Exhibit 2(g)
AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT
AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT dated as of
February 11, 2000 among NewCheck Corporation, d/b/a
Productivity Solutions, Inc., a corporation duly organized,
validly existing under the laws of the State of Delaware
(hereinafter referred to as the "Company"), and those holders
of the Company's securities set forth on Annex I hereto
(hereinafter referred to, individually, as a "Holder" and
collectively, as the "Holders").
W I T N E S S E T H :
WHEREAS, the Company and the holders of its Series B1
Convertible Preferred Stock, $.0001 par value (hereinafter
referred to as the "Series B1 Preferred Stock"), and the
holders of its Series B2 Convertible Preferred Stock, $.0001
par value (hereinafter referred to as the "Series B2 Preferred
Stock" and, together with the Series B1 Preferred Stock,
hereinafter referred to as the "Series B Preferred Stock"),
both series convertible into shares of the Company's common
stock, $.0001 par value (hereinafter referred to as the "Common
Stock"), are parties to a Stockholder's Agreement dated as of
May 13, 1998 (hereinafter referred to as the "Original
Securityholders Agreement"), pursuant to which such holders
mutually agreed to certain matters respecting the Company,
including, without limitation, certain covenants pertaining to
Board representation, voting of their respective shares and
other matters;
WHEREAS, the Company and the purchasers (hereinafter
referred to as the "Purchasers") of the Company's Series C
Convertible Preferred Stock, $.0001 par value (hereinafter
referred to as the "Senior Preferred Stock"), and its 8%
Convertible Notes dated as of even date herewith (hereinafter
referred to as the "Convertible Notes"), are parties to a Stock
and Convertible Note Purchase Agreement dated as of even date
herewith (hereinafter referred to as the "Stock and Note
Purchase Agreement"), providing for, among other matters, the
issuance and delivery by the Company: (i) to the Purchasers of
shares of the Senior Preferred Stock, such shares convertible
into shares of Common Stock; (ii) to Electronic Retailing
Systems International, Inc. (hereinafter referred to as "ERS")
of its Convertible Note (hereinafter referred to as the "ERS
Convertible Note"), convertible into shares of Senior Preferred
Stock and (iii) to AG Checkout LLC (hereinafter referred to as
"AG") of its Convertible Note, convertible into shares of
Senior Preferred Stock;
WHEREAS, it is a condition to the acquisition and
acceptance by the Purchasers of the Senior Preferred Stock and
the Convertible Notes that the Original Securityholders
Agreement be amended and restated as set forth herein, and
that the parties execute and deliver this Agreement;
WHEREAS, each of the parties hereto (other than the
Company) is on the date hereof a holder of a Convertible Note,
or the number of shares of Series B Preferred Stock or Senior
Preferred Stock (hereinafter referred to, collectively, as
"Convertible Preferred Stock"; the Convertible Preferred Stock
(including, without limitation, all shares of Senior
Preferred Stock into which the Convertible Notes are
convertible), and all shares of Common Stock into which the
shares of Convertible Preferred Stock are convertible, together
with all shares of the Company's Series A Convertible Preferred
Stock, $.0001 par value [hereinafter referred to as the "Series
A Preferred Stock"], and the Common Stock into which such
shares are convertible, being hereinafter referred to,
collectively, as the "Stock") as is set forth on Annex I
hereto;
WHEREAS, the holders of the Series B Preferred Stock party
hereto constitute, on the date hereof, the Super-Required
Holders (as set forth in the Original Securityholders
Agreement); and
NOW, THEREFORE, in consideration of the agreements,
premises and mutual covenants contained herein, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Original Securityholders Agreement. This Agreement
hereby amends and restates the terms and provisions of the
Original Securityholders Agreement, which are superseded in
their entirety by the provisions hereof.
2. Right of First Offer for New Securities.
(a) The Company hereby grants to each of the Holders a
right of first offer to purchase shares of any New Securities
(as defined below) which the Company may, from time to time,
propose to sell and issue prior to the Initial Public Offering
(as defined below). Such right of first offer shall allow each
Holder to purchase its "Proportionate Share" or "Residual
Proportionate Share" (as such terms are defined below) of the
New Securities proposed to be issued. In the event any Holder
does not purchase any or all of its First Offeree Proportionate
Share or First Offeree Residual Proportionate Share, or Second
Offeree Proportionate Share or Second Offeree Residual
Proportionate Share (as such terms are defined below) of New
Securities, the other Holders shall have the right to purchase
such unpurchased New Securities, as described below. The right
of first offer granted under this Section 2 shall terminate as
to any Final Balance (as defined below) of New Securities to be
issued if and to the extent unexercised as to such Final
Balance within 25 Business Days after receipt of the notice
described in Section 2(c) hereof. Holders may reallocate their
right of first offer, to the extent arising from ownership of
any series of securities (or securities convertible into such
series), to other Holders of the same series of securities (or
securities convertible into such series).
(b) Unless otherwise defined herein, the following terms
shall have the respective meanings set forth below (such
meanings being equally applicable to both the singular and
plural form of the terms defined):
(i) "Initial Public Offering" shall mean the first
sale of securities by the Company pursuant to an effective
registration statement filed by the Company under the
Securities Act of 1933 (hereinafter referred to as the
"Securities Act");
(ii) "New Securities" shall mean any authorized but
unissued shares, and any treasury shares, of capital stock
of the Company and all rights, options or warrants to
purchase capital stock, and securities of any type
whatsoever that are, or may become, convertible into
capital stock; provided, however, that the term "New
Securities" does not include (i) securities issued
pursuant to the acquisition of another corporation by the
Company by merger, purchase of all or substantially all of
the assets or other reorganization whereby the Company
shall become the owner of more than 50% of the voting
power of such corporation; (ii) shares of Common Stock or
Convertible Preferred Stock issued in connection with any
stock split or stock dividend of the Company; (iii) shares
of Common Stock issued pursuant to any public offering and
sale of equity securities of the Company pursuant to an
effective registration statement under the Securities Act;
(iv) shares of Common Stock issued pursuant to the
conversion of any series of convertible preferred stock of
the Company, including the Series A Preferred Stock,
Series B Preferred Stock or Senior Convertible Preferred
Stock; (v) up to 1,550,000 shares of Common Stock (or any
options, warrants or rights to purchase such shares of
Common Stock) issued or issuable to officers, directors,
employees or consultants of the Company pursuant to stock
grants, stock purchase plans, stock option plans or other
stock incentive programs, agreements or arrangements
approved by the Board (such number appropriately adjusted
to reflect any stock splits, dividends, combinations,
reclassifications or recapitalizations), and (vi) shares
of Common Stock issued or issuable upon conversion or
exercise of or as dividends with respect to options,
rights, warrants or other convertible securities of the
Company outstanding as of the date hereof (and giving
effect to the transactions contemplated by the Stock and
Note Purchase Agreement and the additional agreements
contemplated thereunder).
(iii) "Proportionate Shares" shall mean the First
Offeree Proportionate Share or the Second Offeree
Proportionate Share.
(iv) "First Offeree Proportionate Share" shall be
equal to a fraction, the numerator of which shall equal
the total number of shares of Common Stock (determined on
an as-converted basis [prior to a Participation Event, as
defined in the Amended Terms, Preferences, Rights and
Limitations of the Series B Preferred Stock, as filed with
the Secretary of State of Delaware together with the
Company's Fifth Restated Certificate of Incorporation and
from time to time amended] and only including the Senior
Preferred Stock [including the Senior Preferred Stock
issuable upon conversion of the Convertible Notes] and
Common Stock issuable upon conversion thereof) then owned
by or issuable to such Holder (if a holder of the Senior
Preferred Stock or of the Convertible Notes) and the
denominator of which shall equal the total number of
shares of Common Stock (determined on an as-converted
basis prior to a Participation Event and only including
the Senior Preferred Stock [including the Senior Preferred
Stock issuable upon conversation of the Convertible Notes]
and Common Stock issuable upon conversion thereof) owned
by or issuable to all Holders who are holders of the
Senior Preferred Stock or of the Convertible Notes.
(v) "Second Offeree Proportionate Share" shall be
equal to a fraction, the numerator of which shall equal
the total number of shares of Common Stock (determined on
an as-converted basis prior to a Participation Event and
only including the Series B Preferred Stock and Common
Stock issuable upon conversion thereof) then owned by a
Holder who is a holder of the Series B Preferred Stock and
the denominator of which shall equal the total number of
shares of Common Stock (determined on an as-converted
basis prior to a Participation Event and only including
the Series B Convertible Preferred Stock and Common Stock
issuable upon conversion thereof) owned by all Holders who
are holders of the Series B Convertible Preferred Stock.
(c) If, prior to the Initial Public Offering, the Company
proposes to issue New Securities, it shall give each Holder
written notice thereof, describing the New Securities, the
number thereof to be issued, the purchase price therefor (which
shall be payable solely in cash) and the terms upon which the
Company proposes to issue the same. Each Holder of Senior
Preferred Stock or of a Convertible Note (hereinafter referred
to as a "First Offeree") shall have seven Business Days from
the date such notice is given to determine whether to purchase
all or any portion of such First Offeree's Proportionate Share
of such New Securities for the purchase price and upon the
terms specified in the notice by giving written notice to the
Company and stating therein the number of New Securities to be
purchased.
(c) If, prior to the Initial Public Offering, all First
Offerees have not elected within such seven Business Day
period to purchase all of the New Securities proposed to be
issued, the Company shall provide each Participating First
Offeree (as defined below) within three Business Days after
such period ends with a schedule setting forth the following
information: (i) the amount of New Securities elected to be
purchased, (ii) the purchasers thereof (hereinafter referred
to, individually as a "Participating First Offeree" and,
collectively as the "Participating First Offerees") and the
specific amount of New Securities elected to be purchased by
each such Participating First Offeree, and (iii) the amount of
New Securities not elected to be purchased. Each Participating
First Offeree shall thereafter have an additional five Business
Days after such three-Business Day period has elapsed to
determine whether to purchase all or any portion of such
Participating First Offeree's "First Offeree Residual
Proportionate Share" (as such term is defined below) of such
remaining New Securities for the purchase price and upon the
terms specified in the notice by giving written notice to the
Company and stating therein the number of New Securities to be
purchased. "First Offeree Residual Proportionate Share" shall
be equal to a fraction, the numerator of which shall equal the
total number of shares of Common Stock (as determined in the
definition of First Offeree Proportionate Share) then owned by
or issuable to such Participating First Offeree and the
denominator of which shall equal the total number of shares of
such shares of Common Stock owned by or issuable to all
Participating First Offerees (as so determined).
(e) If, prior to the Initial Public Offering, the First
Offerees and/or the Participating First Offerees have not
collectively elected to purchase all of the New Securities
proposed to be issued (within the time period for notifying the
Company set forth in subparagraphs (c) and (d) above), then the
Company shall provide each Second Offeree (as defined below)
within three Business Days after such period ends with a
schedule setting forth the following information: (i) the
amount of New Securities elected to be purchased by all
Participating First Offerees, and (ii) the amount of New
Securities not elected to be purchased (hereinafter referred to
as the "Unpurchased Balance"). Each Holder of Series B
Preferred Stock (hereinafter referred to as a "Second Offeree")
shall thereafter have an additional five Business Days after
such three-Business Day period has elapsed to determine whether
to purchase all or any portion of such Second Offeree's
Proportionate Share of such Unpurchased Balance for the
purchase price and upon the terms specified in the notice by
giving written notice to the Company and stating therein the
number of New Securities to be purchased from the Unpurchased
Balance.
(f) If, prior to the Initial Public Offering, the Second
Offerees have not elected within such five-Business Day period
to purchase all of the Unpurchased Balance, then the Company
shall provide each Participating Second Offeree (as defined
below) within three Business Days after such period ends with a
schedule setting forth the following information: (i) the
amount of the Unpurchased Balance elected to be purchased by
Second Offerees, (ii) the purchasers thereof (hereinafter
referred to, individually a as "Participating Second Offeree"
and, collectively as the "Participating Second Offerees") and
the specific amount of the Unpurchased Balance elected to be
purchased by each such Participating Second Offeree, and
(iii) the amount of the Unpurchased Balance not elected to be
purchased (hereinafter referred to as the "Final Balance").
Each Participating Second Offeree shall thereafter have an
additional four Business Days after such three-Business Day
period has elapsed to determine whether to purchase all or any
portion of such Participating Second Offeree's "Second
Offeree's Residual Proportionate Share" (as such term is
defined below) of such Final Balance for the purchase price and
upon the terms specified in the notice by giving written notice
to the Company and stating therein the number of New Securities
from the Final Balance to be purchased. "Second Offeree
Residual Proportionate Share" shall be equal to a fraction, the
numerator of which shall equal the total number of shares of
Common Stock (as determined in the definition of Second Offeree
Proportionate Share) then owned by such Participating Second
Offeree and the denominator of which shall equal the total
number of shares of such shares of Common Stock owned by all
Participating Second Offerees (as so determined).
(g) If Holders have not elected to purchase all of the
New Securities proposed to be issued (within the time period
for notifying the Company set forth above), then the Company
shall have 120 calendar days in which to complete the proposed
issuance of the Final Balance not purchased by Holders at a
price not less than that contained in the notice previously
given to Holders and on terms and conditions not more favorable
to the third party than those contained in such notice. If, at
the end of such 120-calendar day period, the Company has not
completed such issuance of the Final Balance of New Securities,
the Company shall no longer be permitted to issue such Final
Balance of New Securities pursuant to this Section 1 without
again fully complying with all of the provisions of this
Section 2.
3. Supplemental Right of First Offer.
(a) The Company hereby grants to ERS, for as long as it
shall hold the ERS Convertible Note or any shares of Senior
Preferred Stock, a right of first offer to purchase shares of
any Voting Securities (as defined below) not subject to the
rights of ERS under Section 2, which the Company may, from time
to time, propose to sell and issue, if the effect of such
issuance and sale would otherwise result in ownership by ERS of
less than ten percent of the outstanding Voting Securities.
Such right of first offer shall allow ERS to purchase a share
of the Voting Securities proposed to be issued so as to result
in ownership by ERS of not less than ten percent of the
outstanding Voting Securities. The right of first offer granted
under this Section 3 shall terminate as to such Voting
Securities to be issued if and to the extent unexercised as to
such Voting Securities within 25 Business Days after receipt of
the notice described in Section 3(c) hereof.
(b) For purposes of this Agreement, the term "Voting
Securities" shall mean all classes of capital stock or other
interests in equity (excluding debt securities convertible into
equity) of the subject referenced then outstanding and normally
entitled to vote in the election of directors, managers or
trustees thereof.
(c) If the Company proposed to issue Voting Securities
not subject to the rights of ERS under Section 2, it shall give
ERS written notice thereof, describing the Voting Securities,
the number thereof to be issued, the purchase price therefor
and the terms upon which the Company proposes to issue the
same, and the aggregate Voting Securities that will be
outstanding after giving effect to such transaction. ERS shall
have seven business days from the date such notice is given to
determine whether to purchase such portion of such Voting
Securities so as to result in ownership by ERS of not less than
ten percent of the outstanding Voting Securities, upon the
terms specified in the notice (appropriately allocated to such
portion), by giving written notice to the Company and stating
therein the number of Voting Securities to be purchased;
provided, however, that, in the event that the purchase price
specified in the Company's notice shall be payable other than
in cash, ERS shall have the right to exercise its right under
this Section 3 in exchange for cash equal to the reasonable
fair market value of the purchase price otherwise payable for
the Voting Securities to be acquired thereby. Such amount shall
be determined by the Company and ERS in good faith, except that
if such parties are unable to determine such amount within five
business days of the Company's notice under this Section 3(c),
such amount shall be determined by an independent appraiser
qualified in such matters and reasonably acceptable to both the
Company and ERS (and the period under this Section 3 during
which ERS may exercise its right shall be extended to seven
business days subsequent to such determination). The Company
shall furnish ERS and such appraiser with all information
reasonably related to the calculation of such amount.
4. Right of First Offer for Sales of Convertible
Preferred Stock and Series A Preferred Stock.
(a) Each Holder hereby grants to the Company first and
then to each of the other Holders a right of first offer to
purchase shares of any Convertible Preferred Stock or Series A
Preferred Stock (and Common Stock received upon conversion
thereof) which such Holder (hereinafter referred to as the
"Selling Holder") may, from time to time, propose to sell prior
to the Initial Public Offering. Such right of first offer
shall allow the Company, and to the extent not purchased by the
Company, then each other Holder (each, hereinafter referred to
as an "Offeree") to purchase its "Convertible Securities
Proportionate Share" (as such term is defined below) of each
class of the Stock proposed to be sold prior to the Initial
Public Offering. In the event any Offeree does not purchase
any or all of its Convertible Securities Proportionate Share of
such Stock proposed to be sold prior to the Initial Public
Offering, the other Offerees shall have the right to purchase
such unpurchased Stock, as described below. The right of first
offer granted hereunder shall terminate if unexercised within
25 Business Days after receipt of the notice described in
Section 4(c)hereof. Offerees may reallocate their right of
first offer among themselves. This right of first offer shall
not apply, however, to (i) sales or other dispositions by
Holders pursuant to their tag-along rights in Section 5 hereof,
or (ii) sales or other dispositions by Holders to their
respective Affiliates (as hereinafter defined), who agree to
acquire such shares subject to the provisions of this
Agreement. For purposes of this Section 4, any proposal to sell
any Convertible Note (or portion thereof) shall be deemed a
proposal to sell the shares of Senior Preferred Stock into
which such Convertible Note (or portion thereof) is
convertible, and shall be subject to the provisions of this
Section 4 (and, notwithstanding any provision to the contrary
contained in any Convertible Note, contemporaneously with
closing of the purchase of any such shares pursuant to the
exercise of any rights under this Section 4, such Convertible
Note [or portion thereof, as the case may be] shall
automatically and without further act by the holder thereof
convert into such shares at the then applicable conversion
price); and the parties further acknowledge and agree that each
subsequent holder of a Convertible Note acquired prior to the
Initial Public Offering shall agree to be subject to the
provisions of this Agreement.
(b)(i) "Convertible Securities Proportionate Share"
shall, in the case of any Holder Offeree, be equal to a
fraction, the numerator of which shall equal the total number
of shares of Common Stock (determined on an as-converted basis
prior to a Participation Event and only including the Series B
Preferred Stock, the Senior Preferred Stock [including the
Senior Preferred Stock issuable upon conversion of the
Convertible Notes] and Common Stock issuable upon conversion
thereof) then owned by or issuable to such Offeree and the
denominator of which shall equal the total number of such
shares of Common Stock owned by or issuable to all Offerees,
and in the case of the Company, be equal to the total amount of
the Company Stock proposed to be sold by the Selling Holder.
(ii) "Affiliates" shall mean (I) each person or
entity that, directly or indirectly, owns or controls, whether
beneficially, or as a trustee, guardian or other fiduciary, 5%
or more of the Voting Securities of the subject referenced,
(II) each person or entity that controls, is controlled by or
is under common control with the subject referenced or any
Affiliate of the subject referenced, (III) each of the
officers, directors, joint venturers and partners of the
subject referenced, (IV) any trust or beneficiary of a trust of
which the subject referenced is the sole trustee or (V) any
lineal descendants, ancestors, spouse or former spouses (as
part of a marital dissolution) of the subject referenced (or
any trust for the benefit thereof). For the purpose of this
definition, "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies, whether through the ownership of
Voting Securities, by contract or otherwise, of the subject
referenced.
(c) If a Selling Holder proposes to sell any shares of
Convertible Preferred Stock or Series A Preferred Stock (or
Common Stock received upon conversion thereof) to which the
right of first offer under this Section 4 applies, it shall
give the Company and each Offeree written notice thereof,
describing the number of shares thereof to be sold, the
purchase price therefor (which shall be payable solely in cash)
and the terms upon which such Selling Holder proposes to sell
the same. The Company shall have ten Business Days from the
date such notice is given to determine whether to purchase all
or any portion of such Stock for the purchase price and upon
the terms specified in the notice by giving written notice to
Selling Holder and to each Offeree and stating therein the
number of shares of Stock to be purchased. To the extent the
Company has not determined to purchase all of the Stock
proposed to be sold, each Offeree shall then have an additional
ten Business Days from the date such notice is given to
determine whether to purchase all or any portion of such
Offeree's Convertible Securities Proportionate Share of such
Stock not purchased by the Company for the purchase price and
upon the terms specified in the notice by giving written notice
to the Selling Holder and stating therein the number of shares
of Stock to be purchased.
(d) If the Offerees and the Company have not elected
within such aggregate 20-Business Day period to purchase all of
the shares of Stock proposed to be sold, the Selling Holder
shall provide each Participating Offeree (as defined below)
within five Business Days after such period ends with a
schedule setting forth the following information: (i) the
number of shares of Stock elected to be purchased, (ii) the
purchasers thereof (hereinafter referred to as the
"Participating Offerees") and the specific number of shares
elected to be purchased by each such Participating Offeree, and
(iii) the number of shares not elected to be purchased. Each
Participating Offeree shall thereafter have an additional ten
Business Days after such five-Business Day period has elapsed
to determine whether to purchase all or any portion of such
Participating Offeree's "Residual Convertible Securities
Proportionate Share" (as such term is defined below) of such
remaining shares for the purchase price and upon the terms
specified in the notice by giving written notice to the Selling
Holder and stating therein the number of shares to be
purchased. "Residual Convertible Securities Proportionate
Share" shall be equal to a fraction, the numerator of which
shall equal the total number of shares of Common Stock (as
determined in the definition of Convertible Securities
Proportionate Share) then owned by or issuable to such
Participating Offeree and the denominator of which shall equal
the total number of such shares of Common Stock owned by or
issuable to all Participating Offerees (as so determined).
(e) If the Offerees and the Company (considered together)
have not elected to purchase all of the shares proposed to be
sold by the Selling Holder (within the time period for
notifying the Selling Holder set forth above), then neither the
Company nor any Offeree shall have any right to purchase any of
such shares and the Selling Holder shall have 120 calendar days
in which to sell all (but not less than all) of the shares
originally proposed to be sold at a price not less than that
contained in the notice previously given to the Offerees and
the Company, and on terms and conditions not more favorable to
the third party than those contained in such notice. If, at
the end of such 120-calendar day period, the Selling Holder has
not completed such sale of Convertible Preferred Stock, the
Selling Holder shall no longer be permitted to sell Convertible
Preferred Stock pursuant to this Section 4 without again fully
complying with all of the provisions of this Section 4
5. Tag-Along Right With Respect to Sales of Canaan Stock.
(a) In addition to the requirements of Section 4 hereof,
Canaan Capital Limited Partnership and Canaan Capital Offshore
Limited Partnership, C.V. (herein collectively referred to as
"Canaan") shall not directly or indirectly sell, transfer or
otherwise dispose of any equity securities of the Company
(including, but not limited to, Common Stock, Series A
Preferred Stock or Convertible Preferred Stock, (hereinafter
referred to, collectively, as "Canaan Stock"), in a single
transaction or related series of transactions, to any third
party (other than (i) distributions of Canaan Stock to Canaan's
partners generally either upon a liquidation or termination of
the applicable Canaan entity or after a Qualified IPO (for
purposes of this Agreement, as defined in the Certificate of
Designation of the Senior Preferred Stock, as filed with the
Secretary of State of Delaware and from time to time amended)
and (ii) sales of Canaan Stock in a public market transaction
after an Initial Public Offering) unless the terms and
conditions of such sale, transfer or other disposition
(hereinafter referred to as the "Third Party Disposition") to
such third party shall contain an offer to each Holder, to
include in such Third Party Disposition such number of shares
of Common Stock or Convertible Preferred Stock as is determined
in accordance with Section 5(b) below. At least 45 days prior
to effecting any Third Party Disposition, Canaan shall promptly
cause the terms and conditions of the Third Party Disposition
to be reduced to a reasonably detailed writing (which writing
shall identify the third party purchaser and shall include the
offer to Holders to purchase or otherwise acquire their Common
Stock or Convertible Preferred Stock, as the case may be,
according to the terms and subject to the conditions of this
Section 5), and shall deliver, or cause the third party to
deliver, written notice (hereinafter referred to as the
"Notice") of the terms of such Third Party Disposition to each
Holder. The Notice shall be accompanied by a true and correct
copy of the agreement, if any, embodying the terms and
conditions of the proposed Third Party Disposition or such
written summary thereof if there is no agreement. At any time
after receipt of the Notice (but in no event later than ten
Business Days after receipt), any Holder may accept the offer
included in the Notice for up to such number of its shares of
Common Stock or Convertible Preferred Stock (including
Convertible Preferred Stock issuable upon conversion of the
Convertible Notes), as the case may be, as determined in
accordance with the provisions of Section 5(b) below, by
furnishing irrevocable written notice of such acceptance to
Canaan and to the third party.
(b) In the event that any Holder elects to accept
the offer included in the Notice described in Section 5(a)
above, such Holder (hereinafter referred to as the "Included
Holder") shall have the right to sell, transfer or otherwise
dispose of such number of its shares of Common Stock and/or
Convertible Preferred Stock (including Convertible Preferred
Stock issuable upon conversion of the Convertible Notes)
pursuant to, and upon consummation of, the Third Party
Disposition which is equal to the product of (X) the total
number of shares of Common Stock owned by the Included Holder
(assuming for the purpose of this calculation, the conversion
of all shares of Convertible Preferred Stock and including
Convertible Preferred Stock issuable upon conversion of the
Convertible Notes) and (Y) a fraction, the numerator of which
shall equal the total number of shares of Canaan Stock
(calculated on an as converted basis) to be sold to the third
party, and the denominator of which shall equal the total
number of shares of Canaan Stock (calculated on an as converted
basis) then owned by Canaan (assuming for the purposes of this
calculation, the conversion of all shares of Convertible
Preferred Stock). If the third party purchaser is not willing
to purchase such additional shares, the number of shares to be
sold by Canaan and the Included Holders shall be
proportionately reduced based upon the number of shares then
owned.
(c) The purchase of Stock pursuant to this Section 5
shall be made on the same terms (including, without limitation,
the per share consideration and method of payment, and the date
of sale, transfer or other disposition), and subject to the
same conditions, if any, as are provided to Canaan and stated
in the Notice. Notwithstanding anything herein to the contrary,
the rights set forth in this Section 5 shall only apply to
shares of Holders' Convertible Preferred Stock in the event
that the Canaan Stock to be sold in the Third Party Disposition
is Convertible Preferred Stock, but shall not apply to Holders'
Common Stock and Convertible Preferred Stock (including
Convertible Preferred Stock issuable upon conversion of the
Convertible Notes) in the event that the Canaan Stock to be
sold in the Third Party Disposition is Common Stock.
(d) Upon the consummation of the disposition of
Stock to the third party pursuant to the Third Party
Disposition, Canaan shall (i) cause the third party to remit
directly to each Included Holder the sales price of its Stock
disposed of pursuant thereto, and (ii) furnish such other
evidence of the completion and time of completion of such
disposition and the terms thereof as may reasonably be
requested by such Included Holder. Each Included Holder will
bear its pro rata share (based upon the number of shares of
each class sold and the aggregate consideration of each class)
of the brokerage and similar costs of any sale of Stock
pursuant to this Section 5. Costs incurred by the Included
Holder on its own behalf will not be considered costs of the
transaction hereunder.
(e) If a Holder has not delivered to Canaan and to the
third party written notice of its acceptance of the offer
contained in the Notice within 10 Business Days after the
receipt of such Notice, it shall be deemed to have waived any
and all rights pursuant to this Section 5 with respect to the
disposition of its Stock described in the Notice, and Canaan
shall have 45 days (calculated from the first day next
succeeding the expiration of the 45 day acceptance period
described above), in which to dispose of the aggregate amount
of Canaan Stock described in the Notice to the third party
identified in the Notice, on terms not more favorable to Canaan
than those which were set forth in the Notice, provided that
the foregoing shall not limit the obligations of Canaan
pursuant to Section 4 above. If a Holder has delivered
irrevocable written notice of acceptance as described in the
preceding sentence and, if after 30 days following receipt of
the Notice, Canaan and the third party shall not have completed
the disposition of Canaan Stock to be sold in connection
therewith in accordance with the terms of the Third Party
Disposition, all the restrictions on the disposition of Canaan
Stock contained in this Section 5 shall again be in force and
effect.
6. Closing Conditions.
(a) Any third party purchaser of Convertible
Preferred Stock (or Common Stock received upon conversion
thereof) shall agree in writing to be bound by all of the
provisions and conditions of this Agreement as are applicable
to Holders as though the third party purchaser had been an
original signatory hereto (except insofar as such shares are
acquired subsequent to an Initial Public Offering and the
provisions hereof no longer apply to the holder of such
shares).
(b) Unless otherwise agreed to by the parties, the
consummation of any disposition of Stock (hereinafter referred
to as the "Closing") pursuant to this Agreement shall take
place at the executive offices of the Company, within 20
Business Days after the date of the applicable notice of
intention to buy. At the Closing, the purchaser(s) shall
deliver a certified or bank cashier's check or shall transfer
funds by wire transfer in the appropriate amount of any cash
purchase price to the Company or such Selling Holder, as the
case may be, against the simultaneous delivery of certificates
representing the Stock being purchased, duly endorsed and in
proper form for transfer, with any required stock transfer tax
stamps affixed thereto, free and clear of all liens, claims and
encumbrances, except as provided by this Agreement.
(c) The obligation of the parties hereto to
consummate the closing of any of the sales of Stock shall be
subject to purchaser(s) in each such transaction having
received (A) all material consents, permits, licenses, orders
or other approvals necessary for the purchase thereof, (B) the
expiration or termination of any applicable waiting periods
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (hereinafter referred to as the "HSR Act"), and (C)
no preliminary or permanent injunction or other order by any
court of competent jurisdiction prohibiting or otherwise
restraining the consummation of any such transaction shall be
in effect.
(d) Notwithstanding anything to the contrary
contained herein, if (A) any waiting period under the HSR Act
applicable to the consummation of any such transaction pursuant
to this Section 6 shall not have expired or been terminated,
(B) any preliminary or permanent injunction or other order by
any court of competent jurisdiction prohibiting or otherwise
restraining the consummation of any such transaction shall be
in effect or (C) any material approvals have not been obtained,
in any case, as of the date specified in this Section 4 for the
consummation of such transaction, such date shall be deemed to
be five Business Days following the later to occur of (x) the
expiration or termination of the waiting period, (y) the
expiration or termination of such order or injunction and (z)
the receipt of such material approvals; provided, however, that
the closing for such transaction shall not be delayed more than
60 days after the date specified in this Section 6.
7. Board of Directors.
(a) The Holders hereby agree that at all times after
the date hereof the Board of Directors of the Company shall
consist of seven directors elected or appointed as follows,
subject to the designation rights of GE Capital Equity
Investments, Inc. (hereinafter referred to as "GE Capital") and
of ERS and of AG as more particularly set forth below: (i)
three (3) directors shall be elected or appointed by the
holders of shares of Senior Preferred Stock, voting separately
as a single class on an as-converted basis, (ii) one (1)
director shall be elected by the holders of shares of Series B2
Preferred Stock, voting separately as a single class, and (iii)
three (3) directors, with relevant industry experience, shall
be elected at large by the holders of shares of all voting
Stock of the Company. Notwithstanding the foregoing provisions
of this Section 7(a) above: (i) the director to be elected or
appointed by the holders of shares of Series B2 Preferred Stock
shall be designated by GE Capital so long as GE Capital,
together with its Affiliates, continues to own at least seven
percent (7%) of the sum of the Company's outstanding Voting
Securities and those issuable upon conversion of the
Convertible Notes, (ii) at least one (1) of the directors to be
elected or appointed by the holders of shares of Senior
Preferred Stock shall be designated by ERS so long as ERS,
together with its Affiliates, continues to own at least seven
percent (7%) of the sum of the Company's outstanding Voting
Securities and those issuable upon conversion of the
Convertible Notes and (iii) for so long as AG continues to own
at least five percent (5%) of the sum of the Company's
outstanding Voting Securities and those issuable upon
conversion of the Convertible Notes, AG shall have the right at
its option (x) to appoint one additional director, in which
case, after written notice thereof to the Board of Directors,
the Board of Directors shall be expanded to consist of eight
directors (consisting of seven directors appointed as aforesaid
and one director appointed by AG) or (y) to designate an
authorized representative of AG (without voting rights) to
attend as observer each meeting of the Board of Directors, with
notice of such meetings to be given to AG in the form and
manner given to the directors. In addition, for as long as PEC
Israel Economic Corporation (hereinafter referred to as "PEC")
and Discount Investment Corporation (hereinafter referred to as
"Discount") together continue to own at least five percent (5%)
of the sum of the Company's outstanding Voting Securities and
those issuable upon conversion of the Convertible Notes,
Discount shall have the right to designate an authorized
representative of PEC and Discount (without voting rights) to
attend as observer each meeting of the Board of Directors, with
notice of such meetings to be given to PEC and Discount in the
form and manner given to directors. Notwithstanding the
foregoing, the parties acknowledge that the requirements of
clause (iii)(y) of the second preceding sentence, and of the
immediately preceding sentence, shall not affect the validity
of any meeting of the Board of Directors or any action taken
thereat, nor prevent the Board of Directors from acting by
consent; it being further agreed that each such observer shall
be entitled to receive copies of any written materials
distributed to the Board of Directors at any meeting and shall
enter into such reasonable confidentiality arrangements as
shall be prescribed by the Board of Directors. Promptly on or
after the date hereof, and from time to time as necessary, the
Holders shall take all actions necessary to elect, or to
approve and appoint members of the Board of Directors of the
Company in accordance with the foregoing. The Holders hereby
further agree not to amend any provision of the Amended Terms,
Preferences, Rights and Limitations of the Series B Preferred
Stock or the Certificate of Designation of the Senior Preferred
Stock or the Company's Certificate of Incorporation which
pertains to the composition of the Company's Board of Directors
in any manner inconsistent with the provisions of the
immediately preceding sentence without the prior written
consent of GE Capital (so long as it is entitled to designate
any directors, and insofar as such provisions pertain to GE
Capital) and ERS (so long as it is entitled to designate any
directors, and such provisions pertain to ERS) and AG (so long
as it is entitled to designate any directors, and insofar as
such provisions pertain to AG) and PEC and Discount (so long as
Discount is entitled to designate any observers, and insofar as
such provisions pertain to them). The foregoing Board
arrangements will terminate upon the closing of a Qualified IPO
of the Company.
(b) In the event that a vacancy is created on the
Board of Directors at any time by the death, disability,
retirement, resignation or removal of any member of the Board
of Directors, or for any other reason there shall exist or
occur any vacancy on the Board, each Holder hereby agrees to
cause the election or appointment as director to fill such
vacancy of the individual designated by the Holders that had
designated (pursuant to Section 7(a) hereof) the director whose
death, disability, retirement, resignation or removal resulted
in such vacancy on the Board (in the manner set forth in
Section 7(a) hereof).
(b) Each Holder hereby agrees to take all actions
necessary to call, or cause the Company and the appropriate
officers and directors of the Company to call, an annual
meeting (and when circumstances so require, a special meeting)
of Holders of the Company and to vote all shares of Stock owned
or held of record by such Holder at any such meeting and at any
other annual or special meeting of stockholders in favor of, or
take all actions by written consent in lieu of any such meeting
as may be necessary to cause, the election as members of the
Board of Directors of those individuals so designated in
accordance with, and to otherwise effect the intent of, this
Section 7.
8. Holders' Representations and Warranties. Except with
respect to that certain Rights Agreement dated June 30, 1994,
and that certain Co-Sale Agreement dated August 14, 1997, to
which Canaan is a party, each Holder represents and warrants to
each of the other Holders that there are no agreements to which
such Holder is a party that will survive the execution and
delivery of this Agreement with respect to the voting or
transfer of the capital stock of the Company or with respect to
any other aspect of the Company's affairs, other than this
Agreement, the Voting Rights Agreement, dated December 10,
1980, as amended, between PEC Israel and Discount Investment
Corporation, Ltd., and the Stock and Note Purchase Agreement
and the agreements and documents contemplated thereby.
9. Legend. The Holders agree that each certificate
representing the Stock and the Canaan Stock now or hereafter
held by a Holder shall be endorsed with a legend in
substantially the following form:
"The shares represented by this certificate are
subject to a certain Amended and Restated
Securityholders Agreement dated as of February 11,
2000 which provides, among other things, for certain
restrictions on the transfer of such shares. A copy
of such Agreement is on file at the principal offices
of NewCheck Corporation and will be furnished upon
request to any holder of the shares represented by
this certificate."
10. Equitable Relief. It is hereby acknowledged that
irreparable harm would occur in the event that any of the
provisions of this Agreement were not performed fully by the
parties hereto in accordance with the terms specified herein,
and that monetary damages are an inadequate remedy for breach
of this Agreement because of the difficulty of ascertaining and
quantifying the amount of damage that will be suffered by the
parties relying hereon in the event that the undertakings and
provisions contained in this Agreement were breached or
violated. Accordingly, each party hereto hereby agrees that
each other party hereto shall be entitled to an injunction or
injunctions to restrain, enjoin and prevent breaches of the
undertakings and provisions hereof and to enforce specifically
the undertakings and provisions hereof in any court of the
United States or any state having jurisdiction over the matter;
it being understood that such remedies shall be in addition to,
and not in lieu of, any other rights and remedies available at
law or in equity.
11. Miscellaneous.
(a) Notices. Any and all notices, designations,
consents, offers, acceptances, or any other communication
provided for herein shall be made in writing by personal-
delivery, first-class mail (registered or certified, with
return receipt requested), telecopier (with "answer back"
confirmation), or overnight air courier guaranteeing next day
delivery in the case of the Company, at its address set forth
at the beginning of this Agreement (Attn: Chief Executive
Officer; telecopy No.: (000) 000-0000, and in the case of any
Holder, to the address of such party appearing under its or his
name on Annex I hereto (or to such other address as may be
designated in writing by any such party in accordance with this
Section 11(a)). Such notices or communications shall be
effective and deemed given upon delivery to said address.
(c) Complete Agreement; Amendment. This Agreement
constitutes the complete understanding of the parties with
respect to its subject matter and supersedes any other
agreement or understanding relating thereto, including, without
limitation, the Original Securityholder's Agreement. No
amendment, change or modification of this Agreement shall be
valid, binding or enforceable, unless the same shall be in
writing and signed by (i) Persons who, in the aggregate, hold
Convertible Preferred Stock (or a Convertible Note), or Common
Stock into which the Convertible Preferred Stock(including
Convertible Preferred Stock issuable or issued upon conversion
of the Convertible Notes) has been converted, representing at
least 66.67% of the total number of shares of Common Stock into
which the Convertible Preferred Stock that has been issued is
convertible (determined prior to a Participation Event) or has
been converted, including in such calculation shares issuable
or issued upon conversion of the Convertible Notes and
excluding in such calculation shares issuable upon conversion
of Convertible Preferred Stock acquired by the Company, and
(ii) solely with respect to any amendment, change or
modification of Section 2 hereof, each Person who (together
with its Affiliates) holds at least 5% of the total number of
shares of Common Stock into which the Convertible Preferred
Stock outstanding is convertible (determined prior to a
Participation Event and including in such calculation shares
issuable upon conversion of the Convertible Notes) and (iii)
solely with respect to any amendment, change or modification of
Section 7 hereof affecting the rights of GE Capital, ERS, AG,
PEC or Discount to designate a director (or nominate an
observer, as the case may be), GE Capital, ERS, AG, PEC and
Discount, respectively, and (iv) the holder of the ERS
Convertible Note, on behalf of the Holders, and the Company to
the extent their rights and obligations under this Agreement
would be affected thereby. Any amendment, change or
modification of this Agreement agreed to aforesaid shall be
binding upon all Holders
(c) Termination. This Agreement may be terminated
at any time by an instrument in writing signed by the Holders
described under clauses (i), (ii), (iii) and (iv) of Paragraph
(b) immediately preceding (without limiting any such Holders
right to consent thereof or to withhold consent by reference to
its rights under any Section of this Agreement) and, if sooner,
upon the consummation of a Qualified IPO, except that the
provisions of Section 5 hereof shall remain in effect for a
period of seven years after the date hereof.
(d) Waiver. No failure or delay on the part of the
Holders or the Company or any of them in exercising any right,
power or privilege hereunder, and no course of dealing between
the Holders or the Company, shall operate as a waiver thereof
nor shall any single or partial exercise of any right, power or
privilege hereunder preclude the simultaneous or later exercise
of any other right, power or privilege. The rights and
remedies herein expressly provided are cumulative and not
exclusive of any rights and remedies which the Holders or the
Company would otherwise have.
(e) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute but one and the same
instrument. This Agreement shall be binding upon the parties
hereto notwithstanding the absence of any execution and
delivery hereof by Xxxxx Xxxxx, who may subsequently be joined
as a party by execution and delivery hereof.
(f) Governing Law; Waivers. This Agreement shall be
governed by, construed and enforced in accordance with the laws
of the State of New York without giving effect to the conflict
of laws provisions thereof. Each of the parties hereby submits
to personal jurisdiction and waives any objection as to venue
in the County of New York, State of New York. The parties
hereto waive all right to trial by jury in any action or
proceeding to enforce or defend any rights hereunder.
(g) Benefit and Binding Effect. All of the terms
and provisions of this Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective
successors and assigns, including any permitted transferee of
their Stock (other than as part of a registered offering under
the Securities Act). References herein to any Holder shall
include Holder and any of its successors and assigns.
(h) Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.
(i) After-Acquired Shares. All of the provisions of
this Agreement shall apply to all of the shares of Stock and
Canaan Stock of the Company now owned or which may be issued to
or acquired by a Holder in consequence of any additional
issuance (including, without limitation, by exercise of an
option or any warrant), purchase, exchange, conversion or
reclassification of stock, corporate reorganization, or any
other form of recapitalization, consolidation, merger, stock
split or stock dividend, or which are acquired by a Holder in
any other manner, which shall constitute Stock and Canaan
Stock, as the case may be, for purposes of this Agreement.
(j) Approvals and Consents. The Holders hereby
agree, for themselves, their successors, heirs and legal
representatives, to vote at stockholders' and directors'
meetings of the Company, to prepare, execute and deliver or
cause to be prepared, executed and delivered such further
instruments and documents, to take such other actions and to
adopt such by-laws and provisions of the certificate of
incorporation as may be reasonably required to more effectively
carry out the intent and purposes of this Agreement and the
transactions contemplated hereby. They further agree to cause
the Company to do the same.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
NEWCHECK CORPORATION
By: s/Xxxxxx X. Xxxxxx, Xx.
---------------------------
Xxxxxx X. Xxxxxx, Xx.
Chief Executive Officer
ELECTRONIC RETAILING SYSTEMS
INTERNATIONAL, INC.
By: s/ Xxxxx X. Failing, Jr.
------------------------
Name: Xxxxx X. Failing, Jr.
Title: Vice Chairman and Chief
Executive Officer
CANAAN CAPITAL OFFSHORE LIMITED
PARTNERSHIP, C.V., a limited
partnership formed under the laws
of the Netherlands Antilles
By: Canaan Capital Management
L.P., General Partner
By: Canaan Capital Partners L.P.,
General Partner
By: s/Xxxxx Xxxx
--------------------------
General Partner
CANAAN CAPITAL LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: Canaan Capital Management
L.P., General Partner
By: Canaan Capital Partners L.P.,
General Partner
By: Xxxxx Xxxx
--------------------------
General Partner
GE CAPITAL EQUITY INVESTMENTS,
INC.
By: s/Xxxxx X. Xxxxx
------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
PEC ISRAEL ECONOMIC CORPORATION
By: s/Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
DISCOUNT INVESTMENT CORPORATION,
LTD.
By: s/Dr. Yoram Turbowicz
s/Xxxxxx Xxxxx
----------------------------
Name: Dr. Yoram Turbowicz
Title: Chief Executive
Officer
Name: Xxxxxx Xxxxx
Title: Assistant to
President
FIRST COMMERCE CAPITAL, INC.,
d/b/a BANC ONE CAPITAL
By: s/Xxxx X. Xxxx
--------------------------
Name: Xxxx X. Xxxx
Title: Authorized Signatory
XXXXXXX NATIONAL LIFE INSURANCE
CO.,
by PPM AMERICA, INC. Attorney in
Fact
By: s/Xxxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
s/Xxxxx X. Failing
-----------------------------------
XXXXX X. FAILING
TRUST UNDER PARAGRAPH II OF ARTICLE
FIRST OF THE FAILING TRUST U/A/D
7/31/90 F/B/O XXXXX X. FAILING, III
By: s/Xxxxx X. Failing
--------------------------------
XXXXX X. FAILING
TRUST UNDER PARAGRAPH II OF ARTICLE
FIRST OF THE FAILING TRUST U/A/D
7/31/90 F/B/O LINDSAY FAILING
By: s/Xxxxx X. Failing
--------------------------------
XXXXX X. FAILING
s/Xxxxx Xxxxxxxx
-----------------------------------
XXXXX XXXXXXXX
s/Xxxxxxx X. Xxxxxxx
------------------------------------
XXXXXXX X. XXXXXXX
s/Xxxxxxx Xxxxxxxxxx
------------------------------------
XXXXXXX XXXXXXXXXX, ON BEHALF OF
XXXXXX X.X. XXXXXXX & J. XXXXXXXXXXX
XXXXX TTEE CREDIT RESEARCH AND
TRADING LLC PFT SHR U/A DTD 1/1/96
FBO XXXXXXX XXXXXXXXXX
s/Xxxxx Xxxxx
-----------------------------------
XXXXX XXXXX
s/Xxxxxx XxXxxx
-----------------------------------
XXXXXX XXXXXX
s/Xxxxxxx Xxx
-----------------------------------
XXXXXXX XXX
s/Xxxx Xxxxxxxxx
-----------------------------------
XXXX XXXXXXXXX
s/Xxxxx Xxxxxxx
-----------------------------------
XXXXX XXXXXXX
XXXXX STREET ASSOCIATES, LLC
By: s/Xxxxx Xxxx
--------------------------------
Name: Xxxxx Xxxx
Title: Member/Manager
AG CHECKOUT LLC
By: s/Xxxxxx Brain
--------------------------------
Name: Xxxxxx Brain
Title: Vice President
XXXXXXXX PARTNERS, LLC
By s/Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
s/Xxxxxx X. Xxxxxxx
-----------------------------------
XXXXXX X. XXXXXXX
XXXXX CORPORATION
By s/Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
BNY CAPITAL MARKETS, INC.
By s/Xxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Managing Director
s/Xxxxxxx Xxxxxxxxxx
--------------------------------
XXXXXXX XXXXXXXXXX
