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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 1998
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TRANSMEDIA NETWORK INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-13806 84-6028875
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
11900 Biscayne Boulevard, Suite 460, Miami, Florida 33181
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (305) 892-3300
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Exhibit Index Appears on Page 6
Total Number of Pages: 90
Page 1 of 90
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ITEM 5. Other Events
On March 3, 1998, the stockholders of Transmedia Network Inc., a
Delaware corporation (the "Registrant"), approved, and the Registrant
completed, the issuance and sale of 2,500,000 shares (collectively, the
"Shares") of common stock, par value $.02, of the Registrant (the "Common
Stock") and Warrants to purchase an additional 1,200,000 shares of Common Stock
(the "Warrants") to Samstock, L.L.C., a Delaware limited liability company
("Samstock"), EGI-Transmedia Investors, L.L.C., a Delaware limited liability
company ("TNI") and Halmostock Limited Partnership, a Wyoming limited
partnership ("Halmostock"; together with Samstock and TNI, the "Stockholders")
for an aggregate purchase price of $10,625,000 in cash.1/ According to the
Schedule 13D/A filed by the Stockholders with the Securities and Exchange
Commission on March 4, 1998, the source of consideration for the purchase of the
Shares and the Warrants (i) by TNI and Samstock was capital contributions by the
members of TNI and Samstock, respectively, and (ii) by Halmostock was a loan to
Halmostock of $1,543,999.25 from an affiliate, which affiliate is a Wyoming
limited partnership whose general partner of which is Halmos
Investments-Western, Inc., a Wyoming corporation. The loan to Halmostock is
evidenced by a note dated March 2, 1998, which is payable on demand and bears
interest at a rate of 8% per annum.
_______________
1/ The Registrant, Samstock, TNI and Halmostock entered into an Assignment
Agreement and, in connection therewith, executed an Amended and
Restated Investment Agreement dated as of March 3, 1998 and an
Amended and Restated Agreement Among Stockholders dated as of March
3, 1998, each of which amends and restates the prior versions of
such agreements filed with the Registrant's Current Report on Form
8-K dated November 6, 1997 (filed with the Commission on November
17, 1997). Pursuant to the Amended and Restated Agreement Among
Stockholders, the Stockholders agreed to vote all shares over which
it has voting control in favor of the election of Melvin Chasen to
the Registrant's Board of Directors, as long as (i) Melvin Chasen
and Iris Chasen, collectively, beneficially own at least 950,000
shares of Common Stock of the Registrant, and (ii) the Stockholders
are entitled to designate one or two directors of the Registrant
under the Amended and Restated Investment Agreement. In addition,
the Stockholders and the Registrant entered into a Stockholders
Agreement dated as of March 3, 1998 (the "Stockholders Agreement")
pursuant to which Halmostock granted to TNI and Samstock a proxy to
vote its shares, a right of first refusal on its shares, and the
right to require Halmostock to sell its shares on the same terms as
TNI and Samstock in certain circumstances and subject to certain
conditions. Each of the foregoing documents are exhibits to this
Report; the foregoing summary of material terms of these documents
is qualified in its entirety by reference to these exhibits.
Page 2 of 90
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The following table sets forth details of the purchase:
Number of Number of Aggregate
Name of Stockholder Shares Acquired Warrants Acquired Purchase Price
------------------- --------------- ----------------- --------------
TNI 322,059 154,588 $ 1,368,750.75
Samstock 1,825,000 876,000 7,756,250.00
Halmostock 352,941 169,412 1,499,999.25
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2,500,000 1,200,000 $10,625,000.00
Samstock and TNI are affiliates of Equity Group Investments Inc.
("Equity Group"), a privately held investment company headed by Sam Zell.
Halmostock is an affiliate of Steven J. Halmos. According to information
presented in the Schedule 13D/A dated March 3, 1998 filed by the
Stockholders with the Commission on March 4, 1998, the Stockholders
beneficially owned as of such date an aggregate of 5,140,009 shares of
Common Stock, representing approximately 35.8% of the Common Stock issued
and outstanding.
In connection with the foregoing transactions, the stockholders
of the Registrant also approved on March 3, 1998 an amendment to the
Registrant's Certificate of Incorporation to declassify the Board of
Directors of the Registrant and elected as directors each of the nominees
as described in the Company's Proxy Statement dated February 10, 1998.
ITEM 7. Financial Statements and Exhibits
Exhibit
Number Description
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3.1 Certificate of Amendment to the Certificate of Incorporation of
Transmedia Network Inc., as filed with the Secretary of State of
Delaware on March 3, 1998;
3.2 Amended and Restated By-laws of Transmedia Network Inc., as adopted on
March 4, 1998;
10.1 Stock Purchase and Sale Agreement, dated as of November 6, 1997, among
Transmedia Network Inc., Samstock, L.L.C. and EGI-Transmedia
Investors, L.L.C.;*
Page 3 of 90
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10.2 Form of Warrant to Purchase Common Stock;*
10.3 Assignment Agreement, dated as of March 3, 1998, among Transmedia
Network Inc., Samstock, L.L.C., EGI-Transmedia Investors, L.L.C. and
Halmostock Limited Partnership;
10.4 Amended and Restated Investment Agreement, dated as of March 3, 1998,
among the Transmedia Network Inc., Samstock L.L.C., EGI-Transmedia
Investors, L.L.C. and Halmostock Limited Partnership;
10.5 Amended and Restated Agreement Among Stockholders, dated as of March
3, 1998, among Transmedia Network Inc., Samstock, L.L.C.,
EGI-Transmedia Investors, L.L.C., Melvin Chasen and Iris Chasen and
Halmostock Limited Partnership; and
10.6 Stockholders Agreement, dated as of March 3, 1998, among Transmedia
Network Inc., EGI-Transmedia Investors, L.L.C., Samstock, L.L.C. and
Halmostock Limited Partnership.
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* Previously filed as an exhibit to the Registrant's Current Report on Form 8-K
dated November 6, 1998 (filed with the Commission on November 17, 1997) and
incorporated by reference thereto.
Page 4 of 90
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSMEDIA NETWORK INC.
Date: March 17, 1998 By: /s/ Melvin Chasen
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Melvin Chasen
President and Chief Executive Officer
Page 5 of 90
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INDEX TO EXHIBITS
Exhibit
Number Description Page
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3.1 Certificate of Amendment to the Certificate of Incorporation 7
of Transmedia Network Inc., as filed with the Secretary of
State of Delaware on March 3, 1998;
3.2 Amended and Restated By-laws of Transmedia Network Inc., as 10
adopted on March 4, 1998;
10.1 Stock Purchase and Sale Agreement, dated as of November 6, *
1997, among Transmedia Network Inc., Samstock, L.L.C. and
EGI-Transmedia Investors, L.L.C.;
10.2 Form of Warrant to Purchase Common Stock; *
10.3 Assignment Agreement, dated as of March 3, 1998 among 30
Transmedia Network Inc., Samstock, L.L.C., EGI-Transmedia
Investors, L.L.C. and Halmostock Limited Partnership;
10.4 Amended and Restated Investment Agreement, dated as of 47
March 3, 1998, among the Transmedia Network Inc.,
Samstock L.L.C., EGI-Transmedia Investors, L.L.C. and
Halmostock Limited Partnership;
10.5 Amended and Restated Agreement Among Stockholders, dated as 67
of March 3, 1998, among Transmedia Network Inc., Samstock,
L.L.C.; EGI-Transmedia Investors, L.L.C., Melvin Chasen and
Iris Chasen and Halmostock Limited Partnership; and
10.6 Stockholders Agreement, dated as of March 3, 1998 among 79
Transmedia Network Inc., EGI-Transmedia Investors, L.L.C.,
Samstock, L.L.C. and Halmostock Limited Partnership.
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* Previously filed as an exhibit to the Registrant's Current Report on Form 8-K
dated November 6, 1998 (filed with the Commission on November 17, 1997) and
incorporated by reference thereto.
Page 6 of 90
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EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TRANSMEDIA NETWORK INC.
Pursuant to Section 242 of the Delaware
General Corporation Law
TRANSMEDIA NETWORK INC., a Delaware corporation, hereby certifies as
follows:
FIRST: The Amended Certificate of Incorporation of the Corporation was
originally filed in the Office of the Secretary of State of Delaware on June 10,
1987 and a certified copy was recorded in the Office of the Recorder of
Kent County, Delaware.
SECOND: The Certificate of Incorporation is amended to eliminate the
provisions for a classified Board by striking Paragraph 2 of Article Five of the
Certificate of Incorporation in its entirety and inserting the following new
Paragraph 2 of Article Five as follows:
"Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified
circumstances, the number of directors shall be fixed from time
to time exclusively by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of
directors then authorized."
THIRD: This Amendment to the Certificate of Incorporation was duly
approved by the unanimous vote of the Board of Directors at a duly convened
Board of Directors Meeting on November 6, 1997 and that thereafter, pursuant to
resolution of its Board of Directors, the annual
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meeting of stockholders was duly called and held, upon at which meeting the
necessary number of shares as required by statute were voted in favor of the
amendment.
FOURTH: That said amendment duly adopted in accordance with provisions
of Sections 141(b), 212, 216, 231 and 242 of the Delaware General Corporation
Law.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the Corporation caused this Certificate of
Amendment of its Certificate of Incorporation to be executed by its Chairman
of the Board, President and Chief Executive Officer this 3rd day of March, 1998.
TRANSMEDIA NETWORK INC.
By: /s/ Melvin Chasen
--------------------
Name: Melvin Chasen
Title: Chairman of the Board,
President and Chief
Executive Officer
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EXHIBIT 3.2
AS ADOPTED March 4, 1998
TRANSMEDIA NETWORK INC.
A Delaware Corporation
BY-LAWS
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Dover, County of Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders for
the election of directors shall be held at such regular place as may be fixed
from time to time by the board of directors, or at such other place either
within or without the State of Delaware as shall be designated from time to time
by the board of directors and stated in the notice of the meeting. Meetings of
stockholders for any other purpose may be held at such time and place, within or
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without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meeting. The Corporation shall hold an annual
meeting of stockholders, in the manner set forth in the following sections, at
which the stockholders shall elect the board of directors of the Corporation and
transact such other business as may properly be brought before the meeting.
Section 3. Date of Annual Meeting. Annual meetings of stockholders
shall be held on March 1 of each year at 10:00 A.M. or at such other date and
time as is designated by the board of directors and stated in the notice of the
meeting, or if such date falls on Saturday, Sunday or a legal holiday, on the
first business day thereafter.
Section 4. Notice of Annual Meeting. Written notice of the annual
meeting stating the place, date and hour of the meeting, shall be given not less
than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 5. List of Stockholders; Inspection. The officer who has
charge of the stock ledger of the Corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of
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the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 6. Special Meetings. Special meetings of the stockholders for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the Chairman of the Board or the President. Special meetings shall be called
by the Chairman of the Board or the President or Secretary at the request of a
majority of the directors then in office, or at the request in writing of the
holders of at least a majority of the voting power of all shares entitled to
vote at such meeting. Such request shall state the purpose or purposes of the
proposed meeting.
Section 7. Notice of Special Meetings. Written notice of a special
meeting of stockholders stating the place, date and hour of the meeting and the
purpose or purposes for which the meeting is called, shall be given not less
than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 8. Proper Business at Special Meetings. Business transacted
at any special meeting of stockholders shall be limited to the purposes stated
in the notice.
Section 9. Quorum. The holders of a majority of the shares of Common
Stock issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided herein
or by statute. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any
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business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the adjourned meeting.
Section 10. Requirement of Majority Vote. When a quorum is present at
any meeting, the vote of a majority of all of the shares of Common Stock present
in person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon which a different vote is required by
express provision of statute or of another section of these By-Laws, in which
case such express provision shall govern and control the decision of such
question.
Section 11. Voting; Proxies. Each stockholder shall at every meeting
of the stockholders be entitled to one vote in person or by proxy for each share
of the Common Stock held by such stockholder. No proxy shall be voted or acted
upon after three years from its date, unless the proxy provides for a longer
period.
Section 12. Action Upon Consent. Any action required or permitted to
be taken at any annual or special meeting of stockholders of the Corporation may
be taken without a meeting, without prior notice, and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of issued and outstanding Common Stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business or an officer or
an agent of the Corporation having custody of the book in which
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proceedings and meetings of the stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Every written consent shall bear the date of
signature of each stockholder who signs the consent, and no written consent
shall be effective to take the corporate action referred to therein unless,
within sixty days of the earliest dated consent delivered to the Corporation,
written consents signed by a sufficient number of holders to take action are
delivered to the Corporation by delivery to its registered office in Delaware,
its principal place of business or an officer or agent of the Corporation having
custody of the book in which proceedings and meetings of the stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. Prompt notice of
the taking of the corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing.
ARTICLE III
DIRECTORS
Section 1. Number and Term of Office. The number of directors of the
Corporation shall be determined initially by the Incorporator of the
Corporation. Thereafter, subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified circumstances, the
number of directors shall be fixed from time to time exclusively by the board of
directors pursuant to a resolution adopted by a majority of the total number of
directors then authorized. The number of directors so fixed is sometimes
referred to in these ByLaws as the "total number of directors." The first
directors of the Corporation shall be designated by the Incorporator.
Thereafter, subject to the rights of the holders of any series of Preferred
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Stock to elect additional directors under specified circumstances, the directors
shall be elected at the annual meeting of stockholders by a plurality of the
issued and outstanding shares of Common Stock of the Corporation entitled to
vote thereat, except as provided in Section 2 of this Article and shall hold
office until their respective successors are duly elected and qualified or until
their earlier resignation or removal. Directors need not be stockholders.
Section 2. Vacancies; Newly Created Directorships. Subject to the
rights of the holders of any series of Preferred Stock, and unless the board of
directors otherwise determines, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the board of
directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office until such director's successor shall have been duly elected
and qualified or until his or her earlier resignation or removal. No decrease in
the number of authorized directors constituting the entire board of directors
shall shorten the term of any incumbent director. If there are no directors in
office, then an election of directors may be held in the manner provided by
applicable law.
Section 3. Management. The business of the Corporation shall be
managed by or under the direction of its board of directors. The board of
directors may exercise all the powers of the Corporation and do all such lawful
acts and things as are not by statute, by the Certificate of Incorporation of
the Corporation, or by these By-Laws directed or required to be exercised or
done by the stockholders.
Section 4. Place of Meetings. The board of directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware.
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Section 5. Annual Meeting. The first meeting of each newly elected
board of directors shall be held at the same place as, and immediately
following, the annual meeting of stockholders. No notice of such meeting need be
given to the newly elected directors in order legally to constitute the meeting,
provided a quorum shall be present. In the event such meeting is not held, the
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the board of directors, or
as shall be specified in a written waiver signed by all of the directors.
Section 6. Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and at such place as shall
time to time be determined by the board.
Section 7. Special Meetings. Special meetings of the board of
directors may be called by the Chairman of the Board or the President on two
days notice to each director. Special meetings shall be called by the Chairman
of the Board, the President or Secretary in like manner and on like notice on
the written request of any director. Such request of a director and any notice
of a special meeting shall state the purpose or purposes of the proposed
meeting.
Section 8. Quorum. At all meetings of the board of directors, a
majority of the total number of directors shall constitute a quorum for the
transaction of business and for action of the board of directors, except as may
be otherwise specifically provided by statute. The vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the board of directors. If a quorum shall not be present at any meeting of the
board, the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present.
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Section 9. Action by Consent. Any action required or permitted to be
taken at any meeting of the board of directors, or of any committee designated
by the board, may be taken without a meeting, if all members of the board or
committee, as the case may be, consent thereto in writing and the writing or
writings are filed with the minutes of proceedings of the board or committee.
Section 10. Telephonic Meetings. Members of the board of directors, or
any committee designated by the board, may participate in a meeting of the
board, or any such committee, by means of conference telephone or other
telecommunications equipment by means of which all persons participating in the
meeting can hear each other. Such participation in a meeting shall constitute
presence in person at the meeting.
Section 11. Committees of the Board of Directors; Powers. The board of
directors may, by a majority of the total number of directors, designate one or
more committees, each committee to consist of one or more of the directors of
the Corporation. The board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members present at any meeting of the committee and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the board, shall have and
may exercise all the powers and authority of the board of directors in the
management of the business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers that may require it.
However, no such committee shall
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have the power or authority (i) to amend, or recommend to the Stockholders the
amendment of, the Certificate of Incorporation (except that a committee may, to
the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board of directors as provided in
subsection (a) of Section 151 of the Delaware General Corporation Law, fix the
designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
(ii) to adopt an agreement of merger or consolidation under Section 251 or 252
of the Delaware General Corporation Law, (iii) to recommend to the stockholders
the sale, lease or exchange of all or substantially all of the Corporation's
property and assets, (iv) to recommend to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, (v) to amend the By-Laws of the
Corporation, or (vi), unless the resolution creating the committee or the
Certificate of Incorporation expressly so provides, to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership and
merger pursuant to Section 253 of the Delaware General Corporation Law. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
Section 12. Minutes of Committee Proceedings. Each committee shall
keep regular minutes of its meetings and, on no less than a quarterly basis,
report such minutes to the board of directors.
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Section 13. Compensation of Directors. The board of directors shall
have the authority to fix the compensation of directors. The directors may be
paid their expenses, if any, of attendance at each meeting of the board. The
directors may be paid a fixed sum for attendance at each meeting of the board or
a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed a
compensation for attending committee meetings.
Section 14. Removal of Directors. The stockholders may, at any special
meeting the notice of which shall state that it is called for that purpose,
remove, with cause, any Director and fill the vacancy; provided that whenever
any Director shall have been elected by the holders of any class of stock of the
Corporation voting separately as a class under the provisions of the Certificate
of Incorporation, such Director may be removed and the vacancy filled only by
the holders of that class of stock voting separately as a class. Vacancies
caused by any such removal and not filled by the stockholders at the meeting at
which such removal shall have been made, may be filled by the affirmative vote
of a majority of the Directors then in office, although less than a quorum, and
any Director so elected to fill any such vacancy shall hold office until his
successor is elected and qualified of until his earlier resignation or removal.
Section 15. Resignation by a Director. A director may resign at any
time by giving written notice to the Corporation. The resignation shall take
effect at the time specified therein or, if such time is not specified, upon
receipt by the Corporation. Unless otherwise required by law or specified in the
resignation, such resignation need not be accepted by the Corporation to be
effective.
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When one or more directors shall resign effective at a future date, a
majority of the directors then in office, including those who have so resigned,
shall have the power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
director so chosen shall hold office as herein provided in connection with the
filling of other vacancies.
ARTICLE IV
NOTICE
Section 1. Notices. Whenever, under the provisions of any statute,
the certificate of incorporation or these By-Laws, notice is required to be
given to any director or stockholder, such notice shall be given to any director
or stockholder, such notice shall be given in writing and shall be deemed
sufficiently given if (i) sent by United States mail, postage prepaid, (ii)
delivered personally against receipt or (iii) sent by telegram or telex and in
addition contemporaneously confirmed by United States mail, postage prepaid.
Notice, in whatever form given, shall be addressed to directors or stockholders
at their respective addresses appearing on the books of the Corporation. Any
notice given by telegram or telex shall be deemed to have been given when it
shall be delivered for transmission and any notice given by mail shall be deemed
to be given when deposited in a post office or a letter box.
Section 2. Waiver of Notice. Whenever any notice is required to be
given under the provisions of any statute, the Certificate of Incorporation, or
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. A written waiver is valid even though it does
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not set forth the purpose of, or the business transacted at, the meeting for
which the waiver is given. A person's attendance at a meeting shall constitute a
waiver of notice of such meeting, except when such person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
ARTICLE V
OFFICERS
Section 1. Executive Officers. The executive officers of the
Corporation shall be a President, a Treasurer and a Secretary. The board of
directors may elect or appoint a Chairman of the Board, one or more Vice
Presidents, Assistant Treasurers and Assistant Secretaries and such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as provided in
these By-Laws and as shall be determined from time to time by the board. Any
number of offices may be held by the same person.
Section 2. Elections. The board of directors, at its first meeting
after each annual meeting of stockholders, shall elect persons to fill the
offices described in Section 1 above, except that the office of Chairman of the
Board of Directors need not be filled if the board does not so desire.
Section 3. Compensation. The salaries of all officers of the
Corporation shall be fixed by the board of directors or a designated committee
thereof, provided, however, that a majority of the directors then in office or
members of such committee may delegate to the
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Chairman of the Board or the President the authority to fix the salaries of all
or any officers other than the Chairman of the Board and the President.
Section 4. Term; Removal; Resignation. Each officer of the
Corporation shall hold office until his or her successor is elected and
qualified, or until his or her earlier resignation or removal. Any officer
elected or appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the total number of directors. An officer may
resign at any time by giving written notice to the Corporation. The resignation
shall take effect at the time specified therein or, if such time is not
specified, upon receipt by the Corporation. Unless otherwise required by law or
specified in the resignation, such resignation need not be accepted by the
Corporation to be effective. Any vacancy occurring in any office of the
Corporation shall be filled by the board of directors.
Section 5. The Chairman of the Board. The Chairman of the Board shall
perform such duties and have such powers as are set forth by these By-Laws and
as the board of directors shall from time to time prescribe.
Section 6. The President. If the board of directors has elected a
Chairman of the Board, all duties and powers of the President set forth in this
Section are qualified by and subject to the duties and powers assigned to the
Chairman of the Board by these By-Laws and by the board of directors. The
President shall be the chief executive officer of the Corporation. The President
shall preside at all meetings of the stockholders and of the board of directors.
Subject to the direction and control of the board of directors, the President
shall have general and active management of the business of the Corporation and
shall see that all orders and resolutions of the
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board of directors are carried into effect. The President shall perform such
other duties and have such other powers as the board may from time to time
prescribe.
Section 7. The Vice Presidents. In the absence of the President or in
the event of the President's inability to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated by the directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the President. When so
acting, the Vice President shall have all the powers of and be subject to all
the restrictions upon the President. The Vice President shall perform such other
duties and have such other powers as the board of directors, the Chairman of the
Board, or the President may from time to time prescribe.
Section 8. The Treasurer. The Treasurer shall be the chief financial
officer of the Corporation. The Treasurer shall have the custody of the
corporate funds and securities and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such depositories as
may be designated by the board of directors. The Treasurer shall disburse the
funds of the Corporation as may be ordered by the board of directors, taking
proper vouchers for such disbursements. The Treasurer shall render to the
Chairman of the Board, the President and the board, at its regular meetings, or
when the board so requires, an account of all his transactions as Treasurer and
of the financial condition of the Corporation. If required by the board, the
Treasurer shall give the Corporation a bond for such term, in such sum, and with
such surety or sureties as shall be satisfactory to the board for the faithful
performance of the duties of the office and for the restoration to the
Corporation, in case of the Treasurer's death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
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whatever kind in the Treasurer's possession or under the Treasurer's control
belonging to the Corporation.
Section 9. Assistant Treasurer. The Assistant Treasurer, if any,
shall in the absence of the Treasurer or in the event of the Treasurer's
inability to act, perform the duties and exercise the powers of the Treasurer.
The Assistant Treasurer shall perform such other duties and have such other
power as the board of directors may from time to time prescribe.
Section 10. The Secretary. The Secretary shall attend all meetings of
the board of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the board in a book to be
kept for that purpose. The Secretary shall perform like duties for the standing
committees when required. The Secretary shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the board. The
Secretary shall perform such other duties as may be prescribed by the board, the
Chairman of the Board, or the President, under whose supervision the Secretary
shall serve. The Secretary shall have custody of the corporate seal of the
Corporation and shall have authority to affix the same to any instrument
requiring it. When so affixed, the corporate seal of the Corporation may be
attested by the Secretary's signature.
Section 11. Assistant Secretary. The Assistant Secretary, if any,
shall, in the absence of the Secretary or in the event of the Secretary's
inability to act, perform the duties and exercise the powers of the Secretary.
The Assistant Secretary shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe. The Assistant
Secretary shall have the same authority to affix and attest the corporate seal
of the Corporation as does the Secretary, even in instances where the Secretary
is not absent or unable to act.
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ARTICLE VI
STOCK OF THE CORPORATION
Section 1. Form of Stock Certificates. Every holders of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation, by (a) the Chairman or Vice Chairman of the board of
directors, if any, or the President or a Vice President of the Corporation and
(b) the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation. Such certificates shall bear such legend with
respect to any restrictions upon the transfer of such stock as shall be required
by statute or an agreement between the Corporation and the holder of the stock
represented by such certificate.
Section 2. Facsimile Signatures. Any of or all the signatures on the
certificate may be facsimiles. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were still such officer, transfer agent or registrar at the
date of issue.
Section 3. Lost Certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or the owner's legal representative, to advertise the same in such
manner as it shall require and/or to give the Corporation a bond in such sum as
it
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may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate or certificates alleged to have been
lost, stolen or destroyed or with respect to the issuance of the new certificate
or certificates.
Section 4. Transfer of Stocks. Subject to compliance with applicable
law and with any provision contained in the Certificate of Incorporation, these
By-Laws or any agreement with respect to restrictions upon the transfer of
shares of stock of the Corporation, upon (i) surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, and (ii) delivery of such evidence of the payment of transfer taxes
and compliance with other provisions of law as the Corporation or its transfer
agent may require, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 5. Fixing Record Date. In order that the Corporation may
determine the stockholders entitled (i) to notice of or to vote at any meeting
of stockholders or any adjournment thereof, (ii) to consent to corporate action
in writing without a meeting, (iii) to receive payment of any dividend or other
distribution or allotment of any rights, or (iv) to exercise any rights in
respect of any change, conversion or exchange of stock, or for the purpose of
any other lawful action, the board of directors may fix a record date, which
shall not precede the date upon which the resolution fixing the record date is
adopted by the board, and shall not be more than sixty nor less than ten days
before the date of a stockholders meeting, or more than ten days after the date
upon which the resolution fixing the record date for a written consent is
adopted by the board, or more than sixty days prior to any such other action, as
the case may be. If the board of directors
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does not fix a record date, then: (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is necessary,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the Corporation by delivery
to its registered office in Delaware, its principal place of business or an
officer or agent of the Corporation having custody of the book in which
proceedings and meetings of the stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested; and (iii) the record date for determining
stockholders for any other purpose shall be at the close of business on the day
on which the board of directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board may fix a new record date for the adjourned meeting.
Section 6. Registered Stockholders. Except as otherwise provided by
the laws of Delaware and applicable securities laws: (i) the Corporation shall
be entitled to recognize the exclusive right of a person registered on its books
as the owner of shares as the person who is entitled to receive dividends and to
vote as such owner; (ii) the Corporation may hold liable for calls and
assessments a person registered on its books as the owner of shares; and (iii)
the Corporation shall not be bound to recognize any equitable or other claim to
or interest in such
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share or shares on the part of any other person, whether or not it shall have
express or other notice thereof.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the Common Stock of the
Corporation may be declared by the board of directors as permitted by law at any
regular or special meeting. Dividends may be paid in cash, in property, or in
shares of the Common Stock.
Section 2. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
the twelve month period ended on a date in each year as is specified by
resolution of the board of directors.
Section 4. Seal. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words "Corporate
Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed, affixed, reproduced, or otherwise. The Seal may be affixed and
attested by the Secretary or Assistant Secretary as set forth in Article V
hereof. The board of directors may give general authority to any other officer
to affix and attest the seal in like manner.
ARTICLE VIII
AMENDMENTS
These By-Laws may be altered, amended or repealed, and new By-Laws
adopted, by vote of (a) the holders of a majority of the shares entitled at the
time to vote for the election of
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directors or (b) a majority of the total number of directors, at any regular or
special meeting of or written consent without a meeting by stockholders or
directors, as the case may be.
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EXHIBIT 10.3
ASSIGNMENT AGREEMENT
ASSIGNMENT AGREEMENT, dated as of March 3, 1998, (the "Agreement"),
among Samstock, L.L.C., a Delaware limited liability company ("Samstock"),
EGI-Transmedia Investors, L.L.C., a Delaware limited liability company (formerly
known as Transmedia Investors, L.L.C., "TNI," and together with Samstock,
"Assignor"), Transmedia Network Inc., a Delaware corporation (the "Company"),
and Halmostock Limited Partnership, a Wyoming limited partnership
("Halmostock").
WHEREAS, Assignor and the Company have entered into that certain Stock
Purchase and Sale Agreement ("Stock Purchase Agreement") dated as of November 6,
1997, pursuant to which the Company has agreed to issue and sell to Assignor,
and Assignor has agreed to purchase from the Company, (i) 2,500,000 newly issued
shares (such 2,500,000 newly issued shares, collectively the "Shares") of Common
Stock in the aggregate, representing approximately 16.84% of the Fully Diluted
Common Stock and 19.7% of the outstanding Common Stock, and (ii) a warrant (the
"Warrant") to purchase an additional 1,200,000 shares of Common Stock in the
aggregate (such additional 1,200,000 shares of Common Stock in the aggregate
issuable from time to time upon exercise of the Warrant, collectively the
"Warrant Shares"), representing approximately 8.08% of the Fully Diluted Common
Stock. All capitalized terms used and not otherwise defined herein have the
meanings ascribed to them in the Stock Purchase Agreement;
WHEREAS, Assignor desires to assign to Halmostock and Halmostock
desires to acquire from Assignor (the "Assignment"), effective contemporaneously
with the consummation of the closing under the Stock Purchase Agreement, the
right to purchase from the Company (i) 352,941 of the Shares (the "Halmostock
Shares"), (ii) a warrant (the "Halmostock Warrant") in the form of Exhibit A
hereto to purchase up to 169,412 of the Warrant Shares (the "Halmostock Warrant
Shares") and (iii) a pro rata interest (i.e., a 14.12% interest) in Assignor's
rights and remedies under the Stock Purchase Agreement ("Halmostock's Pro Rata
Rights");
WHEREAS, the Company desires to sell to Halmostock, and Halmostock
desires to purchase from the Company, the Halmostock Shares, the Halmostock
Warrant and Halmostock's Pro Rata Rights.
NOW, THEREFORE, in consideration of the premises, representations and
warranties and the mutual covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES AND WARRANT; RELATED MATTERS
1.1 Assignment, Purchase and Sale. Subject to the terms and
conditions contained in this Agreement, effective contemporaneously with the
consummation of the closing under the Stock Purchase Agreement, Assignor does
hereby assign, transfer and deliver to Halmostock, and Halmostock does hereby
accept the assignment from Assignor of, (a) Assignor's right to purchase from
the Company the Halmostock Shares and the Halmostock Warrant and (b)
Halmostock's
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Pro Rata Rights. At the Closing, the Company shall sell to Halmostock, and
Halmostock shall purchase from the Company, the Halmostock Shares, the
Halmostock Warrant and Halmostock's Pro Rata Rights.
1.2 Consideration. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, at the Closing, Halmostock shall pay
to the Company $1,499,999.25 in the aggregate ("Halmostock's Purchase Price")
for the Halmostock Shares, the Halmostock Warrant and Halmostock's Pro Rata
Rights.
1.3 No Relief of Assignor's Obligations. Notwithstanding anything to
the contrary herein, this Agreement and the transactions contemplated hereby
shall not relieve Assignor of any of its liabilities, obligations or duties
under the Stock Purchase Agreement.
1.4 Halmostock's Payment of Pro Rata Costs. In order to induce
Assignor to enter into this Agreement, Halmostock agrees to pay to Assignor and
its Affiliates, within five (5) business days after receipt of written request
accompanied by copies of invoices evidencing the costs, fees and expenses
identified below, an amount in cash equal to 14.12% of all costs, fees and
expenses, not to exceed $40,000.00 in the aggregate, incurred by the Zell
Affiliates in connection with (i) the business, legal and accounting due
diligence investigation of the Company, (ii) the negotiation, preparation and
execution of the Stock Purchase Agreement, the other Transaction Documents and
the Halmostock Transaction Documents, (iii) the preparation and filing of any
reports, statements and/or other documents with the Securities and Exchange
Commission, (iv) the satisfaction of conditions precedent to the Closing, (v)
the Closing, and (vi) post-Closing matters, including without limitation, the
fees, expenses and disbursements for services performed by Rosenberg &
Liebentritt, P.C., Seyfarth, Shaw, Fairweather & Geraldson, Jenner & Block,
Arthur Andersen & Co. and Bowne & Co., but excluding all services, if any,
performed solely for the benefit of the Zell Affiliates as determined in good
faith by the Zell Affiliates.
1.5 No Liability or Obligation on Steven J. Halmos. Steven J. Halmos
shall not be personally liable for any obligation or liability whatsoever under
this Agreement.
ARTICLE II
THE CLOSING
2.1 Time and Place. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, the consummation of the Assignment
and the sale of the Halmostock Shares, the Halmostock Warrant and the Halmostock
Pro Rata Rights as contemplated by this Agreement shall take place
contemporaneously with, and contingent upon, the Closing.
2.2 Deliveries by the Company. At the Closing, the Company shall
deliver the following to Halmostock:
(a) stock certificates representing the Halmostock Shares, in the
name of Halmostock and dated as of the Closing Date;
(b) the Halmostock Warrant dated as of the Closing Date;
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(c) the opinion of Morgan, Lewis & Bockius LLP, counsel to the
Company, addressed to Halmostock in the form received by Assignor; and
(d) a copy of all other closing documents in the form delivered
by the Company to Assignor.
2.3 Deliveries by Halmostock. At the Closing, Halmostock shall
deliver the following to the Company:
(a) the Halmostock's Purchase Price by interbank transfer of federal
funds to one or more accounts designated in a writing delivered by the Company
to Halmostock or by such other means as may be agreed upon in writing by the
Company and Halmostock;
(b) An opinion letter from Kenny Nachwalter Seymour Arnold Critchlow
& Spector, P.A., counsel to Halmostock, containing the opinions in the form
attached hereto as Exhibit B, with such provisions concerning scope of firm's
inquiry, law covered by opinion, reliance by the firm, reliance by third
parties, assumptions, definition of firm's "knowledge", qualifications,
limitations and similar matters as shall be reasonably acceptable to the
Company; and
(c) all other closing documents reasonably requested by the Company.
2.4 Closing under Stock Purchase Agreement. The respective
obligations of each party to effect the transactions contemplated by this
Agreement shall be subject to and conditioned upon the contemporaneous
consummation of the closing under the Stock Purchase Agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF HALMOSTOCK
Halmostock hereby represents, warrants and covenants to Assignor
and to the Company on the date of this Agreement and again on the Closing
Date, which representations and warranties shall survive the Closing as
follows:
3.1 Organization. Halmostock is a limited partnership duly formed,
validly existing and in good standing under the laws of the Wyoming.
3.2 Authority Relative to This Agreement. Halmostock has the
partnership power and authority to execute and deliver this Agreement, that
certain Amended and Restated Investment Agreement dated as of March 3, 1998, by
and among the Company, Assignor and Halmostock, that certain Stockholders'
Agreement dated as of March 3, 1998, by and among the Assignor, Halmostock and
the Company and all other documents, instruments and other writings to be
executed and/or delivered by or on behalf of Halmostock to Assignor or the
Company or any of their representatives in connection with the transactions
contemplated hereby or thereby (collectively, the "Halmostock Transaction
Documents"), to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of each of the Halmostock Transaction Documents by
Halmostock and the consummation by Halmostock of the transactions contemplated
hereby and thereby have been duly authorized by the general partner of
Halmostock, and no other partnership proceedings on the part of Halmostock are
necessary to authorize the execution, delivery and performance of the Halmostock
Transaction Documents or the transactions contemplated hereby or thereby. Each
of
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the Halmostock Transaction Documents has been duly executed and delivered by
Halmostock and, assuming due authorization, execution and delivery by Assignor
constitutes a legal, valid and binding obligation of Halmostock, enforceable
against Halmostock in accordance with its terms.
3.3 No Conflict; Required Filings and Consents. The execution,
delivery and performance of the Halmostock Transaction Documents by Halmostock
does not and will not: (i) conflict with or violate the organizational documents
of Halmostock (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Halmostock, or by which any of its properties
are bound or affected; (iii) require any consent, approval, authorization or
permit of, action by, filing with or notification to, any Governmental Entity
(other than any filing required under Section 13(a) or (d), 14, 15(d) or 16(a)
of the Exchange Act); or (iv) result in any breach or violation of or constitute
a default (or an event which with notice or lapse of time or both could become a
default) or result in the loss of a material benefit under, or give rise to any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a Lien on any of the property or assets of Halmostock pursuant
to, any Contract, Permit or other instrument or obligation to which Halmostock
is a party or by which Halmostock, or any of its properties are bound or
affected, except, in the case of clauses (ii), (iii) and (iv), for any such
conflicts, violations, breaches, defaults or other occurrences which could not,
individually or in the aggregate, have a material adverse effect on Halmostock
or reasonably be expected to impair or delay the ability of Halmostock to
perform its obligations under this Agreement.
3.4 Brokers. No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by the Halmostock Transaction Documents based
upon arrangements made by or on behalf of Halmostock.
3.5 Investment Intent. Halmostock is purchasing the Halmostock Shares
and the Halmostock Warrant and will purchase the Halmostock Warrant Shares for
its own account for investment, and not with a view to, or for resale in
connection with, any public distribution of the Halmostock Shares, the
Halmostock Warrant or any Halmostock Warrant Shares.
3.6 Availability of Funds. Halmostock has on hand sufficient funds to
pay Halmostock's Purchase Price in accordance with the terms of this Agreement
and to pay all fees and expenses incurred in connection with the transactions
contemplated hereby for which Halmostock is responsible.
3.7 Halmostock's Indemnification Obligations. Halmostock shall
indemnify, save and keep harmless Assignor and the Company and their respective
officers, directors, employees, agents, representatives, Affiliates, successors
and permitted assigns against and from all Damages sustained or incurred by any
of them resulting from or arising out of or by virtue of any inaccuracy in or
breach of any representation, warranty or covenant made by Halmostock to
Assignor and/or the Company in this Agreement or in any other Halmostock
Transaction Document. No specifically enumerated indemnification obligation with
respect to a particular subject matter shall limit or affect the applicability
of a more general indemnification obligation with respect to the same subject
matter. In the event either Assignor or the Company have an actionable claim and
have suffered Damages, Halmostock shall not be entitled to require that any
action be brought against any Person before action is brought against it
hereunder by a Person seeking indemnification by Halmostock.
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3.8 Contribution of Shares. Steven J. Halmos and/or his Affiliates
have contributed on or before the date hereof to Halmostock 92,000 shares of
Common Stock (the "Contributed Shares"). Halmostock is the sole beneficial and
record owner of the Contributed Shares. Halmostock has good and marketable title
to the Contributed Shares, free of all Liens, other than any Liens created by
the Halmostock Transaction Documents.
ARTICLE IV
MISCELLANEOUS
4.1 Restrictive Legend.
(a) Halmostock and the Company agree that the certificates
representing the Halmostock Shares or the Halmostock Warrant Shares may contain
a legend, in substantially the following form:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be sold,
transferred, assigned, offered, pledged or otherwise disposed of
unless (i) there is an effective registration statement under
such Act and such laws covering such securities or (ii) such
sale, transfer, assignment, offer, pledge or other disposition is
exempt from the registration and prospectus delivery requirements
of such Act and such laws. The securities evidenced by this
certificate are subject to the restrictions on transfer contained
in the Amended and Restated Investment Agreement dated as of
March 3, 1998, and the Stockholders' Agreement dated as of March
3, 1998, in each case, to which the Company is a party, as
amended, supplemented or otherwise modified from time to time,
and may not be transferred except in compliance therewith."
(b) Assignor and the Company agree that the certificates representing
the Shares or the Warrant Shares may contain a legend, in substantially the
following form:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be sold,
transferred, assigned, offered, pledged or otherwise disposed of
unless (i) there is an effective registration statement under
such Act and such laws covering such securities or (ii) such
sale, transfer, assignment, offer, pledge or other disposition is
exempt from the registration and prospectus delivery requirements
of such Act and such laws. The securities evidenced by this
certificate are subject to the restrictions on transfer contained
in the Amended and Restated Investment Agreement dated as of
March 3, 1998, the Amended and Restated Agreement Among
Stockholders dated as of March 3, 1998, and the Stockholder's
Agreement dated as of March 3, 1998, in each case, to which the
Company is a party, as amended, supplemented or otherwise
modified from time to time, and may not be transferred except in
compliance therewith."
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4.2 Continuing Obligations. The Company and Assignor agree that
nothing contained in this Agreement shall in any way relieve Assignor of
any of, or in any way diminish, its obligations, liabilities or duties
under the Stock Purchase Agreement.
4.3 Notices. All notices, and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile, to
the appropriate address or facsimile number set forth below (or at such other
address or facsimile number for a party as shall be specified by like notice):
if to Assignor, Samstock or TNI:
c/o Samstock, L.L.C.
Two N. Riverside Plaza, Suite 600
Chicago, IL 60606
Attention: F. Philip Handy
Fax: (312) 454-0610
with an additional copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza, Suite 1600
Chicago, IL 60606
Attention: Joseph M. Paolucci, Esq.
Fax: (312) 454-0335
if to Halmostock:
Halmostock Limited Partnership
21 W. Las Olas Blvd.
Ft. Lauderdale, FL 33301
Attention: Steven J. Halmos
Fax: (954) 760-4983
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with a copy to:
Kenny Nachwalter Seymour
Arnold Critchlow & Spector, P.A.
1100 Miami Center
201 South Biscayne Boulevard
Miami, Florida 33131-4327
Attention: Thomas H. Seymour, Esq.
Fax: (305) 372-1861
if to the Company:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: Stephen P. Farrell, Esq.
Fax: (212) 309-6273
4.4 Effectiveness. Notwithstanding anything to the contrary in this
Agreement, this Agreement shall become effective only simultaneously with the
consummation of the closing under the Stock Purchase Agreement, and no party
hereto or any other person shall have any rights or obligations hereunder prior
to such time.
4.5 Expenses. Each party shall bear its own fees and expenses
incurred in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement, the other Halmostock Transaction
Documents and the consummation of the transaction contemplated hereby and
thereby, including attorneys', accountants' and other professional fees and
expenses.
4.6 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
4.7 Entire Agreement; Amendment; Waiver; Assignment; Nature of
Obligations. This Agreement, together with the other Halmostock Transaction
Documents and the Stock Purchase Agreement, constitutes the entire agreement
among the parties with respect to the subject matter hereof and thereof and
supersedes all prior agreements and undertakings, both written and oral,
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among the parties, or any of them, with respect to the subject matter hereof and
thereof. No amendment, supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement, whether or not
similar, nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. This Agreement shall not be assigned by operation of law or
otherwise without the prior written consent of each of the parties hereto.
4.8 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
4.9 Governing Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware applicable to contracts
made in that State.
4.10 Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
4.11 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender (including neutral gender) shall extend to and
include all genders.
4.12 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
4.13 Prevailing Party's Attorneys' Fees. Notwithstanding anything to
the contrary in this Agreement, in the event of a dispute among TNI and/or
Samstock, on the one hand, and Halmostock, on the other hand, concerning the
interpretation or enforcement of any provision of this Agreement, the prevailing
party shall be reimbursed by the non-prevailing party for all reasonable
attorneys' fees and expenses incurred by the prevailing party in connection with
such dispute. The Company shall not be bound by this Section 4.13.
4.14 Jurisdiction and Service of Process. THE COMPANY, ASSIGNOR AND
HALMOSTOCK HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREE THAT, SUBJECT TO THE
OTHER PROVISIONS OF THIS AGREEMENT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT WHICH MAY BE LITIGATED SHALL BE LITIGATED IN SUCH
COURTS. EACH OF THE COMPANY, ASSIGNOR AND HALMOSTOCK ACCEPTS FOR SUCH PARTY AND
IN CONNECTION WITH SUCH PARTY'S PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE
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COMPANY, ASSIGNOR AND HALMOSTOCK AGREES TO ACCEPT SERVICE OF ALL PROCESS BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, IN ANY SUCH PROCEEDINGS
IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY EACH SUCH PARTY TO
BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. IF ANY AGENT APPOINTED BY THE
COMPANY, ASSIGNOR OR HALMOSTOCK REFUSES TO ACCEPT SERVICE, SUCH PARTY HEREBY
AGREES THAT SERVICE UPON SUCH PARTY BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COMPANY, ASSIGNOR OR HALMOSTOCK
TO BRING PROCEEDINGS AGAINST THE COMPANY, ASSIGNOR OR HALMOSTOCK IN THE COURTS
OF ANY OTHER JURISDICTION.
4.15 Trial. EACH OF THE COMPANY, ASSIGNOR AND HALMOSTOCK HEREBY WAIVES
SUCH PARTY'S RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO
RELATING TO THE SUBJECT MATTER HEREOF. EACH OF THE COMPANY, ASSIGNOR AND
HALMOSTOCK ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY PARTY TO THIS AGREEMENT WITH
RESPECT TO ANY ACTION COMMENCED BY ONE OF THEM AGAINST THE OTHER OF THEM. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF ASSIGNOR
AND HALMOSTOCK ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. EACH OF ASSIGNOR AND HALMOSTOCK FURTHER
WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH SUCH
PARTY'S LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES SUCH
PARTY'S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER
IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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IN WITNESS WHEREOF, the Company, Halmostock and Assignor have executed
this Assignment Agreement as of the date first above written.
ASSIGNOR:
EGI-TRANSMEDIA INVESTORS, L.L.C.
/s/ Sheli Z. Rosenberg
By -------------------------
Sheli Z. Rosenberg
Vice President
SAMSTOCK, L.L.C.
/s/ Sheli Z. Rosenberg
By ------------------------
Sheli Z. Rosenberg
Vice President
HALMOSTOCK:
HALMOSTOCK LIMITED PARTNERSHIP
by Halmos Investments-Western, Inc.,
its general partner
/s/ Steven Halmos
By: ------------------------
Steven Halmos, President
COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Melvin Chasen
By: ----------------------------
Melvin Chasen, President and
Chief Executive Officer
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EXHIBIT A
TRANSMEDIA NETWORK INC.
WARRANT TO PURCHASE 169,412 SHARES OF COMMON STOCK
Void after March 2, 2003
THIS CERTIFIES THAT, for value received, Halmostock Limited
Partnership, a Wyoming limited partnership (the "Holder"), is entitled to
subscribe for and purchase from Transmedia Network Inc., a Delaware corporation
(the "Company"), an aggregate of 169,412 shares (as adjusted pursuant to Section
3 hereof) of fully paid and nonassessable Common Stock (the "Shares") of the
Company, at the price per share set forth below (the "Exercise Price") (as
adjusted pursuant to Section 3 hereof), and subject to the provisions and upon
the terms and conditions hereinafter set forth.
Shares Exercise Price Per Share
------ ------------------------
56,470 $6.00
56,471 $7.00
56,471 $8.00
1. Exercise; Payment.
(a) Time of Exercise; Expiration. This Warrant is immediately
exercisable. This Warrant shall expire at, and shall no longer be exercisable
after, 5:00 p.m., Chicago local time, on March 2, 2003.
(b) Method of Exercise.
(i) Cash Exercise. The purchase rights represented by this
Warrant may be exercised by the Holder, at any time, in whole, or from
time to time, in part, by the surrender of this Warrant (with the notice
of exercise form attached hereto as Exhibit 1 duly executed) at the
principal office of the Company, and by the payment to the Company, by
certified, cashier's or other check acceptable to the Company, of an
amount equal to the aggregate Exercise Price of the Shares being
purchased.
(ii) Net Issue Exercise. In lieu of exercising this Warrant,
the Holder may elect to receive Shares equal to the value of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with notice of such election, in which
event the Company shall issue to the Holder a number of shares of the Company's
Common Stock computed using the following formula:
X = Y (A-B)
-------
A
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Where X = the number of Shares to be issued to the Holder.
Y = the number of Shares purchasable under this Warrant.
A = the fair market value of one share of the Company's Common Stock.
B = the Exercise Price (as adjusted to the date of such calculation).
(iii) Fair Market Value. For purposes of this Section 1, the fair
market value of the Company's Common Stock shall mean:
A. The average closing price of the Company's Common Stock on
the New York Stock Exchange or in the event the Company's Common
Stock is not then traded on the New York Stock Exchange the average
closing price quoted on any exchange on which the Common Stock is
listed, as published in the Mid-Western Edition of the Wall Street
Journal for the ten consecutive trading days prior to the date of
determination of fair market value.
B. If the Company's Common Stock is not then traded on the
New York Stock Exchange or on another exchange, the per share fair
market value of the Common Stock shall be the fair market value
price per share as determined in good faith by the Company's Board
of Directors.
(c) Stock Certificates. In the event of any exercise of the rights
represented by this Warrant, certificates for the shares of Common Stock so
purchased shall be delivered to the Holder within a reasonable time and, unless
this Warrant has been fully exercised or has expired, a new Warrant of identical
terms and provisions as those hereof, representing the shares with respect to
which this Warrant shall not have been exercised shall also be issued to the
Holder within such time.
2. Stock Fully Paid; Reservation of Shares. All of the Shares
issuable upon the exercise of the rights represented by this Warrant will, upon
issuance and receipt of the Exercise Price therefor, be fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof. During the period within which the rights represented by this
Warrant may be exercised, the Company shall at all times have authorized and
reserved for issuance sufficient shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.
3. Adjustment of Exercise Price and Number of Shares. The number and
kind of Shares purchasable upon the exercise of this Warrant and the Warrant
Price shall be subject to adjustment from time to time upon the occurrence of
certain events, as follows:
(a) Reclassification. In case of any reclassification or change of
outstanding securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), the
Company shall, as condition precedent to such transaction, execute a new Warrant
providing that the Holder shall have the right to exercise such new Warrant and
upon
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such exercise to receive, in lieu of each share of stock theretofore issuable
upon exercise of this Warrant, the kind and amount of shares of stock, other
securities, money and property receivable upon such reclassification or change
by a holder of one share of stock. Such new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this Section 3(a)
shall similarly apply to successive reclassifications or changes.
(b) Subdivision or Combination of Warrant Shares. If the Company at
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its stock, the Warrant Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination.
(c) Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend with respect to stock payable in,
or make any other distribution with respect to stock (except any distribution
specifically provided for in the foregoing Section 3(a) and 3(b)) of stock, then
the Exercise Price shall be adjusted, from and after the date of determination
of stockholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Exercise Price in effect immediately prior to such
date of determination by a fraction (i) the numerator of which shall be the
total number of shares of stock outstanding immediately prior to such dividend
or distribution, and (ii) the denominator of which shall be the total number of
shares of stock outstanding immediately after such dividend or distribution.
(d) Adjustment of Number of Warrant Shares. Upon each adjustment in
the Exercise Price, the number of shares of stock purchasable hereunder shall be
adjusted, to the nearest whole share, to the product obtained by multiplying the
number of Shares purchasable immediately prior to such adjustment in the
Exercise Price by a fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price immediately thereafter.
4. Notice of Adjustments. Whenever the number of Shares purchasable
hereunder or the Exercise Price thereof shall be adjusted pursuant to Section 3
hereof, the Company shall provide notice by first class mail to the holder of
this Warrant setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the number of Shares which may be purchased and the Exercise
Price therefor after giving effect to such adjustment.
5. Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder. In lieu of such fractional
shares the Company shall make a cash payment therefor based upon the Exercise
Price then in effect.
6. Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for new Warrants of like tenor representing in the aggregate the
purchase rights hereunder, and each of such new Warrants will represent such
portion of such rights as is designated by the Holder at the time of such
surrender. All Warrants representing portions of the rights hereunder are
referred to herein as the "Warrant."
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7. Replacement. Upon receipt of evidence reasonably satisfactory to
the Company (an affidavit of the Holder is deemed to be reasonably satisfactory)
of the ownership and the loss, theft, destruction or mutilation of this Warrant,
and in the case of any such loss, theft or destruction, upon the receipt of
indemnity reasonably satisfactory to the Company, or, in the case of any such
mutilation upon surrender of such Warrant, the Company will (at its expense,
except for the cost of any lost security indemnity bond required which shall be
paid for by the Holder) execute and deliver in lieu of such Warrant a new
Warrant of like kind representing the same rights represented by such lost,
stolen, destroyed or mutilated Warrant and dated the date of such lost, stolen,
destroyed or mutilated Warrant.
8. Restrictive Legend. The Shares issuable upon exercise of this
Warrant (unless registered under the Act) shall be stamped or imprinted with a
legend in substantially the following form:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be sold,
transferred, assigned, offered, pledged or otherwise disposed of
unless (i) there is an effective registration statement under
such Act and such laws covering such securities or (ii) such
sale, transfer, assignment, offer, pledge or other disposition is
exempt from the registration and prospectus delivery requirements
of such Act and such laws. The securities evidenced by this
certificate are subject to the restrictions on transfer contained
in the Amended and Restated Investment Agreement dated as of
March 3, 1998, and the Stockholders' Agreement dated as of March
3, 1998, in each case, to which the Company is a party, as
amended, supplemented or otherwise modified from time to time,
and may not be transferred except in compliance therewith."
9. Restrictions on Transfer. Neither this Warrant, nor any interest
herein, may be transferred to any party without the Company's prior written
consent; provided, however, that this Warrant may be transferred to any member
of the Zell Group (as defined in that certain Amended and Restated Investment
Agreement, dated as of March 3, 1998, among the Company, EGI-Transmedia
Investors, L.L.C., Samstock, L.L.C. and Holder) at any time, in whole, or from
time to time, in part, without the Company's consent, upon delivery to the
Company of the Notice of Transfer in the form of Exhibit 2 hereto.
10. Rights of Shareholders. No holder of this Warrant shall be
entitled, as a Warrant holder, to vote or receive dividends or be deemed the
holder of Common Stock or any other securities of the Company which may at any
time be issuable on the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the holder of this Warrant, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, consolidation, merger, conveyance, or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised and the Shares purchasable upon the
exercise hereof shall have become deliverable, as provided herein.
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<PAGE>
11. Notices, Etc. All notices and other communications between the
Company and the Holder shall be mailed by first class registered or certified
mail, postage prepaid, (i) if to the Company, at the Company's executive
offices, and (ii) if to the Holder, at such address as may have been furnished
to the Company in writing by the Holder.
12. Governing Law, Headings. This Warrant is being delivered in the
State of Delaware and shall be construed and enforced in accordance with and
governed by the laws of such State. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof.
Issued this 3rd day of March, 1998.
TRANSMEDIA NETWORK INC.
By: _____________________________
Its: ____________________________
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EXHIBIT 1
NOTICE OF EXERCISE
TO: TRANSMEDIA NETWORK INC.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
1. The undersigned hereby elects to purchase __________ shares
of Common Stock of TRANSMEDIA NETWORK INC. pursuant to the terms of the
attached Warrant.
2. Method of Exercise (Please mark the applicable blank):
___ The undersigned elects to exercise the attached Warrant by
means of a cash payment, and tenders herewith payment in
full for the purchase price of the shares being purchased.
___ The undersigned elects to exercise the attached Warrant by
means of the net exercise provisions of Section 1(b)(ii) of
the Warrant.
3. Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other
name as is specified below:
-----------------------------------
(Name)
-----------------------------------
-----------------------------------
(Address)
---------------------------------
(Signature)
Title:---------------------------
---------------------------
(Date)
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EXHIBIT 2
NOTICE OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________________ the right represented by the attached
Warrant to purchase _______* shares of Common Stock of TRANSMEDIA NETWORK INC.,
to which the attached Warrant relates, and appoints ___________________________
Attorney-in-Fact to transfer such right on the books of TRANSMEDIA NETWORK INC.,
with full power of substitution in the premises.
Dated: __________________
_________________________________
By:______________________________
______________________________
(Address)
- ---------------
* Insert here the number of shares without making any adjustment for additional
shares of Common Stock or any other stock or other securities or property or
cash which, pursuant to the adjustment provisions of the Warrant, may be
deliverable upon exercise.
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EXHIBIT 10.4
AMENDED AND RESTATED INVESTMENT AGREEMENT
Amended and Restated Investment Agreement dated as of March 3, 1998,
(as amended, supplemented or otherwise modified from time to time, this
"Agreement"), among Transmedia Network Inc., a Delaware corporation (the
"Company"), Samstock, L.L.C., a Delaware limited liability company ("Samstock"),
EGI-Transmedia Investors, L.L.C., a Delaware limited liability company (formerly
known as Transmedia Investors, L.L.C., "TNI"), and Halmostock Limited
Partnership, a Wyoming limited partnership ("Halmostock"), (each of the
foregoing parties, other than the Company, individually an "Investor" and
collectively the "Investors").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Stock Purchase and Sale Agreement,
dated as of November 6, 1997, among the Company and, Samstock and TNI (the
"Purchase Agreement"), the Company has agreed to issue and sell to Samstock
and/or TNI, and Samstock and/or TNI have agreed to purchase from the Company, an
aggregate of (i) 2,500,000 newly issued shares (collectively, the "Shares") of
the Company's Common Stock, par value $.02 per share ("Common Stock"), and (ii)
a warrant (the "Warrant") to purchase an additional 1,200,000 shares
(collectively, the "Warrant Shares") of Common Stock, in each case in such
proportions as are set forth in a notice delivered to the Company pursuant to
the terms of the Purchase Agreement.
WHEREAS, pursuant to that certain Assignment Agreement ("Assignment
Agreement"), dated as of even date herewith, among the Company, Samstock, TNI,
and Halmostock, Samstock and TNI have assigned to Halmostock their right to
acquire from the Company pursuant to the Purchase Agreement (i) 352,941 of the
Shares and (ii) a portion of the Warrant exercisable for 169,412 Warrant Shares.
WHEREAS, the Company, Samstock, TNI, and Melvin Chasen and Iris Chasen,
individuals residing in the State of Florida (together "Chasen"), have entered
into an Amended and Restated Agreement Among Stockholders, as of the date hereof
(the "Agreement Among Stockholders").
WHEREAS, the Company, Samstock, TNI and Halmostock, have entered into a
Stockholders' Agreement, as of the date hereof (the "Stockholders' Agreement").
WHEREAS, reference is made to that certain Investment Agreement, dated
as of November 6, 1997, among the Company, Samstock and TNI (the "Original
Investment Agreement").
WHEREAS, the Company and the Investors are entering into this Agreement
to establish certain arrangements with respect to the relationships between
them, and intend for this Agreement to amend, restate and supersede the Original
Investment Agreement in its entirety.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
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ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 The terms "beneficial ownership," "person" and "group" shall have
the respective meanings ascribed to such terms pursuant to Regulation 13D-G
adopted by the Securities and Exchange Commission (the "SEC") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date hereof. The term "affiliate" shall have the meaning ascribed to such
term pursuant to Rule 12b-2 under the Exchange Act, as in effect on the date
hereof.
1.2 The "Combined Voting Power" at any measurement date shall mean
the total number of votes which could have been cast in an election of directors
of the Company had a meeting of the stockholders of the Company been duly held
based upon a record date as of the measurement date if all Company Voting
Securities then outstanding and entitled to vote at such meeting were present
and voted to the fullest extent possible at such meeting.
1.3 "Company Voting Securities" shall mean, collectively, Common
Stock, any preferred stock of the Company that is entitled to vote generally for
the election of directors, any other class or series of Company securities that
is entitled to vote generally for the election of directors and any other
securities, warrants, options or rights of any nature (whether or not issued by
the Company) that are convertible into, exchangeable for, or exercisable for the
purchase of, or otherwise give the holder thereof any rights in respect of,
Common Stock, Company preferred stock that is entitled to vote generally for the
election of directors, or any other class or series of Company securities that
is entitled to vote generally for the election of directors.
1.4 "Disinterested Director" means Independent Directors who are
"disinterested directors" as that term is used in Section 144 of the Delaware
General Corporate Law.
1.5 "Effective Date" means the Closing Date as defined in the
Purchase Agreement.
1.6 "Independent Director" means directors of the Company who (i) are
not current or former employees or officers of the Company, (ii) are not serving
as designees of Samstock pursuant to Section 4.2 hereof, (iii) are not 5% or
greater stockholders of the Company, and (iv) have no financial interest in and
are not otherwise associated with any of the Investors, the Company, any
subsidiary of the Company or any of their respective affiliates, excluding,
however, any equity interest of not more than 2% of any publicly-held entity.
The term "associated" means having a business, financial or familial
relationship that might reasonably be expected to affect the individual's
judgment with respect to matters in which a member of the Zell Group might be
interested.
1.7 The "Maximum Permitted Voting Power" at any measurement date
shall mean the Voting Power as of such measurement date of all Company Voting
Securities, regardless of the holder thereof, (i) represented by the Shares or
the Warrant Shares, (ii) outstanding as of the date hereof and subject to the
Agreement Among Stockholders or the Stockholders' Agreement or (iii)
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issued by the Company after the date hereof and subject to the Agreement Among
Stockholders or the Stockholders' Agreement upon issuance; provided, however,
that, in the event that the Company issues any Company Voting Securities after
the date hereof, the Maximum Permitted Voting Power shall be adjusted so that
the percentage of the Combined Voting Power represented by the Maximum Permitted
Voting Power shall not be reduced.
1.8 "Zell Affiliate" means Samstock, TNI and any of their respective
affiliates under control of or common control with Samstock or TNI (exclusive of
Halmostock, Chasen and their respective affiliates).
1.9 "Zell Group" means (i) Samstock, (ii) TNI, (iii) any member of
Samstock or TNI, (iv) any affiliate of any member of Samstock or TNI under
control of, or common control with, such member, (v) Halmostock, (vi) any
partner of Halmostock, (vii) any affiliate of any partner of Halmostock under
control of, or common control with, Halmostock, and (viii) any corporations,
partnerships, limited liability companies or other legal entities that are the
affiliates of any of the foregoing, collectively; provided, however, that
publicly held entities that might fall within this definition (a "Public Zell
Affiliate") shall not be treated as affiliates of any member of the Zell Group
hereunder unless any member of the Zell Group or any of its affiliates took any
action, directly or indirectly, to suggest, encourage or assist such entity in
taking the relevant action to be attributed to the Zell Group hereunder. For
purposes of the preceding sentence and the similar clause appearing in the
second sentence of Section 3.1, the failure of any member of the Zell Group or
any of its affiliates, upon learning of a Public Zell Affiliate's action, to
request that such Public Zell Affiliate refrain from taking such action because
of the provisions of this Agreement will be deemed to constitute "encouraging or
assisting" in such action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Samstock and TNI jointly and severally represent and warrant to
the Company and Chasen as follows:
(a) Each of Samstock and TNI is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware.
Each of Samstock and TNI has the limited liability company power and authority
to enter into this Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered
by each of Samstock and TNI and constitutes the legal, valid and binding
agreement of each of Samstock and TNI, enforceable against each of them in
accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance by Samstock or TNI of its obligations hereunder will conflict with,
or result in a breach of, or constitute a default under, any law, rule,
regulation, judgment, order or decree of any court, arbitrator or governmental
agency or instrumentality, or any agreement or instrument to which Samstock, TNI
or their respective properties are bound or by which they are affected or any
organizational documents of Samstock or TNI.
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(d) As of the date hereof, no shares of Common Stock (other than the
Shares and the Warrant Shares) are currently beneficially owned by Samstock or
TNI.
2.2 Halmostock represents and warrants to the Company, Samstock, TNI
and Chasen as follows:
(a) Halmostock is a limited partnership duly formed, validly existing
and in good standing under the laws of Wyoming. Halmostock has the limited
partnership power and authority to enter into this Agreement and perform its
obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered
by Halmostock and constitutes the legal, valid and binding agreement of
Halmostock, enforceable against it in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance by Halmostock of its obligations hereunder will conflict with, or
result in a breach of, or constitute a default under, any law, rule, regulation,
judgment, order or decree of any court, arbitrator or governmental agency or
instrumentality, or any agreement or instrument to which Halmostock or its
properties are bound or by which they are affected or the certificate of limited
partnership or limited partnership agreement of Halmostock.
(d) As of the date hereof and as of the Closing Date, Halmostock
beneficially owns 92,000 (and no more) shares of Common Stock (other than the
Shares and the Warrant Shares), free and clear of any liens, claims, equities or
encumbrances of any kind.
2.3 The Company represents and warrants to Investors as follows:
(a) The Company is a validly existing corporation under the laws
of the jurisdiction of its organization and has the corporate power and
authority to enter into this Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or any agreement or instrument to which the Company is bound or
by which it is affected or any charter documents of the Company.
ARTICLE III
STANDSTILL AGREEMENT
3.1 Acquisition of Company Voting Securities. Except as the same
may be approved by a majority of the Disinterested Directors in a specific
resolution to that effect adopted prior to
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the taking of such action, from and after the Effective Date and prior to the
fifth anniversary of the Effective Date, no member of the Zell Group shall,
directly or indirectly, acquire, offer to acquire, agree to acquire, become the
beneficial owner of or obtain any rights in respect of any Company Voting
Securities, by purchase or otherwise, or take any action in furtherance thereof,
if the effect of such acquisition, agreement or other action would be (either
immediately or upon consummation of any such acquisition, agreement or other
action, or expiration of any period of time provided in any such acquisition,
agreement or other action) to increase the aggregate beneficial ownership of
Company Voting Securities by the Zell Group to such number of Company Voting
Securities that represents or possesses greater than the Maximum Permitted
Voting Power. Notwithstanding the foregoing maximum limitations, (A) no member
of the Zell Group shall be obligated to dispose of any Company Voting Securities
beneficially owned in violation of such maximum limitations if, and solely to
the extent that, its beneficial ownership is or will be increased solely as a
result of (1) a repurchase of any Company Voting Securities by the Company or
any of its subsidiaries if such repurchase was approved by a majority of the
Disinterested Directors or (2) the purchase by any Public Zell Affiliate not
otherwise constituting a part of the Zell Group in accordance with Section 1.9
hereof unless any member of the Zell Group took any action, directly or
indirectly, to suggest, encourage or assist in such purchase and (B) the
foregoing shall not prohibit any purchase of Company Voting Securities directly
from the Company pursuant to the exercise of the Warrant and any rights,
oversubscription rights or standby purchase obligations in connection with
rights offerings by the Company or exercise of any stock options granted by the
Company. For purposes of calculating the maximum limitations, all Company Voting
Securities that are the subject of an agreement, arrangement or understanding
pursuant to which the Zell Group or any member thereof has the right to obtain
beneficial ownership of such securities in the future (including the Warrant
Shares to the extent the Warrant has not been exercised or has not expired)
shall also be deemed to be outstanding and beneficially owned by the Zell Group
or the applicable member thereof.
3.2 Proxy Solicitations, etc. Prior to the fifth anniversary of the
Effective Date, no member of the Zell Group shall solicit proxies, assist any
other person in any way, directly or indirectly, in the solicitation of proxies,
become a "participant" in a "solicitation" or assist any "participant" in a
"solicitation" (as such terms are defined in Rule 14a-1 of Regulation 14A under
the Exchange Act) in opposition to the recommendation of a majority of the
Disinterested Directors, submit any proposal for the vote of stockholders of the
Company, in each case (a) without the prior approval of the majority of the
Disinterested Directors or (b) other than with respect to Company Voting
Securities (i) held by any member of the Zell Group or (ii) subject to the
Agreement Among Stockholders or the Stockholders' Agreement.
3.3 No Voting Trusts, Pooling Agreements, or Formation of "Groups".
Except as the same may be approved by a majority of the Disinterested Directors
in a specific resolution to that effect adopted prior to the taking of such
action, prior to the fifth anniversary of the Effective Date, no member of the
Zell Group shall (a) form, join or in any other way participate in a
partnership, pooling agreement, syndicate, voting trust or other "group" with
respect to Company Voting Securities other than (i) the Zell Group or (ii) with
any Company stockholders who are parties to the Agreement Among Stockholders or
the Stockholders' Agreement as of the date hereof or hereafter become parties to
the Agreement Among Stockholders or the Stockholders' Agreement in each case in
accordance with the terms thereof as a result of a sale, assignment or other
transfer of Company Voting Securities that are subject to the Agreement Among
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Stockholders or the Stockholders' Agreement ("Other Covered Stockholders"); or
(b) enter into any agreement or arrangement or otherwise act in concert with any
other person other than a member of the Zell Group (provided such member of the
Zell Group is itself bound by the terms of this Agreement), or a holder of any
interest in any entity included within the Zell Group, for the purpose of
acquiring, holding, voting or disposing of Company Voting Securities, other than
with any Other Covered Stockholders.
3.4 No Solicitation of Bidders. Prior to the fifth anniversary of the
Effective Date, no member of the Zell Group shall directly or indirectly assist,
encourage or induce any person to bid for or acquire outstanding Company Voting
Securities (other than any Company Voting Securities held by the Zell Group) in
any transaction or series of related transactions, unless the consummation of
such transaction or series of related transactions requires approval of a
majority of the Board of Directors. Prior to disclosing any confidential
non-public information concerning the Company to such person, such person shall
have executed and delivered to the Zell Group a confidentiality and standstill
agreement on substantially the same terms as those set forth in the letter
agreement dated July 16, 1997, entered into between the Company and an affiliate
of Samstock and TNI in connection with the transactions contemplated by the
Purchase Agreement, with such duration as shall be appropriate under the
circumstances in the reasonable judgment of the Zell Group. Promptly upon the
Zell Group entering into any written agreement or arrangement with such person
concerning a transaction covered by this Section 3.4 (including such
aforementioned confidentiality and standstill agreement), the Zell Group shall
notify the Company's Board of Directors and provide the Company's Board of
Directors with copies of the same; provided, however, that the mere sale of
Company Voting Securities by any member of the Zell Group shall not constitute
assisting, encouraging or inducing within the meaning of this Section 3.4.
3.5 Non-Circumvention. Except as the same may be approved by a
majority of the Disinterested Directors in a specific resolution to that effect
adopted prior to the taking of such action, prior to the fifth anniversary of
the Effective Date, no member of the Zell Group shall take any action, alone or
in concert with any other person to circumvent the limitations of the provisions
of Article III of this Agreement. Without limiting the generality of the
foregoing, without such approval no member of the Zell Group shall (i) present
to the Company or to any third party any proposal that can reasonably be
expected to result in any increase beyond the Maximum Permitted Voting Power of
Company Voting Securities beneficially owned in the aggregate by the Zell Group,
(ii) publicly suggest or announce its willingness or desire to engage in a
transaction or group of transactions that would result in any increase beyond
the Maximum Permitted Voting Power of Company Voting Securities beneficially
owned in the aggregate by the Zell Group, or (iii) initiate, request, induce or
attempt to induce or give encouragement to any other person to initiate any
proposal that can reasonably be expected to result in any increase beyond the
Maximum Permitted Voting Power of Company Voting Securities beneficially owned
in the aggregate by the Zell Group.
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ARTICLE IV
VOTING OF COMPANY SECURITIES AND RELATED MATTERS
4.1 Each member of the Zell Group that is a holder of record of
Company Voting Securities shall be present, and each member of the Zell Group
that is a beneficial owner of Company Voting Securities shall cause the holder
of record to be present, in person or by proxy, at all meetings of stockholders
of the Company so that all Company Voting Securities owned of record or
beneficially by the Zell Group may be counted for the purpose of determining the
presence of a quorum at such meetings.
4.2 So long as Samstock is entitled to designate one or two directors
in accordance with the provisions of Section 4.4 hereof, except to the extent
otherwise provided herein, the Company shall take all necessary or appropriate
action to assist in the nomination and election as directors of (i) that number
of individuals specified in Section 4.4 below designated by Samstock to be
elected as directors of the Company, provided such designees are reasonably
acceptable to the Independent Directors at the time of their designation, and
(ii) two Independent Directors. All persons to be so designated as Independent
Directors shall be individuals selected by a majority of the Independent
Directors then in office and shall be mutually acceptable to Samstock on the one
hand and a majority of the Independent Directors on the other hand. The Company
hereby agrees and acknowledges that Sam Zell, F. Philip Handy, Rod Dammeyer and
Steven J. Halmos are reasonably acceptable to the Independent Directors as
directors of the Company. The Company hereby agrees and acknowledges that Lester
Wunderman is reasonably acceptable as an Independent Director. The Company
further agrees that one position on the Board of Directors of the Company is
intended to be filled by the chief executive officer to be selected by the Board
of Directors of the Company, and that in no event shall the chief executive
officer of the Company count as a designee of Samstock. Samstock shall cause its
designees on the Board of Directors of the Company to take all necessary or
appropriate action to assist in the nomination and election as directors of all
such nominees as may be selected to serve as Independent Directors in the manner
described above. The Zell Group and the directors designated by Samstock shall
not vote (as stockholders or directors) in favor of, and shall not take any
other action in furtherance of or seeking to cause, a reduction of the number of
directors of the Company below seven directors or the removal of any Independent
Directors.
4.3 For purposes of this Agreement, directors "designated by
Samstock" shall include directors designated by Samstock as anticipated by this
Article IV, and any other directors of the Company (other than the Company's
chief executive officer) affiliated or associated with any member of the Zell
Group.
4.4 Samstock shall be entitled to designate the following number of
directors pursuant to Section 4.2 hereof:
(a) so long as the members of the Zell Group that have
executed this Agreement as parties (the "Zell Contracting Parties")
beneficially own collectively at least 15% of the Combined Voting
Power of all Company Voting Securities (including, for these purposes,
the Warrant Shares issuable upon exercise of the Warrant until such
time as the Warrant expires), Samstock shall have the right to
designate two directors of the
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Company, provided such designees are reasonably acceptable to
the Independent Directors at the time of their designation (it
being hereby acknowledged and agreed by the Company that each of
Sam Zell, F. Philip Handy, Rod Dammeyer and Steven J. Halmos
will be acceptable to the Company at the time of designation);
and
(b) so long as the Zell Contracting Parties beneficially own
less than 15%, but at least 5% of the Combined Voting Power of all
Company Voting Securities (as so calculated), Samstock shall have the
right to designate one director of the Company, provided such designee
is reasonably acceptable to the Independent Directors at the time of
his or her designation (it being hereby acknowledged and agreed by the
Company that each of Sam Zell, F. Philip Handy, Rod Dammeyer and Steven
J. Halmos will be acceptable to the Company at the time of
designation);
provided, however, that at any time when the Zell Contracting Parties
shall no longer beneficially own at least 15% of the Combined Voting Power of
all Company Voting Securities (as so calculated), Samstock shall cause one of
its two designees to resign forthwith such that only one designee remains on the
Board of Directors of the Company; and provided, further, that at any time when
the Zell Contracting Parties shall no longer beneficially own at least 5% of the
Combined Voting Power of all Company Voting Securities (as so calculated),
Samstock shall not have the right to designate any directors of the Company,
Samstock's rights under this Article IV shall terminate, Samstock shall cause
its designees to resign forthwith such that no designee of Samstock remains on
the Board of Directors of the Company and all of the covenants under Article IV
of this Agreement shall lapse and no longer be of any force or effect. In
addition, all of the covenants under Article III of this Agreement shall lapse
and no longer be of any force or effect if for any reason any of the director
designees who are designated by Samstock pursuant to the rights granted by
Section 4.2, and are reasonably acceptable to the Independent Directors at the
time of their designation in accordance with Sections 4.2 and 4.4, shall not be
nominated for election as a director of the Company with the unanimous
recommendation of all of the directors of the Company (other than those
directors designated by Samstock pursuant to Section 4.2) at the next election
of directors of the Company following Samstock's designation. At any time when
Samstock shall have the right to designate one or two directors, as the case may
be, pursuant to this Article IV, the Company shall not increase the number of
directors to more than seven directors without the prior written consent of
Samstock.
4.5 Except as expressly set forth above, the Investors shall vote all
Company Voting Securities owned of record by the Investors and shall cause all
Company Voting Securities owned beneficially by the Investors to be voted with
respect to the election or removal of directors of Company, (a) either (i) in
accordance with the recommendations of a majority of the Disinterested
Directors, or (ii) in the same proportions (including abstentions) as the
holders of record of Company Voting Securities other than those beneficially
owned by the Zell Group that are entitled to vote on the election of directors
(or such other matter) vote their Company Voting Securities, provided, however,
that notwithstanding the foregoing subparagraph (a), the Investors may at all
times vote their Company Voting Securities for the election or retention of the
one or two directors, as the case may be, designated by Samstock in accordance
with Section 4.2.
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ARTICLE V
REGISTRATION RIGHTS
5.1 Definitions. For purposes of this Article V:
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act").
(b) The term "Registrable Securities" means shares of Common Stock
held, from time to time, by any member of the Zell Group or any Other Covered
Stockholders.
(c) The term "Holder" means any (i) Zell Contracting Party or (ii)
Other Covered Stockholder who is a party hereto or who executes and delivers to
the Company a joinder agreement, agreeing to be legally bound by this Article V,
in each case who owns of record Registrable Securities.
(d) The term "Rule 415 Offering" means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Act.
(e) The term "Shelf Registration Statement" means a registration
statement intended to effect a shelf registration in connection with a Rule 415
Offering.
5.2 Shelf Registrations.
(a) Shares and Warrant Shares. As soon as practicable after the
Effective Date, but in any event no later than ninety (90) days after the
Effective Date, the Company shall prepare and file with the SEC a Shelf
Registration Statement (which shall include pledgees of any selling stockholder
under the caption "plan of distribution" contained in such Shelf Registration
Statement) with respect to all Shares and Warrant Shares and use its reasonable
efforts to cause such Shelf Registration Statement to become effective and keep
such registration statement effective until such time as all Shares and Warrant
Shares have been sold or disposed of thereunder or sold, transferred or
otherwise disposed of (other than pursuant to a pledge of such Registrable
Securities) to a person that is not a Holder or, with respect to any Warrant
Shares for which the Warrant has not been exercised prior to its expiration,
until such time as the Warrant has expired. Notwithstanding the foregoing, if
the Company shall furnish to Samstock a certificate signed by the Chief
Executive, Chief Operating, or Chief Financial Officer of the Company stating
that, in the good faith judgment of a majority of the Disinterested Directors,
it would be materially detrimental to the Company for such registration
statement to be filed, the Company shall have the right to defer such filing for
a period of not more than 120 days after receipt of the Samstock's request;
provided, however, that the Company may not utilize this right more than once in
any 12-month period.
(b) Additional Shares. If the Company shall at any time receive a
written request from Samstock (or its designee) on behalf of any Zell Affiliates
who are the Holders of Registrable Securities that the Company file a Shelf
Registration Statement with respect to any Registrable
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Securities, then, within sixty (60) days after the receipt of such request, the
Company shall prepare and file with the SEC a Shelf Registration Statement
(which shall include pledgees of any selling stockholder in the "plan of
distribution") with respect to all Registrable Securities which the Holders
request to be registered and use its reasonable efforts to cause such Shelf
Registration Statement to become effective and keep such Shelf Registration
Statement effective until such time as all Registrable Securities covered
thereby have been sold or disposed of thereunder or sold, transferred or
otherwise disposed of (other than pursuant to a pledge of such Registrable
Securities) to a person that is not a Holder. The rights to cause the Company to
file a Shelf Registration Statement under this Section 5.2(b) shall be in
addition to the rights to cause the Company to file a Shelf Registration
Statement under Section 5.2(a). Notwithstanding the foregoing, if the Company
shall furnish to Samstock a certificate signed by the Chief Executive, Chief
Operating, or Chief Financial Officer of the Company stating that, in the good
faith judgment of a majority of the Disinterested Directors, it would be
materially detrimental to the Company for such registration statement to be
filed, the Company shall have the right to defer such filing for a period of not
more than 120 days after receipt of the Samstock's request; provided, however,
that the Company may not utilize this right more than twice in any 12-month
period.
(c) Schedule 13D Statement. Samstock and TNI covenant and agree that
they will, and that they shall cause each Zell Affiliate which shall at any time
hold Shares and/or Warrant Shares subject to Section 5.2(a) hereof to, include
in any Schedule 13D filed by or on behalf of such Holder a statement to the
effect that such Shelf Registration Statement was put in effect for the sole
purpose of facilitating such Holder's ability to margin its stock and does not
represent any present intention on behalf of the Holder to dispose of any Shares
or Warrant Shares covered thereby. Halmostock covenants and agrees that it will,
and that it shall cause each of its affiliates (other than Zell Affiliates)
which shall at any time hold Shares and/or Warrant Shares subject to Section
5.2(a) hereof to, include in any Schedule 13D filed by or on behalf of such
Holder a statement to the effect that such Shelf Registration Statement does not
represent any present intention on behalf of the Holder to dispose of any Shares
or Warrant Shares covered thereby.
5.3 Additional Obligations of the Company. Whenever the Company has
filed a Shelf Registration Statement under this Article V, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC such amendments and supplements to
such Shelf Registration Statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Act with
respect to the disposition of all securities covered thereby.
(b) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities covered by such Shelf
Registration Statement owned by them.
(c) Use its best efforts to register and qualify the securities
covered by such Shelf Registration Statement under such other securities or Blue
Sky laws of such states or other jurisdictions as shall be reasonably requested
by the Holders, provided that the Company shall not
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be required to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions where it is not so subject.
(d) Notify each Holder of Registrable Securities covered by such
Shelf Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and then
use its best efforts to promptly correct such statement or omission.
Notwithstanding the foregoing and anything to the contrary set forth in this
Section 5.2, each Holder acknowledges that the Company shall have the right to
suspend the use of the prospectus forming a part of a Shelf Registration
Statement if such offering would interfere with a pending corporate transaction
or for other reasons until such time as an amendment to the Shelf Registration
Statement has been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. Each Holder hereby covenants that it will (a) keep
any such notice strictly confidential, and (b) not sell any shares of Common
Stock pursuant to such prospectus during the period commencing at the time at
which the Company gives the Holder notice of the suspension of the use of such
prospectus and ending at the time the Company gives the Holder notice that it
may thereafter effect sales pursuant to such prospectus. The Company shall only
be able to suspend the use of such prospectus for periods aggregating no more
than 90 days in respect of any registration.
5.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article V with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities and as may be required from time to time to keep such registration
current.
5.5 Expenses of Shelf Registration. All expenses incurred by or on
behalf of the Company in connection with registrations, filings or
qualifications pursuant to Section 5.2, including, without limitation, all
registration, filing and qualification fees, printers' and accounting fees, and
fees and disbursements of counsel for the Company, shall be borne by the
Company. In no event shall the Company be obligated to bear any underwriting
discounts or commissions or brokerage fees or commissions relating to
Registrable Securities or the fees and expenses of counsel to the selling
Holders.
5.6 Indemnification. In the event any Registrable Securities are
included in a Shelf Registration Statement under this Article V:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder and the affiliates of such Holder, and their
respective directors, officers, general and limited partners, agents and
representatives (and the directors, officers, affiliates and controlling persons
thereof), and each other person, if any, who controls such Holder within the
meaning of the Act, against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Act, the Exchange Act or
other federal or state law, insofar as such
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losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus (but only if such statement is not corrected in the
final prospectus) contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not misleading
(but only if such omission is not corrected in the final prospectus), or (iii)
any violation or alleged violation by the Company in connection with the
registration of Registrable Securities under the Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Act, the
Exchange Act or any state securities law; and the Company will pay to each such
Holder, affiliate or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 5.6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder or controlling person. Each
indemnified party shall furnish such information regarding itself or the claim
in question as an indemnifying party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 5.6(b) in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 5.6(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
Holder, which consent shall not be unreasonably withheld; provided, that, in no
event shall any indemnity under this Section 5.6(b) exceed the gross proceeds
from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
5.6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 5.6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party
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so desires, jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the parties.
The failure to deliver written notice to the indemnifying party within a
reasonable time after the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
5.6 to the extent of such prejudice, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 5.6. The
indemnified party shall have the right, but not the obligation, to participate
in the defense of any action referred to above through counsel of its own
choosing and shall have the right, but not the obligation, to assert any and all
separate defenses, cross claims or counterclaims which it may have, and the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of such counsel has been specifically authorized in
advance by the indemnifying party, (ii) there is a conflict of interest that
prevents counsel for the indemnifying party from adequately representing the
interests of the indemnified party or there are defenses available to the
indemnified party that are different from, or additional to, the defenses that
are available to the indemnifying party, (iii) the indemnifying party does not
employ counsel that is reasonably satisfatory to the indemnified party within a
reasonable period of time, or (iv) the indemnifying party fails to assume the
defense or does not reasonably contest such action in good faith, in which case,
if the indemnified party notifies the indemnifying party that it elects to
employ separate counsel, the indemnifying party shall not have the right to
assume the defense of such action on behalf of the indemnified party and the
reasonable fees and expenses of such separate counsel shall be borne by the
indemnifying party; provided, however, that, the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to one firm acting as local counsel) for all
indemnified parties.
(d) The obligations of the Company and the holders under this Section
5.6 shall survive the completion of any offering of Registrable Securities in a
Shelf Registration Statement under this Article V.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with any underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
5.7 Reports Under the Exchange Act. With a view to making available
to the holders the benefits of Rule 144 and any other rule or regulation of the
SEC that may at any time permit a Holder to sell securities of the Company to
the public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required under the Act and the Exchange Act; and
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(c) furnish to any Holder forthwith upon request (i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144, or as to whether it qualifies as a registrant whose securities may be
resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information (and the Company shall take such
action) as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
5.8 No Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Article V may only
be assigned by a Holder to a transferee or assignee of any Registrable
Securities if (i) such transferee or assignee is a Zell Contracting Party and
(ii) immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
5.9 Waiver Procedures. The observance by the Company of any provision
of this Article V may be waived (either generally or in a particular instance
and either retroactively or prospectively) with the written consent of the
Holders of a majority of the Registrable Securities, and any waiver effected in
accordance with this paragraph shall be binding upon each Holder of Registrable
Securities.
5.10 "Market Stand-off" Agreement. Any Holder of Registrable
Securities, if requested by an underwriter of any registered public offering of
Company securities being sold in a firm commitment underwriting, agrees not to
sell or otherwise transfer or dispose of any Common Stock (or other Company
Voting Securities) held by such Holder other than shares of Registrable
Securities included in the registration during the seven days prior to, and
during a period of up to 180 days following, the effective date of the
registration statement. Such agreement shall be in writing in a form reasonably
satisfactory to the Company and such underwriter. The Company may impose
stop-transfer instructions with respect to the securities subject to the
foregoing restriction until the end of the required stand-off period.
ARTICLE VI
CONFIDENTIALITY
6.1 Confidential Material.
(a) Definitions. For purposes of this Section 6.1:
(i) The term "Confidential Material" means all information,
whether oral, written or otherwise (including any information furnished
prior to the execution of this Agreement), furnished by the Company to
any member of the Zell Group or any of the Representatives (as defined
below), and all notes, reports, analyses, compilations, studies and
other materials prepared by the Zell Group or any of the
Representatives (in whatever form maintained, whether documentary,
computer storage or otherwise) containing or based upon, in whole or in
part, any such information, and the fact that such information
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has been delivered to the Zell Group or any of its Representatives. The
term "Confidential Material" does not include information which is or
becomes generally available to the public other than as a result of a
disclosure by any member of the Zell Group or any of the
Representatives or becomes available to any member of the Zell Group or
any of the Representatives on a non-confidential basis from any source
that is not known by such member of the Zell Group or such
Representative to be bound by an obligation of confidentiality to the
Company.
(ii) The term "Representatives" shall mean any and all
employees, agents, financial advisors, partners, affiliates or other
representatives of any member of the Zell Group.
(b) Each member of the Zell Group and each of the Representatives
will preserve the confidentiality of the Confidential Material and will not
disclose any of the Confidential Material in any manner whatsoever; provided,
however, that (i) the Zell Group may make any disclosure of such information to
which the Company gives its prior consent, (ii) any of such information may be
disclosed to the Representatives who need to know such information, and who are
informed of the confidential nature of the Confidential Material and of the
terms of this Section 6.1 and who agree to keep such information confidential,
(iii) any member of the Zell Group may make any disclosure of such information
in connection with any activity which such member of the Zell Group reasonably
believes to be in the best interests of the Company and not prohibited by this
Agreement, provided the recipient of such information is informed of the
confidential nature of the Confidential Material and of the terms of this
Section 6.1 and agrees to keep such information confidential and (iv) any member
of the Zell Group may make any disclosure of such information to any other
member of the Zell Group. In any event, the Zell Group will be responsible for
any actions by the Representatives which are not in accordance with the
provisions hereof.
(c) If any member of the Zell Group or any of the Representatives are
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand, any informal or
formal investigation by any government or governmental agency or authority or
otherwise) to disclose any Confidential Material or such person's opinion,
judgment, view or recommendation concerning the Company as developed from the
Confidential Material, the Zell Group agrees (i) to promptly notify the Company
of the existence, terms and circumstances surrounding such a request, (ii) to
the extent possible, to
consult with the Company on the advisability of taking legally available steps
to resist or narrow such request and (iii) if disclosure of such information is
required, to furnish only that portion of the Confidential Material which, in
the opinion of counsel to the relevant member of the Zell Group, the Zell Group
is legally compelled to disclose, and to cooperate with any action by the
Company to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded the Confidential Material.
(d) Each Investor hereby acknowledges that the United States
securities laws prohibit, in certain circumstances, any person who has received
from an issuer material, non-public information, including certain information
that may be part of the Confidential Material, while such information is
non-public, from purchasing or selling securities of such issuer or from
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communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities.
(e) This Section 6.1 shall survive until the earlier of the fifth
anniversary of this Agreement or two years following the date of termination of
this Agreement.
ARTICLE VII
MISCELLANEOUS
7.1. CEO Search. The Company (represented by the Company's current
chief executive officer and the chairman of the Board's Compensation Committee)
and the Investors (represented by an individual designated by Samstock in its
sole discretion) shall jointly conduct a search to find a replacement for the
individual serving as the Company's chief executive officer as of the date of
this Agreement, which search shall commence promptly upon the execution of this
Agreement.
7.2. Term of Agreement; Certain Provisions Regarding Termination.
Unless this Agreement specifically provides for earlier or later termination
with respect to any particular right or obligation, this Agreement shall
terminate (a) contemporaneously with the termination of the Purchase Agreement
in accordance with Section 8.1 thereof, or (b) if the Zell Group shall, at any
time, sell or otherwise dispose of or otherwise cease to own Company Voting
Securities such that the Zell Group beneficially owns in the aggregate Company
Voting Securities representing less than 5% of the Combined Voting Power of all
Company Voting Securities (calculated in accordance with Section 3.1 and
including the Shares and, to the extent the Warrant has not been exercised or
has not expired, the Warrant Shares).
7.3 Legend and Stop Transfer Order. To assist in effectuating the
provisions of this Agreement, each of the Investors hereby consents to the
placement, in connection with the transactions contemplated by the Purchase
Agreement or otherwise within 10 business days after any Company Voting
Securities become subject to the provisions of this Agreement, of the applicable
legend specified in the Assignment Agreement on all certificates representing
ownership of Company Voting Securities owned of record or beneficially by any
member of the Zell Group, until such shares are sold, transferred or disposed in
a manner permitted hereby to a person who is not then a member of the Zell
Group. The Company agrees to remove promptly all legends and stop transfer
orders with respect to the transfer of Company Voting Securities being made to a
person who is not then a member of the Zell Group in compliance with the
provisions of this Agreement.
7.4 Remedies.
(a) Each of the Investors and the Company acknowledge and agree that
(i) the provisions of this Agreement are reasonable and necessary to protect the
proper and legitimate interests of the parties hereto, and (ii) the parties
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each party shall be entitled
to preliminary and permanent injunctive relief to prevent breaches of the
provisions of this Agreement by the
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other party (or its affiliates) without the necessity of proving actual damages
or of posting any bond, and to enforce specifically the terms and provisions
hereof and thereof in any court of the United States or any state thereof having
jurisdiction, which rights shall be cumulative and in addition to any other
remedy to which the parties may be entitled hereunder or at law or equity.
(b) In addition to any other remedy the Company may have under this
Agreement or in law or equity, if any member of the Zell Group shall acquire or
transfer any Company Voting Securities in violation of this Agreement, such
Company Voting Securities which are in excess of the number permitted to be
owned or controlled by the Zell Group or which have been transferred by a member
of the Zell Group in violation of the provisions of this Agreement may not be
voted by the owner thereof or any proxy therefor.
7.5 Additional Zell Group Parties; Several Obligations. All of the
liabilities and obligations under this Agreement: (a) of members of the Zell
Group who are Zell Affiliates shall be joint and several; (b) as between members
of the Zell Group who are Zell Affiliates, on the one hand, and any other
persons or groups who are not Zell Affiliates, on the other hand, shall be
several and not joint. Notwithstanding anything to the contrary in this
Agreement, in no event shall any member of the Zell Group who is a Zell
Affiliate be responsible in any manner for any liability or obligation of any
person or group who is not a Zell Affiliate. Notwithstanding anything to the
contrary in this Agreement, in no event shall any member of the Zell Group who
is not a Zell Affiliate be responsible in any manner for any liability or
obligation of any person or group who is a Zell Affiliate. Notwithstanding
anything to the contrary in this Agreement, no natural person or entity that is
not a signatory party to this Agreement shall have any liability or obligation
under this Agreement, except as otherwise provided in Section 7.12 of this
Agreement. Each member of the Zell Group that shall become or have the right to
become the beneficial owner, within the meaning and scope of Section 3.1 hereof,
of Company Voting Securities shall, promptly upon becoming such owner or holder,
execute and deliver to the Company a joinder agreement, agreeing to be legally
bound by this Agreement to the same extent as if it had signed this Agreement as
an original signatory as a member of the Zell Group (each such member of the
Zell Group, a "Zell Contracting Party"); provided that failure to execute such
an agreement shall not excuse such member's non-compliance with any provision of
this Agreement. No member of the Zell Group shall transfer securities to another
member of the Zell Group unless the transferee shall agree to be bound by this
Agreement in the manner specified above in this Section 7.5.
7.6 Notices. All notices, and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile, to
the appropriate address or facsimile number set forth below (or at such other
address or facsimile number for a party as shall be specified by like notice):
if to Samstock or TNI:
EGI-Transmedia Investors, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: F. Philip Handy
Fax: (312) 454-0610
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with an additional copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza - Suite 1600
Chicago, IL 60606
Attention: Joseph M. Paolucci, Esq.
Fax: (312) 454-0335
if to Halmostock:
Halmostock Limited Partnership
21 W. Las Olas Boulevard
Ft. Lauderdale, FL 33301
Attention: Steven J. Halmos
Fax: (954) 760-4983
with an additional copy to:
Kenny Nachwalter Seymour
Arnold Critchlow & Spector, P.A.
1100 Miami Center
201 South Biscayne Boulevard
Miami, Florida 33131-4327
Attention: Thomas H. Seymour, Esq.
Fax: (305) 372-1861
if to the Company:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: Stephen P. Farrell, Esq.
Fax: (212) 309-6273
7.7 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no
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way be affected, impaired or invalidated. The parties hereto agree that they
will use their best efforts at all times to support and defend this Agreement.
7.8 Amendments. This Agreement may be amended only by an agreement in
writing signed by each of the parties hereto; provided, however, that any
amendment executed by the Company must prior thereto be approved by a majority
of the Disinterested Directors then in office.
7.9 Governing Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware applicable to contracts
made in that State.
7.10 Descriptive Headings. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
7.11 Counterparts; Facsimile Signatures. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
bears the signatures of each of the parties hereto. This Agreement may be
executed in any number of counterparts, each of which shall be an original as
against the party whose signature appears thereon, or on whose behalf such
counterpart is executed, but all of which taken together shall be one and the
same agreement. A facsimile copy of a signature of a party to this Agreement or
any such counterpart shall be fully effective as if an original signature.
7.12 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
7.13 Assignments. This Agreement may not be assigned without the prior
written consent of each party hereto, and any attempt to effect an assignment
hereof without such consent shall be void.
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IN WITNESS WHEREOF, each of the Investors and the Company have executed
this Amended and Restated Investment Agreement as of the date first above
written.
INVESTORS:
EGI-TRANSMEDIA INVESTORS, L.L.C.
/s/ Sheli Z. Rosenberg
By: ----------------------------
Sheli Z. Rosenberg
Vice President
SAMSTOCK, L.L.C.
/s/ Sheli Z. Rosenberg
By: -----------------------------
Sheli Z. Rosenberg
Vice President
HALMOSTOCK LIMITED PARTNERSHIP
by Halmos Investments-Western, Inc.,
its general partner
/s/ Steven J. Halmos
By: ------------------------------
Steven J. Halmos, President
COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Melvin Chasen
By: -------------------------------
Melvin Chasen, President and
Chief Executive Officer
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EXHIBIT 10.5
AMENDED AND RESTATED AGREEMENT AMONG STOCKHOLDERS
This AMENDED AND RESTATED AGREEMENT AMONG STOCKHOLDERS ("Agreement") is
dated as of March 3 , 1998, by and among Samstock, L.L.C., a Delaware limited
liability company ("Samstock"), EGI-Transmedia Investors, L.L.C., a Delaware
limited liability company ( formerly known as Transmedia Investors, L.L.C.,
"TNI", and together with Samstock, "Investor"), Melvin Chasen and Iris Chasen,
each individually (collectively, "Stockholder"), and, solely for purposes of
Sections 1(e), 2(a), 2(b) and 8 through 19 inclusive of this Agreement,
Transmedia Network Inc., a Delaware corporation (the "Company"). Capitalized
terms used and not otherwise defined in this Agreement have the meanings
ascribed to them in Section 8 hereof.
R E C I T A L S
WHEREAS, reference is hereby made to: (i) that certain Stock Purchase
and Sale Agreement, dated as of November 6, 1997, (the "Purchase Agreement")
among the Company and Investor, pursuant to which Investor agreed to purchase
from the Company, and the Company has agreed to sell to Investor, (A) an
aggregate of 2,500,000 newly issued shares of common stock of the Company, par
value $.02 per share ("Common Stock"), and (B) warrants to purchase an
additional 1,200,000 shares of Common Stock in the aggregate; (ii) that certain
Assignment Agreement ("Assignment Agreement"), dated as of even date herewith,
among the Company, Investor and Halmostock Limited Partnership, a Wyoming
limited partnership ("Halmostock"), pursuant to which Investor has assigned to
Halmostock its right to acquire from the Company pursuant to the Purchase
Agreement (A) 352,941 shares of Common Stock and (B) warrants to acquire an
additional 169,412 shares of Common Stock; (iii) that certain Amended and
Restated Investment Agreement, dated as of even date herewith, among the
Company, Investor and Stockholder (the "Investment Agreement"); and (iv) that
certain Agreement Among Stockholders, dated as of November 6, 1997, by and
among, Investor, Stockholder and the Company (the "Original Agreement Among
Stockholders"). Capitalized terms used and not defined in this Agreement shall
have the meanings ascribed to them in the Investment Agreement.
WHEREAS, Investor, Stockholder and the Company intend for this
Agreement to amend, restate and supersede the Original Agreement Among
Stockholders in its entirety.
WHEREAS, as of the date hereof, Stockholder owns of record and/or
beneficially, directly or indirectly, that number of shares of Common Stock, or
options to purchase shares of Common Stock, set forth opposite Stockholder's
name on Exhibit A hereto.
WHEREAS, the parties desire that Stockholder grant Investor an
irrevocable proxy to vote all Shares whether now owned or hereafter acquired by
Stockholder, on the terms set forth in this Agreement.
WHEREAS, the parties desire to establish certain rights and
restrictions related to the transfer of Shares.
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A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
Section 1. Voting of Shares / Related Matters.
(a) Stockholder does hereby constitute and appoint Investor
its true and lawful attorney and proxy during the period that this Agreement
remains in force, to appear for, represent, and vote all Shares held by
Stockholder, whether now owned or hereafter acquired, for Stockholder at all
meetings of the stockholders of the Company, with power to vote upon any and all
questions which may arise at any such meeting or meetings, as fully and with the
same effect as if Stockholder had voted such Shares, subject, however, to any
applicable voting restrictions contained in the Investment Agreement.
(b) Investor may vote on behalf of Stockholder in person or by
proxy, and, promptly upon request from Investor, from time to time, Stockholder
shall execute and deliver to Investor a separate written proxy conferring upon
Investor, or such other person as Investor may designate, the full, irrevocable
authority to vote all of such Stockholder's Shares, whether now owned or
hereafter acquired, at any specified meeting of the stockholders of the Company,
subject, however, to any applicable voting restrictions contained in the
Investment Agreement.
(c) Irrespective of the grant of the proxies referred to in
subparagraphs (a) and (b) above, in each event where Stockholder is entitled to
vote any Shares, if and when requested by Investor, Stockholder shall vote all
of the Shares, whether now owned or hereafter acquired, held by Stockholder
which Stockholder is entitled to vote as directed by Investor, subject, however,
to any applicable voting restrictions contained in the Investment Agreement.
(d) Stockholder hereby agrees that: (i) Investor may appoint
any Affiliate of Investor to act on Investor's behalf or as Investor's successor
under this Section 1 with the same power and authority conferred on Investor;
and (ii) all power and authority conferred on Investor by this Section 1 is
coupled with an interest and is irrevocable and, to the extent not prohibited by
law, shall not be terminated by any act of Investor or Stockholder or by
operation of law or by the occurrence of any event whatsoever, including without
limitation, the death, incapacity, dissolution, liquidation, termination,
bankruptcy, dissolution of marital relationship or insolvency of Investor or
Stockholder or any similar event.
(e) Subject to any applicable voting restrictions contained in
the Investment Agreement, Stockholder and the Company acknowledge that the
Company shall be entitled to rely conclusively on any written direction or
instruction received from Investor regarding any vote of Stockholder's Shares,
and Investor agrees to furnish a copy of any such direction or instructions to
Stockholder no later than the time such directions or instructions are provided
to the Company. The Company agrees that it will not recognize any purported vote
of Stockholder's Shares, except pursuant to written direction or instruction
received from Investor.
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Section 2. Restrictions on Transfer and Related Matters / Permitted
Transferees.
(a) Stockholder shall not Transfer any Shares except for a
Transfer to a Permitted Transferee pursuant to Section 2(b) or a Transfer
pursuant to Section 3, 4, 5 or 6, as applicable, and Investor shall not Transfer
any Shares except for a Transfer to a Permitted Transferee pursuant to Section
2(b), or a Transfer pursuant to Sections 5 or 6, as applicable. If any Transfer
is made or attempted contrary to the provisions of this Agreement, such
purported Transfer shall be void ab initio; and the Company shall refuse to
recognize any such purported transferee of Shares as a holder of such Shares for
any purpose.
(b) Notwithstanding anything to the contrary in Section 2(a)
hereof, for purposes of this Agreement, Stockholder and Investor may Transfer
Shares to a Permitted Transferee of such Stockholder or Investor, as the case
may be, without complying with the provisions of Sections 3, 4, 5 or 6. As a
condition to the effectiveness of any Transfer of Shares to a Permitted
Transferee, the Permitted Transferee shall execute a counterpart to this
Agreement, whereupon the Permitted Transferee shall hold Shares subject to all
of the provisions of this Agreement, as if the Permitted Transferee were the
Person who transferred the Shares actually held by the Permitted Transferee.
Notwithstanding anything to the contrary in this Agreement: (i) all rights and
benefits originally granted to Stockholder or Investor under this Agreement
shall remain with it or him (or Stockholder's duly appointed representative, in
the event of Stockholder's death or incapacity), and shall not be assigned or
transferred to their Permitted Transferees, notwithstanding any Transfer of
Shares by them to their Permitted Transferees, as if Stockholder or Investor, as
the case may be, who Transferred Shares to their Permitted Transferee were the
holders of the Shares actually held by their Permitted Transferee; and (ii) no
Permitted Transferee shall be entitled to exercise any right, satisfy any
obligation or otherwise take any action or do anything under this Agreement,
except through Stockholder or Investor, as the case may be, who Transferred
Shares to its Permitted Transferee (or Stockholder's duly appointed
representative, in the event of Stockholder's death or incapacity), as the
representative for all of such party's Permitted Transferees.
Section 3. Right of First Offer on Private Transfer. In the event that
Stockholder wishes to sell for cash in a bona fide transaction with an
independent third party, whether or not such third party has made an offer to
purchase any of Stockholder's Shares, all or any portion of the Shares now owned
or hereafter acquired by Stockholder, other than in a Public Sale, Stockholder
shall first notify Investor in writing (the "Notice of Intended Sale") of the
number of Shares for sale by Stockholder (the "Offered Shares") and the proposed
price and other terms of sale. Investor thereupon shall have the right to
purchase all (but not less than all) of the Offered Shares at the proposed price
in cash and on the other proposed terms of sale. In order to exercise its
purchase rights, within five (5) business days (two (2) business days in the
event of a proposed sale of no more than 10,000 Shares in the aggregate) after
receiving the Notice of Intended Sale from Stockholder, Investor shall deliver
to Stockholder a written election (the "Election Notice") to purchase all of the
Offered Shares. If Investor does not exercise its purchase rights with respect
to all (and not less than all) of the Offered Shares within the time period as
provided herein with respect to all of the Offered Shares, or fails to deliver
the Election Notice within the time period provided, Stockholder shall be free
for a period of ninety (90) days thereafter to complete a sale of the Offered
Shares to any Person at or above the price in cash and on substantially the same
terms as set forth in Stockholder's notice of intended sale. If such a sale is
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not consummated within such ninety (90) day period by Stockholder, the Offered
Shares shall again be subject to a right of first offer by Investor under the
provisions of this Section 3. Except as provided herein, Stockholder shall be
bound by the restrictions and limitations imposed by this Agreement after any
notice of a desire to sell is given and whether or not any such sale actually
occurs. In the event Investor exercises its rights of first offer hereunder,
Investor and Stockholder shall, as promptly as practicable and as a condition to
their respective obligations hereunder, enter into such agreements and deliver
such documents to one another as shall be necessary for the sale of
Stockholder's Shares to Investor as contemplated hereby. Notwithstanding
anything to the contrary in this Section 3, in the event that after Investor's
receipt of the Notice of Intended Sale and prior to the earlier of (i)
Stockholder's receipt of the Election Notice or (ii) 5:00 p.m. Eastern Time on
the fourth (4th) day following Investor's receipt of the Notice of Intended
Sale, the Market Price of the Shares increases or decreases by twenty percent
(20%) or more as compared to the Market Price on the last trading day
immediately prior to the date of Investor's receipt of the Notice of Intended
Sale, Stockholder shall have the right to withdraw its Notice of Intended Sale
by written notice to Purchaser, in which event the Notice of Intended Sale
actually delivered by Stockholder to Investor shall be deemed for all purposes
under this Section 3 as never having been delivered to Investor.
Section 4. Right of First Offer on Public Sale. In the event that
Stockholder wishes to sell for cash in a Public Sale all or any portion of the
Shares now owned or hereafter acquired by Stockholder, whether or not any third
party has made an offer to purchase any of Stockholder's Shares, Stockholder
shall first notify Investor in writing (the "Notice of Intended Sale") of the
number of Shares for sale by Stockholder (the "Offered Shares"). Investor
thereupon shall have the right to purchase all or any part of the Offered Shares
for cash at their Market Price on the last trading day immediately prior to the
date of Investor's receipt of the Notice of Intended Sale. In order to exercise
its purchase rights, within five (5) business days (two (2) business days in the
event of a proposed Public Sale of no more than 10,000 Shares in the aggregate)
after receiving the Notice of Intended Sale from Stockholder, Investor shall
deliver to Stockholder a written election "Election Notice" to purchase so many
of the Offered Shares as it may desire to purchase. If Investor does not
exercise its purchase rights with respect to all of the Offered Shares within
the time period as provided herein or fails to deliver the Election Notice
within the time period provided, Stockholder shall be free for a period of ten
(10) days thereafter to complete a Public Sale of that number of Offered Shares
with respect to which Investor failed to exercise its purchase rights. If such
Public Sale is not consummated within such ten (10) day period by Stockholder,
the Offered Shares shall again be subject to a right of first offer by Investor
under the provisions of this Section 4. Except as provided herein, Stockholder
shall be bound by the restrictions and limitations imposed by this Agreement
after the Notice of Intended Sale is given and whether or not any such sale
actually occurs. In the event Investor exercises its rights of first offer
hereunder, Investor and Stockholder shall, as promptly as practicable and as a
condition to their respective obligations hereunder, enter into such agreements
and deliver such documents to one another as shall be necessary for the sale of
Stockholder's Shares to Investor as contemplated hereby. Notwithstanding
anything to the contrary in this Section 4, in the event that after Investor's
receipt of the Notice of Intended Sale and prior to the earlier of (i)
Stockholder's receipt of the Election Notice or (ii) 5:00 p.m. Eastern Time on
the fourth (4th) day following Investor's receipt of the Notice of Intended
Sale, the Market Price of the Shares increases or decreases by twenty percent
(20%) or more as compared to the Market Price on the last trading day
immediately prior to the date of Investor's receipt of the Notice of Intended
Sale,
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Stockholder shall have the right to withdraw its Notice of Intended Sale by
written notice to Purchaser, in which event the Notice of Intended Sale actually
delivered by Stockholder to Investor shall be deemed for all purposes under this
Section 4 as never having been delivered to Investor.
Section 5. Co-Sale Rights. In the event that Investor enters into an
agreement to sell to any independent third party or group of independent third
parties, in a single transaction or related series of transactions, other than a
Public Sale, such number of Shares as equals or exceeds more than ten percent
(10%) of the Shares held by Investor, Investor shall first notify Stockholder in
writing, of the identity of the proposed purchaser(s), the number of Shares
proposed to be sold, the proposed purchase price and terms of sale and an
estimate of the Transaction Costs (as defined below) (which estimate shall not
be binding on Investor and shall have no effect on Investor's or Stockholder's
rights or obligations under this Section 5). Stockholder thereupon shall have
the right to participate in the proposed sale at the same net price per share
and other terms of sale as offered to Investor. In order to exercise its co-sale
rights, Stockholder, within ten (10) business days after receiving notice from
Investor, shall deliver to Investor a written election to participate in the
sale to the extent allowed by this Section 5. If Stockholder has elected to
participate in the proposed sale, Stockholder shall be entitled to sell in the
proposed sale a number of Shares equal to the product of (i) the quotient (the
"Co-Sale Fraction") determined by dividing the number of Shares owned by
Stockholder by the aggregate number of Shares owned by Stockholder, Investor
and, if applicable, the Other Tag-Along Stockholders, multiplied by (ii) the
total number of Shares to be sold by them in the proposed sale. Notwithstanding
anything to the contrary in this Section 5, the sale proceeds to which
Stockholder would otherwise be entitled by reason of its participation in a sale
pursuant to this Section 5 shall be reduced by an amount equal to the product of
Stockholder's Co-Sale Fraction multiplied by the sum of any costs, fees and
expenses, including, without limitation, attorneys', accountants' and investment
bankers' fees and expenses (collectively, "Transaction Costs"), incurred by
Investor in connection with the sale or the exercise of Stockholder's or the
Other Tag-Along Stockholders' rights under this Section 5. Stockholder shall, as
promptly as practicable and as a condition to its participation, enter into such
agreements as shall be reasonably requested by Investor for the sale of its
Shares in the proposed sale.
Section 6. Drag-Along Rights. Subject to Section 3 and Section 4, if
Investor owns more Company Voting Securities than Stockholder and Investor
enters into an agreement (including an agreement in principle) to sell all of
its Shares to any purchaser or group of purchasers (other than any Permitted
Transferees or Stockholder), in a single arms-length transaction or related
series of arms-length transactions with an independent third party or group of
independent third parties, Investor may require that Stockholder sell all of its
Shares to such purchaser or group of purchasers at a net price and on terms and
conditions the same as those on which Investor has agreed to sell its Shares;
provided, however, that, notwithstanding the foregoing, prior to the second
anniversary of this Agreement, Investor shall not be entitled to require
Stockholder to sell its Shares at a net price of $6.00 per share or less.
Investor shall give prompt notice to Stockholder that Investor has entered into
an agreement of the type described in this Section 6, and Stockholder shall, as
promptly as practicable, enter into such agreements as shall reasonably be
requested by Investor for the sale of all the Shares in the proposed sale.
Notwithstanding anything to the contrary in this Section 6, the sale proceeds to
which Stockholder would otherwise be entitled by reason of its participation in
a sale pursuant to this Section 6 shall be reduced by an amount equal to the
product of (i) the percentage of
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Shares to be sold in the proposed sale owned by Stockholder, multiplied by (ii)
the sum of any costs, fees and expenses, including, without limitation,
attorneys', accountants' and investment bankers' fees and expenses, incurred by
Investor in connection with the sale or the exercise of Investor's rights under
this Section 6.
Section 7. Stockholder Board Seat. So long as Investor is entitled to
designate one or two directors in accordance with the provisions of Section 4.4
of the Investment Agreement and Stockholder and Stockholder's Permitted
Transferees (other than any charitable organizations) own collectively of record
and beneficially at least 950,000 shares of Common Stock, Investor shall vote
all Company Voting Securities owned of record by Investor or with respect to
which Investor has voting control in favor of the election of Melvin Chasen to
the Company's Board of Directors.
Section 8. Certain Definitions.
"Affiliate" means, with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person; "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
"Chasen Family Entity" means any corporation, partnership, limited
liability company, trust, or other legal entity controlled by Chasen and wholly
owned beneficially and of record by Chasen and/or Chasen's spouse, children,
grandchildren, parents, siblings, in-laws, nieces and/or nephews or a trust
established for any of their benefit, provided such trust is wholly controlled
by Chasen.
"Market Price" means the closing price of the Common Stock on the New
York Stock Exchange (or, if not trading on the New York Stock Exchange, such
other securities exchange or over the counter market on which the Company's
Common Stock is then trading) as of the date of determination.
"Other Tag-Along Stockholder" means Halmostock Limited Partnership and
its Permitted Transferees under that certain Stockholders' Agreement, dated as
of the date hereof, by and among Investor, Halmostock Limited Partnership and
the Company.
"Permitted Transferee" means:
(i) with respect to the Transfer of Shares by Investor, any
Affiliate of Investor or any stockholder, partner or member of any such
Affiliate; and
(ii) with respect to any Transfer of Shares by Stockholder, (A)
any Chasen Family Entity, (B) any charitable organization as defined
under Section 501(c)(3) of the Internal revenue Code of 1986, as
amended, and (C) any other charitable organization(s), provided
Stockholder does not Transfer to any such other charitable
organization(s) in the aggregate over the term of this Agreement more
than ten percent (10%) of the Shares in any single Transfer or series
(related or unrelated) of Transfers.
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"Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint-stock company, a
trust, a business trust, a government or any agency or any political
subdivision, any unincorporated organization or any other entity.
"Public Sale" means a bona fide sale of Shares either in "broker's
transactions" within the meaning of Section 4(4) of the Securities Act of 1933,
as amended, or in transactions directly with a "market maker" as that term is
defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended.
"Shares" means all shares of Company Voting Securities, whether now
owned or hereafter acquired.
"Transfer"means any voluntary or involuntary, direct or indirect,
transfer, sale, assignment, donation, pledge, hypothecation, issuance, grant of
a security interest in or other disposition or attempted disposition of Shares
or any right or interest whatsoever therein, including, without limitation, by
operation of law or otherwise, whether with or without consideration or value,
and whether for cash, other securities or other property and specifically
including any share for share or similar exchange; provided, however, that:
(i) any pledge or hypothecation of or grant of security interest
in Shares by any Stockholder which is either approved by Investor in
writing prior to the pledge, hypothecation or grant of security
interest or is effected by Investor or any Affiliate of Investor shall
not constitute a "Transfer" of Shares for any purpose under this
Agreement; and
(ii) any Transfer effected as a result of a Stockholder's death,
pursuant to the laws of descent and distribution, by operation of law
or otherwise, to such Stockholder's spouse, children, grandchildren,
parents, siblings, in-laws, nieces and/or nephews or a trust
established for any of their benefit, shall not constitute a "Transfer"
of Shares for any purpose under this Agreement, provided each
transferee of Shares executes a counterpart to this Agreement,
whereupon such transferee shall hold such Shares subject to all of the
provisions of this Agreement, as if the transferor were the holder of
Shares held by the transferee.
Section 9. Notices. All notices, and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
facsimile, to the appropriate address or facsimile number set forth below (or at
such other address or facsimile number for a party as shall be specified by like
notice):
if to Investor:
EGI-Transmedia Investors, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: F. Philip Handy
Fax: (312) 454-0610
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with an additional copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza - Suite 1600
Chicago, IL 60606
Attention: Joseph M. Paolucci, Esq.
Fax: (312) 454-0335
if to the Company:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
with an additional copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: Stephen P. Farrell, Esq.
Fax: (212) 309-6273
If to Stockholder:
Mr. Melvin Chasen
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
with an additional copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: Stephen P. Farrell, Esq.
Fax: (212) 309-6273
Section 10. Termination. This Agreement shall terminate and its
provisions shall be of no further force and effect if (i) the Zell Group shall,
at any time, cease to own in the aggregate Company Voting Securities
representing at least five percent (5%) of all Company Voting Securities
outstanding or (ii) contemporaneously with the termination of the Purchase
Agreement in accordance with Section 9.1 thereof.
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Section 11. Remedies. Any party having rights under this Agreement may
enforce such rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. The parties agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and,
accordingly, in addition to all other remedies available to any party, such
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce, or prevent any violation of, the provisions of this Agreement.
Section 12. Entire Agreement. This Agreement, together with the
Purchase Agreement and the Investment Agreement, constitutes the entire
agreement between the parties with respect to the subject matter hereof and
shall be binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, successors and permitted assigns. Any
amendments, or alternative or supplementary provisions to this Agreement must be
made in writing and duly executed by an authorized representative or agent of
each of the parties hereto. Except as contemplated by this Agreement, no Person
who is not an original party to this Agreement may become a party hereto without
the written consent of each of the parties hereto.
Section 13. Non-Waiver. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege in this Agreement conferred,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party. A breach of any
representation, warranty or covenant shall not be affected by the fact that a
more general or more specific representation, warranty or covenant was not also
breached.
Section 14. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
Section 15. Severability. The invalidity of any provision of this
Agreement or portion of a provision shall not affect the validity of any other
provision of this Agreement or the remaining portion of the applicable
provision.
Section 16. Applicable Law. This Agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect and
in all other respects by the internal laws of the State of Delaware applicable
to contracts made in that State.
Section 17. Binding Effect; Benefit, Non-circumvention. This Agreement
shall inure to the benefit of and be binding upon the parties hereto, and their
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer on any person other than the parties hereto, and their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. No Stockholder shall take any
action, alone or in concert with any other person, to circumvent any of the
provisions of this Agreement.
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Section 18. Assignability. This Agreement shall not be assignable by
any party without the prior written consent of each of the other parties.
Section 19. Headings. The headings contained in this Agreement are
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Amended and
Restated Agreement Among Stockholders as of the day and year first above
written.
EGI-TRANSMEDIA INVESTORS, L.L.C.
/s/ Sheli Z. Rosenberg
By: ---------------------------------
Sheli Z. Rosenberg, Vice President
SAMSTOCK, L.L.C.
/s/ Sheli Z. Rosenberg
By: ------------------------------------
Sheli Z. Rosenberg, Vice President
/s/ Melvin Chasen
---------------------------------
Melvin Chasen, individually
/s/ Iris Chasen
-------------------------------
Iris Chasen, individually
TRANSMEDIA NETWORK INC.
/s/ Melvin Chasen
By: ---------------------------
Melvin Chasen, President and
Chief Executive Officer
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EXHIBIT A
AMENDED AND RESTATED AGREEMENT AMONG STOCKHOLDERS
OWNERSHIP OF TRANSMEDIA NETWORK INC.
COMMON STOCK AND OPTIONS
Chasen Shares
Melvin Chasen Direct 684,961
Iris Chasen 186,958
Iris Chasen 13,820
Chasen Family Partnership 100,000
Chasen Family Partnership 39,600
Melvin Chasen - IRA 25,070
Melvin Chasen - Smith Barney 100
---------
1,050,509
Options Schedule
Option Date Exp. Date Option Price Shares Outstanding Shares Exercisable
- ----------- --------- ------------ ------------------ ------------------
4/14/97 4/14/07 $ 4.3750 11,859 11,859
4/14/97 4/14/07 4.3750 8,141 8,141
3/23/95 3/23/05 12.2500 7,500 7,500
3/23/95 3/23/05 12.2500 22,500 22,500
3/22/94 3/22/04 15.0000 26,664 26,664
3/22/94 3/22/04 15.0000 18,336 18,336
9/20/93 9/20/98 7.4445 67,500 67,500
5/19/92 5/19/02 4.8333 135,000 135,000
------- -------
297,500 297,500
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EXHIBIT 10.6
STOCKHOLDERS' AGREEMENT
This STOCKHOLDERS' AGREEMENT ("Agreement") is dated as of March 3,
1998, by and among Samstock, L.L.C., a Delaware limited liability company
("Samstock"), EGI-Transmedia Investors, L.L.C., a Delaware limited liability
company ( formerly known as Transmedia Investors, L.L.C., "TNI", and together
with Samstock, "Investor"), Halmostock Limited Partnership, a Wyoming limited
partnership ("Stockholder"), and, solely for purposes of Sections 1(e), 2(a),
2(b) and 7 through 19 inclusive of this Agreement, Transmedia Network Inc., a
Delaware corporation (the "Company"). Capitalized terms used and not otherwise
defined in this Agreement have the meanings ascribed to them in Section 7
hereof.
R E C I T A L S
WHEREAS, reference is hereby made to: (i) that certain Stock Purchase
and Sale Agreement, dated as of November 6, 1997, (the "Purchase Agreement")
among the Company and Investor, pursuant to which Investor agreed to purchase
from the Company, and the Company has agreed to sell to Investor, (A) an
aggregate of 2,500,000 newly issued shares of common stock of the Company, par
value $.02 per share ("Common Stock"), and (B) warrants to purchase an
additional 1,200,000 shares of Common Stock in the aggregate; (ii) that certain
Assignment Agreement ("Assignment Agreement"), dated as of even date herewith,
among the Company, Investor and Stockholder, pursuant to which Investor has
assigned to Stockholder its right to acquire from the Company pursuant to the
Purchase Agreement (A) 352,941 shares of Common Stock and (B) warrants to
acquire an additional 169,412 shares of Common Stock, and (iii) that certain
Amended and Restated Investment Agreement, dated as of even date herewith, among
the Company, Investor and Stockholder (the "Investment Agreement"). Capitalized
terms used and not defined in this Agreement shall have the meanings ascribed to
them in the Investment Agreement;
WHEREAS, as of the date hereof, Stockholder owns of record and
beneficially 92,000 and no more shares of Common Stock, and neither Stockholder
nor any of its Affiliates owns of record and/or beneficially, directly or
indirectly, any other shares of Common Stock, or options to purchase shares of
Common Stock, other than pursuant to the Assignment Agreement;
WHEREAS, the parties desire that Stockholder grant Investor an
irrevocable proxy to vote all Shares whether now owned or hereafter acquired by
Stockholder, on the terms set forth in this Agreement; and
WHEREAS, the parties desire to establish certain rights and
restrictions related to the transfer of Shares.
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A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
Section 1. Voting of Shares / Related Matters.
(a) Stockholder, on behalf of itself and each of its
Affiliates, does hereby constitute and appoint Investor its true and lawful
attorney and proxy during the period that this Agreement remains in force, to
appear for, represent, and vote all Shares held by Stockholder and any of its
Affiliates, whether now owned or hereafter acquired, for Stockholder and such
Affiliates, at all meetings of the stockholders of the Company, with power to
vote upon any and all questions which may arise at any such meeting or meetings,
as fully and with the same effect as if Stockholder or such Affiliates had voted
such Shares, subject, however, to any applicable voting restrictions contained
in the Investment Agreement.
(b) Investor may vote on behalf of Stockholder and/or such
Affiliates in person or by proxy, and, promptly upon request from Investor, from
time to time, Stockholder shall, and shall cause its Affiliates to, execute and
deliver to Investor a separate written proxy conferring upon Investor, or such
other person as Investor may designate, the full, irrevocable authority to vote
all of such Stockholder's or such Affiliates' Shares, whether now owned or
hereafter acquired, at any specified meeting of the stockholders of the Company,
subject, however, to any applicable voting restrictions contained in the
Investment Agreement.
(c) Irrespective of the grant of the proxies referred
to in subparagraphs (a) and (b) above, in each event where Stockholder or
its Affiliates is entitled to vote any Shares, if and when requested by
Investor, Stockholder shall, and shall cause its Affiliates to, vote all
of the Shares, whether now owned or hereafter acquired, held by
Stockholder or such Affiliates which Stockholder or such Stockholder
Affiliate, is entitled to vote as directed by Investor, subject, however,
to any applicable voting restrictions contained in the Investment
Agreement.
(d) Stockholder, on behalf of itself and its Affiliates,
hereby agrees that: (i) Investor may appoint any Affiliate of Investor to act on
Investor's behalf or as Investor's successor under this Section 1 with the same
power and authority conferred on Investor; and (ii) all power and authority
conferred on Investor by this Section 1 is coupled with an interest and is
irrevocable and, to the extent not prohibited by law, shall not be terminated by
any act of Investor or Stockholder or any of Stockholder's Affiliates or by
operation of law or by the occurrence of any event whatsoever, including without
limitation, the death, incapacity, dissolution, liquidation, termination,
bankruptcy, dissolution of marital relationship or insolvency of Investor or
Stockholder or its Affiliates or any similar event.
(e) Subject to any applicable voting restrictions contained in
the Investment Agreement, Stockholder and the Company acknowledge that the
Company shall be entitled to rely conclusively on any written direction or
instruction received from Investor regarding any vote of Shares held by
Stockholder or its Affiliates, and Investor agrees to furnish a copy of any such
direction or instructions to Stockholder no later than the time such directions
or instructions are
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provided to the Company. The Company agrees that it will not recognize any
purported vote of Shares held by Stockholder or its Affiliates, except pursuant
to written direction or instruction received from Investor.
Section 2. Restrictions on Transfer and Related Matters / Permitted
Transferees.
(a) Stockholder shall not, and shall not permit any of its
Affiliates, to Transfer any Shares except for a Transfer to a Permitted
Transferee pursuant to Section 2(b) or a Transfer pursuant to Section 3, 4, 5 or
6, as applicable, and Investor shall not Transfer any Shares except for a
Transfer to a Permitted Transferee pursuant to Section 2(b), or a Transfer
pursuant to Sections 5 or 6, as applicable. If any Transfer is made or attempted
contrary to the provisions of this Agreement, such purported Transfer shall be
void ab initio; and the Company shall refuse to recognize any such purported
transferee of Shares as a holder of such Shares for any purpose.
(b) Notwithstanding anything to the contrary in Section 2(a)
hereof, for purposes of this Agreement, Stockholder and Investor may Transfer
Shares to a Permitted Transferee of such Stockholder or Investor, as the case
may be, without complying with the provisions of Sections 3, 4, 5 or 6. As a
condition to the effectiveness of any Transfer of Shares to a Permitted
Transferee, the Permitted Transferee shall execute a counterpart to this
Agreement, whereupon the Permitted Transferee shall hold Shares subject to all
of the provisions of this Agreement, as if the Permitted Transferee were the
Person who transferred the Shares actually held by the Permitted Transferee.
Notwithstanding anything to the contrary in this Agreement: (i) all rights and
benefits originally granted to Stockholder or Investor under this Agreement
shall remain with it or him (or Stockholder's duly appointed representative, in
the event of Stockholder's death or incapacity), and shall not be assigned or
transferred to their Permitted Transferees, notwithstanding any Transfer of
Shares by them to their Permitted Transferees, as if Stockholder or Investor, as
the case may be, who Transferred Shares to their Permitted Transferee were the
holders of the Shares actually held by their Permitted Transferee; and (ii) no
Permitted Transferee shall be entitled to exercise any right, satisfy any
obligation or otherwise take any action or do anything under this Agreement,
except through Stockholder or Investor, as the case may be, who Transferred
Shares to its Permitted Transferee (or Stockholder's duly appointed
representative, in the event of Stockholder's death or incapacity), as the
representative for all of such party's Permitted Transferees.
(c) Notwithstanding anything to the contrary in this
Agreement, in order to ensure compliance with Article III of the Investment
Agreement, prior to the fifth anniversary of the Closing Date (as defined in the
Purchase Agreement), Stockholder shall not, directly or indirectly, by purchase
or otherwise, acquire, offer to acquire, agree to acquire, become the beneficial
owner of or obtain any rights in respect of, or sell, transfer any beneficial
interest in, or otherwise dispose of or transfer, any Company Voting Securities,
or take any action in furtherance thereof, or permit any of its respective
Affiliates to do so, if any such action would result in the Zell Group's breach
of any provision of Article III of the Investment Agreement, and, in such event,
the Company shall refuse to recognize any such purported action, and such
purported action shall be void ab initio. In the event of a breach of this
Section 2(c) by Stockholder, Stockholder shall indemnify and hold harmless
Investor against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages and
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liabilities in connection with any claim, action, suit, proceeding or
investigation arising from such breach by Stockholder.
Section 3. Right of First Offer on Private Transfer. In the event
that Stockholder or any of its Affiliates desires to sell for cash or other
consideration in a bona fide transaction with an independent third party,
whether or not such third party has made an offer to purchase any of
Stockholder's Shares, all or any portion of the Shares now owned or hereafter
acquired by Stockholder or any of its Affiliates, other than in a Public Sale,
Stockholder shall first notify Investor in writing (the "Notice of Intended
Sale") of the number of Shares for sale by Stockholder and/or its Affiliates
(the "Offered Shares") and the proposed price and other terms of sale. Investor
thereupon shall have the right to purchase all (but not less than all) of the
Offered Shares at the proposed price in cash or other consideration and on the
other proposed terms of sale all as specified in the Notice of Intended Sale. In
order to exercise its purchase rights, within five (5) business days (two (2)
business days in the event of a proposed sale of no more than 10,000 Shares in
the aggregate) after receiving the Notice of Intended Sale from Stockholder,
Investor shall deliver to Stockholder a written election (the "Election Notice")
to purchase all of the Offered Shares. If Investor does not exercise its
purchase rights with respect to all (and not less than all) of the Offered
Shares within the time period as provided herein with respect to all of the
Offered Shares, or fails to deliver the Election Notice within the time period
provided: (i) Stockholder and its Affiliates shall be free for a period of
ninety (90) days thereafter to complete a sale of the Offered Shares to any
Person at or above the price specified in the Notice of Intended Sale and/or on
substantially the same terms as set forth in the Notice of Intended Sale; and
(ii) Investor and Stockholder shall, and Investor and Stockholder shall cause
their Affiliates to, as promptly as practicable and as a condition to their
respective obligations hereunder, enter into such agreements and deliver such
documents as shall be reasonably necessary for the sale of Stockholder's Shares
to such Person as contemplated hereby. If such a sale is not consummated within
such ninety (90) day period by Stockholder or its Affiliates, the Offered Shares
shall again be subject to a right of first offer by Investor under the
provisions of this Section 3. Except as provided herein, Stockholder shall, and
shall cause its Affiliates to, be bound by the restrictions and limitations
imposed by this Agreement after any notice of a desire to sell is given and
whether or not any such sale actually occurs. In the event Investor exercises
its rights of first offer hereunder, Investor and Stockholder shall, and
Stockholder shall cause its Affiliates to, as promptly as practicable and as a
condition to their respective obligations hereunder, enter into such agreements
and deliver such documents to one another as shall be reasonably necessary for
the sale of Stockholder's Shares to Investor as contemplated hereby.
Notwithstanding anything to the contrary in this Section 3, in the event that
after Investor's receipt of the Notice of Intended Sale and prior to the earlier
of (A) Stockholder's receipt of the Election Notice or (B) 5:00 p.m. Eastern
Time on the fourth (4th) day following Investor's receipt of the Notice of
Intended Sale, the Market Price of the Shares increases or decreases by twenty
percent (20%) or more as compared to the Market Price on the last trading day
immediately prior to the date of Investor's receipt of the Notice of Intended
Sale, Stockholder shall have the right to withdraw its Notice of Intended Sale
by written notice to Purchaser, in which event the Notice of Intended Sale
actually delivered by Stockholder to Investor shall be deemed for all purposes
under this Section 3 as never having been delivered to Investor.
Section 4. Right of First Offer on Public Sale. In the event that
Stockholder or any of its Affiliates desires to sell for cash in a Public Sale
all or any portion of the Shares now owned or
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hereafter acquired by Stockholder or such Affiliates, whether or not any third
party has made an offer to purchase any of Stockholder's or such Affiliates'
Shares, Stockholder shall first notify Investor in writing (the "Notice of
Intended Sale") of the number of Shares for sale by Stockholder or such
Affiliate (the "Offered Shares"). Investor thereupon shall have the right to
purchase all or any part of the Offered Shares for cash at their Market Price on
the last trading day immediately prior to the date of Investor's receipt of the
Notice of Intended Sale. In order to exercise its purchase rights, within five
(5) business days (two (2) business days in the event of a proposed Public Sale
of no more than 10,000 Shares in the aggregate) after receiving the Notice of
Intended Sale from Stockholder, Investor shall deliver to Stockholder a written
election "Election Notice" to purchase so many of the Offered Shares as it may
desire to purchase. If Investor does not exercise its purchase rights with
respect to all of the Offered Shares within the time period as provided herein
or fails to deliver the Election Notice within the time period provided: (i)
Stockholder and its Affiliates shall be free for a period of ten (10) days
thereafter to complete a Public Sale of that number of Offered Shares with
respect to which Investor failed to exercise its purchase rights; and (ii)
Investor and Stockholder shall, and Investor and Stockholder shall cause their
Affiliates to, as promptly as practicable and as a condition to their respective
obligations hereunder, enter into such agreements and deliver such documents as
shall be reasonably necessary for the sale of Stockholder's Shares in a Public
Sale as contemplated hereby. If such Public Sale is not consummated within such
ten (10) day period by Stockholder or its Affiliates, the Offered Shares shall
again be subject to a right of first offer by Investor under the provisions of
this Section 4. Except as provided herein, Stockholder shall, and shall cause
its Affiliates to, be bound by the restrictions and limitations imposed by this
Agreement after the Notice of Intended Sale is given and whether or not any such
sale actually occurs. In the event Investor exercises its rights of first offer
hereunder, Investor and Stockholder shall, and Stockholder shall cause its
Affiliates to, as promptly as practicable and as a condition to their respective
obligations hereunder, enter into such agreements and deliver such documents to
one another as shall be reasonably necessary for the sale of Stockholder's
Shares to Investor as contemplated hereby. Notwithstanding anything to the
contrary in this Section 4, in the event that after Investor's receipt of the
Notice of Intended Sale and prior to the earlier of (i) Stockholder's receipt of
the Election Notice or (ii) 5:00 p.m. Eastern Time on the fourth (4th) day
following Investor's receipt of the Notice of Intended Sale, the Market Price of
the Shares increases or decreases by twenty percent (20%) or more as compared to
the Market Price on the last trading day immediately prior to the date of
Investor's receipt of the Notice of Intended Sale, Stockholder shall have the
right to withdraw its Notice of Intended Sale by written notice to Purchaser, in
which event the Notice of Intended Sale actually delivered by Stockholder to
Investor shall be deemed for all purposes under this Section 4 as never having
been delivered to Investor.
Section 5. Co-Sale Rights. In the event that Investor enters into an
agreement to sell to any independent third party or group of independent third
parties, in a single transaction or related series of transactions, other than a
Public Sale, such number of Shares as equals or exceeds more than ten percent
(10%) of the Shares held by Investor, Investor shall first notify Stockholder in
writing, of the identity of the proposed purchaser(s), the number of Shares
proposed to be sold, the proposed purchase price and terms of sale and an
estimate of the Transaction Costs (as defined below) (which estimate shall not
be binding on Investor and shall have no effect on Investor's or Stockholder's
rights or obligations under this Section 5). Stockholder thereupon shall have
the right to participate in the proposed sale at the same net price per share
and other
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terms of sale as offered to Investor. In order to exercise its co-sale rights,
Stockholder, within ten (10) business days after receiving notice from Investor,
shall deliver to Investor a written election to participate in the sale to the
extent allowed by this Section 5. If Stockholder has elected to participate in
the proposed sale, Stockholder shall be entitled to sell in the proposed sale a
number of Shares equal to the product of (i) the quotient (the "Co-Sale
Fraction") determined by dividing the number of Shares owned by Stockholder by
the aggregate number of Shares owned by Stockholder, Investor and, if
applicable, the Other Tag-Along Stockholder, multiplied by (ii) the total number
of Shares to be sold by them in the proposed sale. Notwithstanding anything to
the contrary in this Section 5, the sale proceeds to which Stockholder would
otherwise be entitled by reason of its participation in a sale pursuant to this
Section 5 shall be reduced by an amount equal to the product of Stockholder's
Co-Sale Fraction multiplied by the sum of any costs, fees and expenses,
including, without limitation, attorneys', accountants' and investment bankers'
fees and expenses (collectively, "Transaction Costs"), incurred by Investor in
connection with the sale or the exercise of the Stockholder's or the Other
Tag-Along Stockholder's rights under this Section 5. Stockholder shall, as
promptly as practicable and as a condition to its participation, enter into such
agreements as shall be reasonably requested by Investor for the sale of its
Shares in the proposed sale.
Section 6. Drag-Along Rights. Subject to Section 3 and Section 4, if
Investor owns more Company Voting Securities than Stockholder and Investor
enters into an agreement (including an agreement in principle) to sell all of
its Shares to any purchaser or group of purchasers (other than any Permitted
Transferees or Stockholder), in a single arms-length transaction or related
series of arms-length transactions with an independent third party or group of
independent third parties, Investor may require that Stockholder sell, and cause
its Affiliates to sell, all of their Shares to such purchaser or group of
purchasers at a net price and on terms and conditions the same as those on which
Investor has agreed to sell its Shares; provided, however, that, notwithstanding
the foregoing, Investor shall not be entitled to require Stockholder or any of
its Affiliates to sell any of the 92,000 shares of Common Stock owned of record
and beneficially by Stockholder as of the date of this Agreement at a net price
below $7.11 per share. Investor shall give prompt notice to Stockholder that
Investor has entered into an agreement of the type described in this Section 6,
and Stockholder shall, and shall cause its Affiliates to, as promptly as
practicable, enter into such agreements as shall reasonably be requested by
Investor for the sale of all the Shares in the proposed sale. Notwithstanding
anything to the contrary in this Section 6, the sale proceeds to which
Stockholder or any of its Affiliates would otherwise be entitled by reason of
its participation in a sale pursuant to this Section 6 shall be reduced by an
amount equal to the product of (i) the percentage of Shares to be sold in the
proposed sale owned by Stockholder or such Affiliates, multiplied by (ii) the
sum of any costs, fees and expenses, including, without limitation, attorneys',
accountants' and investment bankers' fees and expenses, incurred by Investor in
connection with the sale or the exercise of Investor's rights under this Section
6.
Section 7. Certain Definitions.
"Affiliate" means, with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person; "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
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"Halmos Controlled Entity" means any corporation, partnership, limited
liability company, trust or other legal entity wholly controlled by Steven J.
Halmos ("Halmos") and wholly owned beneficially and of record by Halmos and/or
Halmos' wife, children, grandchildren, parents, siblings, in-laws, nieces,
and/or nephews, or a trust established for any of their benefit, provided such
trust is wholly controlled by Halmos, and/or any employees, officers, directors
and other representatives of the Reunion Group, Inc.
"Market Price" means the closing price of the Common Stock on the New
York Stock Exchange (or, if not trading on the New York Stock Exchange, such
other securities exchange or over the counter market on which the Company's
Common Stock is then trading) as of the date of determination.
"Other Tag-Along Stockholder" means Melvin Chasen, Iris Chasen and/or
their Permitted Transferees under that certain Amended and Restated Agreement
Among Stockholders, dated as of the date hereof, by and among Investor, Melvin
Chasen, Iris Chasen and the Company.
"Permitted Transferee" means:
(i) with respect to the Transfer of Shares by Investor, any
Affiliate of Investor or any stockholder, partner or member of any such
Affiliate; and
(ii) with respect to any Transfer of Shares by Stockholder,
Steven J. Halmos, any Halmos Controlled Entity or any charitable
organization as defined under Section 501(c)(3) of the Internal revenue
Code of 1986, as amended (the "Code").
"Person" means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint-stock company, a
trust, a business trust, a government or any agency or any political
subdivision, any unincorporated organization or any other entity.
"Public Sale" means a bona fide sale of Shares either in "broker's
transactions" within the meaning of Section 4(4) of the Securities Act of 1933,
as amended, or in transactions directly with a "market maker" as that term is
defined in Section 3(a)(38) of the Securities Exchange Act of 1934, as amended.
"Shares" means all shares of Company Voting Securities, whether now
owned or hereafter acquired.
"Transfer" means any voluntary or involuntary, direct or indirect,
transfer, sale, assignment, donation, pledge, hypothecation, issuance, grant of
a security interest in or other disposition or attempted disposition of Shares
or any right or interest whatsoever therein, including, without limitation, by
operation of law or otherwise, whether with or without consideration or value,
and whether for cash, other securities or other property and specifically
including any share for share or similar exchange; provided, however, that:
(i) any pledge or hypothecation of or grant of security
interest in Shares by Stockholder which is either approved by
Investor in writing prior to the pledge, hypothecation or grant
of security interest or is done by Investor or any Affiliate of
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Investor shall not constitute a "Transfer" of Shares for any purpose
under this Agreement; and
(ii) any Transfer done as a result of a Stockholder's death,
pursuant to the laws of descent and distribution, by operation of law
or otherwise, to such Stockholder's spouse, children, grandchildren,
parents, siblings, in-laws, nieces and/or nephews or a trust
established for any of their benefit, shall not constitute a "Transfer"
of Shares for any purpose under this Agreement, provided each
transferee of Shares executes a counterpart to this Agreement,
whereupon such transferee shall hold such Shares subject to all of the
provisions of this Agreement, as if the transferor were the holder of
Shares held by the transferee.
Section 8. Notices. All notices, and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
facsimile, to the appropriate address or facsimile number set forth below (or at
such other address or facsimile number for a party as shall be specified by like
notice):
if to Investor:
EGI-Transmedia Investors, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: F. Philip Handy
Fax: (312) 454-0610
with an additional copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza - Suite 1600
Chicago, IL 60606
Attention: Joseph M. Paolucci, Esq.
Fax: (312) 454-0335
if to the Company:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
with an additional copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
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Attention: Stephen P. Farrell, Esq.
Fax: (212) 309-6273
If to Stockholder:
Halmostock Limited Partnership
21 W. Las Olas Boulevard
Ft. Lauderdale, FL 33301
Attention: Steven J. Halmos
Fax: (954) 760-4983
with an additional copy to:
Kenny Nachwalter Seymour
Arnold Critchlow & Spector, P.A.
1100 Miami Center
201 South Biscayne Boulevard
Miami, Florida 33131-4327
Attention: Thomas H. Seymour, Esq.
Fax: (305) 372-1861
Section 9. Termination. This Agreement shall terminate and its
provisions shall be of no further force and effect if (i) the Zell Group shall,
at any time, cease to own in the aggregate Company Voting Securities
representing at least five percent (5%) of all Company Voting Securities
outstanding or (ii) contemporaneously with the termination of the Purchase
Agreement in accordance with Section 8.1 thereof.
Section 10. Remedies. Any party having rights under this Agreement may
enforce such rights specifically to recover damages caused by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law. The parties agree and acknowledge that money damages may not be
an adequate remedy for any breach of the provisions of this Agreement and,
accordingly, in addition to all other remedies available to any party, such
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce, or prevent any violation of, the provisions of this Agreement.
Section 11. Prevailing Party's Attorneys' Fees. Notwithstanding
anything to the contrary in this Agreement, in the event of a dispute among
Investor, Stockholder and/or their respective Affiliates concerning the
interpretation or enforcement of any provision of this Agreement, the prevailing
party shall be reimbursed by the non-prevailing party for all reasonable
attorneys' fees and expenses incurred by the prevailing party in connection with
such dispute. The Company shall not be bound by this Section 11.
Section 12. Entire Agreement. This Agreement, together with the
Purchase Agreement, the Assignment Agreement, the Investment Agreement and the
other Transaction Documents (as defined in the Purchase Agreement), as the same
may be amended by their terms from time to time, constitutes the entire
agreement between the parties with respect to the subject matter
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hereof and shall be binding upon and inure to the benefit of the parties hereto
and their respective legal representatives, successors and permitted assigns.
Any amendments, or alternative or supplementary provisions to this Agreement
must be made in writing and duly executed by an authorized representative or
agent of each of the parties hereto. Except as contemplated by this Agreement,
no Person who is not an original party to this Agreement may become a party
hereto without the written consent of each of the parties hereto.
Section 13. Non-Waiver. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege in this Agreement conferred,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party. A breach of any
representation, warranty or covenant shall not be affected by the fact that a
more general or more specific representation, warranty or covenant was not also
breached.
Section 14. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all such
counterparts shall constitute but one instrument.
Section 15. Severability. The invalidity of any provision of this
Agreement or portion of a provision shall not affect the validity of any other
provision of this Agreement or the remaining portion of the applicable
provision.
Section 16. Applicable Law. This Agreement shall be governed and
controlled as to validity, enforcement, interpretation, construction, effect and
in all other respects by the internal laws of the State of Delaware applicable
to contracts made in that State.
Section 17. Binding Effect; Benefit, Non-circumvention. This Agreement
shall inure to the benefit of and be binding upon the parties hereto, and their
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer on any person other than the parties hereto, and their
respective successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement. No party hereto shall take any
action, alone or in concert with any other person, to circumvent any of the
provisions of this Agreement. Notwithstanding anything herein to the contrary,
Steven J. Halmos shall not be personally liable for any obligation or liability
whatsoever under this Agreement.
Section 18. Assignability. This Agreement shall not be assignable by
any party without the prior written consent of each of the other parties.
Section 19. Headings. The headings contained in this Agreement are
for convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Stockholders'
Agreement as of the day and year first above written.
EGI-TRANSMEDIA INVESTORS, L.L.C.
/s/ Sheli Z. Rosenberg
By: ------------------------------
Sheli Z. Rosenberg
Vice President
SAMSTOCK, L.L.C.
/s/ Sheli Z. Rosenberg
By: -------------------------------
Sheli Z. Rosenberg
Vice President
HALMOSTOCK LIMITED PARTNERSHIP
by Halmos Investments-Western, Inc., its general
partner
/s/ Steven Halmos
By: -------------------------------
Steven Halmos, President
TRANSMEDIA NETWORK INC.
/s/ Melvin Chasen
By: ----------------------------
Melvin Chasen, President and
Chief Executive Officer
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[LETTERHEAD OF MORGAN, LEWIS & BOCKIUS LLP]
March 17, 1998
VIA EDGAR
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Transmedia Network Inc.
Ladies and Gentlemen:
On behalf of Transmedia Network Inc., we are hereby transmitting for filing via
EDGAR the Company's Report on Form 8-K.
If you have any questions with respect to this filing, please contact the
undersigned at (212) 309-6032.
Very truly yours,
/s/Susan LoFrumento
- ----------------------
Susan LoFrumento
Attachments
cc: Transmedia Network
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