-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OXhOUdIollJgSU7b3o0oFfMUvXROxuSbkHiRv9wGFvr1lAZsVWmEh27jHYA5K4QQ IXphT54VkU67ZSJcPmAkvQ== 0000899140-01-500445.txt : 20020412 0000899140-01-500445.hdr.sgml : 20020412 ACCESSION NUMBER: 0000899140-01-500445 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20011130 GROUP MEMBERS: LANDMARK VENTURES VII, LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LANDMARK COMMUNICATIONS INC CENTRAL INDEX KEY: 0000057606 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 150 BRAMBLETON AVE CITY: NORFOLK STATE: VA ZIP: 23510-2075 MAIL ADDRESS: STREET 1: WILLKIE FARR & GALLAGHER STREET 2: 153 EAST 53RD ST CITY: NEW YORK STATE: NY ZIP: 10022 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: COOLSAVINGS COM INC CENTRAL INDEX KEY: 0001087875 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 383216102 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-61045 FILM NUMBER: 1804031 BUSINESS ADDRESS: STREET 1: 8755 WEST HIGGINS ROAD STREET 2: SUITE 100 CITY: CHICAGO STATE: IL ZIP: 60631 BUSINESS PHONE: 7736931300 MAIL ADDRESS: STREET 1: 360 N MICIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60601 SC 13D/A 1 laco941666.txt AMENDMENT NO. 1 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* CoolSavings, Inc. (f/k/a coolsavings.com inc.) - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.001 Par Value - -------------------------------------------------------------------------------- (Title of Class of Securities) 216485 10 2 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Guy R. Friddell, III Executive Vice President and General Counsel Landmark Communications, Inc. 150 W. Brambleton Ave. Norfolk, VA 23510-2075 (757) 446-2035 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: William J. Grant, Jr., Esq. Willkie Farr & Gallagher 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 November 12, 2001 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) 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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page The information required on 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 (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 (however, see Notes). SCHEDULE 13D - -------------------------- ----------------- CUSIP No. 216485 10 2 Page 2 of 8 Pages - -------------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Landmark Communications, Inc. - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Virginia - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 10,000,000 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 65,057,936(1) OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 10,000,000 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 65,057,936(1) - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 75,057,936(1) - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 65.75%(2) - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ----------- -------------------------------------------------------------------- (1) See Items 4 through 6 of this Statement (as defined below). (2) For purposes of Rule 13d-3(d)(1)(i) under the Exchange Act (as defined below), the ownership percentage reported in Item 13 above has been calculated without including shares of Common Stock (as defined below) that have been reserved for issuance upon (1) the conversion of 13 million shares of currently outstanding and convertible CoolSavings, Inc. Series C Preferred Stock and (2) the exercise of 2,602,249 currently outstanding and exercisable options to purchase Common Stock. If such reserved shares of Common Stock were to be issued, Landmark Communications, Inc. would beneficially own 57.85% of the total outstanding Common Stock. SCHEDULE 13D - -------------------------- ----------------- CUSIP No. 216485 10 2 Page 3 of 8 Pages - -------------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Landmark Ventures VII, LLC - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 65,057,936(1) OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 65,057,936(1) - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 65,057,936(1) - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 56.99%(2) - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- -------------------------------------------------------------------- (1) See Items 4 through 6 of this Statement (as defined below). (2) For purposes of Rule 13d-3(d)(1)(i) under the Exchange Act, the ownership percentage reported in Item 13 above has been calculated without including shares of Common Stock that have been reserved for issuance upon (1) the conversion of 13 million shares of currently outstanding and convertible CoolSavings, Inc. Series C Preferred Stock and (2) the exercise of 2,602,249 currently outstanding and exercisable options to purchase Common Stock. If such reserved shares of Common Stock were to be issued, Landmark Ventures VII, LLC would beneficially own 50.14% of the total outstanding Common Stock. Introductory Note This Amendment No. 1 (as defined herein) is being filed by Landmark Communications, Inc. and Landmark Ventures VII, LLC (collectively, the "Reporting Persons") to update the Initial Statement (as defined herein). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Initial Statement. Please refer to the Initial Statement for a detailed description of the corporate structure and affiliations of the Reporting Persons. Item 1. Security and Issuer. Item 1 is hereby amended by deleting the first sentence and inserting the following: This Amendment No. 1 to Schedule 13D ("Amendment No. 1") relates to shares of Common Stock, with $0.001 par value per share (the "Common Stock"), of CoolSavings, Inc., a Delaware corporation (f/k/a coolsavings.com inc., a Michigan corporation) (the "Issuer"). This amendment amends the initial statement on Schedule 13D filed by the Reporting Persons on August 9, 2001 (the "Initial Statement", and collectively with this Amendment No. 1, the "Statement"). Item 3. Source and Amount of Funds or Other Consideration. Item 3 is hereby amended and restated in its entirety as follows: On July 30, 2001, Landmark loaned to the Issuer $5 million under the Amended Loan Agreement, in exchange for a promissory note and a Warrant (all as described below) as initial consideration in a series of transactions described in Item 6. On November 12, 2001, Ventures paid approximately $10 million in consideration for 65,057,936 shares of the Issuer's Series B Preferred Stock (as described below). Under certain circumstances, Ventures will have the option to purchase additional shares of Series B Preferred Stock at the same purchase price ($0.1554 per share). The source of funds for the above transactions was and will be the working capital of the Reporting Persons. Item 4. Purpose of Transaction. Item 4 is hereby amended by deleting the first paragraph and inserting the following: The purpose of Reporting Persons for the transaction is, as part of the planned transactions described below in Item 6, to make a substantial equity investment in the Issuer. The Reporting Persons have the right to designate and elect a majority of the Issuer's board of directors. Item 5. Interest in Securities of the Issuer. Section (a) of Item 5 is hereby amended and restated in its entirety as follows: 4 (a) Landmark may be deemed to have beneficial ownership over 75,057,936 shares of Common Stock through its ownership of the Warrant and its ownership of and control over Ventures, which owns 65,057,936 shares of the Issuer's Series B Preferred Stock. If Landmark exercised its right to acquire 10,000,000 shares of Common Stock pursuant to the Warrant and Ventures exercised its right to convert its shares of Series B Preferred Stock into 65,057,936 shares of Common Stock, Landmark and Ventures would beneficially own, for the purposes of Rule 13d-3(d)(1)(i) under the Exchange Act, 65.75% and 56.99%, respectively, of the Issuer. These ownership percentages do not take into account shares of Common Stock that have been reserved for issuance upon (1) the conversion of 13 million shares of currently outstanding and convertible CoolSavings, Inc. Series C Preferred Stock and (2) the exercise of 2,602,249 currently outstanding and exercisable options to purchase Common Stock. If such reserved shares of Common Stock were to be issued, Landmark and Ventures would beneficially own 57.85% and 50.14%, respectively, of the total outstanding Common Stock. Except as disclosed in this Item 5(a), as of the date hereof, neither of the Reporting Persons beneficially owns, nor, to the best of their knowledge, does any of their directors or executive officers beneficially own, any shares of Common Stock. Section (b) of Item 5 is hereby amended and restated in its entirety as follows: Landmark owns a warrant, a copy of which is attached hereto as Exhibit 4 (the "Warrant"), which entitles Landmark to purchase 10,000,000 shares of Common Stock from the Issuer. If the Warrant were exercised, Landmark or its transferees would possess the sole power to vote or dispose of such shares of Common Stock. Ventures owns 65,057,936 shares of the Issuer's Series B Preferred Stock, over which the Reporting Persons may be deemed to share voting and/or dispositive power. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Item 6 is hereby amended and restated in its entirety as follows: On June 14, 2001, Landmark and the Issuer entered into a Loan and Security Agreement, pursuant to which Landmark loaned $1.75 million to the Issuer. On July 30, 2001, Landmark and the Issuer entered into an Amended and Restated Senior Secured Loan and Security Agreement, a copy of which is attached hereto as Exhibit 5 (the "Amended Loan Agreement"). Under the Amended Loan Agreement, Landmark loaned to the Issuer an additional $3.25 million, for an aggregate $5 million in debt financing. Under the terms of an amended and restated commercial demand grid note (the "Grid Note"), Landmark loaned the Issuer a total of $10 million prior to November 12, 2001. On November 12, 2001, at Landmark's request (for the benefit of Ventures), 5 approximately $10 million of principal and interest then due Landmark under the Grid Note was offset against the purchase price due from Ventures to the Issuer under the Securities Purchase Agreement, dated as of July 30, 2001, by and among the Issuer and the Reporting Persons, a copy of which is attached hereto as Exhibit 2 (the "Purchase Agreement"), for 65,057,936 shares of Series B Preferred Stock. The purchase of 65,057,936 shares of Series B Preferred Stock satisfied Ventures' obligation to purchase two tranches of Series B Preferred Stock under the Purchase Agreement. As a result of Ventures' purchase of Series B Preferred Stock, the Reporting Persons have the right to designate and elect a majority of the Issuer's board of directors. Under certain circumstances, Ventures will have the option to purchase additional shares of Series B Preferred Stock at the same purchase price ($0.1554 per share). Dividends will also accrue on the Series B Preferred Stock at a rate of 8% per year, payable quarterly to Ventures in additional shares of Series B Preferred Stock. The Warrant entitles Landmark to purchase 10,000,000 shares of Common Stock at an exercise price of $0.50 per share (which, if not sooner exercised, will increase to $0.75 per share on July 30, 2005) until July 30, 2009. Commencing on November 12, 2001, the Issuer will issue to Landmark additional warrants to purchase two shares of Common Stock for each dollar of interest that accrues under the Senior Secured Note and the Amended Loan Agreement. Under the terms of a Shareholders Agreement, dated as of November 12, 2001, by and among Ventures, the Issuer and certain other shareholders of the Issuer (the "Other Shareholders"), a copy of which is attached hereto as Exhibit 7 (the "Shareholders Agreement"), the Issuer agreed to nominate and recommend for election to the Issuer's board of directors Ventures' designees to occupy the seats reserved for the holders of Series B Preferred Stock under the Issuer's Certificate of Designations for the Series B Preferred Stock, a copy of which is attached hereto as Exhibit 8 (the "Series B Certificate"). The Issuer also (i) granted Ventures a right to purchase either all or a pro rata portion of any proposed new issuance of securities, and (ii) agreed not to undertake certain actions without first obtaining Ventures' consent, including, among other actions, amendments to the Issuer's charter documents, a merger with or sale of any assets of the Issuer to another company, purchases of all or substantially all assets of another company, redemptions of certain capital stock of the Issuer, and further issuances of equity securities or equivalents of the Issuer. Under the Shareholders Agreement, the Other Shareholders granted Ventures a right of first refusal for any proposed transfer by an Other Shareholder, and if such right is unexercised an additional right to participate on a pro rata basis in any such proposed transfer. On August 16, 2001, the Reporting Persons and certain other shareholders of the Issuer entered into an Amended and Restated Side Agreement, a copy of which is attached hereto as Exhibit 9 (the "Side Agreement"). Under the Side Agreement, the Reporting Persons agreed, until the earlier of (i) two years after the Reporting Persons or any of their affiliates own 51% or more of the Issuer's Common Stock or (ii) until July 30, 2005, not to initiate or propose a transaction or series of transactions that would result in either (x) the Issuer becoming a privately held company or (y) the Reporting Persons acquiring more than 6 20% of the Common Stock of the Issuer, calculated on a fully diluted basis, except that such restriction shall not apply to the transactions contemplated under the Purchase Agreement or other documents related thereto. The Reporting Persons also agreed to vote for the election of the designees of certain shareholders to the Issuer's board of directors. The other shareholders of the Issuer party to the Side Agreement agreed to vote for the election of Ventures' designees to occupy the seats on the Issuer's board of directors reserved for the holders of the Series B Preferred Stock under the Series B Certificate. Pursuant to Rule 13d-1(k) promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), the Reporting Persons have entered into an agreement with respect to the joint filing of this Statement, and any amendment or amendments hereto, a copy of which is attached hereto as Exhibit 1. By virtue of the relationships among the Reporting Persons, as described in this Statement, the Reporting Persons may be deemed to be a "group" under the Federal securities laws. Except as otherwise set forth in this Statement, each Reporting Person expressly disclaims beneficial ownership of any of the shares of Common Stock beneficially owned by any other Reporting Person or the Significant Shareholders and the filing of this Statement shall not be construed as an admission, for the purposes of Sections 13(d) and 13(g) or under any provision of the Exchange Act or the rules promulgated thereunder or for any other purpose, that any Reporting Person is a beneficial owner of any such shares. Except as set forth in this Statement or the Exhibits hereto, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 or between such persons and any other person with respect to any securities of the Issuer. Item 7. Material to be Filed as Exhibits. Item 7 is hereby amended and restated in its entirety as follows: 1. Joint Filing Agreement, dated as of August 9, 2001, by and among the Reporting Persons (filed previously as Exhibit 1 to the Initial Statement). 2. Securities Purchase Agreement, dated as of July 30, 2001, by and among the Reporting Persons and the Issuer (incorporated herein by reference to Exhibit 2.1 to the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 2, 2001 (the "Issuer's 8-K")). 3. Amendment No. 1 to the Securities Purchase Agreement, dated as of August 16, 2001, by and among the Reporting Persons and the Issuer (incorporated herein by reference to Exhibit 2.3 to the Issuer's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2001 (the "Issuer's 10-Q)). 4. Warrant, dated as of November 12, 2001, issued by the Issuer to Landmark. 7 5. Amended and Restated Senior Secured Loan and Security Agreement, dated as of July 30, 2001, by and between Landmark and the Issuer (incorporated herein by reference to Exhibit 10.1 to the Issuer's 8-K). 6. First Amendment to the Amended and Restated Senior Secured Loan and Security Agreement, dated as of September 25, 2001, by and between Landmark and the Issuer (incorporated herein by reference to Exhibit 10.8 to the Issuer's 10-Q). 7. Shareholders Agreement, dated as of November 12, 2001, by and among Ventures and certain other shareholders of the Issuer. 8. Certificate of Designations, Number, Voting Powers, Preferences and Rights of Series B Convertible Preferred Stock (incorporated herein by reference to Exhibit 3.2 to the Issuer's 8-K). 9. Amended and Restated Side Agreement, dated as of August 16, 2001, by and among the Reporting Persons and certain shareholders of the Issuer. 8 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: November 30, 2001 LANDMARK COMMUNICATIONS, INC. By: /s/ Guy R. Friddell, III ------------------------------ Name: Guy R. Friddell, III Title: Executive Vice President and General Counsel Dated: November 30, 2001 LANDMARK VENTURES VII, LLC By: /s/ Richard A. Fraim ------------------------------ Name: Richard A. Fraim Title: Vice President, Treasurer EX-4 4 laco892446.txt WARRANT Exhibit 4 WARRANT THIS WARRANT HAS BEEN ISSUED IN REPLACEMENT OF THAT CERTAIN COMMON STOCK PURCHASE WARRANT ISSUED TO THE HOLDER BY COOLSAVINGS.COM INC. ON JULY 30, 2001 (THE "INITIAL WARRANT"), WHICH INITIAL WARRANT HAS BEEN CANCELED AND VOIDED CONTEMPORANEOUSLY WITH THE DELIVERY HEREOF. THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL, WHICH OPINION AND WHICH COUNSEL SHALL BE REASONABLY SATISFACTORY TO COOLSAVINGS, INC., QUALIFIES AS AN EXEMPT TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER. COOLSAVINGS, INC. Common Stock Purchase Warrant CoolSavings, Inc., a Delaware corporation (the "Company"), hereby certifies that, for value received, Landmark Communications, Inc. or its assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at any time and from time to time during the period beginning on November 12, 2001 and ending on July 30, 2009 (the "Expiration Date"), in whole or in part, the Warrant Shares (defined in Section 1.1 below) of fully paid and non-assessable shares of the Common Stock of the Company at the Purchase Price (defined in Section 1.1 below). The Purchase Price and the number and character of such Warrant Shares are subject to the adjustments provided below, and the term "Common Stock" shall mean, unless the context otherwise requires, the stock or other securities or property at the time deliverable upon the exercise of this Warrant. This Warrant is herein called the "Warrant." 1. EXERCISE OF WARRANT. 1.1 The Holder of this Warrant is entitled to purchase at a purchase price of $0.50 ($0.75 from and after July 30, 2005) per share ("Purchase Price") the following number of shares of Common Stock (the "Warrant Shares"): (a) 10,000,000 shares (the "Base Shares"); and (b) two (2) additional shares of Common Stock (adjusted for dividends, splits, combinations and the like) (the "PIK Shares") for every dollar of interest accrued, compounded and added after the date hereof to the Original Principal Amount (defined below) of the Initial Loan (defined below) on a quarterly basis. The "Initial Loan" is the "Initial Loan" defined in and described under that certain Amended and Restated Loan and Security Agreement dated July 30, 2001 between the Holder and the Company (the "Loan Agreement"), which is further evidenced by the Senior Secured Note (as defined in and attached to the Loan Agreement). The "Original Principal Amount" is the Original Principal Amount of $5,000,000 as defined in the Loan Agreement. Such PIK Shares are part of the Company's obligation to pay the interest accruing under the Initial Loan "in kind"; specifically, the Company is obligated to pay the interest by delivering additional notes and warrants and, in lieu of delivering separately certificated warrants, the Company has agreed to add the PIK Shares (as the warrant portion of the "in kind" payment) to the Base Shares that may be purchased hereunder. The Base Shares and all PIK Shares are collectively the "Warrant Shares" hereunder. Within ten (10) days of each Quarterly Payment Date (as defined in the Loan Agreement) through the Expiration Date, or as reasonably requested by the Holder, the Company shall issue to the Holder a certificate executed by the Company's chief financial officer or other executive officer setting forth the number of PIK Shares as of such date and the amount of the interest accrued, compounded and added to the Initial Loan. 1.2 Until such time as this Warrant is exercised in full or expires, the Warrant Shares issuable upon exercise and the Purchase Price shall be subject to the further adjustments set forth below. 1.3 The purchase rights evidenced by this Warrant shall be exercised by the Holder surrendering this Warrant, with the form of subscription at the end hereof duly executed by the Holder, to the Company at its office at 360 N. Michigan Avenue, 19th Floor, Chicago, IL 60601, accompanied by payment, of an amount (the "Exercise Payment") equal to the Purchase Price multiplied by the number of shares being purchased pursuant to such exercise, payable as follows: (a) by payment to the Company in cash, by certified or official bank check, or by wire transfer of the Exercise Payment, (b) by offset, at the Holder's request, of that portion of any promissory note, indebtedness or cash obligation of the Company to the Holder equal to the Exercise Payment, (c) by surrender to the Company for cancellation of securities of the Company having a Market Price (defined below) on the date of exercise equal to the Exercise Payment; or (d) by a combination of the methods described in clauses (a), (b) and (c) above. For purposes hereof, the term "Market Price" shall mean, with respect to any day, the average closing price of a share of Common Stock for the 15 consecutive trading days preceding such day on the principal national securities exchange on which the shares of Common Stock or securities are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, the average of the reported bid and asked prices during such 15 trading day period in the over-the-counter market as furnished by the National Quotation Bureau, Inc., or, if such firm is not then engaged in the business of reporting such prices, as furnished by any member of the National Association of Securities Dealers, Inc. selected by the Company or, if the shares of Common Stock or securities are not publicly traded, the Market Price for such day shall be the fair market value thereof determined jointly by the Company and the holder of this Warrant; provided, however, that if such parties are unable to reach agreement within a reasonable period of time, the Market Price shall be determined in good faith by the independent investment banking firm selected jointly by the Company and the holder of this Warrant or, if that selection cannot be made within 15 days, by an independent investment banking firm selected by the American Arbitration Association in accordance with its rules. In no event may this Warrant be exercised at any time after the Expiration Date. -2- Notwithstanding any provision herein to the contrary, if the Market Price of one share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), the Holder may elect to receive, without the payment by the Holder of any additional consideration, shares of Common Stock equal to the value (as determined below) of this Warrant or any portion hereof by the surrender of this Warrant or such portion to the Company, with the net issue election notice annexed hereto duly executed, at the office of the Company. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable shares of Common Stock as is computed using the following formula: X = Y (A-B) ------- A where X = the number of shares of Common Stock to be issued to the Holder. Y = the number of shares of Common Stock covered by this Warrant in respect of which the net issue election is made pursuant to this Section 1.2. A = the Market Price of one share of Common Stock, as determined in accordance with the provisions of this Section 1.2. B = the Purchase Price in effect under this Warrant at the time the net issue election is made pursuant to this Section 1.2. 1.4 Partial Exercise. This Warrant may be exercised for less than the full number of Warrant Shares, in which case the number of shares receivable upon the exercise of this Warrant as a whole, and the sum payable upon the exercise of this Warrant as a whole, shall be proportionately reduced. Upon any such partial exercise, the Company at its expense will forthwith issue to the Holder a new Warrant or Warrants of like tenor calling for the number of shares of Common Stock as to which rights have not been exercised, such Warrant or Warrants to be issued in the name of the Holder hereof or his or its nominee (upon payment by the Holder of any applicable transfer taxes). 2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after the exercise of this Warrant and payment of the Purchase Price, and in any event within ten (10) days thereafter, the Company, at its expense, will cause to be issued in the name of and delivered to the Holder a certificate or certificates for the number of fully paid and non-assessable shares or other securities or property to which the Holder shall be entitled upon such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash in an amount determined in accordance with Paragraph 3.9 hereof. The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. 3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to prevent dilution of the rights granted hereunder, the Purchase Price shall be subject to adjustment from time to time in accordance with this Paragraph 3. Upon each adjustment of the Purchase Price pursuant to this Paragraph 3, the registered Holder of this Warrant shall thereafter -3- be entitled to acquire upon exercise, at the Purchase Price resulting from such adjustment, the number of shares of Common Stock obtainable by multiplying the Purchase Price in effect immediately prior to such adjustment by the number of shares of Common Stock acquirable immediately prior to such adjustment and dividing the product thereof by the Purchase Price resulting from such adjustment. 3.1 Adjustment for Issue or Sale of Common Stock at Less than Purchase Price. Except as provided in Paragraph 3.2 or 3.5 below, if and whenever on or after the date hereof (the "Initial Issuance Date"), the Company shall issue or sell or shall be deemed to have issued or sold any shares of its Common Stock (or in case the Company at any time shall in any manner grant (whether directly or by assumption in a merger or otherwise) any rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or other securities convertible into or exchangeable for Common Stock (such rights or options being herein called "Options" and such convertible or exchangeable stock or securities being herein called "Convertible Securities")) for a consideration per share less than the Purchase Price in effect immediately prior to the time of such issue or sale, then forthwith upon such issue or sale (the "Triggering Transaction"), the Purchase Price shall be reduced to the price at which the Common Stock, Options or Convertible Securities were issued or deemed to have been issued in such Triggering Transaction. For purposes of determining the adjusted Purchase Price under this Paragraph 3.1, the following subsections (1) to (9), inclusive, shall be applicable: (1) In case the Company at any time shall in any manner grant (whether directly or by assumption in a merger or otherwise) any Options or Convertible Securities (including without limitation the right to subscribe for or purchase any such Options or Convertible Securities), whether or not such Options or the right to convert or exchange any such Convertible Securities are immediately exercisable and the price per share for which the Common Stock is issuable upon exercise, conversion or exchange (determined by dividing (x) the total amount, if any, received or receivable by the Company as consideration for the granting of such Options, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus, in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (y) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities) shall be less than the Purchase Price in effect immediately prior to the time of the granting of such Option, then the total maximum amount of Common Stock issuable upon the exercise of such Options, or, in the case of Options for Convertible Securities, upon the conversion or exchange of such Convertible Securities, shall (as of the date of granting of such Options) be deemed to be outstanding and to have been issued and sold by the Company for such price per share. No adjustment of the Purchase Price shall be made upon the actual issue of -4- such shares of Common Stock or such Convertible Securities upon the exercise of such Options, except as otherwise provided in subparagraph (3) below. (2) In case the Company at any time shall in any manner issue (whether directly or by assumption in a merger or otherwise) or sell any Convertible Securities, whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by dividing (x) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (y) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Purchase Price in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall (as of the date of the issue or sale of such Convertible Securities) be deemed to be outstanding and to have been issued and sold by the Company for such price per share. No adjustment of the Purchase Price shall be made upon the actual issue of such Common Stock upon exercise of the rights to exchange or convert under such Convertible Securities, except as otherwise provided in subparagraph (3) below. (3) If the purchase price provided for in any Option referred to in subparagraph (1) or the rate at which any Convertible Securities referred to in subparagraphs (1) or (2) are convertible into or exchangeable for Common Stock, shall be reduced at any time under or by reason of provisions with respect thereto designed to protect against dilution, then in case of the delivery of Common Stock upon the exercise of any such Option or upon conversion or exchange of any such Convertible Security, the Purchase Price then in effect hereunder shall forthwith be adjusted to such respective amount as would have been obtained had such Option or Convertible Security never been issued as to such Common Stock and had adjustments been made upon the issuance of the shares of Common Stock delivered as aforesaid, but only if as a result of such adjustment the Purchase Price then in effect hereunder is hereby reduced. (4) On the expiration or earlier termination of any Option or the termination of any right to convert or exchange any Convertible Securities, the Purchase Price then in effect hereunder shall forthwith be increased to the Purchase Price which would have been in effect at the time of such expiration or termination had such Option or Convertible Securities, to the extent outstanding immediately prior to such expiration or termination, never been issued. (5) In case any Options shall be issued in connection with the issue or sale of other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the -5- parties thereto, such Options shall be deemed to have been issued without consideration unless otherwise recorded on the Company's financial statements in accordance with generally accepted accounting principles. (6) In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold or deemed to have been issued or sold for cash, the consideration received therefor shall be deemed to be the amount received by the Company therefor. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be the fair value of such consideration as determined in good faith by the Board of Directors of the Company. In case any shares of Common Stock, Options or Convertible Securities shall be issued in connection with any merger in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving corporation as shall be attributed by the Board of Directors of the Company in good faith to such Common Stock, Options or Convertible Securities, as the case may be. (7) The number of shares of Common Stock outstanding at any given time shall not include shares owned, held by or for the account of the Company or cancelled, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock for the purpose of this Paragraph 3.1. (8) In case the Company shall declare a dividend or make any other distribution upon the stock of the Company payable in Options or Convertible Securities, then in such case any Options or Convertible Securities, as the case may be, issuable in payment of such dividend or distribution shall be deemed to have been issued or sold without consideration. (9) For purposes of this Paragraph 3.1, in case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (x) to receive a dividend or other distribution payable in Common Stock, Options or in Convertible Securities, or (y) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right or subscription or purchase, as the case may be. 3.2 Dividends Not Paid Out of Earnings or Earned Surplus. In the event the Company shall declare a dividend upon the Common Stock (other than a dividend payable in Common Stock) payable otherwise than out of earnings or earned surplus, determined in accordance with generally accepted accounting principles, including the making of appropriate deductions for minority interests, if any, in subsidiaries (herein referred to as "Liquidating Dividends"), then, as soon as possible after the exercise of this Warrant, the Company shall pay -6- to the person exercising such Warrant an amount equal to the aggregate value at the time of such exercise of all Liquidating Dividends (including but not limited to the Common Stock which would have been issued at the time of such earlier exercise and all other securities which would have been issued with respect to such Common Stock by reason of stock splits, stock dividends, mergers or reorganizations, or for any other reason). For the purposes of this Paragraph 3.2, a dividend other than in cash shall be considered payable out of earnings or earned surplus only to the extent that such earnings or earned surplus are charged an amount equal to the fair value of such dividend as determined in good faith by the Board of Directors of the Company. 3.3 Subdivisions and Combinations. In case the Company shall at any time (i) subdivide the outstanding Common Stock or (ii) issue a stock dividend on its outstanding Common Stock, the Purchase Price in effect immediately prior to such subdivision or dividend shall be proportionately reduced by the same ratio as the subdivision or dividend. In case the Company shall at any time combine its outstanding Common Stock, the Purchase Price in effect immediately prior to such combination shall be proportionately increased by the same ratio as the combination. 3.4 Reorganization, Reclassification, Consolidation, Merger or Sale of Assets. If any capital reorganization or reclassification of the capital stock of the Company, or consolidation or merger of the Company with or into another corporation, or the sale of all or substantially all of its assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, cash or other property with respect to or in exchange for Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger or sale, lawful and adequate provision shall be made whereby the Holder shall have the right to acquire and receive, upon exercise of this Warrant, such shares of stock, securities, cash or other property issuable or payable (as part of the reorganization, reclassification, consolidation, merger or sale) with respect to or in exchange for such number of outstanding shares of the Common Stock as would have been received upon exercise of this Warrant at the Purchase Price then in effect. The Company will not effect any such consolidation, merger or sale, unless prior to the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument mailed or delivered to the Holder at the last address of the Holder appearing on the books of the Company, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase. If a purchase, tender or exchange offer is made to and accepted by the holders of more than 50% of the outstanding shares of Common Stock of the Company, the Company shall not effect any consolidation, merger or sale with the person having made such offer or with any Affiliate of such person, unless prior to the consummation of such consolidation, merger or sale the Holder shall have been given a reasonable opportunity to then elect to receive upon the exercise of this Warrant either the stock, securities or assets then issuable with respect to the Common Stock or the stock, securities or assets, or the equivalent, issued to previous holders of the Common Stock in accordance with such offer. For purposes hereof the term "Affiliate" with respect to any given person shall mean any person controlling, controlled by or under common control with the given person. -7- 3.5 No Adjustment for Exercise of Certain Options, Warrants, Etc. The provisions of this Section 3 shall not apply to any Common Stock issued, issuable or deemed outstanding under subparagraphs 3.1(1) to (8) inclusive in respect of: (i) options issued under any Approved Plan as such term is defined in the Company's Certificate of Incorporation or if not so defined therein as defined in that certain Securities Purchase Agreement, dated as of July 30, 2001, by and among the Holder, Landmark Ventures VII, LLC, the Company and coolsavings.com inc. (the "Securities Purchase Agreement") (provided that when determining whether there are any options remaining for issuance under an Approved Plan, all shares issued and outstanding under such Approved Plan regardless of exercise price must be considered in such calculation), (ii) Options, Convertible Securities and conversion rights in existence on the date hereof, (iii) conversion of the Series B Preferred Stock, the Series C Preferred Stock or this Warrant, (iv) any issuance of additional shares of Series B Preferred Stock as a dividend, and (v) any issuance of additional shares of Series B Preferred Stock in accordance with Section 2.4 of the Securities Purchase Agreement. 3.6 Notices of Record Date, Etc. In the event that: (1) the Company shall declare any cash dividend upon its Common Stock, or (2) the Company shall declare any dividend upon its Common Stock payable in stock or make any special dividend or other distribution to the holders of its Common Stock, or (3) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights, or (4) there shall be any capital reorganization or reclassification of the capital stock of the Company, including any subdivision or combination of its outstanding shares of Common Stock, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation, or (5) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in connection with such event, the Company shall give to the Holder: (i) at least twenty (20) days' prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up; and (ii) in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least twenty (20) days' prior written notice of the date when the same shall take place. Such notice in -8- accordance with the foregoing clause (i) shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto, and such notice in accordance with the foregoing clause (ii) shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. Each such written notice shall be given by first class mail, postage prepaid, addressed to the Holder at the address of the Holder as shown on the books of the Company. 3.7 Grant, Issue or Sale of Options, Convertible Securities, or Rights. If at any time or from time to time on or after the date of issuance hereof, the Company shall grant, issue or sell any Options, Convertible Securities or rights to purchase property (the "Purchase Rights") pro rata to the record holders of any class of Common Stock and such grants, issuances or sales do not result in an adjustment of the Purchase Price under Paragraph 3.1 hereof, then the Holder shall be entitled to acquire (within thirty (30) days after the receipt by such holder of the notice concerning Purchase Rights to which such holder shall be entitled under Paragraph 3.6) and upon the terms applicable to such Purchase Rights either: (i) the aggregate Purchase Rights which the Holder could have acquired if it had held the number of shares of Common Stock acquirable upon exercise of this Warrant immediately before the grant, issuance or sale of such Purchase Rights; provided that if any Purchase Rights were distributed to holders of Common Stock without the payment of additional consideration by such holders, corresponding Purchase Rights shall be distributed to the exercising Holder as soon as possible after such exercise and it shall not be necessary for the Holder specifically to request delivery of such rights; or (ii) in the event that any such Purchase Rights shall have expired or shall expire prior to the end of said thirty (30) day period, the number of shares of Common Stock or the amount of property which the Holder could have acquired upon such exercise at the time or times at which the Company granted, issued or sold such expired Purchase Rights. 3.8 Adjustment by Board of Directors. If any event occurs as to which, in the opinion of the Board of Directors of the Company, the provisions of this Section 3 are not strictly applicable or if strictly applicable would not fairly protect the rights of the Holder in accordance with the essential intent and principles of such provisions, then the Board of Directors in good faith shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such rights as aforesaid, but in no event shall any adjustment have the effect of increasing the Purchase Price as otherwise determined pursuant to any of the provisions of this Section 3 except in the case of a combination of shares of a type contemplated in Paragraph 3.3 and then in no event to an amount larger than the Purchase Price as adjusted pursuant to Paragraph 3.3. 3.9 Fractional Shares. The Company shall not issue fractions of shares of Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any fraction of a share -9- of Common Stock would, except for the provisions of this Section 3.9, be issuable upon exercise of this Warrant, the Company shall in lieu thereof pay to the person entitled thereto an amount in cash equal to such fraction, calculated to the nearest one-hundredth (1/100) of a share, multiplied by the Market Price for the Common Stock, determined as of the date of exercise; provided, however, that if the Market Price is to be determined by the Company and the Holder and the parties are unable to reach agreement after a reasonable period of time, the Market Price shall be determined by the Company's Board of Directors in good faith rather than by an independent investment banking firm. 3.10 Officers' Statement as to Adjustments. Whenever the Purchase Price shall be adjusted as provided in Section 3 hereof, the Company shall forthwith file at each office designated for the exercise of this Warrant, a statement, signed by the Chairman of the Board, the President, any Vice President or Treasurer of the Company, showing in reasonable detail the facts requiring such adjustment and the Purchase Price that will be effective after such adjustment. The Company shall also cause a notice setting forth any such adjustments to be sent by mail, first class, postage prepaid, to the record Holder at his or its address appearing on the stock register. If such notice relates to an adjustment resulting from an event referred to in Paragraph 3.6, such notice shall be included as part of the notice required to be mailed and published under the provisions of Paragraph 3.6 hereof. 4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing, the Company will not increase the par value of any shares of stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise, and at all times will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable stock upon the exercise of this Warrant. 5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The Company shall at all times reserve and keep available out of its authorized but unissued stock, solely for the issuance and delivery upon the exercise of this Warrant and other similar Warrants, such number of its duly authorized shares of Common Stock as from time to time shall be issuable upon the exercise of this Warrant and all other similar Warrants at the time outstanding. 6. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to it, or (in the case of mutilation) upon surrender and cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of like tenor. -10- 7. REMEDIES. The Company stipulates that the remedies at law of the Holder in the event of any default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that the same may be specifically enforced. 8. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms, to all of which each taker or owner hereof consents and agrees: (a) Subject to the legend appearing on the first page hereof and applicable federal securities laws, title to this Warrant may be transferred by endorsement (by the Holder executing the form of assignment at the end hereof including guaranty of signature) and delivery in the same manner as in the case of a negotiable instrument transferable by endorsement and delivery. (b) Any person in possession of this Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is granted power to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof for value; each prior taker or owner waives and renounces all of his equities or rights in this Warrant in favor of every such bona fide purchaser, and every such bona fide purchaser shall acquire title hereto and to all rights represented hereby. (c) Until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder as the absolute owner hereof for all purposes without being affected by any notice to the contrary. (d) Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder of the Company with respect to shares for which this Warrant shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. (e) The Company shall not be required to pay any Federal or state transfer tax or charge that may be payable in respect of any transfer involved in the transfer or delivery of this Warrant or the issuance or conversion or delivery of certificates for Common Stock in a name other than that of the registered Holder or to issue or deliver any certificates for Common Stock upon the exercise of this Warrant until any and all such taxes and charges shall have been paid by the Holder or until it has been established to the Company's satisfaction that no such tax or charge is due. 9. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants issued pursuant to the provisions of this paragraph) is exchangeable, upon the surrender hereof by the Holder, at the principal office of the Company for any number of new warrants of -11- like tenor and date representing in the aggregate the right to subscribe for and purchase the number of shares of Common Stock which may be subscribed for and purchased hereunder. 10. MAILING OF NOTICES, ETC. All notices and other communications from the Company to the Holder shall be mailed by first-class certified mail, postage prepaid, to the address furnished to the Company in writing by the last holder of this Warrant who shall have furnished an address to the Company in writing. 11. HEADINGS, ETC. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect the meaning hereof. 12. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated orally but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought which, in the case of holders of the Warrant, shall be evidenced by the approval of a majority of the total Warrant Shares issued or issuable under this Warrant. 13. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. COOLSAVINGS, INC. By /s/ Matthew Moog ------------------------------ Name: /s/ Matthew Moog Title: President and Chief Executive Officer Dated: November 12, 2001 Attest: - ------------------------------ -12- [To be signed only upon exercise of Warrant] EXERCISE NOTICE --------------- CoolSavings, Inc. 360 N. Michigan Avenue, 19th Floor Chicago, IL 60601 Attention: Chief Financial Officer The undersigned hereby elects to purchase, pursuant to the provisions of the Common Stock Purchase Warrant to purchase shares of common stock, no par value per share, issued by coolsavings.com inc. (the "Company") and held by the undersigned, the original of which is attached hereto, and (check the applicable box): [ ] Tenders herewith payment of the Exercise Payment (as defined in the Warrant) in full in the form of cash, certified check, official bank check or wire transfer or check in the amount of $__________________ for _______________ such securities. [ ] Confirms that payment of the Exercise Payment (as defined in the Warrant) in full by means of a wire transfer in the amount of $__________________ for _______________ such securities has been made to the Company. [ ] Elects to surrender to the Company for cancellation securities of the Company having Market Price (as defined in the Warrant) on the date hereof equal to the Exercise Payment. -13- The undersigned hereby represents and warrants that the undersigned is acquiring such shares for its own account for investment purposes only, and not for resale or with a view to distribution of such shares or any part thereof. The undersigned requests that the certificates for such shares be issued in the name of, and be delivered to, ___________________________,whose address is ______________________________. Dated: - ------------------------------ ------------------------------ (Signature must conform in all respects to name of Holder as specified on the face of the Warrant) ------------------------------ Address -14- [To be signed only upon transfer of Warrant] FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________________ (the "Transferee") the right represented by the within Warrant to purchase __________________ shares of Common Stock of coolsavings.com inc. to which the within Warrant relates, and appoints ____________________ attorney to transfer said right on the books of coolsavings.com inc., with full power of substitution in the premises. Dated: - ------------------------------ ------------------------------ (Signature must conform in all respects to name of Holder as specified on the face of the Warrant) ------------------------------ Address In the presence of: - ------------------------------ Transferee hereby represents and warrants to coolsavings.com inc. that Transferee is an "accredited investor" as defined in Rule 501(a) of the Rules and Regulations promulgated under the Securities Act of 1933, as amended. ------------------------------ Transferee ------------------------------ Dated -15- [To be signed only on net issue exercise of the Warrant] NET ISSUE ELECTION ------------------ CoolSavings, Inc. 360 N. Michigan Avenue, 19th Floor Chicago, IL 60601 Attention: Chief Financial Officer The undersigned, the holder of the within Warrant, hereby irrevocably elects to exercise this Warrant with respect to ___________________________ shares of Common Stock of coolsavings.com inc. pursuant to the net issuance provisions set forth in Section 2.1 of this Warrant and requests that the certificates for the number of shares of Common Stock issuance pursuant to said Section 2.1 after application of the net issuance formula to such shares to be issued in the name of, and delivered to ___________________________________________________ , federal taxpayer identification number , whose address is ______________________________________________________________ . Dated: ------------------------------ ------------------------------ (Signature must conform to the name of holder as specified on the face of the Warrant) ------------------------------ ------------------------------ (Address) -16- EX-7 5 laco395470.txt SHAREHOLDERS AGREEMENT Exhibit 7 COOLSAVINGS, INC. SHAREHOLDERS' AGREEMENT ----------------------- THIS SHAREHOLDERS' AGREEMENT, dated as of the 12th day of November, 2001 (this "Agreement") among the investors listed on Schedule I hereto (the "Series B Investors"); the individuals whose names and addresses appear from time to time on Schedule II hereto (the "Management/Founding Investors" and with respect to Steven Golden and his affiliates thereon, "Golden," and with respect to Matthew Moog and his affiliates thereon, "Moog"); and CoolSavings, Inc., a Delaware corporation (the "Company"). The Series B Investors and the Management/Founding Investors are hereinafter collectively referred to as the "Investors". Capitalized terms not defined when used shall have the respective meanings given to such terms under Section 7(a) below. R E C I T A L S WHEREAS, the Series B Investors and/or their Affiliates have, pursuant to the terms of a Securities Purchase Agreement, dated July 30, 2001, as amended, with the Company (the "Purchase Agreement"), agreed to purchase shares of Series B Convertible Preferred Stock of the Company (the "Series B Preferred Stock"), a 12% Senior Secured Note executed by the Company (as may be amended from time to time) (the "Senior Secured Note"), and certain warrants (the "Warrants") to purchase shares of Common Stock (as defined below); and WHEREAS, the Management/Founding Investors hold Common Stock $0.001 per share of the Company (the "Common Stock" and, together with the Preferred Stock, the "Shares"); and WHEREAS, the Investors and the Company desire to promote their mutual interests by agreeing to certain matters relating to the operations of the Company and the disposition of the Shares of Management/Founding Investors. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows: 1. LEGENDS ON CERTAIN SHARES. (a) Legends. The certificates evidencing the Shares held by the Management/Founding Investors, if certificated, will bear the following legend reflecting the restrictions on the transfer of such securities contained in this Agreement: "The securities evidenced hereby are subject to the terms of that certain Shareholders' Agreement, dated as of November 12, 2001, by and among the Company and certain investors identified therein, which includes certain agreements and restrictions on transfer. A copy of this Agreement has been filed with the Secretary of the Company and is available upon request." As promptly as practicable after the date hereof, the Investors shall deliver all certificates representing any Shares to the Company to enable the Company to place the foregoing legend on such certificates. The Company may remove such legend upon request for a Transfer effected pursuant to this Agreement other than a Transfer to a Permitted Transferee. (b) Additional Investors. The parties hereto acknowledge that executive officers of the Company may become shareholders of the Company after the date hereof. As a condition to the issuance of shares of capital stock of the Company to them, the Company's compensation committee may require such executive officers to execute and deliver an agreement containing restrictions substantially similar to those set forth in Sections 1(a), 3(a) and 3(b) hereof in favor of the Company. In such event, the Company shall require such agreements to include terms that entitle the Series B Investors, at their option and in their discretion, to exercise the same rights as held by the Company in the event the Company does not exercise such rights. 2. NOTICES AND RIGHTS RE: MEETINGS AND COMMITTEES. (a) Election of Directors. The Company shall provide the Investors with not less than thirty (30) days' prior written notice of any intended mailing of a notice to shareholders for an annual meeting at which directors are to be elected (excluding elections made at special meetings or by written consent in which case notice shall be provided as required by the Bylaws). The Company agrees to nominate and recommend for election to the Reserved Series B Seats or the seats otherwise required for the Series B Directors only those representatives designated by the holders of shares of Series B Preferred Stock (acting by written consent or affirmative vote of the holders of a majority of the then outstanding shares of Series B Preferred Stock). If the Series B Investors/the holders of Series B Preferred Stock fail to give notice to the Company of their nominees for the Series B Directors, the designees then serving as Series B Directors shall be deemed designated for reelection; provided, such deemed designation shall not preclude the Series B Investors/the holders of Series B Preferred Stock from otherwise acting with respect to the designation and election of Reserved Series B Seats at any time and from time to time as permitted by the Charter. (b) Observer Rights. In addition to the foregoing, the holders of shares of Series B Preferred Stock (acting by written consent or affirmative vote of the holders of a majority of the then outstanding shares of Series B Preferred Stock) shall be entitled to have (and the Company shall permit) to at least one additional person attend meetings of the Board of Directors in an observational capacity (an "Observer"), and if the holders of the Series B Preferred Stock choose not to fill any of the Reserved Series B Seats reserved for the Series B Directors, then the holders of the shares of Series B Preferred Stock (acting by written consent or affirmative vote of the holders of a majority of the then outstanding shares of Series B Preferred Stock) shall be entitled to have (and the Company shall permit) an additional Observer for each unfilled seat. If a Series B Director is not able to attend a Board of Directors meeting or a meeting of a committee on which such Directors serve, such Director may designate any Person to attend in their place as an Observer. 2 3. RESTRICTIONS ON CERTAIN TRANSFERS AND OTHER COVENANTS. (a) Resale of Securities. No Management/Founding Investor shall Transfer any Shares other than in accordance with the provisions of this Section 3. Any Transfer or purported Transfer made in violation of this Section 3 shall be null and void and of no effect. (b) Rights of First Refusal - Share Transfers. (i) Limitations on Transfer. No Management/Founding Investor shall Transfer any of the Shares owned by him unless the Management/Founding Investor desiring to make the Transfer (hereinafter referred to as the "Transferor") shall have first made the offers to sell to the Series B Investors as contemplated by this Section 3(b), and such offers shall not have been accepted in accordance with the terms of this Section 3(b). (ii) Offer by Transferor. The Transferor shall provide the Series B Investors with a copy of a bona fide offer received by the Transferor from a third party together with (A) a written offer from the Transferor to sell to the Series B Investors all of the shares then proposed to be transferred by the Transferor (the "Subject Shares") to the third party, (B) a statement of intention by the Transferor to Transfer the Subject Shares to the third party, (C) the name and address of the third party, (D) the number of Subject Shares involved in the proposed Transfer, and (E) the terms of such Transfer; provided, however, if the Subject Shares are to be sold through a broker in the open market, the Transferor may, in lieu of identifying a specific third party and price, identify the broker and covenant that the Subject Shares shall be sold through a "limit order" at a specified minimum price ("Minimum Price") that shall not continue for more than sixty (60) days (the Subject Shares to be sold through the limit order with respect to Moog only, shall not exceed in number more than 20% of the average daily volume of the Company's shares traded during the immediately preceding thirty days). In no event will a Transferor be entitled to pursue a limit order transaction more than six (6) times in any twelve-month period. (iii) Acceptance of Offer. (A) Within fifteen (15) business days (four (4) business days in the case of a limit order transaction) after the receipt of the offer described in Section 3(b)(ii), the Series B Investors may, at their option, elect to purchase all of the Subject Shares (or any part if a limit order transaction is proposed). The Series B Investors shall give notice of their intention to exercise, or that they do not intend to exercise their option hereunder, to the Transferor within such 15-day (or 4-day) period. The Series B Investors shall purchase all (or any part, as applicable) of the Subject Shares as they shall agree upon among themselves. (B) The notice required to be given by the purchasing party (the "Purchaser") shall specify a date for the closing of the purchase which shall not be more than thirty (30) days after the date of the giving of such notice. (iv) Purchase Price. The purchase price per share for the Subject Shares shall be the price per share offered to be paid by the prospective transferee described in 3 the offer (or the Minimum Price, as applicable), which price shall be paid in cash or, if so provided in the offer of the prospective transferee, cash plus deferred payments of cash in the same proportions, and with the same terms of deferred payment as therein set forth. (v) Consideration Other Than Cash. If the offer of Subject Shares under this Section 3(b) is for consideration other than cash or cash plus deferred payments of cash, the Purchaser shall pay the cash equivalent of such other consideration. If the Transferor and the Purchaser cannot agree on the amount of such cash equivalent within ten (10) days after the beginning of the 15-day (or 4-day) period under Section 3(b)(iii)(A), any of such parties may, by three (3) days' written notice to the other, initiate appraisal proceedings under Section 3(b)(vi) for determination of the cash equivalent. The Purchaser may give written notice to the Transferor revoking an election to purchase the Subject Shares within five (5) days after determination of the appraised value, if it chooses not to purchase the Subject Shares. (vi) Appraisal Procedure. If any party shall initiate an appraisal procedure to determine the amount of the cash equivalent of any consideration for Subject Shares under Section 3(b)(v), then the Transferor, on the one hand, and the Purchaser, on the other hand, shall each promptly appoint as an appraiser an individual who shall be a member of a nationally-recognized investment banking firm. Each appraiser shall, within thirty (30) days of appointment, separately investigate the value of the consideration for the Subject Shares as of the proposed transfer date and shall submit a notice of an appraisal of that value to each party. Each appraiser shall be instructed to determine such value without regard to income tax consequences to the Transferor as a result of receiving cash rather than other consideration. If the appraised values of such consideration (the "Earlier Appraisals") vary by less than ten percent (10%), the average of the two appraisals on a per share basis shall be controlling as the amount of the cash equivalent. If the appraised values vary by more than ten percent (10%), the appraisers, within ten (10) days of the submission of the last appraisal, shall appoint a third appraiser who shall be member of a nationally recognized investment banking firm. The third appraiser shall, within thirty (30) days of his appointment, appraise the value of the consideration for the Subject Shares (without regard to the income tax consequences to the Transferor as a result of receiving cash rather than other consideration) as of the proposed transfer date and submit notice of his appraisal to each party. The value determined by the third appraiser shall be controlling as the amount of the cash equivalent unless the value is greater than the two Earlier Appraisals, in which case the higher of the two Earlier Appraisals will control, and unless that value is lower than the two Earlier Appraisals, in which case the lower of the two Earlier Appraisals will control. If any party fails to appoint an appraiser or if one of the two initial appraisers fails after appointment to submit his appraisal within the required period, the appraisal submitted by the remaining appraiser shall be controlling. The Transferor and the Purchaser shall each bear the cost of its respective appointed appraiser. The cost of the third appraisal shall be shared one-half by the Transferor and one-half by the Purchaser. (vii) Closing of Purchase. The closing of the purchase shall take place at the office of the Company or such other location as shall be mutually agreeable and the purchase price, to the extent comprised of cash, shall be paid at the closing, and cash equivalents and documents evidencing any deferred payments of cash permitted pursuant to Section 3(b)(iv) above shall be delivered at the closing. At the closing, the Transferor shall deliver to the 4 Purchaser the certificates evidencing the Subject Shares to be conveyed, duly endorsed and in negotiable form with all the requisite documentary stamps affixed thereto. (viii) Release from Restriction; Termination of Rights. If the offer to sell is not accepted by the Series B Investors within the applicable time provided for acceptance, the Transferor may make a bona fide Transfer to the prospective transferee named (or pursuant to the qualifying limit order described) in the statement attached to the offer in accordance with the agreed upon terms of such Transfer and the Transferee shall acquire the Subject Shares free and clear of the terms of this Agreement, provided, that such Transfer shall be made only in strict accordance with the terms therein stated. If the Transferor shall fail to make such Transfer within sixty (60) days following the expiration of the time hereinabove provided for the election by the Series B Investors or, in the event the Purchaser revokes an election to purchase the Subject Shares pursuant to Section 3(b)(v), within sixty (60) days of the date of such notice of revocation, such Shares shall again become subject to all the restrictions of this Section 3. (ix) Limitations. The provisions of this Section 3 shall not apply to (i) sales by Tag-Along Investors (as defined below) pursuant to Section 3(c) hereof, (ii) Transfers to Permitted Transferees or to the Company, (iii) Transfers by Moog made subsequent to thirty (30) days after his employment with the Company has been terminated by the Company without cause or upon his death or permanent disability (where applicable as defined in Moog's employment agreement) (iv) Transfers by Golden's estate or personal representative after his death or (v) Transfers by any Management/Founding Investor which, when aggregated with all other Transfers by such Management/Founding Investor, result in the Transfer of less than the greater of (A) five percent (5%) of the Shares owned by the Management/Founding Investor as of the date hereof and (B) fifty thousand (50,000) of the Shares owned by the Management/Founding Investor. (x) Assignment. The rights granted to the Series B Investors under this Section 3(b) may be freely assigned or otherwise transferred severally by the Series B Investors to any Affiliate or to any non-Affiliate, provided such non-Affiliate acquires at least twenty percent (20%) of the shares of Series B Preferred Stock originally owned by the original holder of the Series B Preferred Stock. (c) Tag-Along Rights. In the event the Series B Investors do not exercise their rights of first refusal as to all of the Subject Shares pursuant to Section 3(b) hereto and any Management/Founding Investor intends to consummate the Transfer of any of its Shares (other than Transfers to any Permitted Transferee or to the Company), such Management/Founding Investor (the "Selling Investor") shall notify the Series B Investors (the "Tag-Along Investors") and the Company in writing, of such proposed Transfer and its terms and conditions in the notice specified in Section 3(b) above. Each Tag-Along Investor that so notifies the Selling Investor (pursuant to the same terms and conditions regarding notice set forth in Section 3(b) above) shall have the right to sell, at the same price and on the same terms and conditions as the Selling Investor, an amount of Shares equal to the Shares the third party actually proposes to purchase multiplied by a fraction, the numerator of which shall be the number of Shares owned by such Tag-Along Investor on the date of notice and the denominator of which shall be the aggregate number of Shares owned by the Selling Investor and each Tag-Along Investor exercising its rights under this Section 3(c) on the date of notice; provided, however, that if any Tag-Along 5 Investor has, on the date of notice, the ability to immediately liquidate pursuant to Rule 144 of the Securities Act of 1933, as amended, at a price above the then applicable Conversion Price, a number of Shares equal to the number of Shares such Tag-Along Investor would otherwise be entitled to sell pursuant to the rights granted under this Section 3(c), then such Tag-Along Investor shall not be entitled to the benefit of this Section 3(c). The rights granted to the Series B Investors under this Section 3(c) may be freely assigned or otherwise transferred severally by the Series B Investors to any Person acquiring at least twenty percent (20%) of the shares of Series B Preferred Stock originally owned by the original holder of the Series B Preferred Stock. (d) Right of First Offer - Equity or Debt Financings. (i) If at any time after the date hereof, the Company proposes to issue any Debt or Equity other than (i) the issuance of the Series B Preferred Stock to the Series B Investors, the Series C Preferred Stock, the Warrants, or any shares issuable as a result of the conversion or exercise of such securities, or Debt or Equity issued pro rata to all of the Series B Investors, (ii) pursuant to the acquisition of another person by the Company, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such person or otherwise, or (iii) pursuant to an employee stock option plan, stock bonus plan, stock purchase plan or other management equity program approved by the Company's Board of Directors including the affirmative vote of at least one Series B Director (collectively, "Exempt Issuances"), the Company shall: (A) give written notice setting forth in reasonable detail (1) the designation and all of the terms and provisions of the securities (whether Debt or Equity) proposed to be issued (the "Proposed Securities"), including, where applicable, the voting powers, preferences and relative participating, optional or other special rights, and the qualification, limitations or restrictions thereof and interest rate and maturity; (2) the price and other terms of the proposed sale of such securities; (3) the amount of such securities proposed to be issued; and (4) such other information as the Investors may reasonably request in order to evaluate the proposed issuance; and (B) offer to issue to the Series B Investors the Proposed Securities. (ii) The Series B Investors must exercise their purchase rights hereunder within fifteen (15) business days after receipt of such notice from the Company. The Series B Investors shall purchase the Proposed Securities as they shall agree among themselves. (iii) If the Series B Investors shall not have elected to exercise their purchase rights hereunder prior to the expiration of the offering period described above, the Company will be free to sell the Proposed Securities during the ninety (90) days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to the Series B Investors. Any Proposed Securities offered or sold by the Company after such 90-day period must be reoffered to the Series B Investors pursuant to this Section 3(d). (iv) The election by the Series B Investors not to exercise their right of first refusal under this Section 3(d) in any one instance shall not affect their right (other than in 6 respect of a reduction in their percentage holdings) as to any subsequent proposed issuance. Any sale of such Debt or Equity by the Company without first giving the Series B Investors the rights described in this Section 3(d) shall be void and of no force and effect. (v) The rights granted to the Series B Investors under this Section 3(d) may be freely assigned or otherwise transferred severally by the Series B Investors to any Affiliate or to any non-Affiliate, provided such non-Affiliate acquires at least twenty percent (20%) of the shares of Series B Preferred Stock originally owned by the original holder of the Series B Preferred Stock. (e) Subscription Right. (i) Notwithstanding the foregoing, if the Company issues such Proposed Securities pursuant to Section 3(d) in a transaction other than an Exempt Issuance after the Series B Investors have failed to exercise their purchase rights under such section, the Company shall nonetheless: (A) offer to sell to each such Series B Investor, on the same terms and subject to the same conditions as the sale of the Proposed Securities to non-Series B Investors, a portion of the Proposed Securities equal to a percentage determined by dividing (x) the number of shares of Common Stock owned by such Series B Investor (calculated on an as-converted and as-exercised basis), by (y) the total number of shares of Common Stock then outstanding (calculated on an as-converted and as-exercised basis). (ii) Each such Series B Investor must exercise its purchase rights under this Section 3(e) within five (5) business days after receipt of such notice from the Company of such subscription right. If all of the Proposed Securities offered to such Series B Investors are not fully subscribed by such Series B Investors, the remaining (unsubscribed) Proposed Securities will be reoffered to the Series B Investors purchasing their full allotment upon the terms set forth in this Section 3(e), until all such Proposed Securities are fully subscribed for or until all such Series B Investors have subscribed for all such Proposed Securities which they desire to purchase, except that such Series B Investors must exercise their purchase rights within five days after receipt of all such reoffers. To the extent that the Company offers two or more securities in units, Series B Investors must purchase such units as a whole and will not be given the opportunity to purchase only one of the securities making up such unit. (iii) Upon the expiration of the offering periods described above, the Company will be free to sell such Proposed Securities that the Series B Investors have not elected to purchase during the ninety (90) days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to such holders. Any Proposed Securities offered or sold by the Company after such 90-day period must be reoffered to the Investors pursuant to this Section 3(e) (iv) The election by a Series B Investor not to exercise its subscription rights under this Section 3(e) in any one instance shall not affect its right (other than in respect of a reduction in its percentage holdings) as to any subsequent proposed issuance. Any sale of such 7 securities by the Company without first giving the Series B Investors the rights described in this Section 3(e) shall be void and of no force and effect. (v) The rights granted to the Series B Investors under this Section 3(e) may be freely assigned or otherwise transferred severally by the Series B Investors to any Affiliate or to any non-Affiliate, provided such non-Affiliate acquires at least twenty percent (20%) of the shares of Series B Preferred Stock originally owned by the original holder of the Series B Preferred Stock. (f) The terms of this Section 3 shall terminate and be of no further force and effect as of the date the Series B Investors and their Affiliates own (on an as-converted and as-exercised basis) less than fifteen percent (15%) of the Common Stock. 4. TERMINATION. (a) The Agreement shall terminate on the earlier of (1) the date which the Series B Investors and the Management/Founding Investors owning a majority of the shares of Common Stock (excluding outstanding options) owned by the Management/Founding Investors shall have agreed in writing to terminate this Agreement or (2) ten (10) years from the date hereof. 5. BLOCKING RIGHTS. (a) In addition to any other rights provided by law, the Company shall not, and shall not permit any subsidiary (a "Subsidiary") to, without first obtaining the affirmative vote or written consent of the Series B Investors that own a majority of the outstanding shares of Series B Preferred Stock: (i) amend the Company's articles of incorporation or bylaws in any manner. (ii) merge, consolidate, or otherwise combine the Company with or into any other entity, or effect any sale, lease, license, assignment (for the benefit of creditors or otherwise), transfer or other conveyance or disposition of any material portion of the assets of the Company or any of its Subsidiaries, or any consolidation, merger or share exchange involving the Company or any Subsidiary or any reclassification or other change of any stock, or any recapitalization, or any dissolution, liquidation or winding up of the Company; (iii) acquire, by purchase, exchange, merger, consolidation or other business combination, lease, assignment, or other transfer or conveyance, or series of transfers or conveyances, of, all or substantially all of the properties or assets of any other corporation, entity or business (as determined in accordance with Rule 11-01(d) of Regulation S-X promulgated by the Securities and Exchange Commission), or enter into a joint venture or partnership with any other entity, in each case involving the payment of consideration or contribution by the Company or any Subsidiary in an aggregate amount or value in excess of $1,000,000; (iv) purchase, redeem or otherwise acquire for value (or pay into or set aside as a sinking fund for such purpose) any of the capital stock of the Company; provided, that 8 this provision shall not apply to the repurchase of shares of capital stock from directors, officers, employees or consultants or of advisers to the Company or any Subsidiary pursuant to agreements under which the Company has the option to repurchase such shares upon the occurrence of certain events, including the termination of employment by or service to the Company or any Subsidiary; (v) permit any Subsidiary to issue or sell, or obligate itself to issue or sell, except to the Company or a wholly owned Subsidiary, any stock of such Subsidiary, if after giving effect to such issuance or sale, the Company or a wholly owned Subsidiary would own less than eighty percent (80%) of the outstanding stock of such Subsidiary on a fully diluted basis; (vi) authorize, issue or obligate itself to issue any stock or similar security, including, without limitation, securities containing equity features and securities containing profit participation features, or any security convertible or exchangeable, with or without consideration, into or for any stock or similar security, or any security carrying any warrant or right to subscribe for or purchase any stock or similar security, or any such warrant or right (an "Equity Security") except in exchange for (a) cash (if otherwise permitted), (b) shares issuable upon exercise or conversion of the Series B Preferred Stock, the Series C Preferred Stock or the warrants to purchase common stock issued to Landmark Communications, Inc. or certain of its affiliates or transferees (collectively, "Landmark") (the "Warrants") in connection with the Company's issuance and sale of a Senior Secured Note to Landmark in the aggregate principal amount of $5,000,000 dated July 30, 2001 (as may be amended, the "Senior Secured Note"), or (c) shares of Common Stock or options to purchase Common Stock pursuant to an option or incentive plan approved by the Board of Directors, provided such approval included the affirmative vote of one of the Series B Directors (an "Approved Plan") provided the aggregate number of options, warrants or any other type of rights or equity securities issued and outstanding under any such Approved Plan shall not exceed 7,953,954 plus up to 1,800,000 options issued in connection with the cancellation of options issued under the Company's 1997 Stock Option Plan and reissuance under an Approved Plan as contemplated by the Purchase Agreement; (vii) authorize or issue, or obligate itself to issue (a) any shares of Series B Preferred Stock or capital stock exchangeable or convertible into Series B Preferred Stock to any person other than to a Series B Investor or (b) Equity Securities ranking senior to or on a parity with the Series B Preferred Stock as to dividend or redemption rights, liquidation preferences, conversion rights, voting rights or otherwise, or reclassify any Equity Security such that it ranks senior to or on a parity with the Series B Preferred Stock as to dividend or redemption rights, liquidation preferences, conversion rights, voting rights or otherwise; (viii) increase or decrease (other than by the redemption or conversion of the Series B Preferred Stock as provided herein) the total number of authorized shares of Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock or issue any additional shares of any such series of Preferred Stock or declare or pay any dividends or declare or make any other distribution, direct or indirect (other than a dividend payable solely in shares of Common Stock or paid in kind on the Series B Preferred Stock) on account of any Equity Security or set apart any sum for any such purpose; 9 (ix) adopt any stock option, stock purchase or similar incentive plan or arrangement other than an Approved Plan, amend any Approved Plan or amend any stock option, restricted stock award, stock purchase right or other incentive award or grant issued or granted pursuant to an Approved Plan; (x) enter into or permit any Subsidiary to enter into any agreement, indenture or other instrument which contains any provisions restricting the Company's obligation to make prepayments or payments in kind under or redemptions of the Senior Secured Note or pay dividends, make payments in kind or effect redemptions of the Series B Preferred Stock; (xi) enter into any transaction with an officer, director, employee or holder of more than five percent (5%) of the Company's capital stock (other than with the holders of the Series B Preferred Stock or Landmark or its affiliates) or any affiliate thereof other than in the ordinary course of business; (xii) enter into any agreement which restricts the Company from engaging in any business practice without the approval of the majority of the Board of Directors, including the affirmative vote of the Series B Directors; (xiii) create any Subsidiary; (xiv) amend, alter or rescind any term of the Forbearance Agreement between the Company and American National Bank dated as of June 15, 2001, as amended July 27, 2001, or the Forbearance Agreement between the Company and Midwest Guaranty Bank dated as of July 27, 2001; (xv) create, incur or become or remain liable with respect to any indebtedness in an aggregate amount in excess of $500,000, or make (or permit any Subsidiary to make) any loan or advance to, or own any stock or other securities of, any corporation, partnership, or other entity other than a Subsidiary which is at least eighty percent (80%) owned by the Company; (xvi) make any loan or advance to any person, including, without limitation, any employee or director of the Company or any Subsidiary, except travel advances and similar expenditures in the ordinary course of business or under the terms of an Approved Plan, or guarantee directly or indirectly any indebtedness, except for trade accounts of any Subsidiary arising in the ordinary course of business; (xvii) amend, modify or waive compliance with the terms of any employment agreements with employees of the Company, including without limitation any non-competition, non-solicitation or non-disclosure clauses contained therein or elsewhere; (xviii) hire, terminate or replace the Chief Executive Officer, the President/Chief Operating Officer, Chief Financial Officer, Chief Technology Officer, or Executive Vice President--Business Development; 10 (xix) enter into any material agreements, joint venture agreements, license agreements revenue sharing agreements, or other arrangements which allocate revenues to a third party or obligate the Company to pay any kind of fees which, individually, would exceed $250,000 per year, or $750,000 over the term of such arrangement, or which when combined with all similar arrangements would involve fees in excess of $2,000,000; or (xx) enter into any material agreements, joint venture agreements, license agreements revenue sharing agreements, alliances or other arrangements which allocate revenues to a third party or obligate the Company to perform any services which on an arms length basis calculated at fair market value, individually would exceed $250,000 per year, or $750,000 over the term of such arrangement, or which when combined with all similar arrangements would involve in kind services on an arms length basis calculated at fair market value in excess of $2,000,000. 6. CONVERSION COVENANT. The Series B Investors hereby agree not to request the conversion of their shares of Series B Preferred Stock until the earliest of (i) the first anniversary of the date hereof, (ii) a Change of Control (as defined under the Charter), and (iii) any breach under the Purchase Agreement or any default under the Senior Secured Note or that certain Amended and Restated Loan and Security Agreement between the Company and Landmark Communications, Inc. dated as of July 30, 2001. 7. INTERPRETATION OF THIS AGREEMENT. (a) Terms Defined. As used in this Agreement, the following terms have the respective meaning set forth below: Affiliate: shall mean any Person or entity, directly or indirectly controlling, controlled by or under common control with such Person or entity. Charter: shall mean the Company's certificate of incorporation, as amended from time to time. Debt: shall mean any indenture, mortgage, deed of trust, credit agreement, loan, note or any other evidence of indebtedness. Equity: shall mean a grant by the Company at any time and in any manner of Common Stock or any rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or other securities convertible into or exchangeable for Common Stock (whether directly or by assumption in a merger or otherwise). Exchange Act: shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. Permitted Transferee: shall mean members of a Management/Founding Investor's family, heirs, executors or legal representatives trusts or any other person formed or used for the benefit of such Management/Founding Investor's family for purposes of estate 11 planning; provided, in each instance, that such transferee agrees to be bound by the provisions of this Agreement as if such transferee were an original signatory hereto. Person: shall mean an individual, partnership, joint-stock company, corporation, limited liability company, trust or unincorporated organization, and a government or agency or political subdivision thereof. Reserved Series B Seats: shall have the meaning given such term under the Charter. Securities: shall have the meaning set forth in Section 2(1) of the Securities Act. Securities Act: shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. Series B Directors: shall have the meaning given such term under the Charter. Transfer: shall mean any sale, assignment, pledge, hypothecation, or other disposition or encumbrance. (b) Accounting Principles. Where the character or amount of any asset or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with U.S. generally accepted accounting principles at the time in effect, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement. (c) Directly or Indirectly. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. (d) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State. (e) Section Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. 8. MISCELLANEOUS. (a) Notices. (i) All communications under this Agreement shall be in writing and shall be delivered by hand or facsimile or mailed by overnight courier or by registered or certified mail, postage prepaid: (A) if to any of the Investors, at the address or facsimile number of such Investor shown on Schedule I or Schedule II, as applicable, or at such other 12 address as the Investor may have furnished the Company and the other Investors in writing, with a copy to Willkie Farr & Gallagher, 787 Seventh Avenue, New York, NY 10019 (facsimile: (212) 728-8111), Attention: William J. Grant, Jr., and a copy to Willcox & Savage, P.C., 1800 Bank of America Center, Norfolk, VA 23510 (facsimile: (757) 628-5566), Attention: Thomas C. Inglima; and (B) if to the Company, at 360 N. Michigan Avenue, 19th Floor, Chicago, IL 60601 (facsimile: (312) 853-0456), Attention: Robert Gorman, or at such other address as it may have furnished in writing to each of the Investors, with a copy to Jaffe, Raitt, Heuer & Weiss, P.C., One Woodward Avenue, Suite 2400, Detroit, MI 48226 (facsimile: (313) 961-8358), Attention: Peter Sugar. (ii) Any notice so addressed shall be deemed to be given: if delivered by hand or facsimile, on the date of such delivery; if mailed by courier, on the first business day following the date of such mailing; and if mailed by registered or certified mail, on the third business day after the date of such mailing. (b) Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by a party pursuant hereto, and (iii) financial statements, certificates and other information previously or hereafter furnished to a party, may be reproduced by such party by photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and such party may destroy any original document so reproduced. All parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by each Investor in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. (c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. (d) Entire Agreement; Amendment and Waiver. This Agreement and the Purchase Agreement constitute the entire understanding of the parties hereto relating to the subject matter hereof and supersede all prior understandings among such parties. This Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of each Series B Investor, the Management/Founding Investors owning a majority of the shares of Common Stock (excluding outstanding options) owned by the Management/Founding Investors and the Company. This Agreement shall not become effective and the terms and provisions herein shall be of no force and effect unless and until all parties hereto have executed and delivered the Agreement. (e) Severability. In the event that any part or parts of this Agreement shall be held illegal or unenforceable by any court or administrative body of competent jurisdiction, such determination shall not affect the remaining provisions of this Agreement which shall remain in full force and effect. 13 (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. (g) Injunctive Relief. The Company and the Investors hereby declare that it is impossible to measure in money the damages which will accrue to the parties hereto by reason of the failure of any Investor or the Company to perform any of its obligations set forth in this Agreement. Therefore, in addition to and not in limitation of any other rights and remedies, the Company and each of the Investors shall have the right to specific performance of such obligations (without the showing of special, imminent or irreparable damages and without any obligation to post bond or other security or surety), and if any party hereto shall institute any action or proceeding to enforce the provisions hereof, each of the Company and the Investors hereby waives the claim or defense that the party instituting such action or proceeding has an adequate remedy at law. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGES FOLLOW] 14 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. COOLSAVINGS, INC. By: /s/ Matthew Moog ------------------------------ Name: Matthew Moog Title: Chief Executive Officer LANDMARK VENTURES VII, LLC By: /s/ Richard A. Fraim ------------------------------ Name: Richard A. Fraim Title: Vice President, Secretary and Treasurer STEVEN M. GOLDEN /s/ Steven M. Golden ------------------------------ STEVEN M. GOLDEN REVOCABLE LIVING TRUST DATED 3/3/98 By: /s/ Steven M. Golden ------------------------------ Name: Steven M. Golden Title: Trustee STEVEN M. GOLDEN L.L.C. By: /s/ Steven M. Golden ------------------------------ Name: Steven M. Golden Title: Member MATTHEW MOOG /s/ Matthew Moog ------------------------------ MOOG INVESTMENT PARTNERS LP By: /s/ Matthew Moog ------------------------------ Name: Matthew Moog Title: General Partner [SHAREHOLDERS AGREEMENT] SCHEDULE I Series B Investors ------------------ Name Address - ---- ------- Landmark Ventures VII, LLC 150 W. Brambleton Avenue Norfolk, VA 23510 Facsimile: (757) 664-2164 Attention: Guy R. Friddell, III Executive Vice President and General Counsel - -------------------------------------------------------------------------------- SCHEDULE II Management/Founding Investors ----------------------------- Name Address - ---- ------- Steven M. Golden 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 Steven M. Golden Revocable Living Trust 360 N. Michigan Ave., 19th Floor dated 3/3/98; Steven M. Golden as Chicago, Illinois 60601 Trustee Steven M. Golden L.L.C. 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 Matthew Moog 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 Moog Investment Partners LP 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 - -------------------------------------------------------------------------------- EX-9 6 laco396849.txt AMENDED AND RESTATED SIDE AGREEMENT Exhibit 9 AMENDED AND RESTATED -------------------- SIDE AGREEMENT -------------- THIS AMENDED AND RESTATED SIDE AGREEMENT, dated as of the 16th day of August, 2001 (this "Agreement") among Landmark Ventures VII, LLC, a Delaware limited liability company ("LV"), Landmark Communications, Inc., a Virginia corporation ("LCI" and together with LV, each a "Landmark Party" and collectively the "Landmark Parties"), and the investors listed on Schedule I hereto (the "Initial Investors"). The Landmark Parties and the Initial Investors are hereinafter collectively referred to as the "Investors". Capitalized terms not defined when used shall have the respective meanings given to such terms under Section 5(a) below. R E C I T A L S WHEREAS, LV and LCI have, pursuant to the terms of a Securities Purchase Agreement, dated July 30, 2001 (the "Purchase Agreement"), with coolsavings.com inc., a Michigan corporation (the "Company", which as used herein shall also mean the surviving corporation to the reincorporation merger contemplated by the Purchase Agreement), agreed to purchase shares of Series B Convertible Preferred Stock of the Company (the "Series B Preferred Stock"), a 12% Senior Secured Note executed by the Company (as may be amended from time to time) (the "Senior Secured Note"), and certain warrants (the "Warrants") to purchase shares of Common Stock (as defined below); and WHEREAS, pursuant to the conditions to closing under the Purchase Agreement, certain of the Initial Investors will acquire shares of Series C Convertible Preferred Stock of the Company (the "Series C Preferred Stock," and, collectively with the Series B Preferred Stock, the "Preferred Stock"); and WHEREAS, all of the Initial Investors hold Common Stock $0.001 per share of the Company (the "Common Stock" and, together with the Preferred Stock, the "Shares"); and WHEREAS, the Investors entered into a letter agreement dated July 30, 2001 (the "Initial Side Agreement"), and desire to further their mutual interests by amending and restating the Initial Side Agreement in its entirety on the terms set forth below. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows: 1. LEGENDS. The certificates evidencing the Shares acquired by the Landmark Parties pursuant to the Purchase Agreement and those evidencing the Shares held or acquired by the Initial Investors, if certificated, will bear the following legend reflecting the restrictions on the transfer of such securities contained in this Agreement: -1- "The securities evidenced hereby are subject to the terms of that certain Side Agreement, dated as of August 16, 2001, by and among certain investors identified therein, which includes certain voting agreements. A copy of this Agreement has been filed with the Secretary of the Company and is available upon request." As promptly as practicable after the date hereof, the Investors shall deliver all certificates representing any Shares to the Company to enable the Company to place the foregoing legend on such certificates. The Company may remove such legend a certificate upon request by an Investor in connection with a sale of the shares represented by the certificate. 2. BOARD OF DIRECTORS. (a) Election of Directors. (i) As of the date of the First Tranche Closing (as defined under the Purchase Agreement), the Board of Directors of the Company (the "Board") shall consist of Steven M. Golden, Richard H. Rogel, Hugh R. Lamle, Matthew Moog, Arthur A. Weiss and Gary S. Briggs and up to seven (7) representatives designated by the holders of the outstanding Series B Preferred Stock (as of the date of the First Tranche Closing, LV) as provided under the Company's certificate of incorporation, as amended (the "Charter") (each representative designated by the holders of the Series B Preferred Stock from time to time, a "Series B Director"). (ii) From the date of the First Tranche Closing, and at all times while the Series B Preferred Stock is outstanding, the Investors shall take all reasonable action within their respective power, including but not limited to, the voting (to the extent permitted by law) of all shares of capital stock of the Company owned by them or over which they have voting control, required (A) to cause the Board to consist of no less than seven (7) and no more than the applicable Whole Board Limit or Reset Board Limit (each as defined in the Charter) and (B) upon receipt of a written consent from the holders of the Series B Preferred Stock representing a majority of the then outstanding shares of Series B Preferred Stock (the "Acting Series B Holders"), to appoint and elect the number of Series B Directors required to fill the Reserved Series B Seats (as defined in the Charter). As used herein, "all reasonable action" or "all action" shall include, without limitation, the execution of written consents, the calling of special meetings, and the execution of waivers of notice and attendance at meetings. (iii) In the event (each a "Default") that the Company fails for any reason (A) to pay any quarterly dividend with respect to the Series B Preferred Stock as required by the Charter, or (B) to make any redemption payment required pursuant to the Charter, then, in any such case, upon five (5) days written notice to the Initial Investors given at any time following and during the continuance of any Default, the holders of Series B Preferred Stock shall as a class become entitled to "Special Voting Rights" as defined and described in the Charter and the Investors shall take all action within their respective power to effect the change in Board composition required by the Special Voting Rights provision of the Charter. -2- (iv) (A) From and after the date of the First Tranche Closing, LV and the other holders of Series B Preferred Stock shall be allowed to vote on an as-converted basis in the general election of Board members (the "At-Large Directors") for those Board seats that are not Reserved Series B Seats or otherwise required for Series B Directors (the "At-Large Seats") as provided under the Charter; provided, however, that with respect to the election of directors to such At-Large Seats, until May 31, 2005 and subject to the limitations in Section 2(a)(iv)(B) below, (1) the Landmark Parties shall vote all shares of capital stock of the Company owned by them for one person (a "Special Designee") nominated by each of Steven M. Golden, Richard H. Rogel and Hugh R. Lamle (each, a "Designated Investor"), (2) if a Special Designee is removed, with or without cause (and such removal was not required to effect the Special Voting Rights of the holders of the Series B Preferred Stock), the Landmark Parties shall vote all shares of capital stock of the Company owned by the Landmark Parties for another person nominated by the applicable Designated Investor, and (3) each Designated Investor may request that the Landmark Parties vote with them to remove their Special Designee, in which case the Landmark Parties shall vote all shares of capital stock of the Company owned by them in accordance with such request. (B) No Designated Investor may transfer or assign his rights under this Section 2(a)(iv). In addition, the Landmark Parties' obligations to a Designated Investor under this Section 2(a)(iv) shall terminate if at any time: (1) the Designated Investor fails to request the nomination and election of a replacement director within thirty (30) days after the resignation or removal of the Designated Investor's previous Special Designee, (2) the Designated Investor beneficially owns less than fifty percent (50%) of the shares of capital stock of the Company (calculated on an as-exercised and as-converted basis) beneficially owned by such Designated Investor as of the consummation of the First Tranche Closing, or (3) the shares of Common Stock beneficially owned by a Designated Investor constitute less than one percent (1%) of the Common Stock of the Company (measured on an as-converted basis). (b) Removal of Directors. Upon LV's written request made at any time prior to the Second Tranche Closing (as defined under the Purchase Agreement) or, if the Second Tranche Closing does not occur and the Reset Board Limit applies, then at any time that the Special Voting Rights apply, the Investors agree to promptly take all reasonable action within their respective power, including but not limited to, the voting (to the extent permitted by law) of capital stock of the Company owned by them, to remove, with or without cause, any At-Large Director whose removal would be necessary to give LV majority representation on the Board after such removal with only four (4) of the Reserved Series B Seats being filled. (c) Committees and Subsidiary Boards. Each Investor agrees to take all reasonable actions to cause the Company's Bylaws (including the Bylaws of the surviving entity to the reincorporation merger) to provide that the number of Series B Directors entitled to serve on any committee (including, without limitation any Executive, Audit or Compensation Committees) ("Committee"), and on the board of directors of any subsidiary of the Company (a "Subsidiary Board") shall bear the same proportion to the number of members of the whole committee or whole subsidiary board, as applicable, as the Reserved Series B Seats bears to the Designated Number (as defined in the Charter) of the Company's Board. -3- (d) No Revocation; Termination. The voting agreements contained in this Section 2 are coupled with an interest and may not be revoked, except by an amendment, modification or termination effected in accordance with the terms of this Agreement. The voting agreements contained in this Section 2 shall terminate immediately upon the redemption or conversion of all shares of Series B Preferred Stock. In addition, the voting agreements of the individual investors that are Initial Investors shall not be binding upon a transferee of such Initial Investor's Shares unless such transferee is an Affiliate of the Initial Investor. (e) Nothing in this Section 2 shall be deemed to preclude any right of any holder of the Series B Preferred Stock under the Charter. 3. GOING PRIVATE. Until the earlier of (a) two years after the Landmark Parties and any of their Affiliates own 51% of the Common Stock of the Company (measured on an as-converted basis) or (b) July 30, 2005, the Landmark Parties will not initiate or propose a transaction or series of transactions to make the Company a privately-held company or to acquire more than 20% of the Common Stock (including securities convertible or exchangeable into such Common Stock), calculated on a fully-diluted basis, except in a transaction or series of transactions which has been approved by holders of a majority of the Common Stock, calculated on a fully-diluted basis, not then held by the Landmark Parties or any Affiliate; provided, however, that the above restriction shall not apply to purchases made from any of the Initial Investors, Lend Lease International Pty. Limited or any of the transactions contemplated by the Purchase Agreement or the Transaction Documents (as defined under the Purchase Agreement), including, without limitation, adjustments made in connection with anti-dilution protections, the issuance, conversion or exercise of any of the securities acquired pursuant to the Purchase Agreement or any of the Transaction Documents, the issuance of securities made in respect of anti-dilution protections, and the exercise of any right of first offer or preemptive right. 4. TERMINATION. The Agreement shall terminate on the earliest of (1) the termination of the Purchase Agreement, (2) the termination of the covenants in Sections 2 and 3 above in accordance with their terms, (3) the date which the Landmark Parties and the Initial Investors owning a majority of the Shares (excluding outstanding options) owned by the Initial Investors shall have agreed in writing to terminate this Agreement or (4) ten (10) years from the date hereof. 5. INTERPRETATION OF THIS AGREEMENT. (a) Terms Defined. As used in this Agreement, the following terms have the respective meaning set forth below: Affiliate: shall mean any Person or entity, directly or indirectly controlling, controlled by or under common control with such Person or entity, including in the case of each Initial Investor such Person's family, heirs, executors or legal representatives, trusts or any other person formed or used for the benefit of such Person's family for purposes of estate planning. -4- Person: shall mean an individual, partnership, joint-stock company, corporation, limited liability company, trust or unincorporated organization, and a government or agency or political subdivision thereof. (b) Accounting Principles. Where the character or amount of any asset or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with U.S. generally accepted accounting principles at the time in effect, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement. (c) Directly or Indirectly. Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. (d) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State. (e) Section Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. 6. MISCELLANEOUS. (a) Notices. (i) All communications under this Agreement shall be in writing and shall be delivered by hand or facsimile or mailed by overnight courier or by registered or certified mail, postage prepaid to any of the Investors, at the address or facsimile number of such Investor shown on Schedule I, or at such other address as the Investor may have furnished the other Investors in writing, with a copy to Willkie Farr & Gallagher, 787 Seventh Avenue, New York, NY 10019 (facsimile: (212) 728-8111), Attention: William J. Grant, Jr., and a copy to Willcox & Savage, P.C., 1800 Bank of America Center, Norfolk, VA 23510 (facsimile: (757) 628-5566), Attention: Thomas C. Inglima. (ii) Any notice so addressed shall be deemed to be given: if delivered by hand or facsimile, on the date of such delivery; if mailed by courier, on the first business day following the date of such mailing; and if mailed by registered or certified mail, on the third business day after the date of such mailing. (b) Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, (ii) documents received by a party pursuant hereto, and (iii) financial statements, certificates and other information previously or hereafter furnished to a party, may be reproduced by such party by photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and such party may destroy any original document so reproduced. All parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the -5- original is in existence and whether or not such reproduction was made by each Investor in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. (c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties. (d) Entire Agreement; Amendment and Waiver. This Agreement constitutes the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior understandings among such parties (including the Initial Side Agreement). This Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the Landmark Parties and the Initial Investors owning a majority of the shares of Common Stock (excluding outstanding options) owned by the Initial Investors. This Agreement shall not become effective and the terms and provisions herein shall be of no force and effect unless and until all parties hereto have executed and delivered the Agreement. (e) Severability. In the event that any part or parts of this Agreement shall be held illegal or unenforceable by any court or administrative body of competent jurisdiction, such determination shall not affect the remaining provisions of this Agreement which shall remain in full force and effect. (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. (g) Injunctive Relief. The Investors hereby declare that it is impossible to measure in money the damages which will accrue to the parties hereto by reason of the failure of any Investor to perform any of its obligations set forth in this Agreement. Therefore, in addition to and not in limitation of any other rights and remedies, each of the Investors shall have the right to specific performance of such obligations (without the showing of special, imminent or irreparable damages and without any obligation to post bond or other security or Surety), and if any party hereto shall institute any action or proceeding to enforce the provisions hereof, each of the Company and the Investors hereby waives the claim or defense that the party instituting such action or proceeding has an adequate remedy at law. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGES FOLLOW] -6- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. LANDMARK COMMUNICATIONS, INC. By: /s/ Guy R. Friddell, III ------------------------------ Name: Guy R. Friddell, III Title: Executive Vice President LANDMARK VENTURES VII, LLC By: /s/ Richard A. Fraim ------------------------------ Name: Richard A. Fraim Title: Vice President, Secretary and Treasurer HUGH R. LAMLE /s/ Hugh R. Lamle ------------------------------ RICHARD H. ROGEL /s/ Richard H. Rogel ------------------------------ STEVEN M. GOLDEN /s/ Steven M. Golden ------------------------------ STEVEN M. GOLDEN REVOCABLE LIVING TRUST DATED 3/3/98 By: /s/ Steven M. Golden ------------------------------- Name: Steven M. Golden Title: Trustee STEVEN M. GOLDEN L.L.C. By: /s/ Steven M. Golden ------------------------------ Name: Steven M. Golden Title: Member -7- MATTHEW MOOG /s/ Matthew Moog ------------------------------ MOOG INVESTMENT PARTNERS LP By: /s/ Matthew Moog ------------------------------ Name: Matthew Moog Title: General Partner HLBL FAMILY PARTNERS LP By: /s/ Hugh R. Lamle ------------------------------ Name: Hugh R. Lamle Title: Managing General Partner HUGH AND BETSY LAMLE FOUNDATION By: /s/ Hugh R. Lamle ------------------------------ Name: Hugh R. Lamle Title: President RICHARD ROGEL LIMITED PARTNERSHIP By: /s/ Richard Rogel ------------------------------ Name: Richard Rogel Title: Partner RICHARD H. ROGEL REVOCABLE LIVING TRUST DATED 3/21/90 By: /s/ Richard H. Rogel ------------------------------ Name: Richard H. Rogel Title: Trustee -8- RICHARD ROGEL -- CHARITABLE REMAINDER TRUST By: /s/ Richard H. Rogel ------------------------------ Name: Richard H. Rogel Title: Trustee -9- SCHEDULE I Initial Investors ----------------- Name Address - ---- ------- Hugh R. Lamle M.D. Sass Investor Services, Inc. 1185 Avenue of the Americas New York, New York 10036-2699 Richard H. Rogel 416 Shooting Star P.O. Box 1659 Avon, Colorado 81620 Steven M. Golden 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 Steven M. Golden Revocable Living Trust 360 N. Michigan Ave., 19th Floor dated 3/3/98; Steven M. Golden as Chicago, Illinois 60601 Trustee Steven M. Golden L.L.C. 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 Matthew Moog 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 Moog Investment Partners LP 360 N. Michigan Ave., 19th Floor Chicago, Illinois 60601 HLBL Family Partners LP M.D. Sass Investor Services, Inc. 1185 Avenue of the Americas New York, New York 10036-2699 Hugh and Betsy Lamle Foundation M.D. Sass Investor Services, Inc. 1185 Avenue of the Americas New York, New York 10036-2699 Richard Rogel Limited Partnership 56 Rosecrown P.O. Box 1659 Avon, Colorado 81620 Richard H. Rogel Revocable Living Trust 56 Rosecrown dated 3/21/90 P.O. Box 1659 Avon, Colorado 81620 Richard Rogel -- Charitable Remainder 56 Rosecrown Trust P.O. Box 1659 Avon, Colorado 81620 -10- -----END PRIVACY-ENHANCED MESSAGE-----