UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
SCHEDULE 13D
Under the Securities Exchange Act of 1934
INTERNATIONAL VERIFACT INC.
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(Name of Issuer)
Common Stock, No Par Value
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(Title of Class of Securities)
46055K 30 0
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(CUSIP NUMBER)
Jean-Jacques Poutrel
President du Conseil
Ingenico S.A.
9, quai de Dion Bouton
92816 Puteaux Cedex
FRANCE
33.1.47.72.56.95
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Kevin MacCarthy, Esq.
Kevin MacCarthy Associates, P.C.
444 Madison Avenue
New York, New York 10022
(212) 752-6700
January 16, 1998
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4) check the following
box [ ].
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Act"), or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act.
<PAGE>
SCHEDULE 13D
------------------------- --------------------------
CUSIP NO. 46055K 30 0 PAGE 2 OF 7 PAGES
-------------- ---- ----
------------------------- --------------------------
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ingenico S.A.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC (See Item 3)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
France
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7 SOLE VOTING POWER
NUMBER OF
1,544,416 shares (See Item 5)
SHARES --------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
N/A
OWNED BY --------------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
1,544,416 shares (See Item 5)
REPORTING --------------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON WITH
N/A
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,544,416 shares (See Item 5)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.0%
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14 TYPE OF REPORTING PERSON*
CO
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<PAGE>
PAGE 3 OF 7 PAGES
SCHEDULE 13D - AMENDMENT NO. 1
The undersigned, Ingenico S.A. ("Reporting Person"), hereby amends its
statement on Schedule 13D dated December 27, 1996 (the "Statement")
relating to the shares of Common Stock (the "Common Stock"), no par value,
of International Verifact Inc., a Canadian corporation ("Issuer"), as
follows:
1. Item 4 of the Statement "Purpose of the Transaction" is hereby
----------------------------
amended and supplemented by adding thereto the following:
Pursuant to a Form 8-K filed by Checkmate Electronics, Inc.
("Checkmate") on January 16, 1998, Checkmate reported that it and Issuer
entered into a definitive agreement to combine their companies (the
"Combination Agreement"). According to the Checkmate Form 8-K: (a) the
combined companies will be organized in a holding company structure with a
new publicly-traded Delaware corporation, IVI Checkmate Corp. ("IVI
Checkmate"), as the parent of Checkmate and Issuer, (b) under the terms of
the definitive agreement, the shareholders of the Issuer will receive for
each common share of the Issuer, either one share of common stock of IVI
Checkmate or one exchangeable share of the Issuer which can be exchanged
for one share of IVI Checkmate common stock in the future, and (c)
Checkmate shareholders will receive 1.2775 shares of IVI Checkmate common
stock for each Checkmate common share.
Pursuant to the terms of the Investment Agreement which was reported
in the initial Schedule 13D filed by Reporting Person, Reporting Person was
entitled, among other things, to acquire additional shares of common stock
of Issuer so as to allow Reporting Person to retain ownership of not less
than 15% of the issued and outstanding voting, participating share capital
of Issuer. In connection with the Combination Agreement, Issuer, IVI
Checkmate and Reporting Person entered into an Assignment, Assumption and
Consent Agreement (the "Assignment Agreement") whereby Issuer assigned to
IVI Checkmate various agreements entered into between Issuer and Reporting
Person, including the Investment Agreement. The Assignment Agreement
provides, among other things, that:
The parties covenant and agree that, with respect to
the Investment Agreement dated December 5, 1996, as
amended (the "Investment Agreement"), the effect of the
Assignment Agreement shall be, as provided in the
Investment Agreement, that:
(i) on the Effective Date, as such term is
defined in the Combination Agreement, IVI Checkmate
shall be obliged to advise Reporting Person that its
shareholdings have fallen below 15% of the issued and
outstanding participating equity (which for such
<PAGE>
PAGE 4 OF 7 PAGES
purposes shall include the Exchangeable Shares) of IVI
Checkmate (the "15% Threshold");
(ii) Reporting Person shall have 10 days from the
date it receives such notice to advise IVI Checkmate in
writing whether or not it intends to exercise its
Participation Right to acquire from the treasury of IVI
Checkmate such additional shares of IVI Checkmate
Common Stock so as to bring its holdings to the 15%
Threshold;
(iii) if Reporting Person gives notice of its
intention to increase its holdings to the 15% Threshold
it shall acquire sufficient shares of IVI Checkmate
Common Stock (the "Additional Shares") to achieve such
from of IVI Checkmate within 90 days of the date of
receipt of the notice of IVI Checkmate pursuant to
clause (i) above;
(iv) the Additional Shares shall be purchased by
Reporting Person for a price per share equal to the
weighted average trading price of the IVI Common Shares
on The Toronto Stock Exchange (the "TSE" during the 30
days preceding the notice of IVI Checkmate to Reporting
Person pursuant to clause (i) above).
2. Item 5 of the Statement "Interest in Securities of the Issuer" is
-------------------------------------
hereby amended in its entirety to read as follows:
"Item 5. Interest in Securities of Issuer
--------------------------------
(a)-(b) The number of shares of Common Stock beneficially owned
by Reporting Person and the percentage of the outstanding shares of Common
Stock represented thereby are 1,544,416 and 17.0%, respectively. Reporting
Person has the sole power to vote or to direct the vote of, and to dispose
or direct the disposition of, all of such shares.
(c) Since October 4, 1996, Reporting Person has effected the
following open market, broker confirmed transactions regarding the
securities of Issuer:
Date Description Shares Price
---- ----------- ------ -----
10/04/96 Acquisition 10,000 US $5.75
11/07/96 Acquisition 10,000 US $4.80
11/25/96 Disposition 200 US $5.64
<PAGE>
PAGE 5 OF 7 PAGES
11/26/96 Disposition 500 US $5.75
11/27/96 Disposition 500 US $5.62
12/05/96 Acquisition 1,439,000 US $5.05
12/30/96 Disposition 2,000 US $4.70
9/02/97 Acquisition 1,625 US $5.29
11/03/97 Acquisition 19,445 US $6.73
12/17/97 Acquisition 4,000 US $7.16
12/24/97 Acquisition 16,000 US $7.09
2/11/98 Acquisition 47,546 US $6.97
(d) None
(e) Not applicable"
3. Item 6 of the Statement "Contracts, Arrangements,
-----------------------
Understandings or Relationships with Respect to Securities of Issuer" is
--------------------------------------------------------------------
hereby amended and supplemented by adding thereto the following:
Issuer and Checkmate have entered into a Combination Agreement
pursuant to which Reporting Person, Issuer and Checkmate have entered into
an Assignment Agreement as described in Item 4 of the Statement as hereby
amended. See Item 4.
In connection with the transactions discussed herein, Reporting
Person, Dudley L. Moore, a resident of the State of Georgia and J. Stanford
Spence, a resident of the State of Texas ("Spence"), entered into a
stockholders agreement dated January 16, 1998 (the "Stockholders
Agreement"). Pursuant to the Stockholders Agreement, the parties will vote
all of their shares of capital stock of IVI Checkmate then owned against
any business combination involving IVI Checkmate or its subsidiaries, such
as a merger or a share exchange, and will not tender their shares into,
cause any of their affiliates to make, or encourage others to make, a
tender or exchange offer (in which the tendering party is required to make
a filing under Section 14(d)(1) of the Securities Exchange Act of 1934) in
which the consideration to be received by stockholders of IVI Checkmate is
less than US$15 per share in cash or other highly liquid consideration for
a period ending the earlier of December 31, 1999 or 18 months from the
Effective Date of the Combination Agreement. Pursuant to the Stockholders
Agreement, for a period of three years from the Effective Date of the
Combination Agreement the parties will vote their shares to ensure the
election of Gerard Compain, the designee of Reporting Person (or any other
designee of Reporting Person), Spence and George Whitton to the board of
directors of IVI Checkmate; provided further that if such persons are
elected to the Board of IVI Checkmate, the parties will use their best
efforts to ensure the appointment of Spence as Chairman of the Board,
<PAGE>
PAGE 6 OF 7 PAGES
George Whitton as Vice Chairman of the Board and Gerard Compain as a member
of the three-member Executive Committee of the Board.
Reporting Person, Checkmate, IVI Checkmate, Dudley Moore and J.
Stanford Spence (each a "Shareholder") also entered into a shareholders
agreement dated as of January 16, 1998 (the "Shareholders Agreement").
Pursuant to the Shareholders Agreement, each Shareholder will, until the
termination date of such agreement, vote in favor of the Combination
Agreement and will vote against any action or agreement which would result
in a breach of any covenant, representation or warranty or any other
obligation of Issuer under the Combination Agreement or the Shareholders
Agreement. Pursuant to the Shareholders Agreement, each Shareholder
irrevocably grants such Shareholder's proxy to Checkmate and any designee
of Checkmate, and appoints Checkmate and any designee of Checkmate as such
Shareholder's attorney-in-fact.
4. Item 7 of the Statement "Material to be Filed as Exhibits" is
----------------------------------
hereby amended and supplemented by adding thereto the following:
7.2 Stockholders Agreement dated January 16, 1998 among Ingenico
S.A., Dudley L. Moore Jr. and J. Stanford Spence.
7.3 Assignment Assumption and Consent Agreement dated January 16,
1998 among International Verifact Inc., IVI Checkmate Corp. and
Ingenico S.A., together with attached Schedule A.
7.4 Shareholders Agreement dated as of January 16, 1998 among
Checkmate Electronics, IVI Checkmate Corp., Ingenico, S.A.,
Dudley L. Moore Jr. and J. Stanford Spence, together with
attached Schedule I.
<PAGE>
PAGE 7 OF 7 PAGES
Signatures
----------
After reasonable inquiry and to the best of the knowledge and belief
of the undersigned Reporting Person, Reporting Person certifies that the
information set forth in this statement is true, complete and correct.
Dated: April 22, 1998
INGENICO, S.A.
By: /s/ Gerard Compain
------------------------------
Name: Gerard Compain
Title: Executive Vice-President
<PAGE>
EXHIBIT INDEX
7.2 Stockholders Agreement dated January 16, 1998 among Ingenico S.A.,
Dudley L. Moore Jr. and J. Stanford Spence.
7.3 Assignment Assumption and Consent Agreement dated January 16, 1998
among International Verifact Inc., IVI Checkmate Corp. and Ingenico
S.A., together with attached Schedule A.
7.4 Shareholders Agreement dated as of January 16, 1998 among Checkmate
Electronics, IVI Checkmate Corp., Ingenico, S.A., Dudley L. Moore Jr.
and J. Stanford Spence, together with attached Schedule I.
Exhibit 7.2
STOCKHOLDERS AGREEMENT
This AGREEMENT is dated January 16, 1998 (this
"Agreement") among Ingenico S.A., an entity incorporated under
---------
the laws of France ("Ingenico"), Dudley L. Moore, Jr., a resident
--------
of the State of Georgia ("Moore"), and J. Stanford Spence, a
-----
resident of the State of Texas ("Spence").
------
In consideration of the mutual promises and agreements
set forth herein, the parties agree as follows:
1. For a period ending the earlier of December 31,
1999 or 18 months from the Effective Date of the Combination
Agreement, each of the parties hereto agrees to vote all of its
or his shares of the capital stock of IVI Checkmate (or to cause
the Trustee to vote its Exchangeable Shares) then owned
(including any shares acquired after the parties entered into
this Agreement) (collectively, the "Shares"), at any stockholders
meeting or in any written consent for that purpose, against any
business combination transaction involving IVI Checkmate or its
subsidiaries, such as a merger or share exchange, and further
agrees not to tender shares into, make, cause any of its
affiliates to make, or encourage others to make, during the term
of this Agreement, a tender or exchange offer (in which the
tendering party is required to make a filing under Section
14(d)(1) of the Securities Exchange Act of 1934, as amended) (a
"Tender Offer") for Shares, in which the consideration to be
received by each stockholder of IVI Checkmate is less than US$15
per Share in cash or other highly liquid consideration. The
amount of the consideration is to be calculated two business days
prior to any stockholders' vote required on such a transaction.
2. Notwithstanding Section 1 above, in the event a
Tender Offer has been made by a third party for consideration
less than US$15, each party shall have the right to make a Tender
Offer; provided that the consideration offered by such party for
tendered shares in such Tender Offer must be greater than the
amount offered in the initial third-party Tender Offer. Any
party hereto may tender Shares to another party in a Tender Offer
permitted under this Section 2.
3. For a period of three years from the Effective
Date of the Combination Agreement, each of the parties hereto
agrees to vote all of its or his Shares (or to cause the Trustee
to vote its Exchangeable Shares), at any stockholders' meeting or
in any written consent for that purpose, and take all other
actions necessary, to ensure the election to the Board of
Directors of IVI Checkmate of Gerard Compain (or any other
designee of Ingenico), Spence and George Whitton; provided
further, that if such persons are so elected by the stockholders
of IVI Checkmate, the parties agree to use their best efforts to
ensure the appointment of Spence as Chairman of the Board, George
Whitton as Vice Chairman of the Board of IVI Checkmate and Gerard
Compain as a member of the three-member Executive Committee of
the Board of Directors.
4. Nothing contained herein shall prevent any party,
during the period ending the earlier of December 31, 1999 or 18
months following the Effective Date of the Combination Agreement,
from (a) buying or otherwise acquiring additional Shares, or (b)
selling Shares (i) to the public pursuant to a registered
offering under the Securities Act of 1933, as amended (the
"Securities Act"), (ii) to the public through a broker or
market-maker pursuant to the provisions of Rule 144 (or any
successor rule) promulgated under the Securities Act, (iii) in a
Tender Offer consistent with Section 1 or Section 2 above, or
(iv) in a business combination transaction approved by the
stockholders of IVI Checkmate. Notwithstanding any other
provision of this Agreement, no sale or other transfer of Shares
may be made, other than pursuant to the immediately preceding
sentence, unless the transferee has agreed in writing to be bound
by the terms and conditions of this Agreement pursuant to an
instrument in form and substance satisfactory to the parties
hereto and the transfer complies with all applicable laws.
5. In the event that Ingenico is conclusively and
finally prohibited from exercising its right under the Investment
Agreement to purchase shares of IVI Checkmate in an amount that
would increase its ownership to 15% (as calculated in accordance
with the Investment Agreement) of the voting capital stock of IVI
Checkmate because such action would preclude pooling of interests
accounting treatment with regard to the transactions contemplated
by the Combination Agreement, the terms of Sections 1 and 2 of
this Agreement shall terminate and shall be of no further force
and effect.
6. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such state,
without regard to the principles of conflicts of law thereof.
7. With respect to any claim arising out of this
Agreement, the parties agree to waive their right to a jury trial
and agree to have such matter adjudicated in front of an
arbitration panel in accordance with the provisions of the
Combination Agreement.
Capitalized terms used herein and not defined shall
have the meanings ascribed to such terms in the Combination
Agreement dated as of January 16 ,1998 by and among IVI Checkmate
Corp., a Delaware corporation ("IVI Checkmate"), International
Verifact Inc., a Canadian corporation, Checkmate Electronics,
Inc., a Georgia corporation, and Future Merger Corporation, a
Georgia corporation and wholly-owned subsidiary of Newco.
For purposes of this Agreement, "Investment Agreement"
means that certain Investment Agreement dated as of December 5,
1996 between International Verifact Inc. and Ingenico, as
amended.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed, or
have caused to be executed, this Agreement on the date first
written above.
INGENICO S.A.
By: /s/ Jean Jacques Poutrec
--------------------------
Name: Jean Jacques Poutrec
------------------------
Title: President and C.F.O
------------------------
------------------------------
Dudley L. Moore, Jr.
/s/ J. Stanford Spence
------------------------------
J. Stanford Spence
Exhibit 7.3
EXECUTION COPY
ASSIGNMENT, ASSUMPTION AND CONSENT
----------------------------------
THIS AGREEMENT made the 16th day of
---------------
January, 1998.
B E T W E E N:
INTERNATIONAL VERIFACT INC.
a corporation continued under the laws of Canada,
(hereinafter called the "Assignor"),
OF THE FIRST PART,
- and -
IVI CHECKMATE CORP.
a corporation incorporated under the laws of the State
of Delaware,
(hereinafter called the "Assignee"),
OF THE SECOND PART
- and -
INGENICO S.A.
a corporation incorporated under the laws of France,
(hereinafter called "Ingenico"),
OF THE THIRD PART.
WHEREAS the Assignor and Ingenico entered into certain
agreements and contracts described in Schedule "A" annexed hereto
(the "Assigned Agreements");
WHEREAS the Assignor, the Assignee and certain other
parties have entered into a combination agreement dated January
16th , 1998 (the "Combination Agreement");
-------------
AND WHEREAS it is a term of the Combination Agreement
that the Assignor shall assign to the Assignee, and the Assignee
shall assume, the Assigned Agreements;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in
pursuance of the Combination Agreement, the payment of the sum of
$2.00 in lawful money of the United States of America by the
Assignee to the Assignor and for other good and valuable
consideration (the receipt and sufficiency whereof is hereby
acknowledged by the parties hereto) the parties hereto agree as
follows:
1. Unless otherwise defined herein or unless the context
otherwise requires, all words and phrases defined in the
Combination Agreement and used herein shall have the same
meanings herein as in the Combination Agreement.
2. Effective as of the Effective Date, the Assignor does
hereby grant, assign, transfer and set over unto the Assignee all
the right, title, benefit and interest of the Assignor in, to and
under each and every one of the Assigned Agreements together with
the benefit of each and every of the rights, covenants and other
provisions therein contained.
3. Ingenico hereby consents to the Transactions, the
assignment of the Assigned Agreements and all the Assignor's
rights and obligations thereunder, including the disclosure of
all relevant information, to the Assignee.
4. The Assignor and the Assignee hereby covenant and
agree that as and from the Effective Date, the Assignee hereby
assumes and shall completely and punctually perform and observe
all of the terms, covenants, conditions and agreements of the
Assignor made or contained in the Assigned Agreements and on the
part of the Assignor to be performed.
5. Ingenico hereby accepts the Assignee as a party to the
Assigned Agreements from and after the Effective Date and
covenants and agrees that, upon such assignment becoming
effective, the Assignee shall be entitled to hold and enforce
directly against Ingenico all the rights and privileges of the
Assignor in and under the Assigned Agreements, and the Assigned
Agreements shall continue in full force and effect with the
Assignee substituted as a party thereto in the place and stead of
the Assignor.
6. The Assignee hereby covenants and agrees that, upon
the assignment contemplated herein becoming effective, Ingenico
shall be entitled to hold and enforce directly against the
Assignee all the rights and privileges of Ingenico in and under
the Assigned Agreements, and the Assigned Agreements shall
continue in full force and effect with the Assignee substituted
as a party thereto in the place and stead of the Assignor.
7.
(a) The parties covenant and agree that, with respect to
the Investment Agreement dated December 5, 1996, as amended (the
"Investment Agreement") the effect of the assignment and
assumption set forth above shall be, as provided in the
Investment Agreement, that:
(i) on the Effective Date Newco shall be obliged to
advise Ingenico that its shareholdings have
fallen below 15% of the issued and outstanding
participating equity (which for such purposes
shall include the Exchangeable Shares) of Newco
(the "15% Threshold");
(ii) Ingenico shall have 10 days from the date it
receives such notice to advise Newco in writing
whether or not it intends to exercise its
Participation Right to acquire from the
treasury of Newco such additional shares of
Newco Common Stock so as to bring its holdings
to the 15% Threshold;
(iii) if Ingenico gives notice of its intention to
increase its holdings to the 15% Threshold it
shall acquire sufficient shares of Newco Common
Stock (the "Additional Shares") to achieve such
from of Newco within 90 days of the date of
receipt of the notice of Newco pursuant to
clause (i) above;
(iv) the Additional Shares shall be purchased by
Ingenico for a price per share equal to the
weighted average trading price of the IVI
Common Shares on The Toronto Stock Exchange
(the "TSE" during the 30 days preceding the
notice of Newco to Ingenico pursuant to clause
(i) above).
(b) For greater certainty, the parties acknowledge that
the Board of Directors of IVI is composed of 9 members, rather
than 8 as contemplated in the Investment Agreement and that this
practice shall be continued with Newco. All other provisions to
apply mutatis mutandis.
8. All terms of the Assigned Agreements, including any
prohibition against assignment, shall remain in full force and
effect.
9. Ingenico and the Assignor hereby represent each to the
other that the Assigned Agreements are in full force and effect
and will remain operative in all respects prior to the Effective
Date.
10. Ingenico hereby expressly agrees that the
Transactions, as contemplated in the Combination Agreement, do
not and shall not constitute an Event of Default as defined in
Section 13.01 of the Master Alliance Agreement dated December 5,
1996 between the Assignor and Ingenico nor a default under any of
the other Assigned Agreements.
11. The Assignee hereby represents and warrants that, to
the best of the knowledge of the Assignee, the assignment of the
Investment Agreement, as amended, and any subsequent exercise by
Ingenico of the Participation Right contained therein would not
preclude the Transactions from being accounted for under the
pooling of interests method of accounting as set out in the
requirements of Accounting Principles Board Opinion No. 16,
Business Combinations and the published rules and regulations of
the Securities and Exchange Commission.
12. On the Effective Date, Newco shall cause its counsel
to deliver to Ingenico a standard enforceability opinion with
respect to this Agreement, subject to the usual qualifications.
13. Each party hereto agrees that it will from time to
time and at all times hereafter, upon every reasonable request of
the other party hereto and its successors and assigns, take such
action or cause to be taken such action and execute and deliver
or cause to be executed and delivered such documents as may
reasonably be required for allowing the Assignee to assume the
right, title, interest and liabilities of the Assignor in, to and
under the Assigned Agreements.
14. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced the parties
hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible, failing
which Ingenico may elect to terminate this Agreement.
15. This agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the
parties hereto attorn to such jurisdiction.
16. This agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors
and assigns.
17. In the event the Combination Agreement is terminated
for any reason this agreement shall be null and void.
IN WITNESS WHEREOF this Agreement has been executed by
the Assignor, the Assignee and Ingenico.
INTERNATIONAL VERIFACT INC.
Per: /s/ L. Barry Thomson
-----------------------------------------
IVI CHECKMATE CORP.
Per: /s/ L. Barry Thomson
-----------------------------------------
INGENICO S.A.
Per: /s/ Gerard Compain
-----------------------------------------
<PAGE>
SCHEDULE A
----------
ASSIGNED AGREEMENTS
-------------------
1. Master Alliance Agreement dated December 5,1996 between
International Verifact Inc. ("IVI") and Ingenico S.A.
("Ingenico");
2. Investment Agreement between IVI and Ingenico dated December
5, 1996, as amended by agreement dated December 17, 1996;
3. Marketing and Distribution Agreement between IVI, Ingenico
and IVI-Ingenico Inc. dated December 17, 1996;
4. Joint Development and Procurement Agreement between IVI and
Ingenico dated December 17, 1996;
5. Technology Licence Agreement between IVI and Ingenico dated
December 17, 1996;
6. Latin America Unanimous Shareholders Agreement between IVI,
Ingenico and IVI-Ingenico Inc. dated December 17, 1996;
Exhibit 7.4
EXECUTION VERSION
SHAREHOLDERS AGREEMENT
AGREEMENT, dated as of January 16, 1998 by and among
CHECKMATE ELECTRONICS INC., a Georgia corporation ("Checkmate"),
IVI CHECKMATE CORP., a Delaware corporation ("Parent"), and the
other parties signatory hereto, the names and addresses of which
are set forth on Schedule I hereto (each, a "Shareholder").
Capitalized terms used but not defined herein shall have the
meanings set forth in the Combination Agreement, dated the date
hereof (as such agreement may be amended from time to time, the
"Combination Agreement") by and among Checkmate, Parent,
International Verifact Inc., a Canadian corporation ("IVI"), and
Checkmate Merger Corporation, a Georgia corporation and a wholly
owned subsidiary of Parent ("Merger Sub").
WHEREAS, the Boards of Directors of IVI and Checkmate have
each determined that it is advisable and in the best interests of
their respective shareholders to carry out the transactions
contemplated by the Combination Agreement upon the terms and
subject to the conditions set forth therein;
WHEREAS, in furtherance of such transactions, the Board of
Directors of IVI has approved the reorganization of the capital
of IVI whereby each of the issued and outstanding common shares
in the capital of IVI (the "IVI Common Shares") will be
exchanged, at the holder's election, for either one (the "IVI
Exchange Ratio") share of common stock, $.01 par value of Parent
(the "Parent Common Stock"), or one Exchangeable Share (as
defined in the Combination Agreement) of IVI and certain
ancillary agreements will be entered into including the Voting
and Exchange Trust Agreement and the Support Agreement (such
reorganization referred to herein as the "Arrangement");
WHEREAS, the Exchangeable Shares are exchangeable by the
holders thereof for shares of Parent Common Stock on a
one-for-one basis at any time, subject to the terms of the
Arrangement;
WHEREAS, the Arrangement shall be effected under Section 192
of the Canada Business Corporations Act (the "CBCA") pursuant to
the terms hereof and the Plan of Arrangement;
WHEREAS, each Shareholder desires that IVI, Parent,
Checkmate and Merger Sub enter into the Combination Agreement and
each such Shareholder has agreed to enter into this Agreement
with Checkmate and Parent as an inducement to Checkmate, Parent
and Merger Sub to enter into and execute the Combination
Agreement.
NOW, THEREFORE, in consideration of the execution and
delivery by Checkmate, Parent and Merger Sub of the Combination
Agreement and the mutual agreements contained herein, and
intending to be legally bound, the parties hereby agree as
follows:
Section 1. Certain Definitions. The following terms,
-------------------
when used in this Agreement, shall have the following meanings
(such definitions to be equally applicable to both singular and
plural terms of the terms defined):
"beneficially own" or "beneficial ownership" with respect to
---------------- --------------------
any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the
Exchange Act), including pursuant to any agreement, arrangement
or understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder, securities
beneficially owned by a Person shall include securities
beneficially owned by all other Persons with whom such Person
would constitute a "group" as described in Section 13(d)(3) of
the Exchange Act.
"Shares" means the Existing Shares, together with any IVI
Common Shares acquired of record or beneficially by such
Shareholder in any capacity after the date hereof and prior to
the termination hereof, whether upon exercise of any Rights;
provided, however, that in the event of a stock dividend or
-------- -------
distribution, or any change in the IVI Common Shares by reason of
any stock dividend, split-up, recapitalization, combination,
exchange of shares or the like, the term "Shares" shall be deemed
to refer to and include the Shares as well as all such stock
dividends and distributions and any shares into which or for
which any or all of the Shares may be changed or exchanged.
Section 2. Representations and Warranties of
----------------------------------
Shareholders. ((1)) Each Shareholder hereby, severally and
------------
not jointly, represents and warrants to Checkmate and Parent as
follows:
(A) Such Shareholder is the record and beneficial
owner of the number of IVI Common Shares as is set forth
opposite such Shareholder's name on Schedule I hereto (the
"Existing Shares").
(B) On the date hereof, the Existing Shares set forth
opposite such Shareholder's name on Schedule I hereto
constitute all of the outstanding IVI Common Shares owned of
record or beneficially by such Shareholder. Such Shareholder
does not have record or beneficial ownership of any Shares
not set forth on Schedule I hereto.
(C) Such Shareholder has sole power of disposition
with respect to all of the Existing Shares set forth
opposite such Shareholder's name on Schedule I and sole
voting power with respect to the matters set forth in
Section 3 hereof and sole power to demand dissenter's or
appraisal rights, in each case with respect to all of the
Existing Shares set forth opposite such Shareholder's name
on Schedule I, with no restrictions on such rights, subject
to applicable federal securities laws and the terms of this
Agreement.
(1) Such Shareholder will have sole power of disposition
with respect to Shares other than Existing Shares, if any, which
become beneficially owned by such Shareholder and will have sole
voting power with respect to the matters set forth in Section 3
hereof and sole power to demand dissenter's or appraisal rights,
in each case with respect to all Shares other than Existing
Shares, if any, which become beneficially owned by such
Shareholder with no restrictions on such rights, subject to
applicable federal securities laws and the terms of this
Agreement.
(2) Such Shareholder has the legal capacity, power and
authority to enter into and perform all of such Shareholder's
obligations under this Agreement. This Agreement has been duly
and validly executed and delivered by such Shareholder and
constitutes a valid and binding agreement of such Shareholder,
enforceable against such Shareholder in accordance with its
terms. There is no person whose consent is required for the
execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby. If such Shareholder is
married and such Shareholder's Shares constitute community
property, this Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of,
such Shareholder's spouse, enforceable against such person in
accordance with its terms.
(3) Except for filings under the HSR Act, if applicable,
(i) no filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is
necessary for the execution of this Agreement by such Shareholder
and the consummation by such Shareholder of the transactions
contemplated hereby and (ii) neither the execution and delivery
of this Agreement by such Shareholder nor the consummation by
such Shareholder of the transactions contemplated hereby nor
compliance by such Shareholder with any of the provisions hereof
shall (A) conflict with or result in any breach of any applicable
trust, partnership agreement, trust agreement, voting agreement,
shareholders agreement, voting trust or other agreement or
organizational document applicable to such Shareholder, (B)
result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise
to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or
other instrument or obligation of any kind to which such
Shareholder is a party or by which such Shareholder or any of
such Shareholder's properties or assets may be bound or (C)
violate any order, writ, injunction, decree, judgment, statute,
rule or regulation applicable to such Shareholder or any of such
Shareholder's properties or assets.
(4) Such Shareholder's Shares and the certificates
representing such Shares are now and at all times during the term
hereof will be held by such Shareholder, or by a nominee or
custodian for the benefit of such Shareholder, free and clear of
all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or
proxies arising hereunder.
(5) No broker, investment banker, financial adviser or
other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with
the transactions contemplated hereby based upon arrangements made
by or on behalf of such Shareholder in his or her capacity as
such.
(6) Such Shareholder understands and acknowledges that IVI,
Parent, Checkmate and Merger Sub are entering into the
Combination Agreement in reliance upon such Shareholder's
execution and delivery of this Agreement. Such Shareholder
acknowledges that the irrevocable proxy set forth in Section 3 is
granted in consideration for the execution and delivery of the
Combination Agreement by IVI, Parent and Merger Sub.
Section 3. Agreement to Vote; Proxy
------------------------
(a) Each Shareholder hereby, severally and not jointly,
agrees that, until the Termination Date (as defined in Section
9), at any meeting of the shareholders of IVI, called to vote
upon the Combination Agreement or the Arrangement, or at any
adjournment thereof or in connection with any written consent of
the shareholders of IVI for such purpose (the "Shareholders
Meeting"), such Shareholder shall vote (or cause to be voted) the
Shares held of record or beneficially by such Shareholder (i) in
favor of the Arrangement, the execution and delivery by the IVI
of the Combination Agreement and the approval of the terms
thereof and each of the other actions contemplated by the
Combination Agreement and this Agreement and any actions required
in furtherance hereof and thereof; and (ii) against any action or
agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement
of IVI under the Combination Agreement or this Agreement. Such
Shareholder shall not enter into any agreement or understanding
with any person or entity to vote or give instructions in any
manner inconsistent with clauses (i) or (ii) of the preceding
sentence.
(b) EACH SHAREHOLDER HEREBY IRREVOCABLY GRANTS TO, AND
APPOINTS, CHECKMATE AND ANY DESIGNEE OF CHECKMATE, AND EACH OF
THEM INDIVIDUALLY, SUCH SHAREHOLDER'S IRREVOCABLE (UNTIL THE
TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF
SUBSTITUTION), FOR AND IN THE NAME, PLACE AND STEAD OF SUCH
SHAREHOLDER, TO VOTE THE SHARES AS INDICATED IN SECTION 3(a)
ABOVE. EACH SHAREHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE
(UNTIL THE TERMINATION DATE) AND COUPLED WITH AN INTEREST AND
WILL TAKE SUCH FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS
AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH SHAREHOLDER
WITH RESPECT TO SUCH SHAREHOLDER'S SHARES.
Section 4. Certain Covenants of Shareholders. Except in
---------------------------------
accordance with the terms of this Agreement, each Shareholder
hereby severally covenants and agrees as follows:
(a) Prior to the Termination Date, no Shareholder
shall, in its capacity as such, directly or indirectly
(including through advisors, agents or other
intermediaries), solicit (including by way of furnishing
information) or respond to any inquiries or the making of
any proposal by any person or entity (other than Merger Sub
or any affiliate thereof) with respect to IVI that
constitutes or could reasonably be expected to lead to an
Acquisition Proposal (as defined in Section 10.2 of the
Combination Agreement), provided, however, that the
foregoing shall not restrict a Shareholder who is also a
director of IVI from taking actions in such Shareholder's
capacity as a director to the extent and in the
circumstances permitted by Section 10.2 of the Combination
Agreement. If any Shareholder in its capacity as such
receives any such inquiry or proposal, then such Shareholder
shall promptly inform IVI of the terms and conditions, if
any, of such inquiry or proposal and the identity of the
person making it. Each Shareholder, in its capacity as
such, will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the
foregoing.
(b) Each Shareholder hereby waives any rights of
appraisal, or rights to dissent from the Arrangement and the
transactions contemplated by the Combination Agreement, that
such Shareholder may have.
Section 5. Further Assurances. From time to time, at the
------------------
other party's request and without further consideration, each
party hereto shall execute and deliver such additional documents
and take all such further action as may be necessary or desirable
to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
Section 6. Certain Events. Each Shareholder agrees that
--------------
this Agreement and the obligations hereunder shall attach to such
Shareholder's Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of such Shares
shall pass, whether by operation of law or otherwise, including
without limitation such Shareholder's heirs, guardians,
administrators or successors or as a result of any divorce.
Section 7. Stop Transfer. Each Shareholder agrees with,
-------------
and covenants to, Checkmate that such Shareholder shall not
request that Instant register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest
representing any of such Shareholder's Shares, unless such
transfer is made in compliance with this Agreement.
Section 8. Rule 145 Affiliates. Each Shareholder who is
-------------------
an "affiliate" of IVI for purposes of Rule 145 under the
Securities Act of 1933, as amended, hereby agrees to deliver to
Instant, on or prior to the Effective Date (as defined in the
Combination Agreement) a written agreement, substantially in the
form of Exhibit G-2 to the Combination Agreement.
Section 9. Termination. The obligations of the
-----------
Shareholders shall terminate upon the first to occur of (a) the
Effective Time and (b) the date the Combination Agreement is
terminated in accordance with its terms (the "Termination Date");
provided that the provisions of Sections 2, 3 and 10 and any
claim for breach of any representation, warranty, covenant or
other agreement under this Agreement shall survive the Effective
Time and/or the Termination Date, as applicable.
Section 10. Miscellaneous.
-------------
(a) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly received if so
given) by hand delivery, telegram, telex or telecopy, or by
mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service providing proof
of delivery. All communications hereunder shall be
delivered to the respective parties at the following
addresses:
If to the Shareholders, to the addresses set forth on
Schedule I hereto:
If to Checkmate: Checkmate Electronics Inc.
1003 Mansell Road
Roswell, Georgia 30076
Attn: Chief Executive Officer
Telecopier:
copy to: Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Attn: Hill Jeffries, Esq.
Telecopier: (404) 881-7777
or to such other address as the person to whom notice is given
may have previously furnished to the others in writing in the
manner set forth above.
(b) At any time prior to the Effective Time, any party
hereto may, with respect to any other party hereto, (i)
extend the time for the performance of any of the
obligations or other acts, (ii) waive any inaccuracies in
the representations and warranties contained herein or in
any document delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions
contained herein. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
(c) The headings contained in this Agreement are for
the convenience of reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
(d) If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal
substance of the transactions contemplated by the
Combination Agreement is not affected in any manner adverse
to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent
of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated by the
Combination Agreement are fulfilled to the extent possible.
(e) This Agreement, including all exhibits, disclosure
schedules and schedules hereto, constitutes the entire
agreement and supersedes all prior agreements and
undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof and
except as otherwise expressly provided herein.
(f) Except as provided in Section 3(b), neither this
Agreement nor any of the rights or obligations hereunder may
be assigned by any party (whether by operation of law or
otherwise) without the prior written consent of the other
parties hereto. Subject to the preceding sentence, this
Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
permitted assigns, and no other Person shall have any right,
benefit or obligation under this Agreement as a third party
beneficiary or otherwise.
(g) The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties
hereto shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to
which they are entitled at law or in equity.
(h) No failure or delay on the part of any party
hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty
or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise
available.
(i) Notwithstanding anything herein to the contrary,
no Person executing this Agreement who is, or becomes during
the term hereof, a director of IVI makes any agreement or
understanding herein in his or her capacity as such
director, and the agreements set forth herein shall in no
way restrict any director in the exercise of his or her
fiduciary duties as a director of IVI. Each Shareholder has
executed this Agreement solely in his or her capacity as the
record or beneficial holder of such Shareholder's Shares or
as the trustee of a trust whose beneficiaries are the
beneficial owners of such Shareholder's Shares.
(j) Each party agrees to bear its own expenses in
connection with the transactions contemplated hereby.
(k) This Agreement shall be governed by, and construed
in accordance with, the laws of the Province of Ontario,
without regard to any principles of conflicts of law that
might indicate the applicability of the laws of any
jurisdiction other than the Province of Ontario.
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THE COMBINATION AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
(m) This Agreement may be executed in one or more
counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together
shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
CHECKMATE ELECTRONICS INC.
By: /s/ J.S. Spence
---------------------------
Name:
Title:
IVI CHECKMATE CORP.
By: /s/ L. Barry Thomson
---------------------------
Name: L. Barry Thomson
Title: President & CEO
SHAREHOLDERS:
By: /s/ Gerard Compain
----------------------------
Name: /s/ Gerard Compain
Managing Director
By:
----------------------------
Name:
By:
----------------------------
Name:
<PAGE>
SCHEDULE I
SHAREHOLDERS' AGREEMENT
LIST OF SHAREHOLDERS
GERARD COMPAIN
9, Quai de Dion Bouton
92816 Puteaux
Cedax, France
J. STANFORD SPENCE
1003 Mansell Road
Roswell, GA
U.S.A. 30076
DUDLEY MOORE
1000 Parwood Circle
Suite 1000
Atlanta, GA
U.S.A. 30330
