Exhibit 2(b)
NEITHER THIS NOTE, NOR THE SHARES ISSUABLE UPON CONVERSION
OF THIS NOTE, HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED
IN VIOLATION OF SUCH ACT
NEWCHECK CORPORATION
d/b/a Productivity Solutions, Inc.
8% CONVERTIBLE NOTE
$4,550,000 February 11, 2000
SECTION 1. General. NEWCHECK CORPORATION d/b/a Productivity
Solutions, Inc., a Delaware corporation (hereinafter referred to
as the "Company"), with offices at 0000 Xxxxxxxxxx Xxx, Xxxxx 00,
Xxxxxxxxxxxx, Xxxxxxx 00000, for value received, hereby promises
to pay to ELECTRONIC RETAILING SYSTEMS INTERNATIONAL, INC., a
Delaware corporation (hereinafter referred to as "ERS"), with
offices at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, or
order, the principal amount of $4,550,000 (Four Million Five
Hundred Fifty Thousand Dollars), the entire principal balance of
which shall be due and payable on the fifth anniversary of the
date hereof (hereinafter referred to as the "Maturity Date"), in
such coin or currency of the United States of America as at the
time of payment shall be legal tender therein for the payment of
public and private debts or, at the election of the Company, in
the manner hereinafter set forth; and, to pay interest on the
unpaid balance of the principal amount hereof from the date
hereof at the rate of 8% per annum, compounded semi-annually on
each July 1 and January 1 prior to the Maturity Date, in like
coin or currency or, at the election of the Company, in the
manner hereinafter set forth, on the Maturity Date; and to pay
interest at such rate, in like coin or currency or, at the
election of the Company, in such manner, on any overdue principal
and (to the extent permitted by law) on any overdue interest,
from the due date hereof until the obligation of the Company with
respect to the payment thereof shall be discharged; all payments
of principal of this Note and all payments of the interest on
this Note to be made at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx
00000, or such other location as shall be specified in writing by
the holder of this Note to the Company.
All payments of principal of this Note and all payments of
interest on this Note may, at the election of the Company, in
lieu of payment in coin or currency of the United States of
America as aforesaid, be made in validly authorized and issued,
fully-paid and non-assessable shares of Senior Preferred Stock
(as hereinafter defined), registered in the name of the payee,
free and clear of any and all liens, charges or other
encumbrances of any nature whatsoever, with an aggregate
liquidation preference equal in amount to the payment to be made.
SECTION 2. Definitions. As used herein, the following terms
shall have the following respective meanings:
The Term "AG Note" shall mean the 8% Convertible Note in the
original principal amount of $700,000 issued as of the date
hereof by the Company to AG Checkout LLC.
The term "Certificate of Designation" shall mean the
Certificate of Designation of the Senior Preferred Stock, as
filed with the Secretary of State of Delaware and as may be
amended from time to time.
The term "Company" shall mean NewCheck Corporation d/b/a
Productivity Solutions, Inc., a Delaware corporation, the maker
of this Note, and shall also mean any successor corporation.
The term "Conversion Price" shall mean the applicable price
per share of Senior Preferred Stock set forth in Section 7.6
hereof, or, in case any adjustment of such price has taken place
pursuant to the further provisions of Section 7, then the price
as last adjusted and in effect for purposes of Section 7.
The term "Convertible Securities" shall have the meaning set
forth in Section 6.2 hereof.
The term "ERS" shall have the meaning set forth in Section 1
hereof.
The term "Events of Default" shall have the meaning set
forth in Section 5.1 hereof.
The term "Issuance Date" shall mean the date of this Note.
The term "majority-in-interest", when used with reference to
the principal amount of the Notes, shall mean in excess of 50% of
the aggregate outstanding principal amount of the Notes.
The term "Maturity Date" shall have the meaning set forth in
Section 1 hereof.
The term "Mandatory Conversion" shall have the meaning set
forth in Section 7.3 hereof.
The term "Note" shall mean this Note and any Note executed
and delivered by the Company in exchange or replacement for this
Note pursuant to Section 8 hereof.
The term "Notes" shall mean this Note and the AG Note.
The term "Options" shall have the meaning set forth in
Section 6.2 hereof.
The term "Person" shall mean an individual, a corporation, a
partnership, a trust, an unincorporated organization and a
government or any department, agency or political subdivision
thereof.
The term "Purchase Agreement" shall mean the Stock and
Convertible Note Purchase Agreement dated as of the Issuance Date
among the Company, ERS and the other parties signatory thereto.
The term "Registration Rights Agreement" shall mean the
Amended and Restated Registration Rights Agreement dated the
Issuance Date among the Company, ERS and the other parties
signatory thereto.
The term "Securityholders Agreement" shall mean the Amended
and Restated Securityholders Agreement dated the Issuance Date
among the Company, ERS and the other parties signatories thereto.
The term "Senior Preferred Stock" shall mean the Series C
Convertible Preferred Stock, $.0001 par value, of the Company.
The term "Subsidiary" shall mean: (x) any present or future
corporation at least a majority of the outstanding voting
securities of which shall at the time be owned through
Subsidiaries, by the Company, or which is otherwise controlled by
the Company and (y) any partnership, association, joint venture
or other entity in which the Company, directly or indirectly, or
through Subsidiaries, has a 50% or more equity interest at the
time or which is otherwise controlled by the Company. For
purposes hereof, outstanding voting securities shall be deemed to
be all classes of capital stock or other interests in equity
(excluding debt securities convertible into equity) then
outstanding and normally entitled to vote in the election of
directors, managers or trustees.
SECTION 3. Optional Prepayment.
3.1 Except as agreed to in writing by the holders of a
majority-in-interest of the principal amount of the Notes to any
such payment, the Company shall not prepay all or any portion of
the principal of or any interest on this Note prior to the
Maturity Date.
3.2 Provided the holders of a majority-in-interest of the
principal amount of the Notes shall have evidenced their
agreement to such payment as aforesaid, the Company may prepay
the whole, or any part, of the unpaid principal amount of this
Note, without premium or penalty, upon the terms hereinafter set
forth, and provided that interest on the principal prepayment
shall be paid concurrently therewith. Notices of intended
prepayment shall be given by the Company by mail and shall be
mailed to the holder of this Note not less than 30 days from the
date fixed for prepayment. The giving of such notice by the
Company shall not in any way affect the rights of the holder of
this Note under Section 7 hereof. In case this Note is intended
to be prepaid in part only, such notice shall specify the
principal amount hereof to be prepaid; and, in such case, the
principal amount of this Note shall be prepaid in an amount
proportionate to the principal amount of all Notes so prepaid.
Upon giving of notice of prepayment as aforesaid, and subject to
agreement thereto by the holder of this Note, this Note or
portion thereof so specified for prepayment shall on the
prepayment date specified in such notice become due and payable,
and from and after the prepayment date so specified (unless the
Company shall default in making such prepayment) interest on the
principal of this Note or portion hereof so specified for
prepayment shall cease to accrue, and the principal of this Note
or portion thereof so specified for prepayment shall be paid by
the Company at the prepayment price aforesaid.
SECTION 4. Consolidation Merger or Disposition of Assets.
Without limiting any other covenant contained in the Purchase
Agreement, the Company shall not consolidate with, merge into, or
sell or otherwise dispose of all or substantially all its
properties as an entirety to, any person unless:
(a) the successor formed by or resulting from such
consolidation or merger or to which such sale or other
disposition shall have been made shall be a corporation organized
under the laws of the United States of America or any State,
district or territory thereof;
(b) such successor corporation shall expressly assume
the due and punctual payment of the principal of and interest on
this Note according to its tenor, and the due and punctual
performance and observance of all the covenants, agreements and
conditions of this Note to be performed or observed by the
Company to the same extent as if such successor corporation had
been the original maker of this Note (and such assumption shall,
upon the request of the holder of this Note, be evidenced by the
endorsing of an appropriate legend upon this Note, and any Note
executed pursuant to Section 8 hereof after such assumption
shall, unless executed in the name of such corporation, have a
similar legend endorsed thereon);
(c) immediately after such consolidation, merger,
sale or other disposition, such successor corporation shall not
be in default in the performance of any of the covenants,
agreements or conditions contained in this Note and no condition,
act or event (with the giving of notice, passage of time, or
otherwise) would result in such default; and
(d) immediately after such consolidation, merger,
sale or other disposition, such successor corporation shall have
a consolidated stockholders' equity, determined in accordance
with generally accepted accounting principles, which is no less
than the Company's stockholders' equity, as so determined,
immediately prior to such transaction.
SECTION 5. Events of Default and Remedies.
5.1 Unless waived by the holders of a majority-in-interest
of the principal amount of the Notes, the entire unpaid principal
amount of this Note, together with all accrued interest hereon,
at the option of the holder hereof exercised by notice to the
Company, shall forthwith become and be due and payable if any one
or more of the following events (herein called "Events of
Default") shall have occurred (for any reason whatsoever and
whether such happening shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in
compliance with any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body) and be continuing at the time of such notice, that is to
say:
(a) if default shall be made in the due and punctual
payment of the principal of this Note when and as the same shall
become due and payable, whether at maturity, by acceleration or
otherwise;
(b) if default shall be made in the due and punctual
payment of any interest on this Note when and as such interest
shall become due and payable;
(c) if default shall be made in the performance or
observance of any of the other covenants, agreements or
conditions of the Company or any Subsidiary contained in this
Note or in the Purchase Agreement or any other agreement to which
the Company and the holder of this Note are party, and such
default shall have continued for a period of 30 days after notice
thereof to the Company;
(d) if any representation or warranty made by the
Company under the Purchase Agreement or in any document or
certificate furnished by the Company pursuant thereto shall prove
to be inaccurate in any material respect when made;
(e) if this Note, the Purchase Agreement or any other
agreement to which the Company and the holder of this Note are
party shall cease to be enforceable in accordance with its terms
against the Company, or the Company shall so state in writing;
(f) if the Company or any Subsidiary shall default
beyond any period of grace provided with respect thereto in the
payment of principal of, premium, if any, or interest on any
obligation in respect of borrowed money when due, whether by
acceleration or otherwise; or if the Company or any Subsidiary
shall default beyond any grace period herein provided in the
performance or observance of any other agreement, term or
condition contained in such obligation or in any agreement under
which any such obligation is created, if the effect of any such
default is to cause or permit the holder or holders of such
obligations (or a trustee on behalf of such holder or holders) to
cause such obligation to become due prior to the date of its
stated maturity, unless such holder or holders or trustee shall
have waived such default after its occurrence or unless such
holder or holders or trustee shall have failed to give any notice
required to create an event of default thereunder;
(g) if final judgment for the payment of money in
excess of $100,000 shall be rendered by a court of record against
the Company or any Subsidiary and the Company or such Subsidiary
shall not discharge the same or provide for its discharge in
accordance with its terms, or shall not procure a stay of
execution thereon within 30 days from the date of entry thereof
and, within the period during which execution of such judgment
shall have been stayed, appeal therefrom, and cause the execution
thereof to be stayed during such appeal;
(h) if the Company or any Subsidiary shall:
(i) admit in writing its inability to pay its
debts generally as they become due;
(ii) file a petition in bankruptcy or a petition
to take advantage of any insolvency act;
(iii) make an assignment for the benefit of
creditors;
(iv) consent to the appointment of a receiver of
itself or of the whole or any substantial part of its
property;
(v) on a petition in bankruptcy filed against
it, be adjudicated a bankrupt; or
(vi) file a petition or answer seeking
reorganization or arrangement under the Federal
bankruptcy laws or any other applicable law or statute
of the United States of America or any State, district
or territory thereof;
(i) if a court of competent jurisdiction shall enter,
except at the direct or indirect request of the holder of this
Note, an order, judgment, or decree appointing, without the
consent of the Company or any Subsidiary, a receiver of the
Company or any Subsidiary or of the whole or any substantial part
of its property, or approving a petition filed against it seeking
reorganization or arrangement of the Company or any Subsidiary
under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any State, district or
territory thereof, and such order, judgment or decree shall not
be vacated or set aside or stayed within 60 days from the date of
entry thereof; or
(j) if, under the provisions of any other law for the
relief or aid of debtors, any court of competent jurisdiction
shall assume custody or control of the Company or any Subsidiary
or of the whole or any substantial part of its property and such
custody or control shall not be terminated or stayed within 60
days from the date of assumption of such custody or control.
5.2. In the case any one or more of the Events of Default
specified in Section 5.1 hereof shall have occurred and be
continuing, unless waived by the holders of a majority-in-
interest of the principal amount of the Notes, the holder of this
Note may proceed to protect and enforce its rights either by suit
in equity and/or by action at law, whether for the specific
performance of any covenant or agreement contained in this Note,
or, unless so waived, the holder of this Note may proceed to
enforce the payment of all sums due upon this Note or to enforce
any other legal or equitable right of the holder of this Note. In
the event an Event of Default shall have occurred, unless so
waived, and the holder of this Note shall employ attorneys, or
incur other costs and expenses for the collection of payments due
or to become due, or for the enforcement or performance or
observance of any obligation or agreement of the Company under
this Note, the Company agrees that it will pay to the holder, on
demand, the reasonable fees of such attorney together with all
other costs and expenses incurred by the holder.
5.3 No remedy herein conferred upon the holder is intended
to be exclusive of any other remedy and each and every such
remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law
or in equity or by statute or otherwise.
5.4 No course of dealing between the Company and the
holder or any delay on the part of the holder hereof in exer-
cising any rights hereunder shall operate as a waiver of any
rights of the holder hereof.
SECTION 6. Protective Covenants.
6.1 Without the prior written consent of the holders of a
majority-in-interest of the principal amount of the Notes, the
Company shall not: authorize, adopt or approve an amendment to
the Certificate of Incorporation of the Company which would alter
or change in any manner the terms, powers, preferences or special
rights of the Senior Preferred Stock, or grant any waivers of
such preferences or rights, including any such modification or
amendment that may (A) change the redemption date of the Senior
Preferred Stock, (B) raise the conversion price of the Senior
Preferred Stock or reduce the liquidation preference or
redemption price or the dividend rights of the Senior Preferred
Stock, (C) adversely affect any of the conversion features of the
Senior Preferred Stock, or (D) reduce the percentage of
outstanding Senior Preferred Stock necessary to modify or amend
the terms thereof or to grant waivers thereof; or (without
limiting any rights of any party to require the Company to effect
a registration under the Registration Rights Agreement) cause or
permit to occur any Participation Event (as defined in the
Certificate of Designation), if within the control of the Company
and except for any Liquidity Event (as defined in the Certificate
of Designation) in the ordinary course of business.
6.2 Without the prior written consent of a majority-in-
interest of the principal amount of the Notes, the Company shall
not: (A) declare a dividend or effect any other distribution on
the Senior Preferred Stock except as required by the Purchase
Agreement or the Certificate of Designation; (B) subdivide the
outstanding shares of Senior Preferred Stock into a greater
number of shares of Senior Preferred Stock or combine the
outstanding shares of Senior Preferred Stock into a smaller
number of shares of Senior Preferred Stock; or (C) issue or sell
any shares of Senior Preferred Stock for a consideration per
share less than the Conversion Price in effect immediately prior
to the time of such issue or sale, or without consideration. For
purposes of this Section 6.2, the following additional paragraphs
shall apply:
(i) Issuance of Rights or Options. In case at any time
the Company shall in any manner grant (whether directly or by
assumption in a merger or otherwise) any rights to subscribe for
or to purchase, or any options for the purchase of, Senior
Preferred Stock or any stock or securities convertible into or
exchangeable for Senior Preferred Stock (such rights or options
being herein called "Options" and such convertible or
exchangeable stock or securities being herein called "Convertible
Securities") whether or not such Options or the right to convert
or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Senior Preferred
Stock is issuable upon the exercise of such Options or upon the
conversion or exchange of such Convertible Securities (determined
by dividing (I) the total amount, if any, received or receivable
by the Company as consideration for the granting of such Options,
plus the aggregate amount of additional consideration payable to
the Company upon the exercise of all such Options, plus, in the
case of such options which relate to Convertible Securities, the
aggregate amount of additional consideration, if any, payable
upon the issue or sale of such Convertible Securities and upon
the conversion or exchange thereof, by (ii) the total maximum
number of shares of Senior Preferred Stock issuable upon the
exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Conversion Price in effect
immediately prior to the time of the granting of such Options,
then the total maximum number of shares of Senior Preferred Stock
issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be
deemed to have been issued for such price per share as of the
date of granting of such Options.
(ii) Issuance of Convertible Securities. In case the
Company shall in any manner issue (whether directly or by
assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert
any such Convertible Securities are immediately exercisable,
and the price per share for which Senior Preferred Stock is
issuable upon such conversion or exchange (determined by
dividing (i) the total amount received or receivable by the
Company as consideration for the issue or sale of such
Convertible Securities, plus the aggregate amount of
additional consideration, if any, payable to the Company
upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Senior Preferred Stock issuable
upon the conversion or exchange of all such Convertible
Securities) shall be less than the Conversion Price in
effect immediately prior to the time of such issue or sale,
then the total maximum number of shares of Senior Preferred
Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued
for such price per share on the date of the issue or sale of
such Convertible Securities.
(iii) Consideration for Stock. In case any shares of
Senior Preferred Stock, Options or Convertible Securities
shall be issued or sold for cash, the consideration received
therefor shall be deemed to be the amount received by the
Company therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection
therewith. In case any shares of Senior Preferred Stock,
Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the
consideration other than cash received by the Company shall
be deemed to be the fair value for such consideration as
determined in good faith by the Board of Directors of the
Company, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by
the Company in connection therewith. In case any Options
shall be issued in connection with the issue and sale of
other securities of the Company, together comprising one
integral transaction in which no specific consideration is
allocated to such Options by the parties thereto, such
Options shall be deemed to have been issued without
consideration.
SECTION 7. Conversion of Note.
7.1 Right to Convert. Subject to and upon compliance with the
provisions hereof, the holder of this Note shall have the right,
at such holder's option, at any time or from time to time
on or after the second anniversary of the Issuance Date, to
convert all or any part of the unpaid principal amount hereof,
plus all interest accrued to the date of such conversion, into
shares of Senior Preferred Stock, at the applicable Conversion
Price.
7.2 Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the holder of this Note shall
surrender it to the Company at the principal executive offices of
the Company at 0000 Xxxxxxxxxx Xxx, Xxxxx 00, Xxxxxxxxxxxx,
Xxxxxxx 00000 accompanied by written notice to the Company that
the holder elects to convert this Note, or, if less than the
entire unpaid principal amount hereof is to be converted, the
portion hereof to be converted, and, if requested by the Company,
by a duly executed instrument of transfer. Such notice (and any
notice by the holder of this Note accompanying surrender of this
Note in the event of a Mandatory Conversion) shall also state the
name or names (with address or addresses) in which the
certificate or certificates for shares of Senior Preferred Stock
which shall be issuable on such conversion shall be issued. As
soon as practicable after the receipt of such notice and the
surrender of this Note, the Company shall issue and shall deliver
at said offices to the holder of this Note, or on his written
order, a certificate or certificates for the number of full
shares of Senior Preferred Stock issuable upon the conversion of
this Note (or portion hereof) and provision shall be made for any
fraction of a share as provided in Section 7.5 hereof. Such
conversion (other than a Mandatory Conversion) shall be deemed to
have been effected immediately prior to the close of business on
the date on which such notice shall have been received by the
Company and this Note shall have been surrendered as aforesaid.
Conversion shall be at the Conversion Price in effect at the time
of conversion, and at such time the rights of the holder of this
Note as such holder shall cease and the person or persons in
whose name or names any certificate or certificates for shares of
Senior Preferred Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of
the shares of Senior Preferred Stock represented thereby. Upon
conversion of only a part of the unpaid principal amount of this
Note, the Company shall execute and deliver to or on the order of
the holder thereof at said offices, at the expense of the
Company, a new Note in principal amount equal to the unconverted
portion of such unpaid principal amount, which new Note shall be
dated and bear interest from the date to which interest shall
have been paid on such unconverted portion.
7.3 Mandatory Conversion. Immediately prior to any event
which, pursuant to the Certificate of Designation, would cause
the mandatory conversion of all outstanding shares of Senior
Preferred Stock into shares of the common stock, $.0001 par
value, of the Company, the entire unpaid principal amount hereof,
plus all interest accrued to the date of such conversion, shall
automatically and without any further act by the holder of this
Note convert into shares of Senior Preferred Stock, at the then
applicable Conversion Price (herein referred to as a "Mandatory
Conversion").
7.4 Right to Interest. Notwithstanding any provision to
the contrary contained in this Note, the holder of this Note
shall have the right, exercisable by written notice delivered to
the Company, to require that any interest payable under this Note
be paid by delivery of shares of Senior Preferred Stock in the
manner set forth under Section 1 hereof.
7.5 Adjustment for Fractional Shares. No fractional
shares of Senior Preferred Stock or scrip shall be issued upon
conversions of this Note. Instead of any fractional shares of
Senior Preferred Stock which would otherwise be issuable upon
conversion of this Note (or portion hereof) the Company shall pay
a cash adjustment in respect of such fractional share of Senior
Preferred Stock in an amount equal to the same fraction of the
then current fair value of a share of Senior Preferred Stock, as
determined in good faith by the Board of Directors of the
Company.
7.6 Conversion Price. The Conversion Price per share of
Senior Preferred Stock shall be $7.42.
7.7 Consolidation, Merger, Sale of Assets, Reorganization
or Reclassification. If any consolidation or merger of the
Company with another corporation after the Issuance Date, or the
sale of all or substantially all of its assets to another
corporation shall be effected, or in case of any capital
reorganization or reclassification of the capital stock of the
Company, then, as a condition of such consolidation, merger or
sale, reorganization or reclassification, lawful and adequate
provision shall be made whereby the holder of this Note shall
thereafter have the right to purchase and receive upon the basis
and upon the terms and conditions specified herein and in lieu of
the shares of Senior Preferred Stock immediately theretofore
purchasable and receivable upon the conversion of this Note, such
shares of stock, securities or assets as may be issuable or
payable with respect to or in exchange for a number of
outstanding shares of Senior Preferred Stock of the Company equal
to the number of shares of Senior Preferred Stock immediately
theretofore purchasable and receivable by such holder had such
consolidation, merger, sale, reorganization, or reclassification
not taken place, and in any such case appropriate provision shall
be made with respect to the rights and interest of such holder to
the end that the provisions hereof (including without limitation
provisions for adjustment of the Conversion Price) shall
thereafter be applicable, as nearly as may be, in relation of any
shares of stock, securities or assets thereafter deliverable upon
the exercise of such conversion rights.
7.8 Notice of Certain Actions. Without limiting any
provision of the Purchase Agreement or contained herein, in case
at any time:
(i) the Company shall offer for subscription pro rata
to the holders of its shares of Senior Preferred Stock any
additional shares of stock of any class or other rights;
(ii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or
consolidation or merger of the Company with, or sale of all
or substantially all its assets to, another corporation; or
(iii)there shall be a voluntary or involuntary
dissolution, liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give
written notice to the holder hereof, of the date on which (A) the
books of the Company shall close or a record shall be taken for
such transaction or (B) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding-up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of shares of
Senior Preferred Stock of record shall participate in such
transaction or shall be entitled to exchange their shares of
Senior Preferred Stock for securities or other property
deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such written notice shall be
given at least 30 days prior to the action in question and not
less than 30 days prior to the record date or the date on which
the Company's transfer books are closed in respect thereto.
7.9 Reservation of Shares. The Company shall at all times
reserve and keep available out of its authorized shares of Senior
Preferred Stock, solely for the purpose of issue upon the
conversion of this Note as herein provided, such number of shares
of Senior Preferred Stock as shall then be issuable upon the
conversion of this Note.
7.10 Taxes. The issuance of certificates of shares of
Senior Preferred Stock upon the conversions of this Note shall be
made without charge to the holder of this Note for any issuance
tax in respect thereto; 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 issuance and delivery of any
certificate in a name other than that of the holder of this Note.
7.11 Closing of Books. The Company will at no time close
its transfer books against the transfer of any shares of Senior
Preferred Stock issued or issuable upon the conversion of this
Note in any manner which interferes with the timely conversion of
this Note.
SECTION 8. Exchange or Replacement of Note.
8.1 The holder of this Note, at its option, may in person
or by duly authorized attorney surrender this Note for exchange,
at the principal executive offices of the Company, and at the
expense of the Company receive in exchange therefor a new Note in
the same aggregate principal amount as the aggregate unpaid
principal amount of the Note so surrendered, bearing interest at
the same annual rate as the Note so surrendered and otherwise in
substantially the form of the Note so surrendered, each such new
Note to be dated as of the date to which interest has been paid
on the note so surrendered and to be in such principal amount and
payable to the holder of this Note. Five days' prior written
notice to the holder's intention to make such exchange shall be
given to the Company.
8.2 Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Note,
and (in case of loss, theft or destruction) of indemnity
reasonably satisfactory to it, and upon surrender and cancel-
lation of this Note, if mutilated, the Company, upon reimburse-
ment to it of all reasonable expenses incidental thereto, will
make and deliver a new Note, of like tenor, in lieu of this Note.
Any Note made and delivered in accordance with the provisions of
this Section 8 shall be dated as of the date to which interest
has been paid on this Note.
SECTION 9. Notices. All notices, requests or instructions
hereunder shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid or by overnight
express mail by a nationally recognized overnight mail carrier as
follows:
(1) if to the Company:
0000 Xxxxxxxxxx Xxx
Xxxxx 00
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Powell, Goldstein, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
(2) if to the holder of this Note:
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx, Esq.
Krugman & Kailes LLP
Park 00 Xxxx - Xxxxx Xxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Telecopy Number: (000) 000-0000
Any notice so addressed and mailed, shall be deemed to be given
when so mailed. Any notice so addressed and otherwise delivered
shall be deemed to be given when actually received by the
addressee. Any of the above addresses may be changed at any time
by notice given as provided above; provided, however, that any
such notice of change of address shall be effective only upon
receipt.
SECTION 10. Captions. Captions and section titles
contained herein are inserted as a matter of convenience and for
reference only and are not intended to define, limit, extend or
describe the scope of this Note or the intent of any provision
hereof.
SECTION 11. Severability. In the event that one or more
of the provisions of this Note shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provisions of this Note, but this Note shall be construed
as if such invalid, illegal or unenforceable provision had never
been contained herein.
SECTION 12. Holders. The Company may deem and treat the
holder of this Note as the absolute owner of this Note for the
purpose of receiving payment hereon or on account hereof and for
all other purposes, and the Company shall not be affected by any
notice to the contrary.
SECTION 13. Governing Law. This Note shall be governed
by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely
within such state.
SECTION 14. Related Agreements. This Note is issued
pursuant to the Purchase Agreement and is entitled to the
benefits thereof and subject to the obligations thereunder, and
to those set forth in the Registration Rights Agreement and the
Securityholders Agreement. Copies of such agreements may be
obtained by any holder of this Note at the principal executive
offices of the Company.
IN WITNESS WHEREOF, the undersigned has executed this Note
as of the date first-above written.
ATTEST: NEWCHECK CORPORATION
d/b/a Productivity Solutions,
Inc.
s/Xxxxxx X. XxXxxx By s/Xxxxxx X. Xxxxxx, Xx.
-------------------- -----------------------------
Secretary President and Chief Executive
Officer
