EXHIBIT 10.25
As of December 1, 2000
TO EACH HOLDER OF SERIES C
CONVERTIBLE PREFERRED STOCK,
$.0001 PAR VALUE ("SERIES C STOCK"),
OF NEWCHECK CORPORATION:
Under the terms of the Amended and Restated Securityholders
Agreement dated February 11, 2000 (the "Securityholders
Agreement") of NewCheck Corporation (the "Company"), each of you
holds a right of first offer to acquire additional securities
proposed to be issued by the Company in the applicable
circumstances. Accordingly, we will communicate with you shortly
regarding the resolution of the Company's financing plan for the
near term and any new securities acquisitions to which you are
entitled.
As an interim measure, in order to provide liquidity
adequate to sustain the Company's operations, we request that
you enter into the commitment, to be evidenced by this letter,
to fund your share of: (i) an aggregate of $1,000,000 in short-
term funds (the "Initial Loan") that may be drawn against by the
Company, on one or more occasions, on or after December 15, 2000
and for 60 days thereafter, (ii) an additional aggregate of
$2,000,000 in short-term funds (the "First Supplemental Loan"),
that may be drawn against by the Company, on one or more
occasions, on or after January 15, 2001 and for 60 days
thereafter, and (iii) an additional aggregate of $2,000,000 in
short-term funds (the "Second Supplemental Loan"), that may be
drawn against by the Company, on one or more occasions, on or
after March 1, 2001 and for 90 days thereafter (the Initial
Loan, the First Supplemental Loan and the Second Supplemental
Loan are together referred to as the "Loans").
Your pro rata share of each of the Loans (calculated on the
basis of the outstanding Series C Stock and shares subject to
issuance under the Company's convertible notes outstanding) is
set forth opposite your name on Annex 1 to this letter. In the
event any share of the Loans is not committed on or prior to
December 1, 2000 (such date subject to extension at the
discretion of the Company's Board of Directors), such share may
be assigned, at the discretion of the Board, to any other
shareholder.
Subject to your countersignature of this letter in the
space below provided for that purpose, the Company may require
you to fund your share of the Loans, respectively, in each
instance by written notice to you. Each funding call will be
made by the Company pro rata to the committing shareholders. In
the case of each Loan, your portion thereof will be evidenced by
the Company's promissory note to you, dated the first date on
which the Company may draw down such Loan and due 90 days after
the last date on which the Company may draw down such Loan as
aforesaid, which will accrue interest at the rate per annum of
9% and be subject to prepayment at the option of the Company.
Any and all of the Loans made by you as aforesaid will, at
the option of the Company (as determined by its Board of
Directors and approved by the holders [the "Required Holders"]
of the Company's notes representing in excess of 75% of the
aggregate principal amount of the Loans outstanding), be applied
to the acquisition for your account of shares of Series C Stock
at a price per share equal to its fair value (as determined by
the Board and approved by the Required Holders). In the event
you currently hold any of the Company's notes convertible into
Series C Stock, the indebtedness so applied will be allocated
between such shares and an increase in the principal amount of
your convertible note in appropriate proportion to your current
holdings of shares and notes. Any interim note or notes issued
in connection with funding hereunder will be prepared by the
Company so as to evidence in reasonable manner the terms of the
Loans set forth herein.
Your execution below will also constitute your consent to
the consummation by the Company of the transactions described
herein (including issuance of a number of shares of Series C
Stock sufficient to effectuate such transactions),
notwithstanding any of the covenants contained in the Company's
Stock and Convertible Note Purchase Agreement dated February 11,
2000 and free of any additional rights-of-first offer under the
Securityholders Agreement. You further agree to execute and
deliver any such additional documentation, and deliver such
additional consents, reasonably requested by the Company to
effectuate the transactions contemplated herein.
Kindly confirm your agreement to the foregoing by
countersigning this letter in the space below provided and
returning it to the undesignated, whereupon your commitment
shall remain in effect through the periods set forth above.
Very truly yours,
NEWCHECK CORPORATION
By s/Xxxxx X. Xxxxxxx, Xx.
------------------------
Xxxxx X. Xxxxxxx, Xx.
Chief Executive Officer
AGREED:
Annex 1
First Supple- Second Supple-
Shareholder Percentage* Initial Loan mental Loan mental Loan
Electronic 49.77% $497,700 $ 995,400 $ 995,400
Retailing
Systems
International,
Inc.
Canaan Capital 14.03 140,300 280,600 280,600
Offshore Limited
Partnership, C.V.
Canaan Capital 1.68 16,800 33,600 33,600
Limited
Partnership
GE Capital Equity 9.00 90,000 180,000 180,000
Investments Inc.
AG Checkout LLC 7.66 76,600 153,200 153,200
PEC Israel Economic 4.50 45,000 90,000 90,000
Corporation
Discount Investment 2.70 27,000 54,000 54,000
Corporation Limited
Xxxxx X. Xxxxxxx 3.53 35,300 70,600 70,600
The Failing Trust .96 9,600 19,200 19,200
f/b/o Lindsay
Failing
The Failing Trust .96 9,600 19,200 19,200
f/b/o Xxxxx
X. Xxxxxxx III
Xxxxx Street 1.53 15,300 30,600 30,600
Associates LLC
BNY Capital 1.15 11,500 23,000 23,000
Markets Inc.
Xxxxxxxx Partners .57 5,700 11,400 11,400
Xxxxx Xxxxx .57 5,700 11,400 11,400
Kaveh Corporation .38 3,800 7,600 7,600
Xxxxxxx Xxxxxx .23 2,300 4,600 4,600
Xxxx Xxxxxxxxx .19 1,900 3,800 3,800
Xxxxx Xxxxxxx .17 1,700 3,400 3,400
Xxxxxx XxXxxx .11 1,100 2,200 2,200
Xxxxxxx Xxx .11 1,100 2,200 2,200
X. Xxxxxxxxxx .08 800 1,600 1,600
Xxxxxx X. Xxxxxxx .08 800 1,600 1,600
Xxxxxxx X. Xxxxxxx .04 400 800 800
Total 100.00 $1,000,000 $2,000,000 $2,000,000
___________
*Based on Series C Stock outstanding and subject
to issuance under convertible notes
NEWCHECK CORPORATION
PROMISSORY NOTE
Up to $497,700 December 15, 2000
SECTION 1. General. NEWCHECK CORPORATION d/b/a
PRODUCTIVITY SOLUTIONS, INC., a corporation organized and existing
under the laws of the State of Delaware (hereinafter referred to
as the "Maker"), for value received, hereby promises to pay to
ELECTRONIC RETAILING SYSTEMS INTERNATIONAL, INC., with a mailing
address at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, the
aggregate principal amount of $497,700 (Four Hundred Ninety-Seven
Thousand Seven Hundred Dollars) or the amount of all outstanding
advances hereunder, whichever is lesser in amount, the entire
principal balance of which shall be due and payable on May 14,
2001 (subject to prepayment in whole or in part in the manner
provided in Section 4 hereof), 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; and to
pay interest on the unpaid balance of the principal amount hereof
in like coin or currency at the rate of 9% per annum, all interest
as aforesaid to be payable together with the principal amount
hereof; and to pay interest at such rate, in like coin or
currency, 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 Maker with respect to the payment thereof shall
be discharged; all payments and prepayments of principal of this
Note to be made by the Maker to the holder hereof at the address
first set forth above or such other location as shall be specified
in writing by the holder of this Note to the Maker.
SECTION 2. Definitions. As used herein, the following
terms shall have the following respective meanings:
The term "Affiliate" shall mean any person or entity
controlling, controlled by or under common control with the
subject referenced.
The term "Commitment Letter" shall mean the commitment
letter dated as of December 1, 2000 executed to the Maker by the
initial holder of this Note.
The term "Maker" shall mean NewCheck Corporation d/b/a
Productivity Solutions, Inc., a Delaware corporation, the Maker of
this Note, and shall also mean any successor thereto.
The term "Note" shall mean this Note and any Note
executed and delivered by the Maker in replacement of this Note.
The term "Notes" shall mean this Note and any and all
additional Promissory Notes, in the original aggregate principal
amount of up to $1,000,000, issued by the Maker on or about the
date hereof, each in substantially the form of this Note, and any
additional notes executed and delivered by the Maker in
replacement for such notes, respectively.
The term "Proportionate Share" shall mean, with respect
to any holder of the Notes, the percentage of the outstanding
aggregate principal balance of all Notes represented by such
holder's Note.
SECTION 3. Advances. This Note shall evidence advances
to the Maker from time to time made pursuant to calls delivered by
the Maker under the Commitment Letter through and including
February 13, 2001 and constituting the Initial Loan (as defined
therein). The Maker hereby authorizes the holder of this Note, or
its duly authorized agent, to endorse on the grid attached hereto
as Schedule A an appropriate notation evidencing the amount of
each such advance which, in the absence of manifest error, shall
be conclusive as to the outstanding amount thereof.
SECTION 4 Optional Prepayment. The Maker shall have the
right at any time to prepay the whole, or at any time or from time
to time to prepay any part, of the unpaid principal amount of this
Note, without premium or penalty, provided that interest on the
principal amount hereof to be so prepaid accrued to the date of
such prepayment shall be paid concurrently therewith. Notices of
prepayment shall be given by the Maker by mail and shall be mailed
to the holder of this Note not less than five days from the date
fixed for prepayment. In case this Note is to be prepaid in part
only, such notice shall specify the principal amount hereof to be
prepaid. Upon giving of notice of prepayment as aforesaid, this
Note or portion hereof 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
Maker shall default in making such prepayment) interest on this
Note or portion hereof so specified for prepayment shall cease to
accrue, and this Note or portion hereof so specified for
prepayment shall be paid by the Maker as aforesaid.
Notwithstanding the foregoing, this Note shall not be prepaid in
part unless each of the Notes shall contemporaneously be prepaid
pro rata based on the respective Proportionate Shares of the
holders thereof.
SECTION 5. Representations. The Maker hereby
represents to the holder of this Note that: (i) the Maker is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; (ii) the execution,
delivery and performance by the Maker of this Note have been duly
authorized by all necessary or proper corporate action; (iii) the
execution, delivery and performance by the Maker of this Note will
not violate any law or regulation, or any order or decree of any
court or governmental instrumentality, and will not conflict with
or result in the breach or termination of, constitute a default
under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to
which the Maker is a party or by which its property is bound; (iv)
this Note has been duly executed and delivered by the Maker and
constitutes a legal, valid and binding obligation of the Maker,
enforceable against the Maker in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); (v) the Maker has received
commitments to fund not less than 80% of the Loans (as defined in
the Commitment Letter); and (vi) this Note has been executed,
delivered and issued in compliance with all applicable provisions
of law.
SECTION 6. Covenants. The Maker covenants and agrees
with the holder of this Note as follows:
6.1 The Maker shall punctually pay or cause to be paid
the principal of and interest on this Note according to the terms
hereof.
6.2 The Maker shall not prepay the principal of or
interest on any Note unless each of the Notes shall
contemporaneously be prepaid pro rata based on the respective
Proportionate Shares of the holders thereof.
6.3 The Maker shall:
(a) pay and discharge promptly, or cause to be paid
and discharged promptly, all taxes, assessments and
governmental charges or levies imposed upon it or upon its
income or upon any of its property, real, personal or mixed,
or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies which, if
unpaid, might by law become a lien or charge upon its
property), provided, however, that the Maker shall not be
required to pay any such tax, assessment, charge, levy or
claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate
proceedings and if the Maker shall have set aside on its
books reserves (segregated to the extent required by sound
accounting practice) reasonably deemed by it adequate with
respect thereto; and
(b) do or cause to be done all things necessary or
appropriate to preserve and keep in full force and effect its
corporate existence, rights and franchises.
SECTION 7. Non-Negotiability of Note. This Note shall
not be transferred, assigned, conveyed or negotiated by the holder
without the consent of the Maker (except that this Note may be
assigned by the holder hereof to any Affiliate thereof, subject to
the obligations of such holder pursuant to the Commitment Letter).
The Maker may deem and treat the holder of this Note as the
absolute owner of this Note for purposes of receiving payment
hereon or on account hereof and for all other purposes, and the
Maker shall not be affected by any notice to the contrary.
SECTION 8. Events of Default and Remedies.
8.1 The entire unpaid principal amount of this Note,
together with all accrued interest hereon, at the option of the
holder of this Note exercised by written notice to the Maker at
its principal executive offices, 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 Maker contained in this Note, and such default shall have
continued for a period of 30 days after notice thereof by the
holder hereof to the Maker;
(d) if any representation made by the Maker contained
herein shall prove to be inaccurate in any material respect when
made, or if this Note shall cease to be enforceable in accordance
with its terms against the Maker, or the Maker shall so state in
writing;
(e) if an Event of Default under any of the other Notes
shall have occurred and be continuing, if the effect thereof is to
cause the holder or holders thereof to cause such obligations,
respectively, to become due prior to the date of stated maturity
(unless such holder or holders shall subsequently have waived such
Event of Default);
(f) if the Maker shall:
(i) admit in writing its inability to pay its debts
generally as they become due or it shall generally not pay
its debts as such debts became 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;
(g) 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 Maker, a receiver of the Maker or of the whole or
any substantial part of its property, or approving a petition
filed against it seeking reorganization or arrangement of the
Maker 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
(h) 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 Maker 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.
8.2 In the case any one or more of the Events of Default
specified in Section 8.1 hereof shall have occurred and be
continuing, 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 the holder of this Note may
at its option exercised by written notice to the Maker at its
principal executive offices declare the unpaid principal balance
hereof, together with all accrued interest thereon, immediately
due and payable, and otherwise 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 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 Maker under this Note, the Maker 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.
8.3 No remedy herein conferred upon the holder of this
Note 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.
8.4 No course of dealing between the Maker and the
holder of this Note or any delay on the part of the Holder hereof
in exercising any rights hereunder shall operate as a waiver of
any rights of the holder hereof.
SECTION 9. Replacement of Note. Upon receipt by the
Maker 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 satisfactory to it, and upon
surrender and cancellation of this Note, if mutilated, the Maker,
upon reimbursement 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 9 shall be dated as of the date to
which interest has been paid on this Note.
SECTION 10. Captions. Captions and section titles
contained herein are for the purpose of convenience of 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. 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 13. Related Agreements. This Note is issued
pursuant to the Commitment Letter and is entitled to the benefits
thereof and subject to the obligations thereunder, including,
without limitation, the provisions thereof relative to conversion
of this Note in the circumstances set forth therein.
IN WITNESS WHEREOF, the undersigned has executed this
Note as of the date first set forth above.
NEWCHECK CORPORATION d/b/a
PRODUCTIVITY SOLUTIONS, INC.
By s/Xxxxx X. Xxxxxxx, Xx.
----------------------------
SCHEDULE 1
Amount of
Principal Balance of
Amount of Paid or Principal Notation
Date Advance Prepaid Unpaid Made By
---- --------- ---------- --------- ---------
12/15/00 $ 497,700 s/Xxxxxx Xxxxxx
-------- --------- ---------- ---------- ---------------
NEWCHECK CORPORATION
PROMISSORY NOTE
Up to $995,400 January 15, 2001
SECTION 1. General. NEWCHECK CORPORATION d/b/a
PRODUCTIVITY SOLUTIONS, INC., a corporation organized and existing
under the laws of the State of Delaware (hereinafter referred to
as the "Maker"), for value received, hereby promises to pay to
ELECTRONIC RETAILING SYSTEMS INTERNATIONAL, INC., with a mailing
address at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, the
aggregate principal amount of $995,400 (Nine Hundred Ninety-Five
Thousand Four Hundred Dollars) or the amount of all outstanding
advances hereunder, whichever is lesser in amount, the entire
principal balance of which shall be due and payable on June 14,
2001 (subject to prepayment in whole or in part in the manner
provided in Section 4 hereof), 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; and to
pay interest on the unpaid balance of the principal amount hereof
in like coin or currency at the rate of 9% per annum, all interest
as aforesaid to be payable together with the principal amount
hereof; and to pay interest at such rate, in like coin or
currency, 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 Maker with respect to the payment thereof shall
be discharged; all payments and prepayments of principal of this
Note to be made by the Maker to the holder hereof at the address
first set forth above or such other location as shall be specified
in writing by the holder of this Note to the Maker.
SECTION 2. Definitions. As used herein, the following
terms shall have the following respective meanings:
The term "Affiliate" shall mean any person or entity
controlling, controlled by or under common control with the
subject referenced.
The term "Commitment Letter" shall mean the commitment
letter dated as of December 1, 2000 executed to the Maker by the
initial holder of this Note.
The term "Maker" shall mean NewCheck Corporation d/b/a
Productivity Solutions, Inc., a Delaware corporation, the Maker of
this Note, and shall also mean any successor thereto.
The term "Note" shall mean this Note and any Note
executed and delivered by the Maker in replacement of this Note.
The term "Notes" shall mean this Note and any and all
additional Promissory Notes, in the original aggregate principal
amount of up to $2,000,000, issued by the Maker on or about the
date hereof, each in substantially the form of this Note, and any
additional Notes executed and delivered by the Maker in
replacement for such Notes, respectively, together with such other
Promissory Notes, in the original principal amount of up to an
additional $3,000,000 as may heretofore have been issued and
delivered, or may hereafter be issued and delivered, by the Maker
pursuant to the Commitment Letter, and any additional Notes
executed and delivered by the Maker in replacement for such Notes,
respectively.
The term "Proportionate Share" shall mean, with respect
to any holder of the Notes, the percentage of the outstanding
aggregate principal balance of all Notes represented by such
holder's Note.
SECTION 3. Advances. This Note shall evidence advances
to the Maker from time to time made pursuant to calls delivered by
the Maker under the Commitment Letter through and including March
16, 2001 and constituting the First Supplemental Loan (as defined
therein). The Maker hereby authorizes the holder of this Note, or
its duly authorized agent, to endorse on the grid attached hereto
as Schedule A an appropriate notation evidencing the amount of
each such advance which, in the absence of manifest error, shall
be conclusive as to the outstanding amount thereof.
SECTION 4 Optional Prepayment. The Maker shall have the
right at any time to prepay the whole, or at any time or from time
to time to prepay any part, of the unpaid principal amount of this
Note, without premium or penalty, provided that interest on the
principal amount hereof to be so prepaid accrued to the date of
such prepayment shall be paid concurrently therewith. Notices of
prepayment shall be given by the Maker by mail and shall be mailed
to the holder of this Note not less than five days from the date
fixed for prepayment. In case this Note is to be prepaid in part
only, such notice shall specify the principal amount hereof to be
prepaid. Upon giving of notice of prepayment as aforesaid, this
Note or portion hereof 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
Maker shall default in making such prepayment) interest on this
Note or portion hereof so specified for prepayment shall cease to
accrue, and this Note or portion hereof so specified for
prepayment shall be paid by the Maker as aforesaid.
Notwithstanding the foregoing, this Note shall not be prepaid in
part unless each of the Notes shall contemporaneously be prepaid
pro rata based on the respective Proportionate Shares of the
holders thereof.
SECTION 5. Representations. The Maker hereby
represents to the holder of this Note that: (i) the Maker is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; (ii) the execution,
delivery and performance by the Maker of this Note have been duly
authorized by all necessary or proper corporate action; (iii) the
execution, delivery and performance by the Maker of this Note will
not violate any law or regulation, or any order or decree of any
court or governmental instrumentality, and will not conflict with
or result in the breach or termination of, constitute a default
under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to
which the Maker is a party or by which its property is bound; (iv)
this Note has been duly executed and delivered by the Maker and
constitutes a legal, valid and binding obligation of the Maker,
enforceable against the Maker in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); (v) the Maker has received
commitments to fund not less than 80% of the Loans (as defined in
the Commitment Letter); and (vi) this Note has been executed,
delivered and issued in compliance with all applicable provisions
of law.
SECTION 6. Covenants. The Maker covenants and agrees
with the holder of this Note as follows:
6.1 The Maker shall punctually pay or cause to be paid
the principal of and interest on this Note according to the terms
hereof.
6.2 The Maker shall not prepay the principal of or
interest on any Note unless each of the Notes shall
contemporaneously be prepaid pro rata based on the respective
Proportionate Shares of the holders thereof.
6.3 The Maker shall:
(a) pay and discharge promptly, or cause to be paid
and discharged promptly, all taxes, assessments and
governmental charges or levies imposed upon it or upon its
income or upon any of its property, real, personal or mixed,
or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies which, if
unpaid, might by law become a lien or charge upon its
property), provided, however, that the Maker shall not be
required to pay any such tax, assessment, charge, levy or
claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate
proceedings and if the Maker shall have set aside on its
books reserves (segregated to the extent required by sound
accounting practice) reasonably deemed by it adequate with
respect thereto; and
(b) do or cause to be done all things necessary or
appropriate to preserve and keep in full force and effect its
corporate existence, rights and franchises.
SECTION 7. Non-Negotiability of Note. This Note shall
not be transferred, assigned, conveyed or negotiated by the holder
without the consent of the Maker (except that this Note may be
assigned by the holder hereof to any Affiliate thereof, subject to
the obligations of such holder pursuant to the Commitment Letter).
The Maker may deem and treat the holder of this Note as the
absolute owner of this Note for purposes of receiving payment
hereon or on account hereof and for all other purposes, and the
Maker shall not be affected by any notice to the contrary.
SECTION 8. Events of Default and Remedies.
8.1 The entire unpaid principal amount of this Note,
together with all accrued interest hereon, at the option of the
holder of this Note exercised by written notice to the Maker at
its principal executive offices, 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 Maker contained in this Note, and such default shall have
continued for a period of 30 days after notice thereof by the
holder hereof to the Maker;
(d) if any representation made by the Maker contained
herein shall prove to be inaccurate in any material respect when
made, or if this Note shall cease to be enforceable in accordance
with its terms against the Maker, or the Maker shall so state in
writing;
(e) if an Event of Default under any of the other Notes
shall have occurred and be continuing, if the effect thereof is to
cause the holder or holders thereof to cause such obligations,
respectively, to become due prior to the date of stated maturity
or default shall be made in the due and punctual payment of the
principal of or any interest on any of the other Notes on the
respective dates of stated maturity (unless such holder or holders
shall subsequently have waived such Event of Default or default);
(f) if the Maker shall:
(i) admit in writing its inability to pay its debts
generally as they become due or it shall generally not pay
its debts as such debts became 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;
(g) 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 Maker, a receiver of the Maker or of the whole or
any substantial part of its property, or approving a petition
filed against it seeking reorganization or arrangement of the
Maker 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
(h) 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 Maker 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.
8.2 In the case any one or more of the Events of Default
specified in Section 8.1 hereof shall have occurred and be
continuing, 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 the holder of this Note may
at its option exercised by written notice to the Maker at its
principal executive offices declare the unpaid principal balance
hereof, together with all accrued interest thereon, immediately
due and payable, and otherwise 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 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 Maker under this Note, the Maker 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.
8.3 No remedy herein conferred upon the holder of this
Note 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.
8.4 No course of dealing between the Maker and the
holder of this Note or any delay on the part of the Holder hereof
in exercising any rights hereunder shall operate as a waiver of
any rights of the holder hereof.
SECTION 9. Replacement of Note. Upon receipt by the
Maker 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 satisfactory to it, and upon
surrender and cancellation of this Note, if mutilated, the Maker,
upon reimbursement 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 9 shall be dated as of the date to
which interest has been paid on this Note.
SECTION 10. Captions. Captions and section titles
contained herein are for the purpose of convenience of 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. 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 13. Related Agreements. This Note is issued
pursuant to the Commitment Letter and is entitled to the benefits
thereof and subject to the obligations thereunder, including,
without limitation, the provisions thereof relative to conversion
of this Note in the circumstances set forth therein.
IN WITNESS WHEREOF, the undersigned has executed this
Note as of the date first set forth above.
NEWCHECK CORPORATION d/b/a
PRODUCTIVITY SOLUTIONS, INC.
By s/Xxxxx X. Xxxxxxx, Xx.
--------------------------
SCHEDULE 1
Amount of
Principal Balance of
Amount of Paid or Principal Notation
Date Advance Prepaid Unpaid Made By
----- ---------- ---------- ----------- ----------
02/07/01 $746,550 s/Xxxxxx Xxxxxx
-------- -------- ---------- ----------- ---------------
03/16/01 $248,850 s/Xxxxxx Xxxxxx
-------- -------- ---------- ----------- ---------------
NEWCHECK CORPORATION
PROMISSORY NOTE
Up to $995,400 March 1, 2001
SECTION 1. General. NEWCHECK CORPORATION d/b/a
PRODUCTIVITY SOLUTIONS, INC., a corporation organized and existing
under the laws of the State of Delaware (hereinafter referred to
as the "Maker"), for value received, hereby promises to pay to
ELECTRONIC RETAILING SYSTEMS INTERNATIONAL, INC. with a mailing
address at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, the
aggregate principal amount of $995,400 (Nine Hundred Ninety-Five
Thousand Four Hundred Dollars) or the amount of all outstanding
advances hereunder, whichever is lesser in amount, the entire
principal balance of which shall be due and payable on August 28,
2001 (subject to prepayment in whole or in part in the manner
provided in Section 4 hereof), 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; and to
pay interest on the unpaid balance of the principal amount hereof
in like coin or currency at the rate of 9% per annum, all interest
as aforesaid to be payable together with the principal amount
hereof; and to pay interest at such rate, in like coin or
currency, 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 Maker with respect to the payment thereof shall
be discharged; all payments and prepayments of principal of this
Note to be made by the Maker to the holder hereof at the address
first set forth above or such other location as shall be specified
in writing by the holder of this Note to the Maker.
SECTION 2. Definitions. As used herein, the following
terms shall have the following respective meanings:
The term "Affiliate" shall mean any person or entity
controlling, controlled by or under common control with the
subject referenced.
The term "Commitment Letter" shall mean the commitment
letter dated as of December 1, 2000 executed to the Maker by the
initial holder of this Note.
The term "Maker" shall mean NewCheck Corporation d/b/a
Productivity Solutions, Inc., a Delaware corporation, the Maker of
this Note, and shall also mean any successor thereto.
The term "Note" shall mean this Note and any Note
executed and delivered by the Maker in replacement of this Note.
The term "Notes" shall mean this Note and any and all
additional Promissory Notes, in the original aggregate principal
amount of up to $2,000,000, issued by the Maker on or about the
date hereof, each in substantially the form of this Note, and any
additional Notes executed and delivered by the Maker in
replacement for such Notes, respectively, together with such other
Promissory Notes, in the original principal amount of up to an
additional $3,000,000 as may heretofore have been issued and
delivered by the Maker pursuant to the Commitment Letter, and any
additional Notes executed and delivered by the Maker in
replacement for such Notes, respectively.
The term "Proportionate Share" shall mean, with respect
to any holder of the Notes, the percentage of the outstanding
aggregate principal balance of all Notes represented by such
holder's Note.
SECTION 3. Advances. This Note shall evidence advances
to the Maker from time to time made pursuant to calls delivered by
the Maker under the Commitment Letter through and including May
30, 2001 and constituting the Second Supplemental Loan (as defined
therein). The Maker hereby authorizes the holder of this Note, or
its duly authorized agent, to endorse on the grid attached hereto
as Schedule A an appropriate notation evidencing the amount of
each such advance which, in the absence of manifest error, shall
be conclusive as to the outstanding amount thereof.
SECTION 4 Optional Prepayment. The Maker shall have the
right at any time to prepay the whole, or at any time or from time
to time to prepay any part, of the unpaid principal amount of this
Note, without premium or penalty, provided that interest on the
principal amount hereof to be so prepaid accrued to the date of
such prepayment shall be paid concurrently therewith. Notices of
prepayment shall be given by the Maker by mail and shall be mailed
to the holder of this Note not less than five days from the date
fixed for prepayment. In case this Note is to be prepaid in part
only, such notice shall specify the principal amount hereof to be
prepaid. Upon giving of notice of prepayment as aforesaid, this
Note or portion hereof 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
Maker shall default in making such prepayment) interest on this
Note or portion hereof so specified for prepayment shall cease to
accrue, and this Note or portion hereof so specified for
prepayment shall be paid by the Maker as aforesaid.
Notwithstanding the foregoing, this Note shall not be prepaid in
part unless each of the Notes shall contemporaneously be prepaid
pro rata based on the respective Proportionate Shares of the
holders thereof.
SECTION 5. Representations. The Maker hereby
represents to the holder of this Note that: (i) the Maker is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; (ii) the execution,
delivery and performance by the Maker of this Note have been duly
authorized by all necessary or proper corporate action; (iii) the
execution, delivery and performance by the Maker of this Note will
not violate any law or regulation, or any order or decree of any
court or governmental instrumentality, and will not conflict with
or result in the breach or termination of, constitute a default
under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to
which the Maker is a party or by which its property is bound; (iv)
this Note has been duly executed and delivered by the Maker and
constitutes a legal, valid and binding obligation of the Maker,
enforceable against the Maker in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity); (v) the Maker has received
commitments to fund not less than 80% of the Loans (as defined in
the Commitment Letter); and (vi) this Note has been executed,
delivered and issued in compliance with all applicable provisions
of law.
SECTION 6. Covenants. The Maker covenants and agrees
with the holder of this Note as follows:
6.1 The Maker shall punctually pay or cause to be paid
the principal of and interest on this Note according to the terms
hereof.
6.2 The Maker shall not prepay the principal of or
interest on any Note unless each of the Notes shall
contemporaneously be prepaid pro rata based on the respective
Proportionate Shares of the holders thereof.
6.3 The Maker shall:
(a) pay and discharge promptly, or cause to be paid
and discharged promptly, all taxes, assessments and
governmental charges or levies imposed upon it or upon its
income or upon any of its property, real, personal or mixed,
or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies which, if
unpaid, might by law become a lien or charge upon its
property), provided, however, that the Maker shall not be
required to pay any such tax, assessment, charge, levy or
claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate
proceedings and if the Maker shall have set aside on its
books reserves (segregated to the extent required by sound
accounting practice) reasonably deemed by it adequate with
respect thereto; and
(b) do or cause to be done all things necessary or
appropriate to preserve and keep in full force and effect its
corporate existence, rights and franchises.
SECTION 7. Non-Negotiability of Note. This Note shall
not be transferred, assigned, conveyed or negotiated by the holder
without the consent of the Maker (except that this Note may be
assigned by the holder hereof to any Affiliate thereof, subject to
the obligations of such holder pursuant to the Commitment Letter).
The Maker may deem and treat the holder of this Note as the
absolute owner of this Note for purposes of receiving payment
hereon or on account hereof and for all other purposes, and the
Maker shall not be affected by any notice to the contrary.
SECTION 8. Events of Default and Remedies.
8.1 The entire unpaid principal amount of this Note,
together with all accrued interest hereon, at the option of the
holder of this Note exercised by written notice to the Maker at
its principal executive offices, 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 Maker contained in this Note, and such default shall have
continued for a period of 30 days after notice thereof by the
holder hereof to the Maker;
(d) if any representation made by the Maker contained
herein shall prove to be inaccurate in any material respect when
made, or if this Note shall cease to be enforceable in accordance
with its terms against the Maker, or the Maker shall so state in
writing;
(e) if an Event of Default under any of the other Notes
shall have occurred and be continuing, if the effect thereof is to
cause the holder or holders thereof to cause such obligations,
respectively, to become due prior to the date of stated maturity
or default shall be made in the due and punctual payment of the
principal of or any interest on any of the other Notes on the
respective dates of stated maturity (unless such holder or holders
shall subsequently have waived such Event of Default or default);
(f) if the Maker shall:
(i) admit in writing its inability to pay its debts
generally as they become due or it shall generally not pay
its debts as such debts became 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;
(g) 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 Maker, a receiver of the Maker or of the whole or
any substantial part of its property, or approving a petition
filed against it seeking reorganization or arrangement of the
Maker 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
(h) 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 Maker 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.
8.2 In the case any one or more of the Events of Default
specified in Section 8.1 hereof shall have occurred and be
continuing, 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 the holder of this Note may
at its option exercised by written notice to the Maker at its
principal executive offices declare the unpaid principal balance
hereof, together with all accrued interest thereon, immediately
due and payable, and otherwise 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 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 Maker under this Note, the Maker 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.
8.3 No remedy herein conferred upon the holder of this
Note 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.
8.4 No course of dealing between the Maker and the
holder of this Note or any delay on the part of the Holder hereof
in exercising any rights hereunder shall operate as a waiver of
any rights of the holder hereof.
SECTION 9. Replacement of Note. Upon receipt by the
Maker 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 satisfactory to it, and upon
surrender and cancellation of this Note, if mutilated, the Maker,
upon reimbursement 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 9 shall be dated as of the date to
which interest has been paid on this Note.
SECTION 10. Captions. Captions and section titles
contained herein are for the purpose of convenience of 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. 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 13. Related Agreements. This Note is issued
pursuant to the Commitment Letter and is entitled to the benefits
thereof and subject to the obligations thereunder, including,
without limitation, the provisions thereof relative to conversion
of this Note in the circumstances set forth therein.
IN WITNESS WHEREOF, the undersigned has executed this
Note as of the date first set forth above.
NEWCHECK CORPORATION d/b/a
PRODUCTIVITY SOLUTIONS, INC.
By s/Xxxxxxx Xxxxxx
------------------------
SCHEDULE 1
Amount of
Principal Balance of
Amount of Paid or Principal Notation
Date Advance Prepaid Unpaid Made By
---- --------- ---------- ----------- ---------
03/16/01 $373,275 s/Xxxxxx Xxxxxx
-------- --------- ---------- ----------- ---------------
