unrelated to its interest in the Company, any and all
information relating in any way, to the Company which had been provided to the
Purchaser, or its representatives, by the Company or was otherwise obtained by
the Purchaser (such information, "Confidential Information"), except information
which: (i) is or shall be in the public domain not due to any act of the
Purchaser in breach of law or agreement; (ii) was initially possessed by the
Purchaser without the obligation of confidentiality under any obligation of
confidentiality; (iii) was rightfully received or shall be received without
obligation of confidentiality from a third party under no obligation of
confidentiality; or (iv) is required to be disclosed according to any law,
including under the securities laws of the United States.
(b) In connection with periodic reports to its shareholders,
investors or partners, the Purchaser may only make general statements, not
containing any technical or specific business information, regarding the general
nature and progress of the Company's business, and if required under applicable
law may provide summary financial information of the Company.
(c) Notwithstanding the foregoing, in the event that the Purchaser
or any of its representatives is legally compelled, pursuant to a subpoena,
civil investigative demand, regulatory demand or similar process or pursuant to
applicable law to disclose any Confidential Information or any other information
concerning the Company, the Purchaser shall seek a written opinion from
reputable and experienced outside counsel that a specific disclosure is
necessary in order for the Purchaser not to be in violation of or default under
an applicable law or order. The Purchaser agrees that it shall provide the
Company with prompt notice (both oral and in writing) of such request or
requirement as well as a copy of such opinion together with the text of the
proposed disclosure as far in advance of its disclosure as is reasonably
practicable, and will in good faith consult with and consider the suggestions of
the Company concerning the nature and scope of the Confidential Information and
any other information the Purchaser proposes to disclose. The Company may seek
an appropriate protective order or other remedy, may consult with the Purchaser
with respect to the Company's taking steps to resist or narrow the scope of such
request or legal process, or may waive compliance, in whole or in part, with the
terms of this Section 6.1. The Purchaser agrees to cooperate fully with and not
to oppose any action by the Company to obtain a protective order or
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other appropriate remedy. In the event that no such protective order or other
remedy is obtained, or that the Company waives compliance with the terms of this
Section 6.1, the Purchaser may disclose only that part of the Confidential
Information as it is advised by counsel in writing is legally required. In any
such event, the Purchaser shall use its best efforts to ensure that all
Confidential Information and any other information that is so disclosed will be
accorded confidential treatment in accordance with the terms and conditions of
this Section 6.1.
(d) Notwithstanding anything contained herein to the contrary, the
provisions set forth in this Section 6.1 shall be in addition to and shall not
supersede or terminate any other agreement, including, but not limited to any
non-disclosure agreement, entered into between the Purchaser and the Company
prior to the date hereof.
SECTION 6.2. Governing Law. This Agreement shall be governed by and
construed under the law of the State of New York without regard to its choice of
law provisions. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto to the same extent as if delivered personally.
SECTION 6.3. Survival of Representations, Warranties, and Covenants.
Each of the Company's and the Purchaser's representations, warranties and
covenants shall survive the execution and delivery of this Agreement and the
delivery of the certificates representing the Shares, the Warrants and the
Warrant Common Stock.
SECTION 6.4. Assignment. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or the Purchaser without the prior written
consent of the other party.
SECTION 6.5. Binding Effect. The provisions of this Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
SECTION 6.6. Notification of Changes. The Purchaser hereby covenants
and agrees to notify the Company upon the occurrence of any event prior to the
date hereof which would cause any representation, warranty or covenant of the
Purchaser contained in this Agreement to be false or incorrect.
SECTION 6.7. Sections; Other Headings; Interpretation. The section and
other headings herein are for convenience of reference only, do not constitute
part of this Agreement and shall not be deemed to limit or otherwise affect any
of the provisions hereof. Where a reference in this Agreement is made to a
Section or Exhibit, such reference shall be to a Section of or Exhibit to this
Agreement unless otherwise indicated. Where the reference "hereof," "hereby" or
"herein" appears in this Agreement, such reference shall be deemed to be a
reference to this Agreement as a whole. Whenever the words "include," "includes"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitation." Words denoting the singular include the
plural, and vice versa, and references to it or its or words denoting any gender
shall include all genders. References to "$" or "dollars" mean U.S. dollars
unless otherwise specified.
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SECTION 6.8. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which together shall be deemed to be one and the same
agreement.
SECTION 6.9. Brokers or Finders. The Company may provide fees or
commissions to certain brokers or finders in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of the Company.
SECTION 6.10. Entire Agreement; Waiver, Amendment. This Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and supersedes any and all prior agreements, understandings or
undertakings, written or oral. Neither this Agreement nor any provisions hereof
shall be waived, amended, modified, changed, discharged or terminated except by
an instrument in writing, signed by the party against whom any waiver,
amendment, modification, change, discharge or termination is sought.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
INTERNET COMMERCE CORPORATION
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
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Full Name and Address of the Purchaser for Registration Purposes:
NAME:
ADDRESS:
TEL. NO:
FAX NO.:
CONTACT NAME:
Delivery Instructions (if different from Registration Name):
NAME:
ADDRESS:
TEL. NO:
FAX NO.:
CONTACT NAME:
SPECIAL
INSTRUCTIONS:
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