0001104659-07-053644.txt : 20070712 0001104659-07-053644.hdr.sgml : 20070712 20070712172852 ACCESSION NUMBER: 0001104659-07-053644 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20070712 DATE AS OF CHANGE: 20070712 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EASYLINK SERVICES CORP CENTRAL INDEX KEY: 0001081661 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 133787073 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-56949 FILM NUMBER: 07977109 BUSINESS ADDRESS: STREET 1: 33 KNIGHTSBRIDGE ROAD CITY: PISCATAWAY STATE: NJ ZIP: 08854 BUSINESS PHONE: 732-652-3500 MAIL ADDRESS: STREET 1: 33 KNIGHTSBRIDGE ROAD CITY: PISCATAWAY STATE: NJ ZIP: 08854 FORMER COMPANY: FORMER CONFORMED NAME: MAIL COM INC DATE OF NAME CHANGE: 19990311 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET COMMERCE CORP CENTRAL INDEX KEY: 0000894738 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 133645702 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 6025 THE CORNERS PARKWAY STREET 2: SUITE 100 CITY: NORCROSS STATE: GA ZIP: 30092 BUSINESS PHONE: 678-533-8000 MAIL ADDRESS: STREET 1: 6025 THE CORNERS PARKWAY STREET 2: SUITE 100 CITY: NORCROSS STATE: GA ZIP: 30092 FORMER COMPANY: FORMER CONFORMED NAME: INFOSAFE SYSTEMS INC DATE OF NAME CHANGE: 19940914 SC 13D 1 a07-19461_1sc13d.htm SC 13D

	UNITED STATES	OMB APPROVAL
	SECURITIES AND EXCHANGE COMMISSION	OMB Number: 3235-0145
	Washington, D.C. 20549	Expires: February 28, 2009
	SCHEDULE 13D	Estimated average burden hours per response. . 14.5

Under the Securities Exchange Act of 1934
(Amendment No. )*

EASYLINK SERVICES CORPORATION

(Name of Issuer)

Class A Common Stock, $.01 Par Value

(Title of Class of Securities)

277 84T 200

(CUSIP Number)

Glen E. Shipley

Chief Financial Officer

Internet Commerce Corporation

6025 The Corners Parkway, Suite 100

Norcross, Georgia 30092

(678-533-8000)

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

With a copy to:

Larry W. Shackelford, Esq.

Troutman Sanders LLP

600 Peachtree Street, N.E.

Suite 5200

Atlanta, Georgia 30308

(404-885-3000)

July 2, 2007

(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §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).

CUSIP No. 277 84T 200

	1.	names of reporting persons I.R.S. Identification Nos. of above persons (entities only) Internet Commerce Corporation 13-3645702

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds WC, OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization Delaware

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 2,293,515

			8.	Shared Voting Power 2,689,566

			9.	Sole Dispositive Power 2,293,515

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 2,293,515

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x Excludes 2,689,566 as to which reporting person may be deemed to share voting control but as to which reporting person disclaims beneficial ownership.

	13.	Percent of Class Represented by Amount in Row (11) 20.8%

	14.	Type of Reporting Person (See Instructions) CO

Item 1. Security and Issuer.

This statement on Schedule 13D relates to the Class A common stock, par value $0.01 per share, of EasyLink Services Corporation (“Issuer” or “EasyLink”), a Delaware corporation. The principal executive office of EasyLink is located at 33 Knightsbridge Road, Piscataway, New Jersey 08854.

Item 2. Identity and Background.

(a) The name of the company filing this statement is Internet Commerce Corporation, a Delaware corporation (“ICC” or “reporting person”).

(b) The reporting person’s principal office address is 6025 The Corners Parkway, Suite 100, Norcross, Georgia 30092.

(d) During the last five years, neither the reporting person nor, to the best knowledge of the reporting person, any of the reporting person’s directors or executive officers have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, neither the reporting person nor, to the best knowledge of the reporting person, any of its directors or executive officers have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) ICC is a Delaware corporation.

Item 3. Source and Amount of Funds or Other Consideration.

In June and July 2007, the reporting person purchased an aggregate of 2,293,515 shares of the Issuer’s Class A common stock that are the subject of this filing, paid for in cash in the aggregate amount of $13,223,184.45.

On July 2, 2007, the reporting person entered into a Securities Purchase Agreement by and among the reporting person and several purchasers (the “Purchasers”) affiliated with York Capital Management, L.P. (the “Securities Purchase Agreement”). Pursuant to the Securities Purchase Agreement, the Purchasers agreed to purchase an aggregate of $10,000,000 in principal amount of Senior Secured Convertible Bridge Notes (the “Notes”) issued by the Company. The transaction has been approved by the reporting person’s Board of Directors. The proceeds from the sale of the Notes shall be used for working capital purposes and to acquire equity securities other than the equity securities of ICC and its subsidiaries. The reporting person financed the purchase of the Securities in part with the proceeds from the $10,000,000 aggregate principal amount of the Notes and in part from working capital.

Item 4. Purpose of Transaction.

(a) The reporting person is a party to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 3, 2007, by and among the reporting person, Jets Acquisition Sub, Inc., a wholly-owned subsidiary of the reporting person and EasyLink pursuant to which the subsidiary of the reporting person will merge with and into EasyLink, which will then become a wholly-owned subsidiary of the reporting person. The acquisition of the Issuer’s securities reported herein has been effected in furtherance of the reporting person’s objective to acquire EasyLink as a wholly-owned subsidiary, as evidenced by the Merger Agreement.

(b-j) Not Applicable.

Item 5. Interest in Securities of the Issuer.

(a) The reporting person beneficially owns 4,983,081 shares of Class A common stock of the Issuer equivalent to approximately 45.1% of such class. The reporting person disclaims beneficial ownership of 2,689,556 of such shares of Class A common stock..

(b) The reporting person has sole power to vote or to direct the vote and to dispose of or direct the disposition of 2,293,515 of the shares of Class A common stock of the Issuer and shares the power to vote 2,689,556 shares of the Class A common stock of the Issuer.

(c) The transactions in the Issuer Class A common stock that were effected by the reporting person during the past 60 days are as contained in Schedule 1 attached hereto.

Except as described in Schedule 1, neither the reporting person, nor to the best knowledge of the reporting person any of its directors or executive officers, has effected any other transactions with respect to the Class A common stock during the past 60 days.

(d) Not applicable.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

On May 3, 2007, the reporting person and Jets Acquisition Sub, Inc., a wholly-owned subsidiary of the reporting person (“MergerSub”), entered into the “Merger Agreement” to acquire EasyLink. Pursuant to the Merger Agreement, the Merger Sub will merge with and into EasyLink, and EasyLink will become a wholly-owned subsidiary of the reporting person. The transaction has been approved by both the reporting person’s Board of Directors and the EasyLink Board of Directors. Under the terms of the Merger Agreement, the reporting person will pay $5.80 per share in cash in exchange for each share of Class A common stock of EasyLink, for an estimated aggregate purchase price of approximately $67 million. The transaction is expected to close in the third quarter of 2007, subject to customary closing conditions, regulatory approvals, and stockholder approval by both companies.

At the effective time of the Merger, each outstanding share of EasyLink Class A common stock, other than shares owned indirectly by EasyLink or shares subject to dissenter’s rights, will be canceled and converted into the right to receive $5.80 per share in cash, without interest (the “Merger Consideration”). Following the closing of the Merger, EasyLink’s Class A common stock will no longer be listed on The Nasdaq Capital Market.

All options to acquire shares of EasyLink Class A common stock held by directors with an exercise price per share that is less than the Merger Consideration (as defined in the Merger Agreement) will vest immediately as of the effective time of the Merger and holders of such options will be entitled to receive an amount in cash equal to the excess of the Merger Consideration over the exercise price per share of EasyLink Class A common stock subject to the option for each share subject to the option. All other outstanding options that are not held by a director will be replaced by the reporting person with a substitute option to purchase shares of the reporting person’s class A common stock. Each substitute option will be subject to, and will vest and become exercisable in accordance with, comparable terms and conditions as the corresponding option that was in effect immediately prior to the closing of the Merger, except that each substitute option will be exercisable for that number of shares of the reporting person’s class A common stock equal to the number of shares of EasyLink Class A common stock subject to the option that is being replaced multiplied by an Exchange Ratio (as defined in the Merger Agreement).

Grants of restricted shares of EasyLink Class A common stock to certain executive officers will be converted into restricted shares of the reporting person’s class A common stock equal to (i) the product of $5.80 per share and the number of shares of restricted stock held by each holder, (ii) divided by the volume weighted average price (as defined in the Merger Agreement) of the reporting person’s class A common stock. Each share of restricted stock of the reporting person replacing EasyLink restricted stock will be subject to the same vesting restrictions as applied to such restricted shares of EasyLink Class A common stock immediately prior to the closing of the Merger.

Concurrently with the execution of the Merger Agreement, EasyLink’s directors, certain of its officers and Federal Partners, L.P. entered into separate voting agreements with the reporting person. These parties beneficially hold outstanding shares of EasyLink’s Class A common stock that represent approximately 18.8% of EasyLink’s outstanding Class A common stock and options currently exercisable for EasyLink’s Class A common stock that represent approximately an additional 5.4% of EasyLink’s outstanding Class A common stock. Pursuant to each such voting agreement, such parties have agreed, among other things, to vote their shares of EasyLink Class A common stock in favor of adoption of the Merger Agreement and the Merger.

Item 7. Material to Filed as Exhibits.

		2.1		Securities Purchase Agreement, dated as of July 2, 2007, by and among Internet Commerce Corporation and each of the Purchasers identified on the signature pages thereto.

		2.2		Form of Senior Secured Convertible Bridge Note.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: July 12, 2007	INTERNET COMMERCE CORPORATION


	/s/ Thomas J. Stallings
	Name:	Thomas J. Stallings
	Title:	Chief Executive Officer

SCHEDULE 1

Purchase Date	Number of Shares Purchased	Price Per Share		Transaction Type
6/25/07	20,000	$	5.6863	Open Market Purchase
6/26/07	100,400	$	5.6999	Open Market Purchase
6/27/07	105,600	$	5.6984	Open Market Purchase
6/28/07	122,300	$	5.6988	Open Market Purchase
6/29/07	151,700	$	5.6980	Open Market Purchase
7/2/07	801,578	$	5.7668	Open Market Purchase
7/3/07	304,900	$	5.72	Open Market Purchase
7/5/07	47,900	$	5.75	Open Market Purchase
7/6/07	293,933	$	5.76	Open Market Purchase
7/9/07	203,704	$	5.78	Open Market Purchase
7/10/07	141,500	$	5.79	Open Market Purchase

EX-2.1 2 a07-19461_1ex2d1.htm SECURITIES PURCHASE AGREEMENT, DATED AS OF JULY 2, 2007

EXHIBIT 2.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement is entered into and dated as of July 2, 2007 (this “Agreement”) by and among Internet Commerce Corporation, a Delaware corporation (the “Company”) and each of the purchasers identified on the signature pages hereto (each, a “Purchaser” and, collectively, the “Purchasers”).

WHEREAS, the Company and the Purchasers entered into that certain Securities Purchase Agreement dated as of May 3, 2007 (the “May Agreement”) pursuant to which the Purchasers agreed to purchase from the Company certain securities of the Company (the “May Securities”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933 (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, certain securities of the Company pursuant to the terms set forth herein.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser, severally and not jointly, agree as follows:

ARTICLE I.
DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth in this Section 1.1:

“Affiliate” of a Person means any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the first Person. Without limiting the foregoing with respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

“Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

“Closing Date” means the date of the Closing.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the class A common stock of the Company, par value $0.01 per share, and any securities into which such common stock may hereafter be reclassified or exchanged.

“Company Counsel” means Troutman Sanders LLP, counsel to the Company.

“Company Security Agreement” means that certain Security Agreement, dated as of the Closing Date, by and among the Company, the Agent (as defined therein), and each of the Purchasers, as the same be amended, modified or supplemented from time to time, substantially in the form of Exhibit B.

“Easylink” means Easylink Services Corporation, a Delaware corporation.

“Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq Global Market or the Nasdaq Capital Market or any successor thereto.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Stock” means issuances permitted pursuant to the definition of “Excluded Stock” in the May Agreement.

“Flow of Funds Memorandum” means the memorandum to be distributed prior to the Closing and agreed upon by the parties providing the parties with the amounts and wire instructions for the various payments to be made at Closing.

“Guaranty” means that certain guaranty executed by each of the Subsidiaries in favor of the Purchasers in the form of Exhibit C.

“Indebtedness” of any Person means (i) all indebtedness representing money borrowed which is created, assumed, incurred or guaranteed in any manner by such Person or for which such Person is responsible or liable (whether by guarantee of such indebtedness, agreement to purchase indebtedness of, or to supply funds to or invest in, others or otherwise), (ii) any direct or contingent obligations of such person arising under any letter of credit (including standby and commercial), bankers acceptances, bank guaranties, surety bonds and similar instruments, and (iii) all Indebtedness of another entity secured by any Lien existing on property or assets owned by such Person.

“Liens” means any lien, charge, claim, security interest, encumbrance, right of first refusal or other restriction.

“Losses” means any and all damages, fines, penalties, deficiencies, liabilities, claims, losses (including loss of value), judgments, awards, settlements, taxes, actions, obligations and costs and expenses in connection therewith (including, without limitation, interest, court costs and fees and expenses of attorneys, accountants and other experts, or any other expenses of litigation or other Proceedings or of any default or assessment).

“Maturity Date” has the meaning set forth in the Notes.

“Notes” means the Senior Secured Convertible Bridge Notes due on the Maturity Date with an aggregate principal face amount of $10,000,000, in the form of Exhibit A.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition).

“Purchaser Counsel” means Proskauer Rose LLP, counsel to York Capital Management, L.P.

“Securities” means the Notes and the Underlying Securities issued or issuable (as applicable) to the applicable Purchaser pursuant to the Transaction Documents.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Security Agreements” means, collectively, the Company Security Agreement, the Subsidiary Security Agreements and the Guaranty.

“Subsidiary” means any Person or interest therein directly or indirectly owned or controlled by the Company or any of its Subsidiaries.

“Subsidiary Security Agreements” means, collectively, those certain Subsidiary Security Agreements, dated as of the Closing Date, by and among each of the Subsidiaries, the Agent (as defined therein) and each of the Purchasers, as the same may be amended, modified or supplemented from time to time, substantially in the form of Exhibit D.

“Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market, or (b) if the Common Stock is not then listed or quoted and traded on any Trading Market, then any Business Day.

“Trading Market” means Nasdaq Global Market or any other primary Eligible Market or any national securities exchange, market or trading or quotation facility on which the Common Stock is then listed or quoted.

“Transaction Documents” means this Agreement, the Notes, the Security Agreements and any other documents, certificates or agreements executed or delivered in connection with the transactions contemplated hereby.

“Underlying Securities” means the Series A Notes and the Series B Notes, each as defined in the May Agreement, and which shall be deemed to include, for purposes of this Agreement and the May Agreement, up to $5,000,000 of Series A Notes and up to $6,666,667 of

Series B Notes, in the aggregate not the exceed $10,000,000, and in each case in addition to the amounts set forth in the May Agreement.

ARTICLE II.
PURCHASE AND SALE

2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each of the Purchasers, and each Purchaser shall, severally and not jointly, purchase from the Company, the Notes set forth on Schedule 2.1, for an aggregate purchase price of $10,000,000. The Closing shall take place not later than 5:30 p.m. New York time on July 2, 2007 at the offices of Proskauer Rose LLP, 1585 Broadway, New York, New York or at such other location or time as the parties to this Agreement may agree in writing.

2.2 Closing Deliveries.

(a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the following:

(i) a Note, registered in the name of such Purchaser, in the principal amount indicated across from such Purchaser’s name on Schedule 2.1 under the heading “Note Principal Amount”;

(ii) the Company Security Agreement duly executed by the Company in favor of the Purchasers;

(iii) the Subsidiary Security Agreements duly executed by the applicable Subsidiaries in favor of the Purchasers;

(iv) the Guaranty executed by each of the Subsidiaries in favor of the Purchasers;

(v) proper financing statements in form appropriate for filing under the Uniform Commercial Code of all jurisdictions that the Purchasers may reasonably deem necessary or desirable in order to perfect and protect the liens and security interests created under the Security Agreements, covering the collateral described in the Security Agreements;

(vi) each of the physical stock certificates of the Subsidiaries, along with an undated stock power for each of such certificate, executed in blank (or, if any such shares of capital stock are uncertificated, confirmation and evidence reasonably satisfactory to the Purchasers that the security interest in such uncertificated securities has been transferred to and perfected by the Purchasers, in accordance with Sections 8-313, 8-321 and 9-115 of the Uniform Commercial Code or any other similar or local or foreign law that may be applicable);

(vii) the legal opinion of Company Counsel, in the form of Exhibit E, executed by such counsel and addressed to the Purchasers;

(viii) a certificate of the Secretary of the Company dated as of the Closing Date, and certifying: (1) that attached thereto is a true and complete copy of the By-laws of the Company in effect upon the Closing Date; (2) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors of the Company authorizing the execution, delivery and performance of this Agreement and the other the Transaction Documents, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement and the other Transaction Documents; and (3) the signatures and titles of the officers of the Company executing each of the Transaction Documents; and

(ix) any other document reasonably requested by the Purchasers or Purchaser Counsel.

(b) At the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following: (i) the purchase price indicated across from such Purchaser’s name on Schedule 2.1 under the heading “Purchase Price”, in United States dollars and in immediately available funds, by wire transfer in accordance with the Flow of Funds Memorandum; and (ii) each Transaction Document to which such Purchaser is a signatory, duly executed by such Purchaser.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in Schedule 3.1, the Company hereby represents and warrants and agrees with the Purchasers that each of the representations and warranties of the Company set forth in the May Agreement (the “May Representations and Warranties”) is true and correct as of the date hereof and as of the Closing, as if made on such date, and, for purposes of this Section 3.1, (a) each reference in the May Representations and Warranties to “Underlying Shares” shall be deemed to mean “Underlying Securities” as defined in this Agreement, (b) each term used and not defined in this Agreement and defined in the May Agreement shall be deemed to have the meaning given to it in the May Agreement, (c) each term defined in this Agreement and also defined in the May Agreement shall be deemed to have the meaning given to it in this Agreement, and (d) each of the May Representations and Warranties shall apply mutatis mutandis to any term covered by clause (c) above (including without limitation to the terms the “Notes,” the “Securities,” this “Agreement” and the “Transaction Documents,” each as defined in this Agreement).

3.2 Additional Representations of the Company. The Company may from time to time use some or all of the proceeds from the issuance of the Notes for the purchase of equity securities of Easylink. The Company represents and warrants to, and agrees with, the Purchasers that the Company is not as of the date hereof, and will not be as of the Closing Date, in possession of any material non-public information regarding Easylink, that it will not at any time engage in any transaction in the securities of Easylink while in the possession of any material non-public information regarding Easylink, and that the Company will not at any time engage in any transaction regarding or relating to securities of Easylink in violation of any applicable law, rule or regulation, including without limitation all securities laws, rules and regulations. The Company further represents and warrants that neither it nor any of its representatives has

provided any material non-public information regarding the Company or Easylink to any of the Purchasers.

The Purchasers acknowledge and agree that the Company does not make and has not made any representations or warranties with respect to the transactions contemplated solely by this Agreement other than those specifically set forth or referenced in Sections 3.1 and 3.2.

3.3 Representations and Warranties of the Purchasers. Each Purchaser hereby, as to itself only and for no other Purchaser, represents and warrants to the Company as follows:

(a) Organization; Authority. Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate, limited liability company or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by such Purchaser of the Transaction Documents to which it is a party have been duly authorized by all necessary corporate or, if such Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Purchaser. Each of the Transaction Documents to which such Purchaser is a party has been duly executed by such Purchaser and, when delivered by such Purchaser in accordance with terms hereof, will constitutes the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms.

(b) Investment Intent. Such Purchaser is acquiring the Securities as principal for its own account for investment purposes and not with a view to distributing or reselling such Securities or any part thereof in violation of applicable securities laws, without prejudice, however, to such Purchaser’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold the Securities for any period of time. Such Purchaser understands that the Securities have not been registered under the Securities Act, and therefore the Securities may not be sold, assigned or transferred unless (i) a registration statement under the Securities Act is in effect with respect thereto or (ii) an exemption from registration is found to be available to the reasonable satisfaction of the Company.

(c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

(d) Experience of such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

(e) General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

The Company acknowledges and agrees that each Purchaser does not make and has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.3.

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

4.1 Transfer Restrictions.

(a) The Securities may only be disposed of pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act, and in compliance with any applicable state securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or to the Company, except as otherwise set forth herein, the Company may require the transferor to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration under the Securities Act. As a condition of transfer of the Notes, any transferee shall agree in writing to be bound by the terms of this Agreement (and any other applicable Transaction Document) and shall have the rights of a Purchaser under this Agreement.

(b) The Purchasers agree to the imprinting on any instrument evidencing Notes of a restrictive legend in substantially the form as follows, together with any additional legend required by any applicable state securities laws:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. NOTWITHSTANDING THE FOREGOING, THESE SECURITIES

MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

(c) Instruments evidencing Securities shall not be required to contain the legend set forth in Section 4.1(b) (i) following any sale of such Securities pursuant to the “Plan of Distribution” of an effective Registration Statement covering the resale of such Securities under the Securities Act and compliance with the prospectus delivery requirements of Section 5 of the Securities Act in connection with such resale, (ii) following any sale of such Securities in compliance with Rule 144, (iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission). The Company shall cause its counsel to issue a legal opinion in a form agreed to by the Company and the Purchasers to the Company’s transfer agent on the Effective Date. At such time as a legend is no longer required for certain Securities, the Company will no later than three Trading Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a legended instrument representing such Securities, deliver or cause to be delivered to such Purchaser an instrument representing such Securities that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in Section 4.1(b).

(d) The Company acknowledges and agrees that a Purchaser may from time to time pledge or grant a security interest in some or all of the Securities in connection with a bona fide margin agreement secured by the Securities and, if required under the terms of such agreement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.

4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities (including the Underlying Securities) will result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain circumstance. The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue the Securities (including the Underlying Securities) pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim that the Company may have against any Purchaser.

4.3 Furnishing of Information; Further Assurances. Until the later of the second anniversary of the Closing Date or the last date of acquisition of the Underlying Securities upon conversion of the Notes, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. If, at any time after the Closing

Date, any further action is necessary or desirable to carry out the purposes of the Transaction Documents or consummate the transactions contemplated thereby, the Company hereby agrees to take all such lawful and necessary actions, including such actions as may be required under the Hart-Scott Rodino Act (the “HSR Act”) and under similar other anti-trust, competition or trade law or other similar laws. In furtherance of the foregoing sentence, the Company hereby agrees that upon written request of any Purchaser, the Company shall promptly and at its own expense provide all such information and make all such filings as may be required under the HSR Act in connection with the Transaction Documents and the issuance of securities and the other transactions contemplated thereby.

4.4 Integration. The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market.

4.5 Conversion and Exercise Procedures. The form of Holder Conversion Notice included in the Notes set forth the totality of the procedures required by the Purchasers in order to convert the Notes. No additional legal opinion or other information or instructions shall be necessary to enable the Purchasers to convert their Notes. The Company shall honor conversions of the Notes and shall deliver Underlying Securities in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

4.6 Securities Laws Disclosure; Publicity. Within four Business Days of the Closing Date, the Company shall file a Current Report on Form 8-K with the Commission (the “8-K Filing”) describing the material terms of the transactions contemplated by the Transaction Documents and including as exhibits to such Current Report on Form 8-K this Agreement and the form of Note, in the form required by the Exchange Act. Thereafter, the Company shall timely file any filings and notices required by the Commission or applicable law with respect to the transactions contemplated hereby and provide copies thereof to the Purchasers promptly after filing. The Company and the Purchasers shall consult with each other in issuing any press releases or otherwise making public statements or filings and other communications with the Commission or any regulatory agency or Trading Market with respect to the transactions contemplated hereby, and neither party shall issue any such press release or otherwise make any such public statement, filing or other communication without the prior consent of the other, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement, filing or other communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law, Trading Market regulations or the Commission, in which case the Company shall provide the Purchasers with prior notice of such disclosure. Except to the extent requested by any Purchaser pursuant to and in accordance with Section 4.14, the Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents not to, provide any Purchaser with any

material nonpublic information regarding the Company or any of its Subsidiaries or Easylink without the express written consent of such Purchaser.

4.7 Use of Proceeds. The Company shall use substantially all of the net proceeds from the sale of the Securities hereunder for working capital and to acquire equity securities other than equity securities of ICC or its Subsidiaries.

4.8 Indebtedness; Liens.

(a) At any time after the date of this Agreement, neither the Company nor any Subsidiary shall create, incur, assume or suffer to exist any Indebtedness, other than Permitted Indebtedness as defined in and in accordance with the terms of the May Agreement (“Permitted Indebtedness”). The Company and the Purchasers, who are the parties to the May Agreement, hereby confirm and agree that the Notes shall be deemed to be an Approved Issuance under the May Agreement, notwithstanding any provisions in the May Agreement to the contrary.

(b) At any time after the date of this Agreement, neither the Company nor any Subsidiary shall create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than (i) Liens incurred by the Company or the Subsidiaries, pursuant to the financings permitted under Section 4.8(a) above, (ii) Liens pursuant to the Security Agreements, (iii) Liens arising from taxes, assessments, charges or claims that are not yet due or that remain payable without penalty, and (iv) Liens on real property that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries.

(c) The provisions of this Section 4.8 shall terminate and be of no further force or effect upon the conversion or indefeasible repayment in full of the Notes and all accrued interest thereon and any and all expenses or liabilities relating thereto.

4.9 Repayment of Notes. Each of the parties hereto agrees that (a) all repayments of the Notes (including any accrued interest thereon) by the Company (other than by conversion of a Note or, after notice and an opportunity for all holders of Notes to participate pro rata, upon exercise by a holder of a Note of its rights and remedies thereunder to be repaid or to have its Note repurchased) will be paid pro rata to the holders thereof based upon the principal amount then outstanding of the series of Notes being repaid to each of such holders, and (b) except as otherwise set forth herein, all payments on the Notes shall be applied to the payment of accrued but unpaid interest before being applied to the payment of the principal. Notwithstanding anything in this Agreement or the Notes to the contrary, the Company may only prepay or repurchase Notes as specifically provided in this Agreement or the Notes. Permitted prepayments or repurchases in respect of the Underlying Securities shall be made in accordance with the terms of Section 4.11 of the May Agreement.

4.10 No Impairment. At all times after the date hereof, the Company will not take or permit any action, or cause or permit any Subsidiary to take or permit any action that impairs or adversely affects the rights of the Purchasers under any Transaction Document.

4.11 Fundamental Changes. In addition to any other rights provided by law or set forth herein, from and after the date of this Agreement and, after issuance of the Notes to the Purchasers, for so long as any Note remains outstanding, except for the transactions specifically contemplated by this Agreement and the other Transaction Documents, neither the Company nor any Subsidiary shall, without first obtaining the approval of the holders of a majority of the outstanding principal face amount of the Notes:

(a) dissolve, liquidate or merge or consolidate with or into another Person, or dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, other than a transaction in which the Company or a redomiciled successor of the Company remains the sole beneficial owner of substantially all of its assets and the ultimate owners of all securities of the Company remain unchanged;

(b) purchase, redeem (other than pursuant to the Company’s stock option plan or similar employee incentive plan as described in the definition of “Excluded Stock” in the May Agreement giving the Company the right to repurchase shares at cost upon the termination of an employee’s or director’s services) or set aside any sums for the purchase or redemption of, or declare or pay any dividend (including a dividend payable in stock of the Company) or make any other distribution with respect to, any shares of capital stock or any other securities that are convertible into or exercisable for such stock, except for the payment of accruing dividends of Common Stock that are required or permitted to be paid under the terms of the Company’s Series C Preferred Stock as in effect as of the date hereof;

(c) sell, dispose or otherwise transfer any assets or property in any one transaction or series of related transactions with a value equal to or greater than $500,000, except in the ordinary course of business consistent with past practice;

(d) fail to maintain its corporate existence, or change the nature of the Company’s business to any business which is fundamentally distinct and separate from the business currently conducted by the Company;

(e) cause or permit any Subsidiary directly or indirectly to take any actions described in clauses (a) through (d) above;

(f) except in connection with the consummation of the transactions contemplated by the May Agreement, issue or cause any action to be taken which will result in any shares of any class or series of common stock of the Company other than the Common Stock to be issued or issuable or outstanding or make any dividend or distribution in respect thereof or purchase or redeem any shares thereof, except for the payment of accruing dividends of Common Stock that are required or permitted to be paid under the terms of the Company’s Series C Preferred Stock as in effect as of the date hereof and in connection with the redemption of the Company’s Series D Preferred Stock at an aggregate price not to exceed $250,000; or

(g) enter into any agreement to do any of the foregoing.

4.12 Indemnification.

(a) If any Purchaser or any of its Affiliates or any officer, director, partner, controlling person, employee or agent of a Purchaser or any of its Affiliates (a “Related Person”) becomes involved in any capacity in any Proceeding brought by or against any Person in connection with or as a result of the transactions contemplated by the Transaction Documents, the Company will indemnify and hold harmless such Purchaser or Related Person for its reasonable legal and other expenses (including the costs of any investigation, preparation and travel) and for any Losses incurred in connection therewith, as such expenses or Losses are incurred, excluding only Losses that result directly from such Purchaser’s or Related Person’s gross negligence or willful misconduct. In addition, the Company shall indemnify and hold harmless each Purchaser and Related Person from and against any and all Losses, as incurred, arising out of or relating to any breach by the Company of any of the representations, warranties or covenants made by the Company in this Agreement or any other Transaction Document, or any allegation by a third party that, if true, would constitute such a breach. The indemnification obligations of the Company under this paragraph shall be in addition to any liability that the Company may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Purchasers and any such Related Persons. If the Company breaches its obligations under any Transaction Document, then, in addition to any other liabilities the Company may have under any Transaction Document or applicable law, the Company shall pay or reimburse the Purchasers on demand for all costs of collection and enforcement (including reasonable attorneys’ fees and expenses). Without limiting the generality of the foregoing, the Company specifically agrees to reimburse the Purchasers on demand for all costs of enforcing the indemnification obligations in this paragraph.

4.13 Shareholders Rights Plan. No claim will be made or enforced by the Company, any Subsidiary or any other Person that any Purchaser is an “Acquiring Person” or any similar term under any shareholders rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, any Subsidiary or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Underlying Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

4.14 Access. In addition to any other rights provided by law or set forth herein, from and after the date of this Agreement and for so long as any Note remains outstanding, the Company shall, and shall cause each of the Subsidiaries, to give the Majority Purchasers (as defined in Section 7.4) and their representatives, at the Majority Purchasers’ request, reasonable access during reasonable business hours to (a) all properties, assets, books, contracts, commitments, reports and records relating to the Company and the Subsidiaries, and (b) the management of the Company and the Subsidiaries, and the Company shall use its commercially reasonable efforts to provide the Majority Purchasers such access to the accountants of the Company; provided, however, that in each case, unless the Majority Purchasers sign a confidentiality agreement with the Company with respect to the information contemplated by clauses (x) through (z) below, the Company shall not be required to provide the Majority Purchasers access to any information or Persons if the Company reasonably determines that access to such information or Persons (x) would adversely affect the attorney-client privilege between the Company and its counsel, (y) would result in the disclosure of trade secrets, material nonpublic information or other confidential or proprietary information, and (z) cannot be provided to the Majority Purchasers in a manner that would avoid the adverse affect on the attorney-client privilege between the

Company and its counsel or the disclosure of trade secrets, material nonpublic information or other confidential or proprietary information, as applicable.

4.15 Amendments to Transaction Documents. From and after the date of this Agreement, the Company shall not, and shall not permit any of its Subsidiaries to, enter into, become or remain subject to any agreement or instrument, except for the Transaction Documents, that would prohibit or require the consent of any Person to any amendment, modification or supplement to any of the Transaction Documents.

4.16 New Subsidiaries. After the date hereof, if the Company or any Subsidiary forms, creates or acquires a majority or greater owned direct or indirect subsidiary (each, a “New Subsidiary”), the Company shall immediately provide written notice thereof to the Purchasers, and shall promptly cause, or cause a Subsidiary to cause, such New Subsidiary to guarantee all of the Company’s obligations to the Purchasers by executing and delivering (i) a joinder to the Guaranty, and (ii) a security agreement substantially in the form of the Subsidiary Security Agreements attached hereto as Exhibit D. If requested by the Purchasers, the Company shall also deliver to the Purchasers an opinion of counsel to such New Subsidiary that is reasonably satisfactory to the Purchasers covering such legal matters with respect to such New Subsidiary becoming a guarantor of the Company’s obligations, executing and delivering a security agreement in favor of the Purchasers and any other matters that the Purchasers may reasonably request. The stock or other equity interests of a New Subsidiary shall be pledged to the Purchasers pursuant to the applicable Security Agreement, and the Company shall deliver, or cause the applicable Subsidiary to deliver, each of the physical stock certificates of such New Subsidiary, along with an undated stock power for each such certificate, executed in blank (or, if any such shares of capital stock are uncertificated, confirmation and evidence reasonably satisfactory to the Purchasers that the security interest in such uncertificated securities has been transferred to and perfected by the Purchasers, in accordance with Sections 8-313, 8-321 and 9-115 of the Uniform Commercial Code or any other similar or local or foreign law that may be applicable).

4.17 Underlying Securities. Each Purchaser shall have all of the rights in respect of the Underlying Securities held, or to be acquired, by such Purchaser afforded to holders of the Series A Notes or Series B Notes (or Underlying Shares (as defined in the May Agreement) in respect thereof) in the May Agreement on the terms set forth therein (including without limitation with respect to all of the applicable rights set forth in Articles 4 and 6 of the May Agreement); provided that the reference to “9.9%” in Section 6(b) of each of the Series A Notes and Series B Notes shall be replaced with a reference to “4.9%” so that the right of any Holder of Series A Notes or Series B Notes to acquire Common Stock is limited to the extent necessary to insure that, following any conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with such Holder’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.9% (with beneficial ownership determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder).

ARTICLE V.
INTENTIONALLY OMITTED

ARTICLE VI.
INTENTIONALLY OMITTED

ARTICLE VII.
MISCELLANEOUS

7.1 Fees and Expenses. At the Closing or upon the earlier request of the Purchasers, the Company shall pay to the Purchasers (a) the estimated legal and due diligence fees and expenses incurred by the Purchasers (including the fees and expenses of Purchaser Counsel) incurred to date with respect to the preparation and negotiation of the May Agreement and the Transaction Documents (as defined in the May Agreement), and (b) without duplication of clause (a) above, the estimated legal and due diligence fees and expenses incurred by the Purchasers (including the fees and expenses of Purchaser Counsel) in connection with the preparation and negotiation of this Agreement and the other Transaction Documents. In lieu of the foregoing payment, the Purchasers may retain such amount at the Closing. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the issuance of any Notes. Notwithstanding anything to the contrary contained in this Section, this Section shall not limit the rights of the Purchasers to full reimbursement of all fees and expenses as provided in the May Agreement (except to the extent such fees and expenses are paid by the Company pursuant to this Section).

7.2 Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements (except for the May Agreement and the Transaction Documents (as defined in the May Agreement), to the extent not expressly modified or superseded by the terms of this Agreement) and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and without further consideration, the Company will execute and deliver to the Purchasers such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

7.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, specifying next business day delivery or (iv) upon actual receipt by the party to whom such notice is required to be given if delivered by hand. The addresses for such notices and communications are as follows:

If to the Company:

Internet Commerce Corporation

	6025 The Corners Parkway, Suite 100 Norcross, Georgia 30092 Attention: Glen Shipley Fax No.: (678) 229-9087

With a copy to:	Troutman Sanders LLP
	600 Peachtree Road, NE, Suite 5200 Atlanta, Georgia 30326 Attention: Larry W. Shackelford, Esq. Fax No.: (404) 962-6548


If to the Purchasers:	To the address set forth under such Purchaser’s name on the signature pages attached hereto.

or such other address as may be designated in writing hereafter, in the same manner, by such Person by two Trading Days’ prior notice to the other party in accordance with this Section 7.3.

7.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers who hold a majority of the outstanding principal balance of the Notes (the “Majority Purchasers”), or, in the case of a waiver, by the Majority Purchasers. Any waiver executed by the Majority Purchasers shall be binding on the Company and all holders of Notes. At any time that Persons Affiliated with York Capital Management hold at least a plurality of the Notes, any waiver, amendment, request, certification, consent or approval by the Majority Purchasers (or any Purchaser Affiliated with York Capital Management) pursuant to this Agreement or any Transaction Document may be given on behalf of the Majority Purchasers (or such Purchaser, as applicable) by York Capital Management or its designee. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

7.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

7.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers. Any Purchaser may assign its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof and of the applicable Transaction Documents that apply to the “Purchasers.” Notwithstanding anything to

the contrary herein, Securities may be pledged to any Person in connection with a bona fide margin account or other loan or financing arrangement secured by such Securities.

7.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

7.8 Governing Law; Venue; Waiver of Jury Trial. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (EXCEPT FOR MATTERS GOVERNED BY CORPORATE LAW IN THE STATE OF DELAWARE), WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY ANY OF THE TRANSACTION DOCUMENTS (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN. EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THIS AGREEMENT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT, THEN THE PREVAILING PARTY IN SUCH ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE ATTORNEYS FEES AND OTHER REASONABLE COSTS

AND EXPENSES INCURRED WITH THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR PROCEEDING.

7.9 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery, exercise and/or conversion of the Securities, as applicable.

7.10 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.

7.11 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

7.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

7.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.

7.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

7.15 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser hereunder or under any other Transaction Document or any Purchaser enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company by a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

7.16 Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate of interest applicable to the Transaction Documents from the effective date forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election.

7.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Securities pursuant to this Agreement has been made by such Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise) or prospects of the Company or of the Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other Purchaser, and no Purchaser or any of its agents or employees shall have any liability to any other Purchaser (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or

create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Document. The Company hereby confirms that it understands and agrees that the Purchasers are not acting as a “group” as that term is used in Section 13(d) of the Exchange Act. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no other Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment hereunder. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES FOLLOW.]

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed and delivered by their respective authorized signatories as of the date first indicated above.

	INTERNET COMMERCE CORPORATION


	By:	/s/ Thomas J. Stallings
		Name: Thomas J. Stallings
		Title: Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES OF PURCHASERS FOLLOW.]

	PURCHASERS:

	YORK CAPITAL MANAGEMENT, L.P.

	By: Dinan Management, LLC, its general partner


	By:	/s/ Adam J. Semler
		Name: Adam J. Semler
		Title: Chief Financial Officer


	Address for Notice:
	York Capital Management, L.P.
	c/o York Capital Management
	767 Fifth Avenue
	17th Floor
	New York, NY 10153
	Facsimile No.: (212) 300-1302
	Attn.: Adam J. Semler, Chief Financial Officer

	With a copy to:

	Proskauer Rose LLP
	1585 Broadway
	New York, NY 10036-8299
	Facsimile No.: (212) 969-2900
	Attn: Adam J. Kansler, Esq.

	PURCHASERS:

	YORK INVESTMENT LIMITED

	By: York Offshore Holdings, Ltd., its investment manager


	By:	/s/ Adam J. Semler
		Name: Adam J. Semler
		Title: Director


	Address for Notice:
	York Investment Limited
	c/o York Capital Management
	767 Fifth Avenue
	17th Floor
	New York, NY 10153
	Facsimile No.: (212) 300-1302
	Attn.: Adam J. Semler, Chief Financial Officer

	With a copy to:

	Proskauer Rose LLP
	1585 Broadway
	New York, NY 10036-8299
	Facsimile No.: (212) 969-2900
	Attn: Adam J. Kansler, Esq.

	PURCHASERS:

	YORK SELECT, L.P.

	By: York Select Domestic Holdings, LLC, its general partner


	By:	/s/ Adam J. Semler
		Name: Adam J. Semler
		Title: Chief Financial Officer


	Address for Notice:
	York Select, L.P.
	c/o York Capital Management
	767 Fifth Avenue
	17th Floor
	New York, NY 10153
	Facsimile No.: (212) 300-1302
	Attn.: Adam J. Semler, Chief Financial Officer

	With a copy to:

	Proskauer Rose LLP
	1585 Broadway
	New York, NY 10036-8299
	Facsimile No.: (212) 969-2900
	Attn: Adam J. Kansler, Esq.

	PURCHASERS:

	YORK SELECT UNIT TRUST

	By: York Select Offshore Holdings, LLC, its investment manager


	By:	/s/ Adam J. Semler
		Name: Adam J. Semler
		Title: Chief Financial Officer


	Address for Notice:
	York Select Unit Trust
	c/o York Capital Management
	767 Fifth Avenue
	17th Floor
	New York, NY 10153
	Facsimile No.: (212) 300-1302
	Attn.: Adam J. Semler, Chief Financial Officer

	With a copy to:

	Proskauer Rose LLP
	1585 Broadway
	New York, NY 10036-8299
	Facsimile No.: (212) 969-2900
	Attn: Adam J. Kansler, Esq.

	PURCHASERS:

	YORK CREDIT OPPORTUNITIES FUND, L.P.

	By: York Credit Opportunities Domestic Holdings, LLC, its general partner


	By:	/s/ Adam J. Semler
		Name: Adam J. Semler
		Title: Chief Financial Officer


	Address for Notice:
	York Credit Opportunities Fund, L.P.
	c/o York Capital Management
	767 Fifth Avenue
	17th Floor
	New York, NY 10153
	Facsimile No.: (212) 300-1302
	Attn.: Adam J. Semler, Chief Financial Officer

	With a copy to:

	Proskauer Rose LLP
	1585 Broadway
	New York, NY 10036-8299
	Facsimile No.: (212) 969-2900
	Attn: Adam J. Kansler, Esq.

Exhibits:

A.	Form of Note

B.	Company Security Agreement

C.	Guaranty

D.	Form of Subsidiary Security Agreement

E.	Opinion of Company Counsel


Schedules:

2.1	Purchasers

3.1	Exceptions to Representations and Warranties

Schedule 2.1

Purchaser	Purchaser Price		Note Principal Amount
York Capital Management, L.P.	$	1,033,000	$	1,033,000
York Investment Limited	$	3,334,000	$	3,334,000
York Select, L.P.	$	1,133,000	$	1,133,000
York Select Unit Trust	$	1,333,000	$	1,333,000
York Credit Opportunities Fund, L.P.	$	3,167,000	$	3,167,000
Total:	$	10,000,000	$	10,000,000

EX-2.2 3 a07-19461_1ex2d2.htm FORM OF SENIOR SECURED CONVERTIBLE BRIDGE NOTE

EXHIBIT 2.2

FORM OF NOTE

THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. NOTWITHSTANDING THE FOREGOING, THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

No. [ ] &# 160; ; $[ &nbs p; ]
Date: July 2, 2007

INTERNET COMMERCE CORPORATION
SENIOR SECURED CONVERTIBLE BRIDGE NOTE DUE

ON THE MATURITY DATE (AS DEFINED HEREIN)

THIS NOTE is one of a series of duly authorized and issued senior secured promissory notes of Internet Commerce Corporation, a Delaware corporation (the “Company”), designated as its Senior Secured Convertible Bridge Notes Due on the Maturity Date (as defined below), in the aggregate principal amount of $10,000,000 (collectively, the “Notes”), issued pursuant to a Securities Purchase Agreement dated July 2, 2007, by and among the Company and the Purchasers named therein (the “Purchase Agreement”).

FOR VALUE RECEIVED, the Company promises to pay to the order of [Holder] or its registered assigns (the “Holder”), the principal sum of [ ] Dollars $( ), on the earliest to occur of (x) the consummation of the merger contemplated by the Agreement and Plan of Merger (the “Merger Agreement”) dated as of May 3, 2007 among the Company, Jets Acquisition Sub, Inc. and Easylink (the “Merger”), (y) the termination of the Merger Agreement pursuant to the terms thereof, and (z) September 1, 2007 (such earliest date, the “Maturity Date”), or such earlier date as the Notes are required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the then outstanding principal amount of this Note in accordance with the provisions hereof. In addition, the Company shall pay to the order of the Holder interest on any principal or interest payable hereunder that is not paid in full when due, whether at the time of any stated interest payment date or maturity or by prepayment, acceleration or declaration or otherwise, for the period from and including the due date of such payment to but excluding the date the same is paid in full, at a rate of 18% per annum (but in no event in excess of the maximum rate permitted under applicable law).

Interest payable under this Note shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which interest is payable.

Payments of principal and interest shall be made in lawful money of the United States of America to the Holder at its address as provided in Section 12 or by wire transfer to such account specified from time to time by the Holder hereof for such purpose as provided in Section 12.

The Holder is entitled to the benefits of the Security Agreements and the Guaranty.

1. Definitions. In addition to the terms defined elsewhere in this Note, (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms have the meanings indicated:

“Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof; (b) there is commenced against the Company or any Subsidiary any such case or proceeding that is not dismissed within 90 days after commencement; (c) the Company or any Subsidiary is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 90 days; (e) the Company or any Subsidiary makes a general assignment for the benefit of creditors; (f) the Company or any Subsidiary fails to pay, or states that it is unable to pay or is unable to pay, its debts generally as they become due; (g) the Company or any Subsidiary calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (h) the Company or any Subsidiary, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“Change of Control” means the occurrence of any of the following in one or a series of related transactions: (i) an acquisition after the date hereof by an individual or legal entity or “group” (as such term is used in Rule 13d-5(b)(1) under the Exchange Act) of more than 50% of the voting rights or equity interests in the Company; (ii) a replacement of more than 50% of the members of the Company’s board of directors that is not approved by those individuals who are members of the board of directors on the date hereof (or other directors approved by such individuals); (iii) a merger or consolidation of the Company or a sale of 50% or more of the assets of the Company or grant of an exclusive license with respect to the material assets of the Company or any of its Subsidiaries in one or a series of related transactions, unless following such transaction or series of transactions, the holders of the Company’s securities prior to the first such transaction continue to hold at least 50% of the voting rights and equity interests in the surviving entity or acquirer of such assets; (iv) a recapitalization, reorganization or other transaction involving the Company that constitutes or could result in a transfer of more than 50% of the voting rights or equity interests in the Company; (v)

consummation of a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act with respect to the Company; or (vi) the execution by the Company or its controlling shareholders of an agreement providing for or that will result in any of the foregoing events; provided that the purchase of the Securities contemplated by the Purchase Agreement and the purchase of the Securities and the Approved Issuance contemplated by the May Agreement (each as defined therein), shall not constitute a Change of Control.

“Closing Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on an Eligible Market or any other national securities exchange, the closing bid price per share of the Common Stock for such date (or the nearest preceding date) on the primary Eligible Market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the OTC Bulletin Board, the closing bid price per share of the Common Stock for such date (or the nearest preceding date) so quoted; (c) if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by a majority in interest of the Purchasers.

“Conversion Notice” means a written notice in the form attached hereto as Schedule 1.

“Equity Conditions” means, with respect to Common Stock issuable pursuant to the Underlying Securities, that each of the following conditions is satisfied: (i) the number of authorized but unissued and otherwise unreserved shares of Common Stock is sufficient for such issuance; (ii) the Common Stock is listed or quoted (and is not suspended from trading) on an Eligible Market and such shares of Common Stock are approved for listing upon issuance; (iii) such issuance would be permitted in full without violating the rules or regulations of any Trading Market; (iv) no Event of Default nor any event or circumstance that with the passage of time and without being cured would constitute an Event of Default has occurred and not been cured; (v) neither the Company nor any Subsidiary is in default or has breached any material obligation under any Transaction Document; (vi) no public announcement of a pending or proposed Change of Control transaction has occurred that has not been consummated; and (vii) the Company has confirmed to Holder that the Company has not provided Holder with what the Company believes could be deemed material, non-public information, except to the extent requested and received by the Holder pursuant to Section 4.15 of the Purchase Agreement.

“Event Equity Value” means the average of the Closing Prices for the five Trading Days preceding the date of delivery of the notice requiring payment of the Event Equity Value, provided that if the Company does not make such required payment (together with any other payments, expenses and liquidated damages then due and payable under the Transaction Documents) when due or, in the event the Company

disputes in good faith the occurrence of the event pursuant to which such notice relates, does not instead deposit such required payment (together with such other payments, expenses and liquidated damages then due) in escrow with an independent third-party escrow agent within five Trading Days of the date such required payment is due, then the Event Equity Value shall be the greater of (a) the average of the Closing Prices for the five Trading Days preceding the date of delivery of the notice requiring payment of the Event Equity Value and (b) the average of the Closing Prices for the five Trading Days preceding the date on which such required payment (together with such other payments, expenses and liquidated damages) is paid in full.

“Interest Rate” has the meaning set forth in Section 2(a) herein.

“Majority Holders” means Holders of a majority of the outstanding principal amount of all Notes.

“Prime Rate” means the interest rate on the Interest Payment Date that is published by The Wall Street Journal as the prime lending rate; provided, if The Wall Street Journal ceases to publish an interest rate as the prime lending rate (or similar designation), the Prime Rate shall mean the prime lending rate established from time to time by Citibank, N.A. or its successor.

“Triggering Event” means any of the following events: (a) the Common Stock is not listed or quoted, or is suspended from trading, on an Eligible Market for a period of ten or more Trading Days (which need not be consecutive Trading Days) in any 12 month period; (b) the Company fails for any reason to deliver an instrument evidencing any Securities to a Purchaser within ten Trading Days after delivery of such certificate is required pursuant to any Transaction Document or the conversion rights of the Holders pursuant to any Transaction Document are otherwise suspended for any reason; (c) the Company fails to have available a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock available to issue the Common Stock underlying the Underlying Securities or fails to have full authority, including under all laws, rules and regulations of any Trading Market, to issue such Common Stock; (d) at any time after the Closing Date, any Common Stock issuable pursuant to the Transaction Documents is not listed on an Eligible Market; (e) the Company effects or publicly announces its intention to effect any exchange, recapitalization or other transaction that effectively requires or rewards physical delivery of certificates evidencing the Common Stock; (f) the Company or any Subsidiary fails to make any cash payment required under any Transaction Document to which it is a party and such failure is not cured within five days after notice of such default is first given to the Company by a Holder; (g) the Company or any Subsidiary defaults in the timely performance of any other material obligation under any Transaction Document to which it is a party and such default continues uncured for a period of 15 days after the date on which notice of such default is first given to the Company by a Holder (it being understood that no prior notice need be given in the case of a default that cannot reasonably be cured within fifteen days); (h) the Company or any Subsidiary breaches in any material respect any of its representations or warranties under any Transaction Document to which it is a party; or (i) any change,

event or circumstance that has had or could reasonably be expected to result in a Material Adverse Effect.

2. Principal and Interest.

(a) The Company shall pay interest to the Holder on the then outstanding principal amount of this Note at a rate equal to the Prime Rate on the applicable Interest Payment Date (the “Interest Rate”). Interest shall be payable quarterly in arrears in cash on each of March 31, June 30, September 30 and December 31 (except if such date is not a Business Day in which case such interest shall be payable on the next succeeding Business Day) (each, an “Interest Payment Date”). The first Interest Payment Date shall be September 30, 2007. During the pendancy of any Event of Default, the Interest Rate shall equal 18%.

(b) The Company shall repurchase this Note from the Holder at a price equal to 100% of the outstanding principal balance of this Note, plus all accrued and unpaid interest thereon, in cash on the Maturity Date (except if such date is not a Business Day in which case such amount shall be payable on the next succeeding Business Day); provided; however; that if upon the Maturity Date, (i) the Merger has not been consummated, (ii) the Merger Agreement has been terminated, or (iii) the Company has indicated to the Holder or any Purchaser under the May Agreement that the Company does not intend to consummate the transactions contemplated thereby on the terms set forth therein, then in each case the Company shall repurchase this Note from the Holder at a price equal to 115% of the outstanding principal balance of this Note, plus all accrued and unpaid interest thereon; except that in the case of clause (ii) above, if the Merger Agreement is duly terminated by the Company due to (A) a breach of the Merger Agreement by Easylink or (B) the failure of Easylink to obtain the required shareholder approval contemplated by the Merger Agreement, and in each case there has not been a Superior Proposal (as defined in the Merger Agreement), then the repurchase price shall equal 100% of the outstanding principal balance of this Note, plus all accrued and unpaid interest thereon.

3. Ranking and Covenants.

(a) Except for Permitted Indebtedness (as defined in Section 4.8(a) of the Purchase Agreement) (i) no Indebtedness of the Company is senior to or on a parity with this Note in right of payment, whether with respect to interest, damages or upon liquidation or dissolution or otherwise, and (ii) the Company will not, and will not permit any Subsidiary to, directly or indirectly, enter into, create, incur, assume or suffer to exist any Indebtedness of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom.

(b) So long as any Notes are outstanding, neither the Company nor any Subsidiary shall, directly or indirectly, redeem, purchase or otherwise acquire any capital stock or set aside any monies for such a redemption, purchase or other acquisition of its capital stock (other than pursuant to the definition of “Excluded Stock” under the May Agreement).

(c) If, at any time while any Note is outstanding, the Company or any Subsidiary (i) issues or incurs any Indebtedness for borrowed money, including, without limitation, Indebtedness evidenced by notes, bonds, debentures or other similar instruments but excluding

Permitted Indebtedness and excluding in connection with the transactions contemplated by the May Agreement, the Company shall notify the Holder of such event and offer (which offer shall remain open for 10 Trading Days) to repurchase an amount of this Note from the Holder having an aggregate price (as determined below) equal to the lesser of (A) the aggregate amount of such Indebtedness, and (B) the aggregate amount required to repurchase this entire Note pursuant to this Section 3(c). All Notes repurchased under this Section 3(c) shall be repurchased at a price equal to 125% of the outstanding principal amount of the Notes repurchased, plus all accrued but unpaid interest thereon through the date of payment; provided that, in the event the Equity Conditions are not satisfied on the date of such repurchase and, with respect to clause (ii) of the Equity Conditions, were not satisfied at all times during the 20 Trading Days immediately preceding and including such date, then, such Notes shall be repurchased at a price equal to the greater of (X) 125% of the outstanding principal amount of the Notes repurchased, plus all accrued but unpaid interest thereon through the date of payment and (Y) the Event Equity Value of the Common Stock underlying the Underlying Securities then issuable upon conversion of the Notes repurchased (without regard to any restrictions on conversion).

(d) The Company covenants that it will at all times reserve and keep available out of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Common Stock as required hereunder, the amount of Common Stock which is then issuable and deliverable upon the conversion of (and otherwise in respect of) the Underlying Securities underlying each Note, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder. The Company covenants that all Common Stock so issuable and deliverable shall, upon issuance in accordance with the terms hereof, be duly and validly authorized and issued and fully paid and nonassessable.

(e) The Company may not prepay, repurchase or redeem all or any portion of this Note except as specified herein.

4. Registration of Notes. The Company shall register the Notes upon records to be maintained by the Company for that purpose (the “Note Register”) in the name of each record holder thereof from time to time. The Company may deem and treat the registered Holder of this Note as the absolute owner hereof for the purpose of any conversion hereof or any payment of interest or principal hereon, and for all other purposes, absent actual notice to the contrary.

5. Registration of Transfers and Exchanges. This Note and all rights hereunder are transferable in whole or in part upon the books of the Company by the Holder hereof; provided, however, that the transferee shall agree in writing to be bound by the terms and subject to the conditions of this Note and the Purchase Agreement. The Company shall register the transfer of any portion of this Note in the Note Register upon surrender of this Note to the Company at its address for notice set forth herein. Upon any such registration or transfer, a new Note, in substantially the form of this Note (any such new Note, a “New Note”), evidencing the portion of this Note so transferred shall be issued to the transferee and a New Note evidencing the remaining portion of this Note not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Note by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Note. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized

denominations, as requested by the Holder surrendering the same. No service charge or other fee will be imposed in connection with any such registration of transfer or exchange.

6. Conversion at the Option of the Holder. Provided that the Holder notifies the Company no later than 5:30 p.m. on July 9, 2007 of its intention to convert this Note under this Section 6 (which the Holder may do in its sole and absolute discretion), this Note shall be converted in full by the Holder at the time specified by the Holder (but not later than the consummation of the Merger in accordance with the Merger Agreement and the consummation of the transactions contemplated to occur at the Closing (the “May Closing”) as defined in and in accordance with the May Agreement) (the “Conversion Date”), into additional Series A Notes and Series B Notes (subject to the modifications set forth in Section 4.17 of the Purchase Agreement) divided pro rata among Series A Notes and Series B Notes according to the proportion of Series A Notes and Series B Notes purchased or agreed to be purchased by the original Holder of this Note as a Purchaser under the May Agreement. The amount of any Underlying Securities issuable upon any conversion hereunder shall equal the outstanding principal amount of this Note, plus the amount of any accrued but unpaid interest on this Note through the Conversion Date. The Holder shall effect conversion under this Section 6 by delivering to the Company a Conversion Notice.

7. Mechanics of Conversion; Restrictive Legends.

(a) Upon conversion of this Note, the Company shall promptly (but in no event later than two Business Days after the Conversion Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate an instrument for the Underlying Securities issuable upon such conversion. The Holder, or any Person so designated by the Holder to receive Underlying Securities, shall be deemed to have become holder of record of such Underlying Securities as of the Conversion Date.

(b) The Holder shall not be required to deliver the original Note in order to effect a conversion hereunder. Execution and delivery of the Conversion Notice shall have the same effect as cancellation of the original Note; provided that the cancellation of the original Note shall not be deemed effective until instruments for such Underlying Securities are delivered to the Holder.

(c) The Company’s obligations to issue and deliver Underlying Securities upon conversion of this Note in accordance with the terms and subject to the conditions hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any set-off, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Underlying Securities (other than such limitations contemplated by this Note).

(d) If by the second Business Day after the Conversion Date the Company fails to deliver to the Holder such Underlying Securities in such amounts and in the manner required pursuant to Section 7(a), then the Holder will have the right to rescind such conversion.

(e) If by the second Business Day after the Conversion Date the Company fails to deliver to the Holder such Underlying Securities in such amounts and in the manner required pursuant to Section 7(a), the Holder shall be entitled to treat this Note as, and this Note shall be deemed to be for all purposes, the physical representation of such Underlying Securities and the Holder shall be entitled to all of the rights of a holder of such Underlying Securities thereupon, including without limitation the right to convert such Underlying Securities into underlying Common Stock immediately thereunder.

Each instrument for Underlying Securities shall bear a restrictive legend to the extent required and as provided in the Purchase Agreement and any instrument issued at any time in exchange or substitution for any certificate bearing such legend shall also bear such legend unless, in the opinion of counsel for the holder thereof (which opinion shall be reasonably satisfactory to counsel for the Company), the securities represented thereby are not, at such time, required by law to bear such legend.

8. Events of Default.

(a) “Event of Default” means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

(i) any default in the payment (free of any claim of subordination) of principal, interest or liquidated damages in respect of any Notes, as and when the same becomes due and payable (whether on a date specified for the payment of interest or the date on which the obligations under the Note mature or by acceleration, redemption, prepayment or otherwise);

(ii) the Company or any Subsidiary defaults in any of its covenants or other obligations in respect of (A) any Permitted Indebtedness or (B) any other note or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company or any Subsidiary in an amount exceeding $500,000, whether such Indebtedness now exists or is hereafter created, and any such default is not cured within the time permitted by such agreements; or any event or circumstance occurs that with notice or lapse of time would constitute such a default.

(iii) the Company or any Subsidiary is in default under any contract or agreement, financial or otherwise, between the Company or any Subsidiary, as applicable, and any other Person and such default involves claimed actual damages in excess of $2,500,000 or the other party thereto commences litigation or arbitration

proceedings to exercise its rights and remedies under such contract or agreement as a consequence of such default and such default is not waived or cured within 90 days of the occurrence thereof;

(iv) there is entered against the Company or any Subsidiary (A) a final judgment or order or settlement for the payment of money in an aggregate amount exceeding $1,500,000, except to the extent such amounts have been paid to or on behalf of the Company or such Subsidiary by its respective insurer(s), or (B) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Company or any Subsidiary;

(v) any provision of any Transaction Document, at any time after the date hereof, and for any reason other than as expressly permitted thereunder, ceases to be in full force and effect; or the Company or any Subsidiary contests in any manner the validity or enforceability of any Transaction Document or any provision thereof; or the Company or any Subsidiary denies that it has any or further liability or obligation under any Transaction Document, or purports to revoke, terminate or rescind any Transaction Documents;

(vi) any Security Agreement ceases to give the Agent (as defined in the Security Agreements) the primary benefits thereof, including a perfected, enforceable first priority security interest in, and Lien on, all of the Collateral (as defined therein);

(vii) the occurrence of a Triggering Event; or

(viii) the occurrence of a Bankruptcy Event.

At any time or times following the occurrence of an Event of Default, the Holder shall have the option to elect, by notice to the Company (an “Event Notice”), to require the Company to repurchase all or any portion of (i) the outstanding principal amount of this Note, at a purchase price equal to 125% of the outstanding principal amount of the Notes repurchased, plus all accrued but unpaid interest thereon through the date of payment; provided that if the Equity Conditions are not satisfied on the date of such repurchase and, with respect to clause (ii) of the Equity Conditions, for the 20 Trading Days immediately preceding such date, such Notes shall be repurchased at a price equal to the greater of the price set forth in the foregoing clause and the Event Equity Value of the Common Stock underlying the Underlying Securities then issuable upon conversion of the Notes repurchased (without regard to any restrictions on conversion) and (ii) any Common Stock underlying any Underlying Securities issued to the Holder upon conversion of Notes and then owned by the Holder, at a price per share equal to the Event Equity Value of such issuable and issued Common Stock. The aggregate amount payable pursuant to the preceding sentence is referred to as the “Event Price.” The Company shall pay the Event Price to the Holder no later than the fifth Trading Day following the date of delivery of the Event Notice, and upon receipt thereof the Holder shall deliver this Note and certificates evidencing any Underlying Shares so repurchased to the Company (to the extent such certificates have been delivered to the Holder). The Company’s obligation to pay the Event Price shall be

unconditional and unaffected by any subsequent event (including without limitation any cure of any Event of Default).

(b) Upon the occurrence of any Bankruptcy Event, all amounts pursuant to Section 8(a) shall immediately become due and payable in full in cash, without any further action by the Holder.

(c) In connection with any Event of Default, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Any such declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right incidental thereto.

9. Charges, Taxes and Expenses. Issuance of certificates for Underlying Shares upon conversion of (or otherwise in respect of) this Note shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Underlying Shares or Notes in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Note or receiving Underlying Shares in respect hereof.

10. Fundamental Changes.

(a) Fundamental Changes. If, at any time while this Note is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or more transactions, or (iii) there is a Change of Control (each case in clauses (i) through (iii) above, a “Fundamental Change”), then upon any subsequent conversion of this Note, the Holder shall have the right to receive, for the Underlying Securities that would have been issuable upon such conversion absent such Fundamental Change, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Change if it had been, immediately prior to such Fundamental Change, the holder of such Underlying Securities (the “Alternate Consideration”). If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Change, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Change. In the event of a Fundamental Change, the Company or the successor or purchasing Person, as the case may be, shall execute with the Holder a written agreement providing that:

(x) this Note shall thereafter entitle the Holder to purchase the Alternate Consideration;

(y) in the case of any such successor or purchasing Person, upon such consolidation, merger, statutory exchange, combination, sale or conveyance such successor or purchasing Person shall be jointly and severally liable with the Company for the performance of all of the Company’s obligations under this Note and the other Transaction Documents; and

(z) if registration or qualification is required under the Exchange Act or applicable state law for the public resale by the Holder of shares of stock and other securities so issuable upon exercise of this Note, such registration or qualification shall be completed prior to such reclassification, change, consolidation, merger, statutory exchange, combination or sale.

If, in the case of any Fundamental Change, the Alternate Consideration includes shares of stock, other securities, other property or assets of a Person other than the Company or any such successor or purchasing Person, as the case may be, in such Fundamental Change, then such written agreement shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holder as the Board of Directors of the Company shall reasonably consider necessary by reason of the foregoing. At the Holder’s request, any successor to the Company or surviving Person in such Fundamental Change shall issue to the Holder a new Note consistent with the foregoing provisions and evidencing the Holder’s right to convert such Note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Change is effected shall include terms requiring any such successor or surviving Person to comply with the provisions of this Section 10(a) and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Change. If any Fundamental Change constitutes or results in a Change of Control, then at the request of the Holder, the Company (or any such successor or surviving entity) will purchase this Note from the Holder for a purchase price, payable in cash within five Trading Days after such request, equal to the greater of (x) 125% of the outstanding principal amount of the Notes repurchased, plus all accrued but unpaid interest thereon through the date of payment and (y) the Black-Scholes value of this Note; provided that if the Equity Conditions are not satisfied on the date of such repurchase and, with respect to clause (ii) of the Equity Conditions, for the 20 Trading Days immediately preceding such date, such Notes shall be repurchased at a price equal to the greater of (I) the price set forth in the foregoing clause and (II) the Event Equity Value of the Common Stock underlying the Underlying Securities then issuable upon conversion of the Notes repurchased (without regard to any restrictions on conversion).

(b) Notice of Adjustments. Upon the occurrence of any Fundamental Change pursuant to Section 10(a), the Company at its expense will promptly prepare and deliver to the Holder a certificate describing in reasonable detail such Fundamental Change and the transactions giving rise thereto.

(c) Notice of Corporate Events. If the Company (i) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for a Fundamental Change or (ii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least 30 Trading Days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with

respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to convert this Note and the corresponding Underlying Securities prior to such time so as to participate in or vote with respect to such transaction.

11. Intentionally Omitted.

12. Notices. Any and all notices or other communications or deliveries hereunder (including any Conversion Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 12 prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 12 on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next Business Day delivery, or (iv) upon actual receipt by the party to whom such notice is required to be given, if by hand delivery. The address and facsimile number of a party for such notices or communications shall be as set forth in the Purchase Agreement, unless changed by such party by two Trading Days’ prior notice to the other party in accordance with this Section 12.

13. Miscellaneous.

(a) This Note shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. The Company shall not be permitted to assign this Note absent the prior written consent of the Holder.

(b) Subject to Section 13(a), nothing in this Note shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Note.

(c) GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT

SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

(d) The headings herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

(e) In case any one or more of the provisions of this Note shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Note shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Note.

(f) In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference in this Note to a price shall be amended to appropriately account for such event.

(g) This Note, together with the other Transaction Documents, constitutes the entire agreement of the parties with respect to the subject matter hereof. No provision of this Note may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the Majority Holders or, in the case of a waiver, by the Majority Holders. Any waiver executed by the Majority Holders shall be binding on the Company and all Holders. No waiver of any default with respect to any provision, condition or requirement of this Note shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

	INTERNET COMMERCE CORPORATION


	By
	Name: Thomas J. Stallings
	Title: Chief Executive Officer

Schedule 1

FORM OF CONVERSION NOTICE

(To be executed by the registered Holder in order to convert Note)

The undersigned hereby elects to convert the specified principal amount of Senior Secured Convertible Bridge Notes (the “Notes”) into Series A Notes and Series B Notes of Internet Commerce Corporation, a Delaware corporation, according to the conditions hereof, as of the date written below.


	Date to Effect Conversion



	Principal amount of Notes owned prior to conversion



	Principal amount of Notes to be converted (including accrued but unpaid interest thereon)



	Amount of Series A Notes to be Issued



	Amount of Series B Notes to be Issued



	Name of Holder

	By
	Name:
	Title:

Under the Securities Exchange Act of 1934 (Amendment No. )*

ARTICLE I. DEFINITIONS