<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
TRANSMEDIA NETWORK INC.
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $0.02 PER SHARE
(TITLE OF CLASS OF SECURITIES)
893767103
(CUSIP NUMBER)
SUSAN OBUCHOWSKI
EQUITY GROUP INVESTMENTS, L.L.C.
TWO NORTH RIVERSIDE PLAZA, SUITE 600
CHICAGO, ILLINOIS 60606
(312) 454-40100
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
NOVEMBER 9, 1999
(DATE OF EVENT WHICH REQUIRES
FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this Schedule because of Rule 13d-1(b)(3) or (4), check the following box
[__].
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SCHEDULE 13D
CUSIP NO. 893767103 PAGE 2 OF 15 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
EGI-Transmedia Investors, L.L.C.
FEIN#: 36-4192415
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) x
(b) __
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) o
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
8 SHARED VOTING POWER
BENEFICIALLY
0
OWNED BY EACH
9 SOLE DISPOSITIVE POWER
REPORTING
0
PERSON
10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* __
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
14 TYPE OF REPORTING PERSON*
00
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
* Represents the number of shares which are beneficially owned by all
members of the group, in the aggregate, and which are subject to voting
arrangements set forth more fully in Items 3 and 4 below. This filing
shall not be construed as an admission that such reporting person is
the beneficial owner of all of such shares.
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SCHEDULE 13D
CUSIP NO. 893767103 PAGE 3 OF 15 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Samstock, L.L.C.
FEIN: 36-4156890
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) x
(b) __
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) o
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF
SHARES
8 SHARED VOTING POWER
BENEFICIALLY
8,416,802*
OWNED BY EACH
9 SOLE DISPOSITIVE POWER
REPORTING
6,766,057
PERSON
10 SHARED DISPOSITIVE POWER
WITH 1,650,745
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,416,802*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* __
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.6%
14 TYPE OF REPORTING PERSON*
00
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
* Represents the number of shares which are beneficially owned by all
members of the group, in the aggregate, and which are subject to voting
arrangements set forth more fully in Items 3 and 4 below. This filing
shall not be construed as an admission that such reporting person is
the beneficial owner of all of such shares.
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 893767103 PAGE 4 OF 15
PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halmostock Limited Partnership
FEIN#: 83-0319692
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) x
(b) __
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) o
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Wyoming
7 SOLE VOTING POWER
NUMBER OF
SHARES 0
8 SHARED VOTING POWER
BENEFICIALLY
8,416,802*
OWNED BY EACH
9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 0
10 SHARED DISPOSITIVE POWER
WITH 810,736
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,416,802*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* __
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.6%
14 TYPE OF REPORTING PERSON*
00
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
* Represents the number of shares which are beneficially owned by all
members of the group, in the aggregate, and which are subject to voting
arrangements set forth more fully in Items 3 and 4 below. This filing
shall not be construed as an admission that such reporting person is
the beneficial owner of all of such shares.
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This Amendment No. 3 to Schedule 13D relates to the common stock, par
value $.02 per share ("Common Stock"), of Transmedia Network Inc. (the
"Issuer"). Items 2, 3, 4, 5, 6 and 7 of the Schedule 13D are hereby amended to
read in their entirety as follows:
ITEM 2. IDENTITY AND BACKGROUND
(a-c) This Statement is being filed by the following beneficial owners
of Common Stock: EGI-Transmedia Investors, L.L.C., a Delaware limited liability
company ("TMI"), Samstock, L.L.C., a Delaware limited liability company
("Samstock"), and Halmostock Limited Partnership, a Wyoming limited partnership
("Halmostock"). (TMI, Samstock and Halmostock are referred to herein,
individually, as a "Stockholder" and, collectively, as the "Stockholders.") The
sole managing member of TMI is Samstock. The sole member of Samstock is SZ
Investments, L.L.C., a Delaware limited liability company ("SZI"). The managing
member of SZI is Zell General Partnership, Inc., an Illinois corporation
("ZGP"). The general partner of Halmostock is Halmos Investments-Western, Inc.,
a Wyoming corporation ("HIW"). Additional information concerning SZI, ZGP and
HIW is set forth in Appendix A hereto.
The principal business of TMI is investment in the securities of the
Issuer. The principal business of Samstock, SZI and ZGP is general investments.
The business address of TMI, Samstock, SZI and ZGP is Two North Riverside Plaza,
Chicago, Illinois, 60606. The principal business of Halmostock is investment in
the securities of the Issuer and the principal business of HIW is general
investments. The business address of Halmostock and HIW is 21 W. Las Olas
Boulevard, Fort Lauderdale, Florida, 33301.
(d) and (e) Neither the Stockholders nor, to the best knowledge of the
Stockholders, any of SZI, ZGP or HIW, or any of the persons listed in Appendix A
hereto, have during the last five years (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was, or is, subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to a Stock Purchase and Sale Agreement dated as of November 6,
1997 among TMI, Samstock and the Issuer (the "Stock Purchase Agreement"), TMI
and Samstock agreed to acquire in the aggregate (i) 2,500,000 newly issued
shares of Common Stock (the "Shares") and (ii) warrants to purchase an
additional 1,200,000 shares of Common Stock (the "Warrant Shares"), subject to
the satisfaction of certain conditions precedent. The Stock Purchase Agreement
was attached as Exhibit 1 to the original Schedule 13D and is incorporated
herein by reference.
Pursuant to an Assignment Agreement dated as of March 3, 1998 (the
"Initial Investment Closing Date") among the Stockholders and the Issuer (the
"Assignment Agreement"), effective contemporaneously with the closing under the
Stock Purchase Agreement, TMI and Samstock assigned to Halmostock the right to
acquire 352,941 of the Shares and 169,412 of the Warrant Shares. The Assignment
Agreement was attached as Exhibit 2 to Amendment Number 1 to Schedule 13D and is
incorporated herein by reference. In addition, Halmostock is the beneficial
owner of 92,000 shares of Common Stock, which 92,000 shares were contributed to
Halmostock by Steven J. Halmos prior to the Initial Investment Closing Date.
On the Initial Investment Closing Date, TMI acquired 322,059 of the
Shares and 154,588 of the Warrant Shares and Samstock acquired 1,825,000 of the
Shares and 876,000 of the Warrant Shares, for a total aggregate consideration of
$9,125,000.75, the source of which was capital contributions to TMI and Samstock
by the members of TMI and Samstock, respectively. In addition, on the Initial
Investment Closing Date, Halmostock acquired 352,941 Shares and 169,412 Warrant
Shares for a total aggregate consideration of $1,499,999.25 paid to the Issuer,
the source of which was a loan of $1,534,999.25 from an affiliate of Halmostock,
which affiliate is a Wyoming limited partnership the general partner of which is
HIW. The loan was made pursuant to a note dated March 2, 1998, is payable on
demand, and bears interest at a rate of 8% per annum. The acquisition of the
Shares and Warrant Shares by TMI, Samstock and Halmostock described in this
paragraph are referred to herein collectively as the "Initial Investment."
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Effective as of the Initial Investment Closing Date, immediately after
the closing of the Initial Investment, Samstock sold to Robert M. Steiner, as
trustee under the declaration of trust dated March 9, 1983, as amended,
establishing the Robert M. Steiner Revocable Trust ("Steiner Trust"), 40,364 of
the Shares and 19,375 of the Warrant Shares for a purchase price in cash in the
amount of $171,547.00, and Halmostock sold to the Steiner Trust 6,636 of the
Shares and 3,185 of the Warrant Shares, for a purchase price in cash of
$28,203.00.
In connection with the Initial Investment, TMI, Samstock, the Issuer,
Melvin Chasen and Iris Chasen (Melvin Chasen and Iris Chasen being referred to
herein, together, as the "Chasens") have also entered into an Amended and
Restated Agreement Among Stockholders dated as of March 3, 1998 (the "Amended
Agreement Among Stockholders"), which amends, restates and supersedes an
Agreement Among Stockholders dated as of November 6, 1997 among the same
parties. Pursuant to the Amended Agreement Among Stockholders, TMI and Samstock
acquired the sole power to vote or to direct the vote of all of the shares of
Common Stock and other voting securities of the Issuer held by the Chasens (the
"Chasen Shares"), whether now owned or hereafter acquired, subject to certain
limitations in the Investment Agreement described below. There are currently
840,009 Chasen Shares issued and outstanding known to the Reporting Persons,
representing 6.3% of the issued and outstanding Common Stock.
The Amended Agreement Among Stockholders also provides that, subject to
certain limitations, TMI and Samstock have a right of first refusal on all sales
of the Chasen Shares, and the Chasen Shares are subject to "co-sale" and "drag
along" provisions if TMI and Samstock sell any shares they may own. On September
7, 1999, Samstock exercised its right of first refusal on a portion of the
Chasen Shares, thereby acquiring from the Chasens 135,000 of the Chasen Shares
for an aggregate purchase price of $472,500 in cash, the source of which was
Samstock's working capital.
The Amended Agreement Among Stockholders will terminate if Stockholders
and their affiliates (the "Stockholder Group") cease to own in the aggregate at
least 5% of the Issuer's Common Stock (or other securities of the Issuer
entitled to vote generally for the election of directors or securities
convertible into or exchangeable for Common Stock or such voting securities or
other options or rights to acquire Common Stock or such voting securities)
(collectively, the "Voting Securities"). The Amended Agreement Among
Stockholders was attached as Exhibit 3 to Amendment Number 1 to Schedule 13D and
is incorporated herein by reference.
Also in connection with the Initial Investment, the Stockholders and
the Issuer have entered into a Stockholders' Agreement dated as of March 3, 1998
(the "Stockholders Agreement"), pursuant to which TMI and Samstock acquired the
sole power to vote or to direct the vote of all of the shares of Common Stock
and other voting securities of the Issuer held by Halmostock (the "Halmostock
Shares"), whether now owned or hereafter acquired, subject to certain
limitations in the Investment Agreement described below. There are currently
438,305 Halmostock Shares issued and outstanding, representing 3.3% of the
issued and outstanding Common Stock. In addition, Halmostock owns 206,204
Preferred Shares (as hereinafter defined) and warrants in respect of 166,227
Warrant Shares and which, together with the 438,305 issued and outstanding
Halmostock Shares, represent 5.9% of the Common Stock, including the 166,227
Warrant Shares and the 206,204 Preferred Shares.
Like the Amended Agreement Among Stockholders, the Stockholders
Agreement also provides that, subject to certain limitations, TMI and Samstock
have a right of first refusal on all sales of the Halmostock Shares, and the
Halmostock Shares are subject to "co-sale" and "drag along" provisions if TMI
and Samstock sell any shares they may own. The Stockholders Agreement will
terminate if the Stockholder Group ceases to own in the aggregate at least 5% of
the Issuer's Voting Securities. The Stockholders Agreement was attached as
Exhibit 4 to Amendment Number 1 to Schedule 13D and is incorporated herein by
reference.
The summary contained in this Statement of certain provisions of each
of the Stock Purchase Agreement, the Assignment Agreement, the Amended Agreement
Among Stockholders and the Stockholders Agreement is not intended to be complete
and is qualified in its entirety by reference to the Stock Purchase Agreement,
the Assignment Agreement, the Amended Agreement Among Stockholders and the
Stockholders Agreement, each of which was attached as an exhibit to the original
Schedule 13D or Amendment Number 1 to Schedule 13D and is incorporated herein by
reference.
In June 1999, the Issuer entered into a $10 million loan agreement (the
"GAMI Loan Agreement") with GAMI Investments, Inc. ("GAMI"), an affiliate of
Samstock. The Issuer drew down the entire $10 million principal amount
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available under the GAMI Loan Agreement on June 30, 1999 (the "GAMI Loan"). The
GAMI Loan Agreement obligated the Issuer to conduct a $10,000,000 rights
offering (the "Rights Offering") for shares of a newly created series of
convertible preferred stock (the "Series A Preferred Stock") described in the
Issuer's definitive proxy statement filed with the Securities Exchange
Commission on September 17, 1999. The Issuer conducted the Rights Offering as
required by the GAMI Loan Agreement. The Rights Offering closed on November 9,
1999 (the "Rights Offering Closing"). The GAMI Loan Agreement was attached as
Exhibit 6 to Amendment Number 2 to Schedule 13D and is incorporated herein by
reference. The summary contained in this Statement of certain provisions of the
GAMI Loan Agreement is not intended to be complete and is qualified in its
entirety by reference to the GAMI Loan Agreement.
In connection with the Rights Offering, Samstock and the Issuer entered
into a Standby Purchase Agreement dated as of June 30, 1999 (the "Standby
Purchase Agreement"), whereby Samstock agreed to act as a standby purchaser to
ensure that $10 million in proceeds are raised in the Rights Offering. The
Issuer was required to use all proceeds of the Rights Offering to repay the
outstanding amount of the GAMI Loan. Under the Standby Purchase Agreement,
Samstock was obligated to exercise its basic subscription privilege in full and
to purchase, at the subscription price, all shares of Series A Preferred Stock
offered pursuant to the Rights Offering which were not subscribed for by other
stockholders (including pursuant to any oversubscription privilege). Pursuant to
the Standby Purchase Agreement, Samstock purchased 2,840,489 shares of Series A
Preferred Stock at the Rights Offering Closing for an aggregate purchase price
of $6,845,577.51 or $2.41 per share in cash, the source of which was capital
contributions to Samstock by the members of Samstock. At the Rights Offering
Closing, the Issuer used all of the proceeds therefrom to repay the outstanding
amount of the GAMI Loan which was $10,135,208.33 including accrued interest. In
addition, Halmostock has advised Samstock that Halmostock purchased 206,204
shares of Series A Preferred Stock in the Rights Offering for an aggregate
purchase price of $496,952.04 or $2.41 per share, the source of which was a loan
from an affiliate. The 2,840,489 shares of Series A Preferred Stock acquired by
Samstock and the 206,204 shares of Series A Preferred Stock acquired by
Halmostock are collectively referred to as the "Preferred Shares." The Standby
Purchase Agreement was attached as Exhibit 7 to Amendment No. 2 to Schedule 13D
and is incorporated herein by reference.
In consideration of Samstock's commitment under the Standby Purchase
Agreement and of the provision of the GAMI Loan by GAMI, the Issuer issued to
Samstock at the Rights Offering Closing a non-transferable five-year warrant
(the "Rights Offering Warrant") to purchase 1,000,000 shares of the Issuer's
common stock (the "Rights Offering Warrant Shares"). A copy of the Rights
Offering Warrant is attached hereto as Exhibit 10. The summary contained in this
Statement of certain provisions of the Standby Purchase Agreement and the Rights
Offering Warrant is not intended to be complete and is qualified in its entirety
by reference to the Standby Purchase Agreement and the Rights Offering Warrant
attached as an exhibit to Amendment No. 2 to Schedule 13D or hereto and
incorporated herein by reference.
On September 23, 1999, TMI distributed all of the securities of the
Issuer held by it to TMI's members without additional consideration (the "TMI
Distribution"). Samstock was one of TMI's members and received in the TMI
Distribution 100,883 of the Shares and a warrant representing 48,424 of the
Warrant Shares. The balance of the Shares and the Warrant Shares previously held
by TMI were distributed to other members of TMI, and Samstock does not have sole
or shared voting or dispositive power over such Shares and Warrant Shares.
In connection with the Initial Investment, the Stockholders and the
Issuer entered into an Amended and Restated Investment Agreement dated as of
March 3, 1998 (the "First Amended Investment Agreement"), which amended,
restated and superseded an Investment Agreement dated as of November 6, 1997
among TMI, Samstock and the Issuer. The Steiner Trust joined the First Amended
Investment Agreement only for purposes of Section 5 thereof in connection with
its purchase of a portion of the Samstock Shares and Halmostock Shares described
above. In connection with the GAMI Loan and the Standby Purchase Agreement, the
Stockholders (other than Halmostock), the Issuer, and for purposes of Section 5
thereof only, the Steiner Trust, entered into a Second Amended and Restated
Investment Agreement dated as of June 30, 1999 (the "Second Amended Investment
Agreement"), which amends, restates and supersedes the First Amended Investment
Agreement, only with respect to the rights and obligations of each of the
parties to the First Amended Investment Agreement other than Halmostock. The
First Amended and Restated Investment Agreement continues in full force and
effect with respect to the rights and obligations of Halmostock thereunder vis a
vis each of the other Stockholders and the Issuer. The Second Amended Investment
Agreement contains agreements as to certain aspects of the relationship among
the Stockholders other than Halmostock and the Issuer. The Second Amended
Investment Agreement was attached to Amendment No. 2 to Schedule 13D as Exhibit
8 thereto and is incorporated herein by reference. The First Amended
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Investment Agreement and the Second Amended Investment Agreement read together
are collectively referred to herein as the "Investment Agreement."
Pursuant to the Amended Investment Agreement, the Stockholders agreed
that the members of the Stockholder Group will not take any of the following
actions (collectively, the "Standstill Provisions") prior to the fifth
anniversary of the Initial Investment Closing Date, without the approval of a
majority of the Issuer's disinterested directors, subject to specified limited
exceptions: (a) increase their ownership of Voting Securities beyond the
combined voting power of all Voting Securities represented by the Shares, the
Warrant Shares, the Preferred Shares or the Rights Offering Warrant Shares or
subject to the Amended Agreement Among Stockholders or Stockholders Agreement;
provided, however, that the foregoing limitation shall not prohibit the purchase
of Voting Securities directly from the Issuer pursuant to exercise of the
warrants and any rights, oversubscription rights or standby purchase obligations
in connection with rights offerings by the Issuer or exercise of any stock
options granted by the Issuer; (b) solicit proxies, assist any other person in
the solicitation of proxies, become a "participant" in a "solicitation" or
assist any such "participant" (as such terms are defined in Rule 14a-1 of
Regulation 14A under the Securities Exchange Act of 1934, as amended) in
opposition to the recommendation of a majority of disinterested directors, or
submit any proposal for the vote of Issuer's stockholders; (c) form, join or
participate in any other way in a partnership, pooling agreement, syndicate,
voting trust or other "group", or enter into any agreement or arrangement or
otherwise act in concert with any other person, for the purpose of acquiring,
holding, voting or disposing of Voting Securities of the Issuer; provided,
however, that the members of the Stockholder Group may engage in any of such
activities among themselves and with any stockholder of the Issuer who is a
party to the Amended Agreement Among Stockholders or the Stockholders Agreement;
(d) engage in certain specified takeover actions or take any other actions,
alone or in concert with any other person, to seek control of the Issuer; or (e)
take any action to seek to circumvent any of the foregoing limitations.
Pursuant to the Investment Agreement, at all times prior to the fifth
anniversary of the date of the Initial Investment Closing Date, Samstock is
entitled to designate two representatives, reasonably acceptable to the
independent directors of the Issuer, to serve on the Board of Directors of the
Issuer (the "Board") as long as the Stockholders together beneficially own at
least 15% of the combined voting power of the Issuer's Voting Securities
(including, for these purposes, the Warrant Shares and the Rights Offering
Warrant Shares issuable upon exercise of the warrants until such time as the
warrants expire) and, in the event that the Stockholders together beneficially
own less than 15%, but at least 5%, of the combined voting power of the Issuer's
Voting Securities, Samstock shall be entitled to designate one representative,
reasonably acceptable to the independent directors of the Issuer, to serve on
the Issuer's Board. The Issuer agreed that it will not increase the size of the
Board beyond seven members as long as Samstock is entitled to designate one or
two Board representatives, except in furtherance of the exercise by Samstock of
its rights under the Investment Agreement, and further agreed that,
notwithstanding the agreements contained in the Amended Agreement Among
Stockholders, the chief executive officer of the Issuer shall not count as a
designee of Samstock.
Pursuant to the Investment Agreement, in addition to any other rights
to designate directors of the Issuer thereunder, because Samstock, pursuant to
the Standby Purchase Agreement, purchased more than 25% of the total number of
shares of Series A Preferred Stock issued by the Issuer in the Rights Offering
(exclusive of those shares of Series A Preferred Stock purchased by Samstock
pursuant to its basic subscription privilege or its obligation to purchase
shares of Series A Preferred Stock not purchased by TMI or TMI's members
pursuant to its or their basic subscription privileges), Samstock has the right
to designate one additional director of the Issuer, which individual may be
designated in Samstock's sole discretion without obtaining the acceptance or
approval of the Issuer's disinterested directors or any other person or entity,
to serve for a period of three years or, if earlier, until the time when the
Stockholders together beneficially own less than 15% of the combined voting
power of the Issuer's Voting Securities. Samstock has not yet designated its
additional Board member.
Pursuant to the Investment Agreement, the Stockholders agreed that,
except to the extent otherwise provided in the Investment Agreement, the
Stockholders would vote their Voting Securities with respect to the election or
removal of directors of the Issuer either (a) in accordance with the
recommendations of a majority of the disinterested directors of the Issuer or
(b) in the same proportions (including abstentions) as the holders of record of
the Issuer's Voting Securities, other than those beneficially owned by the
Stockholders, vote their securities; provided that the Stockholders may vote in
favor of the election or retention of the one or two directors designated by
Samstock as described in the preceding paragraph.
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<PAGE> 9
Pursuant to the Investment Agreement and subject to certain exceptions,
the Issuer granted to the Stockholders and certain other parties certain shelf
registration rights in connection with certain permitted sales of shares of
Common Stock. In particular, pursuant to such registration rights, the Issuer
has prepared and filed with the SEC a shelf registration statement (including
pledgees of any selling stockholder) with respect to all Shares and Warrant
Shares and caused such shelf registration statement to become effective and has
agreed to use its reasonable efforts keep such registration statement effective
until such time as all Shares and Warrant Shares have been sold or otherwise
disposed of. The purpose of such shelf registration is to facilitate the ability
of each of TMI, Samstock and their affiliates to margin its stock and does not
represent any present intention on behalf of any Stockholder to dispose of any
Shares or Warrant Shares covered thereby.
Pursuant to the Investment Agreement and subject to certain exceptions,
the Issuer granted to Samstock and certain other parties certain shelf
registration rights in connection with certain permitted sales of shares of
Series A Preferred Stock and Common Stock. In particular, the Issuer agreed to
prepare and file with the SEC a shelf registration statement (which shall
include pledgees of any selling stockholder) with respect to the Series A
Preferred Stock, Common Stock issuable upon conversion of the Series A Preferred
Stock and the Rights Offering Warrant Shares as soon as practicable after the
Rights Offering Closing, and to use its reasonable efforts to cause such shelf
registration statement to become effective and keep such registration statement
effective until such time as all Series A Preferred Stock, Common Stock issuable
upon conversion of the Series A Preferred Stock or the Rights Offering Warrant
Shares have been sold or otherwise disposed of. The purpose of any such shelf
registration put in effect pursuant to the Investment Agreement is to facilitate
the ability of Samstock and its affiliates to margin its stock and does not
represent any present intention on behalf of any Stockholder to dispose of any
Series A Preferred Stock, Common Stock issuable upon conversion of the Series A
Preferred Stock or the Rights Offering Warrant Shares to be covered thereby.
The summary contained in this Statement of certain provisions of the
Investment Agreement is not intended to be complete and is qualified in its
entirety by reference to the First Amended Investment Agreement and the Second
Amended Investment Agreement attached as exhibits to Amendment Number 1 to
Schedule 13D or Amendment Number 2 to Schedule 13D and incorporated herein by
reference.
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ITEM 4. PURPOSE OF THE TRANSACTION
The Stockholders' acquisition of the Shares, the Warrant Shares and the
Preferred Shares, Samstock's acquisition of 135,000 of the Chasen Shares and
Samstock's acquisition of the Rights Offering Warrant , and TMI's and Samstock's
acquisition of the sole power to vote or to direct the vote of the Chasen Shares
and the Halmostock Shares, were effected for the purpose of investing in the
Issuer.
The purchase price upon exercise of the warrants in respect of the
Warrant Shares is equal to a specified price (the "Exercise Price") multiplied
by the number of shares of Common Stock that TMI, Samstock, or Halmostock, as
the case may be, is then purchasing upon exercise of the warrants. The Exercise
Price is $6.00 per share for one third of the Warrant Shares purchased, $7.00
per share for another third of the Warrant Shares, and $8.00 per share for the
final third of the Warrant Shares. The warrants may be exercised at any time and
will expire on the fifth anniversary of the date of the Initial Investment
Closing Date.
The purchase price upon exercise of the Rights Offering Warrant in
respect of the Rights Offering Warrant Shares is equal to $2.4813 per share
(which exercise price is equal to the average of the closing prices of the
common stock for the 20 trading days preceding the Rights Offering Closing). The
Rights Offering Warrant may be exercised at any time and will expire on the
fifth anniversary of the date of the Rights Offering Closing.
Each Stockholder intends to continue to review its investment in Common
Stock and Series A Preferred Stock and, subject to the limitations of the
Investment Agreement described above, from time to time depending upon certain
factors, including without limitation the financial performance of the Issuer,
the availability and price of shares of Common Stock and Series A Preferred
Stock and other general market and investment conditions, may determine to
acquire through open market purchases or otherwise additional shares of Common
Stock or Series A Preferred Stock, or may determine to sell through the open
market or otherwise.
Except as stated above, none of the Stockholders has any plans or
proposals of the types referred to in clauses (a) through (j) of Item 4 of
Schedule 13D, as promulgated by the Securities and Exchange Commission.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) and (b) To the best knowledge of the Stockholders, there are
13,352,709 shares of Common Stock outstanding as of the date hereof. As of the
date hereof, the aggregate 3,298,833 shares of Common Stock beneficially owned
by the Stockholders represent approximately 24.7% of the Common Stock issued and
outstanding and, together with the 3,046,693 Preferred Shares, the 1,071,276
Warrant Shares and the 1,000,000 Rights Offering Warrant Shares, represent 45.6%
of the Common Stock, including the Warrant Shares, the Preferred Shares and
the Rights Offering Warrant Shares. Such securities are held as follows:
<TABLE>
<CAPTION>
ISSUED AND PREFERRED RIGHTS OFFERING
HOLDER OUTSTANDING SHARES SHARES WARRANT SHARES WARRANT SHARES
- ------ ------------------ ---------- -------------- ---------------
<S> <C> <C> <C> <C>
Samstock 2,020,519 2,840,489 905,049 1,000,000
TMI 0 0 0 0
Halmostock 438,305 206,204 166,227 0
Chasens (1) 840,009 0 0 0
---------- --------- --------- ---------
Total 3,298,833 3,046,693 1,071,276 1,000,000
========== ========= ========= =========
</TABLE>
(1) As described in Item 3 above and as set forth more fully in this Item
5, TMI and Samstock have shared voting power and shared dispositive
power in respect of the Chasen Shares.
Pursuant to the Amended Agreement Among Stockholders, and subject to
the limitations of the Investment Agreement, TMI and Samstock have the shared
power to vote or to direct the vote of the 840,009 Chasen Shares beneficially
owned by them. Pursuant to the Stockholders Agreement, and subject to the
limitations of the Investment
10
<PAGE> 11
Agreement, TMI and Samstock have the shared power to vote or to direct the vote
of the 810,736 Halmostock Shares beneficially owned by it. In addition, each of
the Stockholders has agreed to vote its shares of Common Stock and Series A
Preferred Stock in accordance with certain provisions of the Investment
Agreement.
Each Stockholder has the power to dispose of or to direct the
disposition of such Stockholder's shares of Common Stock and/or Series A
Preferred Stock, subject to the following limitations, which are described more
fully in Item 3 above. Pursuant to the "drag along" provisions of the Amended
Agreement Among Stockholders, TMI and Samstock have the shared power, together
with the Chasens, to dispose of or to direct the disposition of the Chasen
Shares. Similarly, pursuant to the "drag along" provisions of the Stockholders
Agreement, TMI and Samstock have the shared power, together with Halmostock, to
dispose of or to direct the disposition of the Halmostock Shares.
For purposes of this Statement the Stockholders are being treated as a
group which, in the aggregate, beneficially owns all of the shares of Common
Stock and Series A Preferred Stock listed above. This filing shall not be
construed as an admission that any reporting person is the beneficial owner of
all of such shares of Common Stock or Series A Preferred Stock.
At the date hereof, neither the Stockholders, nor to the best knowledge
of the Stockholders, any of SZI, ZGP, HIW or any of the persons listed in
Appendix A hereto owns any shares of Common Stock or Series A Preferred Stock
other than shares of Common Stock and Series A Preferred Stock beneficially
owned by the Stockholders, as described herein, of which one or more of such
other persons may be deemed to have beneficial ownership pursuant to Rule 13d-3
of the Exchange Act.
(c) Since the date of filing of Amendment Number 2 to the Schedule
13D the following transactions have occurred:
1) On September 23, 1999, TMI distributed the 322,059 Common
Shares and warrants representing 154,588 Warrant Shares to its members.
Samstock, a member of TMI, received 100,883 Common Shares and warrants
representing 48,424 Warrant Shares in the distribution.
2) On November 9, 1999, Samstock purchased 2,840,489 Preferred
Shares at $2.41 per share.
3) On November 9, 1999, Halmostock purchased 206,204 Preferred
Shares at $2.41 per share.
(d) No person other than a Stockholder has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of
the Common Stock beneficially owned by such Stockholders, except for the
Chasens, in the case of the Chasen Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Except for the matters described herein, no Stockholder or, to the best
knowledge of the Stockholders, any of SZI, ZGP or HIW or any of the persons
listed in Appendix A hereto has any contract, arrangement, understanding or
relationship with any person with respect to any securities of the Issuer.
11
<PAGE> 12
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 - Stock Purchase Agreement*
Exhibit 2 - Assignment Agreement*
Exhibit 3 - Amended Agreement Among Stockholders*
Exhibit 4 - Stockholders Agreement*
Exhibit 5 - First Amended Investment Agreement*
Exhibit 6 - GAMI Loan Agreement*
Exhibit 7 - Standby Purchase Agreement*
Exhibit 8 - Second Amended Investment Agreement*
Exhibit 9 - Power of Attorney dated February 26, 1998*
Exhibit 10 - Rights Offering Warrant**
* Previously filed.
** Filed herewith.
12
<PAGE> 13
APPENDIX A SCHEDULE 13D/A CUSIP NUMBER 893767103
SZ Investments, L.L.C., A Delaware Limited Liability Company: SZI's managing
member is Zell General Partnership, Inc., and its non-managing members are
Alphabet Partners and ZFT Partnership.
Zell General Partnership, Inc., An Illinois Corporation: ZGP's sole shareholder
is the Samuel Zell Revocable Trust and its sole director is Samuel Zell.
Samuel Zell: Mr. Zell is Chairman of the Board of Directors of Equity Group
Investments, L.L.C. ("EGI"). EGI is a privately owned investment management
firm. Mr. Zell is a citizen of the United States of America.
Alphabet Partners, An Illinois General Partnership: Alphabet Partners is
composed of three trusts created for the benefit of Mr. Zell and his family.
Chai Trust Company, L.L.C., an Illinois limited liability company, is the sole
trustee of the three trusts.
ZFT Partnership, An Illinois General Partnership: ZFT Partnership is composed of
four trusts created for the benefit of Mr. Zell and his family. Chai Trust
Company, L.L.C., an Illinois limited liability company, is the sole trustee of
the four trusts.
Halmos Investments-Western, Inc.: HIW's sole shareholder and sole director is
Steven J. Halmos. Mr. Halmos is a citizen of the United States of America.
13
<PAGE> 14
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
statement is true, complete and correct.
DATED: November 12, 1999
EGI-TRANSMEDIA INVESTORS, L.L.C.
By: /s/ Donald J. Liebentritt
----------------------------
Name: Donald J. Liebentritt
Title: Vice President
SAMSTOCK, L.L.C.
By: /s/ Donald J. Liebentritt
----------------------------
Name: Donald J. Liebentritt
Title: Vice President
HALMOSTOCK LIMITED PARTNERSHIP
by Halmos Investments-Western, Inc.,
its general partner
By: /s/ *
----------------------------
Name: Steven J. Halmos, President
* By: /s/ Donald J. Liebentritt
--------------------------
Donald J. Liebentritt
Attorney-in-fact
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
1 Stock Purchase and Sale Agreement dated as of November 6, 1997*
2 Assignment Agreement dated as of March 3, 1998*
3 Amended and Restated Agreement Among Stockholders dated as of March 3, 1998*
4 Stockholders' Agreement dated as of March 3, 1998*
5 First Amended Investment Agreement dated as of March 3, 1998*
6 GAMI Loan Agreement dated as of June 30, 1999**
7 Standby Purchase Agreement dated as of June 30, 1999**
8 Second Amended Investment Agreement dated as of June 30, 1999**
9 Power of Attorney dated February 26, 1998**
</TABLE>
* Previously filed.
** Filed herewith.
15
<PAGE> 1
Ex-99.10 Rights Offering Warrant
<PAGE> 2
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 NON-TRANSFERABLE, EXCEPT AS PROVIDED HEREIN.
TRANSMEDIA NETWORK INC.
WARRANT TO PURCHASE 1,000,000 SHARES OF COMMON STOCK
VOID AFTER NOVEMBER 9, 2004
THIS CERTIFIES THAT, for value received, Samstock, L.L.C., a Delaware
limited liability company (the "HOLDER"), is entitled to subscribe for and
purchase from Transmedia Network Inc., a Delaware corporation (the "COMPANY"),
an aggregate of 1,000,000 shares (as adjusted pursuant to Section 3 hereof) of
fully paid and nonassessable Common Stock (the "SHARES") of the Company, at the
price of $2.4813 per share (the "EXERCISE PRICE") (as adjusted pursuant to
Section 3 hereof), and subject to the provisions and upon the terms and
conditions hereinafter set forth.
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 November 9, 2004.
(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
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).
<PAGE> 3
(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 Exercise
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 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 Exercise 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.
<PAGE> 4
(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."
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."
<PAGE> 5
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, Samstock, L.L.C.,
EGI-Transmedia Investors, L.L.C. and Halmostock Limited Partnership) 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 Stockholders. 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.
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 9th day of November, 1999.
TRANSMEDIA NETWORK INC.
By: /s/ Stephen E. Lerch
-------------------------------
Its: Executive Vice President
and Chief Financial Officer
