EXHIBIT 99.1
AMENDMENT NO. 1 TO
SHAREHOLDER RIGHTS PROTECTION AGREEMENT
Amendment No. 1, dated as of January 16, 1998, to the Shareholder Rights
Protection Agreement, dated as of October 13, 1997 (the "Agreement"), between
Checkmate Electronics, Inc., a Georgia corporation (the "Company"), and First
Union National Bank, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Company proposes to enter into a Combination Agreement, dated as
of January 16, 1998 (the "Combination Agreement"), with International Verifact,
Inc., a Canadian corporation, IVI Checkmate Corp., a Delaware corporation, and
its wholly-owned subsidiary, Future Merger Corporation, a Georgia corporation,
pursuant to which the Company will represent and warrant, among other things,
that the Agreement has been amended as provided herein, the effect of which is
to provide that neither (i) the execution and delivery of or the consummation of
the transactions contemplated by the Combination Agreement and the ancillary
agreements thereto, including, without limitation, the Stockholders Agreement
(as defined in the Combination Agreement), will result in a Stock Acquisition
Date nor a Separation Time nor in any other way effect any change or
modification of the terms of the Rights or the rights of the holders thereof;
and
WHEREAS, the Board of Directors of the Company has determined that it is
necessary and desirable to amend, pursuant to Section 5.4 of the Agreement, the
Agreement to comply with the terms of the Combination Agreement, and a majority
of the Continuing Directors, at a meeting of such Board duly called and held on
December 22, 1997, voted in favor of the adoption of this Amendment.
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 1.1 of the Agreement under the definition of "Acquiring Person"
is hereby amended by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, no Person shall become an 'Acquiring
Person' as the result of the execution and delivery of or the consummation
of the transactions contemplated by the Combination Agreement dated as of
January 16, 1998 among International Verifact, Inc., a Canadian corporation
("IVI"), IVI Checkmate Corp., a Delaware corporation, and its wholly-owned
subsidiary, Future Merger Corporation, a Georgia corporation, and the
Company (the "Combination Agreement"), and the ancillary agreements
thereto, including, without limitation, the Stockholders Agreements, dated
as of the date of the Combination Agreement, among IVI Checkmate Corp.,
IVI, Future Merger Corporation, the Company, certain principal shareholders
of the Company and certain principal shareholders of IVI (the "Stockholders
Agreements")."
2. Section 1.1 of the Agreement under the definition of "Beneficial Owner"
is hereby amended by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, no Person shall be deemed the 'Beneficial
Owner' of, or to 'Beneficially Own', any securities on account of the
execution and delivery of the Combination Agreement and the ancillary
agreements thereto, including, without limitation, the Stockholders
Agreement, or the consummation of the transactions contemplated thereby."
3. Section 1.1 of the Agreement under the definition of Separation Time is
hereby amended by adding the following sentence at the end thereof:
"Notwithstanding the foregoing, no announcement of the execution and
delivery of the Combination Agreement or of the calling of a shareholders
meeting to
approve and adopt the Combination Agreement nor the filing of the
Registration Statement (as defined in the Combination Agreement) or any
amendment thereto nor any distribution of the prospectus contained therein
nor any other action taken to facilitate the consummation of the
transactions contemplated by the Combination Agreement and the ancillary
agreements thereto shall be deemed the publication, sending or giving of an
exchange offer for the purposes of this Agreement."
4. Section 1.1 of the Agreement under the definition of Expiration Time is
hereby deleted in its entirety and the following is substituted in lieu thereof:
"'Expiration Time' shall mean the earliest of (i) the Exchange Time, (ii)
the Redemption Time, (iii) October 24, 2007, and (iv) the Effective Time
(as defined in the Combination Agreement)."
5. Section 5.14 of the Agreement is hereby amended by adding a new sentence
to the end as follows:
"The execution and delivery of and the consummation of the transactions
contemplated by the Combination Agreement and Amendment No. 1 to this
Agreement have been approved as of December 22, 1997 by all members of the
Board of Directors of the Company for all purposes under this Section
5.14."
6. Terms used herein without definition shall have the meanings assigned to
them in the Agreement. Other than as amended hereby, all other provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and attested as of the day and year first above written.
CHECKMATE ELECTRONICS, INC.
By: /s/ J. Stanford Spence
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Title: Chairman of the Board
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FIRST UNION NATIONAL BANK
By: /s/ Frances Beam
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Title:Vice President
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