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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)
TRANSMEDIA NETWORK INC.
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $0.02 PER SHARE
(TITLE OF CLASS OF SECURITIES)
893767103
(CUSIP NUMBER)
JOSEPH M. PAOLUCCI
EQUITY GROUP INVESTMENTS, L.L.C.
TWO NORTH RIVERSIDE PLAZA, SUITE 600
CHICAGO, ILLINOIS 60606
(312) 466-3885
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
APRIL 28 AND MAY 1, 2000
(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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<TABLE>
<CAPTION>
CUSIP No. 893767-103 SCHEDULE 13D PAGE 2 OF ___
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<S> <C>
1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Samstock L.L.C. FEIN: 36-4156890
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
NUMBER OF
SHARES ----------------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH REPORTING 8,322,632*
PERSON WITH ----------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
6,766,057
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10 SHARED DISPOSITIVE POWER
1,556,575
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,322,632*
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12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.3%
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14 TYPE OF REPORTING PERSON*
00
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</TABLE>
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* 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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<TABLE>
<S> <C>
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1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Halmostock Limited Partnership FEIN #83-0319692
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Wyoming
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7 SOLE VOTING POWER
0
NUMBER OF
SHARES ----------------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH REPORTING 8,322,632*
PERSON WITH ----------------------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
0
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10 SHARED DISPOSITIVE POWER
716,566
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,322,632*
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12 CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- ------------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
42.3%
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14 TYPE OF REPORTING PERSON*
00
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</TABLE>
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* 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. 4 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, 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: Samstock, L.L.C., a Delaware limited liability company
("Samstock"), and Halmostock Limited Partnership, a Wyoming limited partnership
("Halmostock"). (Samstock and Halmostock are referred to herein, individually,
as a "Stockholder" and, collectively, as the "Stockholders."). 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 Samstock, SZI and ZGP is general investments.
The business address of 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 EGI-Transmedia Investors, L.L.C., a Delaware limited liability
company ("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.
The principal business of TMI was investment in the securities of the
Issuer. 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"). TMI has had no investment in the securities of the Issuer since
the TMI Distribution.
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.
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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."
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
745,839 Chasen Shares issued and outstanding known to the Reporting Persons,
representing 5.1% 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 3.0% 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 5.4% of the Common Stock, including the 166,227
Warrant Shares and the 206,204 Preferred Shares.
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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 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.
The TMI Distribution occurred on September 23, 1999. 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 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
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Shares"). A copy of the Rights Offering Warrant was attached as Exhibit 10 to
Amendment No. 3 to Schedule 13D and is incorporated herein by reference. 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.
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 Investment
Agreement and the Second Amended Investment Agreement read together are
collectively referred to herein as the "Investment Agreement."
Pursuant to the 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
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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.
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
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Investment Agreement attached as exhibits to Amendment Number 1 to Schedule 13D
or Amendment Number 2 to Schedule 13D and incorporated herein by reference.
Samstock entered into a Co-Sale and Voting Agreement (the "New
Investors Co-Sale Agreement") dated as of April 28, 2000, with the Issuer,
Minotaur Partners II, L.P., an Illinois limited partnership ("MP II"),
ValueVision International Inc., a Minnesota corporation ("ValueVision"), Dominic
Mangone ("Mangone"), and Raymond Bank ("Bank" and, together with MP II,
ValueVision and Mangone, the "New Investors"). The New Investors Co-Sale
Agreement was entered into in connection with the acquisition on May 1, 2000 by
the New Investors of (i) 904,303 newly issued shares of Common Stock (the "First
Tranche Shares") and (ii) warrants to purchase 1,808,606 shares of Common Stock
(the "First Tranche Warrants"). The New Investors have also agreed to acquire
(i) 629,944 newly issued shares of Common Stock (the "Second Tranche Shares")
and (ii) warrants to purchase an additional 1,259,888 shares of Common Stock
(the "Second Tranche Warrants"), subject to certain conditions.
Pursuant to a Stock Purchase and Sale Agreement dated as of April 28,
2000 (the "Management Stock Purchase Agreement") among the Issuer, certain
investors including Issuer management listed on the signature page of the
Management Stock Purchase Agreement (the "Management Investors"), and Samstock,
Samstock agreed to purchase, at the time of the closing of the purchase of the
Second Tranche Shares and Second Tranche Warrants,(i) 657,536 newly issued
shares of Common Stock (the "Management Shares") at a price of $4.5625 per
share and (ii) warrants (the "Management Warrant Shares") to purchase an
additional 1,315,072 shares of Common Stock. The Management Stock Purchase
Agreement is attached hereto as Exhibit 11 and is incorporated herein by
reference. The form of warrant to purchase the Management Warrant Shares is
attached as Exhibit A to the Management Stock Purchase Agreement that is
attached hereto as Exhibit 11 and is incorporated herein by reference.
Samstock's source of funds for the aggregate $1,850,000 purchase price for the
Management Shares and the Management Warrant Shares will be working capital.
Samstock also entered into a Co-Sale and Voting Agreement (the "Management
Investors Co-Sale Agreement") dated as of April 28, 2000 with the Issuer and
the Management Investors.
The New Investors Co-Sale Agreement provides that, subject to the prior
rights of the Stockholders pursuant to the Amended Agreement Among Stockholders
and the Stockholders Agreement, the New Investors have a right of first refusal
on all sales to a third party of the stock held by Samstock where the amount of
shares is equal to or exceeds more than ten percent (10%) of the shares held by
Samstock. Furthermore, the New Investors' shares are subject to "drag along"
provisions if Samstock sells all of its shares provided, however, that prior to
the first anniversary of the New Investors Co-Sale Agreement, Samstock cannot
require the New Investors to sell their shares pursuant to this provision if the
contemplated transaction would result in an internal rate of return for the New
Investors on their initial investment of less than 25%. Further, so long as
Samstock is entitled to designate one or two directors of the Issuer pursuant to
the Investment Agreement, each New Investor shall vote in favor of the election
of Samstock's designee or designees to the Company's Board of Directors. In
addition, so long as MP II is entitled to designate one director in accordance
with the investment agreement dated as of April 28, 2000 among the Issuer and
the New Investors, Samstock shall vote in favor of the election of MP II's
designee to the Issuer's Board of Directors.. In the New Investors Co-Sale
Agreement, Samstock also agrees to vote in favor of the proposal to be included
in the Issuer's proxy statement to authorize the issuance and sale of the Second
Tranche Shares and Second Tranche Warrants. The New Investors Co-Sale Agreement
will terminate if the New Investors cease to own in the aggregate at least 5% of
the Issuer's Voting Securities. The New Investors Co-Sale Agreement is attached
hereto as Exhibit 12 and is incorporated herein by reference.
The Management Investors Co-Sale Agreement provides that, subject to
the prior rights of the Stockholders pursuant to the Amended Agreement Among
Stockholders and the Stockholders Agreement and of the New Investors pursuant
to the New Investors Co-Sale Agreement, the Management Investors have a right of
first refusal on all sales to a third party of the stock held by Samstock where
the amount of shares is equal to or exceeds more than ten percent (10%) of the
shares held by Samstock. Furthermore, the Management Investors' shares are
subject to "drag along" provisions if Samstock sells all of its shares provided,
however, that prior to the first anniversary of the Management Investors Co-Sale
Agreement, Samstock cannot require the Management Investors to sell their shares
pursuant to this provision if the contemplated transaction would result
11
<PAGE> 12
in an internal rate of return for the Management Investors on their initial
investment of less than 25%. In the Management Investors Co-Sale Agreement,
Samstock also agrees to vote in favor of the proposal to be included in the
Issuer's proxy statement to authorize the issuance and sale of the Second
Tranche Shares and Second Tranche Warrants. The Management Investors Co-Sale
Agreement will terminate if the Management Investors cease to own in the
aggregate at least 5% of the Issuer's Voting Securities. The Management
Investors Co-Sale Agreement is attached hereto as Exhibit 13 and is incorporated
herein by reference.
The summary contained in this Statement of certain provisions of the
Management Stock Purchase Agreement, the New Investors Co-Sale Agreement and the
Management Investors Co-Sale Agreement is not intended to be complete and is
qualified in its entirety by reference to the Management Stock Purchase
Agreement, the New Investors Co-Sale Agreement and the Management Investors
Co-Sale Agreement each attached as an Exhibit hereto and incorporated herein by
reference.
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,
Samstock's acquisition of the Rights Offering Warrant, and Samtock's acquisition
of the Management Shares and the Management Warrant Shares, 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.
The purchase price upon exercise of the warrants in respect of the
Management Warrant Shares is equal to a specified price (the "Management Warrant
Exercise Price") multiplied by the number of shares of Common Stock that
Samstock is then purchasing upon the exercise of the warrants. The Management
Warrant Exercise Price is $5.93125 per share for one-half of the Management
Warrant Shares purchased and $7.30 per share for the other one-half of the
Management Warrant Shares purchased. The warrants may be exercised at any time
and will expire on the fifth anniversary of their issuance date.
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, the New Investors Co-Sale Agreement and the Management
Investors Co-Sale 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.
12
<PAGE> 13
ITEM 5. Interest in Securities of the Issuer
(a) and (b) To the best knowledge of the Stockholders, there are
14,536,382 shares of Common Stock outstanding as of May 1, 2000, including the
First Tranche Shares. As of May 1, 2000, the aggregate 3,204,663 shares of
Common Stock beneficially owned by the Stockholders represent approximately
22.0% of the Common Stock issued and outstanding, and, together with the
3,046,693 Preferred Shares, the 1,071,276 Warrant Shares, the 1,000,000 Rights
Offering Warrant Shares and the 810,959 Management Warrant Shares, represent
42.3% of the Common Stock, including the Warrant Shares, the Preferred Shares,
the Rights Offering Warrant Shares, and the Management Warrants on a fully
converted and exercised basis. 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
Halmostock........................... 438,305 206,204 166,227 0
Chasens (1).......................... 745,838 0 0 0
-------------------- ---------------- --------------- ---------------
Total................................ 3,204,663 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, Samstock has shared voting power and shared dispositive power in
respect of the Chasen Shares.
Because Samstock is a party with the New Investors in the Co-Sale
Agreement the Stockholders may, pursuant to Rule 13d-3, be deemed to be in a
"group" with the New Investors, and therefore to jointly beneficially own
2,712,909 shares of the Issuer held by the New Investors as of May 1, 2000.
Assuming the closing of the purchase of all of the Second Tranche
Shares and the Second Tranche Warrants, the closing of all of the purchases
under the Management Stock Purchase Agreement and no other issuances of Common
Stock, there will be 15,823,860 shares of Common Stock outstanding, the
Stockholders will beneficially own 3,610,142 shares of Common Stock representing
22.8% of the of the Common Stock issued and outstanding, and together with the
3,046,693 Preferred Shares, the 1,071,276 Warrant Shares, the 1,000,000 Rights
Offering Warrant Shares and the 810,959 Management Warrant Shares, will
represent 46.6% of the Common Stock, including the Warrant Shares, the Preferred
Shares, the Rights Offering Warrant Shares, and the Management Warrant Shares.
Pursuant to the Amended Agreement Among Stockholders, and subject to
the limitations of the Investment Agreement, Samstock has the shared power to
vote or to direct the vote of the 745,839 Chasen Shares beneficially owned by
it. Pursuant to the Stockholders Agreement, and subject to the limitations of
the Investment Agreement, Samstock has 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, Samstock has 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, Samstock has 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
13
<PAGE> 14
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 the filing of Amendment No. 3 to the Schedule
13D, the following transactions have occurred: On February 28, 2000, the Chasens
sold 94,170 shares of Common Stock.
(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 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*
Exhibit 11 2000 Stock Purchase Agreement**
Exhibit 12 New Investors Co-Sale Agreement**
Exhibit 13 Management Investors Co-Sale Agreement**
Exhibit 14 Press Release dated May 2, 2000**
* Previously filed.
** Filed herewith.
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.
14
<PAGE> 15
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.
15
<PAGE> 16
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: May 5, 2000
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
16
<PAGE> 17
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*
10 Stock Purchase and Sale Agreement dated as of April 28, 2000**
11 Co-Sale and Voting Agreement dated as of April 28, 2000 (New
Investors)**
12 Co-Sale and Voting Agreement dated as of April 28, 2000 (Management
Investors)**
13 Press Release dated May 2, 2000**
</TABLE>
* Previously filed.
** Filed herewith.
17
<PAGE> 1
EXHIBIT 10
STOCK PURCHASE AND SALE AGREEMENT
STOCK PURCHASE AND SALE AGREEMENT, dated as of April 28, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), among each of the purchasers listed on the signature pages hereto
(collectively, the "Purchasers"), and Transmedia Network Inc., a Delaware
corporation (the "Company"). All capitalized terms used and not otherwise
defined herein have the meanings ascribed to them in Article IX hereof.
WHEREAS, the Company desires to issue and sell to the Purchasers, and
the Purchasers desire to purchase from the Company, (i) 657,536 newly issued
shares of Common Stock in the aggregate (such 657,536 newly issued shares,
collectively the "Shares") at a price of $4.5625 per share (the "Share Purchase
Price") and (ii) warrants (the "Warrants") in the form of Exhibit A hereto to
purchase an additional 1,315,072 shares of Common Stock in the aggregate (such
additional 1,315,072 shares of Common Stock in the aggregate issuable from time
to time upon the exercise of the Warrants, collectively the "Warrant Shares").
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 WARRANTS
1.1 Purchase and Sale of the Shares and Warrants. Upon the terms and
subject to the satisfaction of the conditions contained in this Agreement, at
the Closing, the Company shall issue and sell to the Purchasers (in such
proportions as between the Purchasers as set forth on Schedule 1 hereto), and
the Purchasers shall so purchase from the Company, the Shares and the Warrants,
in each case free and clear of all Liens.
1.2 Consideration. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, the Purchasers shall pay to the
Company (in such proportions as between the Purchasers as set forth on Schedule
1 hereto) $3,000,000 in the aggregate (the "Purchase Price") for the Shares and
the Warrants.
ARTICLE II
THE CLOSING
2.1 Time and Place. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, including but not limited to the
Stockholder Approval and the approval by the Disinterested Directors of the
Company of the purchase by Samstock of the Shares and Warrants pursuant to this
Agreement, the closing of the issuance and sale of the Shares and the Warrants
contemplated by this Agreement (the "Closing") shall take place at the
<PAGE> 2
offices of Transmedia Network Inc., 11900 Biscayne Boulevard, Miami, Florida, at
10:00 a.m. (local time) within ten business days of the Company receiving the
Stockholder Approval and concurrently with the Second Closing, or at such other
place or time as the Purchasers and the Company may agree, but in no event at
any time prior to the receipt of the Stockholder Approval. The date and time at
which the Closing actually occurs is hereinafter referred to as the "Closing
Date."
2.2 Deliveries by the Company. At the Closing, the Company shall
deliver the following to the Purchasers:
(i) a certificate of the Secretary or any Assistant Secretary of the
Company certifying as to the receipt by the Company of the
Stockholder Approval;
(ii) stock certificates representing the Shares, in the names of each
of the Purchasers, dated as of the Closing Date, in the
respective denominations set forth on Schedule 1 hereto;
(iii) the Warrants, dated as of the Closing Date, in the names of each
of the Purchasers, dated as of the Closing Date, in the
respective denominations set forth on Schedule 1 hereto; and
(iv) all other documents, instruments and writings required to be
delivered by the Company at or prior to the Closing Date pursuant
to this Agreement.
2.3 Deliveries by the Purchasers. At the Closing, the Purchasers shall
deliver the following to the
Company:
(i) the Purchase Price by wire transfer of immediately available
funds to such accounts designated in a writing delivered by the
Company to the Purchasers no less than two (2) business days
prior to the Closing Date or by such other means as may be agreed
upon in writing by the Company and the Purchasers; and
(ii) all other documents, instruments and writings required to be
delivered by the Purchasers at or prior to the Closing Date
pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to the Purchasers on the
date of this Agreement, which representations, warranties and covenants shall
survive the Closing to the extent hereinafter provided, that (except as set
forth in the Company's schedules delivered herewith):
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<PAGE> 3
3.1 Organization and Qualification. Each of the Company and each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to carry on its business as it is now
being conducted. Each of the Company and each Subsidiary is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction (including any foreign country) where the character of its
properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed or in good standing which would not, individually or in
the aggregate, have a Material Adverse Effect.
3.2 Certificate of Incorporation and Bylaws. The Company has heretofore
made available to the Purchasers a complete and correct copy of the certificates
of incorporation of the Company and iDine and the bylaws of the Company and
iDine as currently in effect (collectively, the "Organizational Documents").
Such Organizational Documents are in full force and effect, and no other
organizational documents are applicable to or binding upon the Company or any
Subsidiary (including, without limitation, any joint venture, investment or
other agreement). Neither the Company nor iDine is in violation of any of the
provisions of its Organizational Documents.
3.3 Capitalization; Subsidiaries.
(a) The authorized capital stock of the Company consists of 70,000,000
shares of Common Stock and 10,000,000 shares of Preferred Stock. As of March 31,
2000, (i) 13,632,709 shares of Common Stock were issued and outstanding, (ii)
4,149,378 shares of Series A Preferred Stock were issued and outstanding and
(iii) no shares of Common Stock or Preferred Stock were held in the treasury of
the Company.
(b) The Shares and the Warrants shall represent approximately 8.10% of
the Fully Diluted Common Stock and 14.47% of the outstanding shares of Common
Stock as of the Closing Date.
(c) Except as set forth above in Section 3.3(a) and as set forth in
Schedule 3.3(c) hereto, and except with respect to any Equity Securities issued
by the Company in the ordinary course of business, there were as of March 31,
2000 no outstanding Equity Securities of the Company. Schedule 3.3(c) includes a
true and correct table summarizing all outstanding stock options, warrants and
other rights to acquire Equity Securities of the Company or any Subsidiary,
including the identity and title of the holder (other than the holders of the
Series A Preferred Stock), the number of shares covered, the vesting schedule
therefor, the exercise price therefor, and the termination date therefor.
(d) Each of the outstanding shares of capital stock of each Subsidiary
is duly authorized, validly issued, fully paid and nonassessable, and all such
shares are owned by the Company free and clear of all Liens, and there are no
outstanding Equity Securities of any Subsidiary other than such shares. Except
as set forth on Schedule 3.3(d) hereto, the Company does not own, directly or
indirectly, any capital stock or other equity interest in any Person other than
the Subsidiaries.
-3-
<PAGE> 4
3.4 The Shares and the Warrants. Upon payment of the Purchase Price,
the Purchasers will acquire good and marketable title to the Shares and the
Warrants, free and clear of all Liens, and such Shares shall be validly issued,
fully paid and nonassessable. Upon exercise of the Warrants, in whole or, from
time to time, in part, and upon payment of the exercise price therefor, in
accordance with the terms of the Warrants, the Purchasers will acquire good and
marketable title to the Warrant Shares, free and clear of all Liens, and such
Warrant Shares shall be validly issued, fully paid and nonassessable.
3.5 Power and Authority. The Company has all necessary corporate power
and authority to execute and deliver this Agreement, the Co-Sale and Voting
Agreement, the Investment Agreement, the Warrants and all other documents,
instruments and other writings to be executed and/or delivered by or on behalf
of the Company to the Purchasers or any of their representatives in connection
with the transactions contemplated hereby or thereby (collectively, the "Company
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 Company Transaction Documents by the
Company, and the consummation by the Company of the transactions contemplated
hereby and thereby, have been duly and validly authorized by the Board of
Directors of the Company (the "Board") and by a majority of the Disinterested
Directors of the Company, and no other corporate proceedings on the part of the
Company are necessary to authorize the execution, delivery and performance of
the Company Transaction Documents or the consummation of the transactions
contemplated hereby and thereby, other than the Stockholder Approval. The Board
has approved each of the Company Transaction Documents and the transactions
contemplated hereby and thereby so as to render inapplicable to such
transactions, including, without limitation, the issuance to the Purchasers of
the Shares, the Warrants and Warrant Shares, the restrictions contained in
Article Seventh of the Certificate of Incorporation of the Company and the
restrictions contained in Section 203 of the Delaware General Corporation Law.
Each of the Company Transaction Documents has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof and thereof by the Purchasers, each constitutes a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms.
3.6 No Conflict; Required Filings and Consents. The execution, delivery
and performance of the Company Transaction Documents by the Company do not and
will not: (a) conflict with or violate the Organizational Documents of the
Company or any Subsidiary; (b) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any
Subsidiary or by which its or any of their respective properties are bound or
affected; (c) 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 (d) 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 by the Company or any Subsidiary 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 properties or
assets of the Company or any Subsidiary pursuant to, any Contract, Permit or
other instrument or obligation to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of their respective properties
are bound or affected; other than (i) in the case of clauses (b) and (d) for
such conflicts,
-4-
<PAGE> 5
violations, breaches, defaults, rights, losses and Liens as, and (ii) in the
case of clause (c), such consents, approvals, authorizations, permits, actions,
filings and notifications, the absence of which, would not have a Material
Adverse Effect.
3.7 Employment, Consulting and Severance Agreements and Related
Matters. Except as set forth in Schedule
3.7 hereto:
(a) There are no Employment, Consulting or Severance Agreements with
respect to iDine to which the Company or iDine is a party or by which the
Company or iDine or any of their respective assets may be bound, and no present
or former employee, officer, director, consultant, independent contractor or
other agent of the Company or iDine is a party to or the beneficiary of any such
Employment, Consulting or Severance Agreements; and
(b) The execution and delivery of this Agreement or the other Company
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby: (i) do not and will not 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 by the Company or any Subsidiary
of a material benefit under, or give rise to any right of termination,
amendment, acceleration or cancellation of any Employment, Consulting or
Severance Agreement; or (ii) do not and will not give rise to any obligation on
the part of the Company or any Subsidiary to pay or provide any Severance
Payment.
3.8 Compliance; No Violation. Each of the Company and each Subsidiary
is in compliance with, and is not in default or violation of, (i) its respective
Organizational Documents and (ii) all Contracts, Permits and other instruments
or obligations to which any of them are a party or by which any of them or any
of their respective properties may be bound or affected, except, in the case of
clause (ii), for any such failures of compliance, defaults and violations which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Since January 1, 2000, neither the Company nor any
Subsidiary has received notice of any revocation or modification of any federal,
state, local or foreign Permit material to the Company and its subsidiaries
taken as a whole.
3.9 SEC Documents; Undisclosed Liabilities.
(a) Since September 30, 1998, the Company has filed all required
reports, schedules, forms, proxy, registration and other statements and other
documents with the SEC (collectively, the "SEC Documents"). As of the date of
this Agreement, the last SEC Document filed by the Company was its Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999. As of their
respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents. As of their respective filing dates, none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent such statements have been modified or
superseded by a later SEC Document filed and publicly available prior to the
Closing Date, the circumstances or bases for which
-5-
<PAGE> 6
modifications or supersessions have not and will not individually or in the
aggregate result in any material liability or obligation on behalf of the
Company under the Securities Act, the Exchange Act, the rules promulgated under
the Securities Act or the Exchange Act, or any federal, state or local
anti-fraud, blue-sky, securities or similar laws. The consolidated financial
statements of the Company included in the SEC Documents (as amended or
supplemented by any later filed SEC Document filed and publicly available prior
to January 1, 2000), comply as to form in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in notes thereto) and fairly present the
consolidated financial position of the Company and the Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the SEC Documents,
neither the Company nor any Subsidiary has any obligation or liability of any
nature whatsoever (direct or indirect, matured or unmatured, absolute, accrued,
contingent or otherwise) either (i) required by generally accepted accounting
principles to be set forth on a consolidated balance sheet of the Company and
the Subsidiaries or in the notes thereto or (ii) which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect
whether or not required by generally accepted accounting principles to be
provided or reserved against on a balance sheet prepared in accordance with
generally accepted accounting principles; other than liabilities and obligations
reflected or reserved against in the consolidated financial statements of the
Company and its consolidated subsidiaries included in the Company's quarterly
report on Form 10-Q for the quarter ended December 31, 1999, or incurred since
the date of the balance sheet included in such financial statements in the
ordinary course of business which are not individually or collectively material
to the Company and the Subsidiaries taken as a whole.
(b) At the date the Proxy Statement is first mailed to the Company's
stockholders or at the time of the Stockholders' Meeting, the Proxy Statement
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement shall comply in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder except that the Company makes no representation, warranty or covenant
with respect to any written information supplied by the Purchasers specifically
for inclusion in the Proxy Statement.
3.10 Absence of Certain Changes or Events. Except as disclosed in the
SEC Documents, since January 1, 2000, the Company and the Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice, and there has not occurred any event, condition,
circumstance, change or development (whether or not in the ordinary course of
business) that, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing, except as set forth on Schedule 3.10 hereto or as disclosed in
any SEC Documents filed with the SEC and publicly available prior to January 1,
2000, since January 1, 2000, there has not been (i) any change by the Company in
its accounting methods, principles or practices, (ii) any revaluation by the
Company of any of its or any Subsidiary's material assets, including but not
limited to,
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writing down the value of any Rights to Receive other than in the ordinary
course of business consistent with past practice, (iii) any entry outside the
ordinary course of business by the Company or any Subsidiary into any
commitments or transactions material, individually or in the aggregate, to the
Company and the Subsidiaries taken as a whole, (iv) any declaration, setting
aside or payment of any dividends or distributions in respect of the shares of
Common Stock or, any redemption, purchase or other acquisition of any of its
securities, other than semi-annual cash dividends of $.02 per share on
outstanding Common Stock consistent with past practices, (v) any grant or
issuance of any Equity Securities of the Company or any Subsidiary; or (vi) any
increase in, establishment of or amendment of any Employment, Consulting or
Severance Agreement, bonus, insurance, deferred compensation, pension,
retirement, profit sharing, stock option (including without limitation the
granting of stock options, stock appreciation rights, performance awards, or
restricted stock awards), stock purchase or other employee benefit plan or
agreement or arrangement, or any other increase in the compensation payable or
to become payable to any present or former directors, officers or employees of
the Company or any Subsidiary, except for increases in compensation in the
ordinary course of business consistent with past practice.
3.11 Absence of Litigation; Compliance. Except as set forth on Schedule
3.11 hereto or as disclosed in any SEC Documents filed with the SEC and publicly
available prior to January 1, 2000, there are no suits, claims, actions,
proceedings or investigations pending or, to the Company's knowledge, overtly
threatened against the Company or any Subsidiary, or any properties or rights of
the Company or any Subsidiary, before any arbitrator or Governmental Entity,
that (i) if determined adversely to the Company or any Subsidiary could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (ii) seek to delay or prevent the consummation of the
transactions contemplated by this Agreement or any other Transaction Document.
Neither the Company nor any Subsidiary nor any of their respective properties is
or are subject to any order, writ, judgment, injunction, decree, determination
or award having, or which in the future could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or could prevent or
delay the consummation of the transactions contemplated by this Agreement or any
other Transaction Document. Neither the Company nor any Subsidiary is in
violation of, nor has the Company or any Subsidiary violated, any applicable
provisions of any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise, or other instrument or obligations to which the
Company or any Subsidiary is a party or by which the Company, any Subsidiary or
any of their respective properties are bound or affected except for any such
violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as disclosed in the SEC
Documents filed with the SEC and publicly available prior to January 1, 2000,
the Company and its Subsidiaries are in compliance with all applicable statutes,
laws, ordinances, rules, orders and regulations of any Governmental Entity
(including, without limitation, with respect to employment and employment
practices, immigration laws relevant to employment, and terms and conditions of
employment and wages and hours) except for any failures to comply which could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the SEC Documents filed with the SEC and
publicly available prior to January 1, 2000, no investigation by any
Governmental Entity with respect to the Company or any Subsidiary is pending or
threatened.
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3.12 Material Contracts; Defaults. All material Contracts (other than
Employment, Consulting or Severance Agreements) to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any of their
respective assets may be bound (the "Material Contracts") have been filed with
or described in the Company's SEC Documents. Neither the Company nor any
Subsidiary is, or has received any notice or has any knowledge that any other
party is, in default in any respect under any Material Contract, except for
those defaults which would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default by the Company or any Subsidiary or, to the
Company's knowledge, by any other party. To the Company's knowledge, no party to
any Material Contract has threatened to terminate such Material Contract (or
modify such Material Contract in a manner detrimental to the Company or any
Subsidiary).
3.13 Intellectual Property. The Company and each of its Subsidiaries
owns, or is licensed to use (in each case, free and clear of any Liens) all
patents, trademarks, trade names, copyrights, technology, know-how, trade
secrets, processes and computer software (including, without limitation, all
documentation and source and object codes with respect to such software) used in
or necessary for the conduct of its business as currently conducted which are
material to the business, operations, assets, prospects, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole. To
the Company's knowledge, the use of such patents, trademarks, trade names,
copyrights, technology, know-how, trade secrets, processes and computer software
(including, without limitation, all documentation and source and object codes
with respect to such software) by the Company and its Subsidiaries does not
infringe or otherwise violate the rights of any person. To the Company's
knowledge, no person is infringing any right of the Company or any Subsidiary
with respect to any such patents, trademarks, trade names, copyrights,
technology, know-how, processes or computer software (including, without
limitation, all documentation and source and object codes with respect to such
software).
3.14 Vote Required. The affirmative vote of the holders of no more than
a majority of the outstanding shares of Common Stock and the Series A Preferred
Stock, voting together as a class, is the only vote of the holders of any class
or series of capital stock or other Equity Securities of the Company necessary
to approve the issuance and sale of the Shares and the Warrants.
3.15 Takeover Status. No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws or applicable stock exchange rules or regulations,
including, without limitation, Section 203 of the Delaware General Corporation
Law, applicable to the Company or any Subsidiary is applicable to the
transactions contemplated hereby or by any other Transaction Document, taken
individually or in the aggregate.
3.16 Compliance with Securities Laws. The Company has not taken, and
will not take, any action which would subject the issuance and sale of the
Shares, the Warrants and/or the Warrant Shares pursuant to this Agreement to the
provisions of Section 5 of the Securities Act, or violate the registration or
qualification provisions of any securities or blue sky laws of any applicable
jurisdiction, and, based in part on the representations of the Purchasers in
Section 4.5,
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the sale of the Shares and the Warrants pursuant to this Agreement and the
issuance of the Warrant Shares from time to time upon exercise of the Warrants
complies with all applicable requirements of applicable federal and state
securities and blue sky laws.
3.17 Brokers. No broker, finder, investment banker or other person is
entitled to receive from the Purchasers any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by the Company
Transaction Documents based upon arrangements made by or on behalf of the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby severally, but not jointly, represents,
warrants and covenants to the Company, with respect to itself, himself or
herself, on the date of this Agreement and again on the Closing Date, which
representations and warranties shall survive the Closing, as follows:
4.1 Organization. Each Purchaser, as applicable, is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized.
4.2 Authority Relative to This Agreement, etc. Each Purchaser, as
applicable, has the requisite power and authority to execute and deliver this
Agreement, the Investment Agreement, the Co-Sale and Voting Agreement and all
other documents, instruments and other writings to be executed and/or delivered
by or on behalf of such Purchaser to the Company or any of its representatives
in connection with the transactions contemplated hereby or thereby
(collectively, "Purchaser Transaction Documents"), to perform its, his or her
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of each
of the Purchaser Transaction Documents by such Purchaser and the consummation by
such Purchaser of the transactions contemplated hereby and thereby have been
duly authorized by the requisite officer, manager, partner or member of such
Purchaser, and no other proceedings on the part of such Purchaser, are necessary
to authorize the execution, delivery and performance of the Purchaser
Transaction Documents or the transactions contemplated hereby or thereby. Each
of the Purchaser Transaction Documents has been duly executed and delivered by
such Purchaser, as the case may be, and, assuming due authorization, execution
and delivery by the Company, constitutes a legal, valid and binding obligation
of such Purchaser, as the case may be, enforceable against such Purchaser, as
the case may be, in accordance with its terms.
4.3 No Conflict; Required Filings and Consents. The execution, delivery
and performance of the Purchaser Transaction Documents by such Purchaser, as the
case may be, does not and will not: (i) conflict with or violate the
organizational documents of such Purchaser, as the case may be; (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to such Purchaser, as the case may be, or by which any of their properties are
bound or
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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 such Purchaser, as
the case may be, pursuant to, any Contract, Permit or other instrument or
obligation to which such Purchaser, as the case may be, is a party or by which
such Purchaser, as the case may be, 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, reasonably be expected to impair or delay the
ability of such Purchaser, as the case may be, to perform its obligations under
this Agreement.
4.4 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 Purchaser Transaction Documents based
upon arrangements made by or on behalf of such Purchaser.
4.5 Investment Intent. Each of the Purchasers (i) agrees that the
Shares, the Warrants and the Warrant Shares have not been registered under the
Securities Act or any state securities laws and may not be sold or transferred
except pursuant to a registration statement or pursuant to an exemption from the
Securities Act, (ii) is purchasing the Shares and the Warrants and will purchase
the 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 Shares, the
Warrants or any Warrant Shares and (iii) agrees to include in any Schedule 13D
filed with the SEC covering the Shares and the Warrant Shares a statement
asserting their investment intent, such statement to be in a form that is
reasonably satisfactory to the Company.
4.6 Share Ownership. Except as set forth on the Purchasers' Schedule
4.6, the Purchasers do not beneficially own any Equity Securities.
4.7 Proxy Statement. The information supplied or to be supplied by the
Purchasers in writing specifically for inclusion in the Proxy Statement will
not, at the date the Proxy Statement is first mailed to the Company's
stockholders or at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
4.8 Availability of Funds. Each Purchaser has on hand and will have on
the Closing Date sufficient funds to pay the Purchase Price then payable in
accordance with the terms of this Agreement and all fees and expenses incurred
in connection with the transactions contemplated hereby for which each Purchaser
is responsible.
4.9 The Purchasers not "Interested Stockholders". Except to the extent
that they may be deemed such by virtue of this Agreement and the Co-Sale and
Voting Agreement, neither the
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Purchasers, nor any of their affiliates, are an "interested stockholder" of the
Company within the meaning of Section 203 of the Delaware General Corporation
Law or Article 7 of the Company's Certificate of Incorporation.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access to Information. The Purchasers are entitled to continue
their due diligence investigation of the Company and the Subsidiaries, including
without limitation, any business, legal, financial or environmental due
diligence as the Purchasers deem appropriate. The Company will permit the
Purchasers and their authorized representatives, accountants, attorneys,
advisors and consultants full access to the Company's and the Subsidiaries'
property and all records and other data with respect to the Company, the
Subsidiaries, and their respective properties, assets, operations, sales and
marketing activities, and products and services, as is reasonably requested, and
will provide such assistance as is reasonably requested. Upon prior notification
to the Company, the Purchasers are entitled to contact and communicate with
employees, participating merchants (i.e., restaurants, other vendors and credit
card companies), legal advisors and accountants of the Company and the
Subsidiaries.
5.2 Filings. As promptly as practicable after the date of this
Agreement, the Company and the Purchasers shall make or cause to be made all
filings and submissions under laws and regulations applicable to the Company and
the Purchasers, if any, as may be required for the consummation of the
transactions contemplated by this Agreement. The Purchasers and the Company
shall coordinate and cooperate in exchanging such information and providing such
reasonable assistance as may be requested by any of them in connection with the
filings and submissions contemplated by this Section 5.2.
5.3 Stockholders' Meeting. The Company acting through the Board shall,
in accordance with applicable law, as soon as practicable:
(a) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Stockholders' Meeting") for the purpose of considering
and taking action upon the Proxy Proposal;
(b) include in the proxy statement (the "Proxy Statement") to be
distributed to the Company's stockholders in connection with the Proxy Proposal,
including any amendments or supplements thereto (which Proxy Statement shall be
in form and content reasonably satisfactory to the Purchasers), the
recommendation of the Board that the stockholders of the Company vote in favor
of the approval of the Proxy Proposal;
(c) provide a reasonable opportunity for the Purchasers and their
counsel to review and provide comment on the Proxy Statement prior to its
filing;
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(d) use its best efforts (i) to obtain and furnish the information
required to be included by it in the Proxy Statement and respond promptly to any
comments made by the SEC with respect to the Proxy Statement and any preliminary
version thereof and cause the Proxy Statement to be mailed to its stockholders
at the earliest practicable time and (ii) to obtain the necessary approvals by
its stockholders of the Proxy Proposal; and
(e) cause the Proxy Statement (i) not to contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (ii) to comply as
to form in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations thereunder, provided that the Company makes no
covenant with respect to any written information supplied by the Purchasers
specifically for inclusion in the Proxy Statement.
5.4 Agreement to Cooperate; Further Assurances. Subject to the terms
and conditions of this Agreement, each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the other Transaction Documents, including providing
information and using reasonable efforts to obtain all necessary or appropriate
waivers, consents and approvals, and effecting all necessary registrations and
filings. In case at any time after the Closing Date any further action is
necessary or desirable to transfer any Shares, the Warrants or the Warrant
Shares to the Purchasers or otherwise to carry out the purposes of this
Agreement and the other Transaction Documents, the Company and the Purchasers
shall execute such further documents and shall take such further action as shall
be necessary or desirable to effect such transfer and to otherwise carry out the
purposes of this Agreement and the other Transaction Documents, in each case to
the extent not inconsistent with applicable law.
5.6 Public Announcements. Any public announcement made by or on behalf
of any Purchaser or the Company prior to the termination of this Agreement
pursuant to Article VII hereof concerning this Agreement, the transactions
described herein or in any other Transaction Document or any other aspect of the
dealings heretofore had or hereafter to be had between the Company and the
Purchasers and their respective Affiliates must first be approved in writing by
the other (any such approval not to be unreasonably withheld), subject to the
Company's obligations under applicable law or New York Stock Exchange rules and
listing requirements as a public company (but the Company shall use its best
efforts to consult with the Purchasers as to all such public announcements).
5.7 Notification of Certain Matters. The Company shall promptly provide
the Purchasers (or their counsel) with copies of all filings made by the Company
with the SEC or any other Governmental Entity in connection with this Agreement,
the other Transaction Documents and the transactions contemplated hereby and
thereby.
5.8 Representations and Warranties. The Company shall give prompt
notice to the Purchasers, and the Purchasers shall give prompt notice to the
Company, of (a) any representation or warranty made by such party contained in
this Agreement that is qualified as to materiality
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becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect prior to the Closing or (b) the failure by such party prior to the
Closing to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by such party under this
Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.9 Use of Proceeds. Unless otherwise approved by the Board, the
proceeds raised by the Company pursuant to this Agreement shall be used solely
for the development of iDine.
ARTICLE VI
CONDITIONS AND SCHEDULE UPDATES
6.1 Conditions to Obligation of Each Party. The respective obligations
of each party to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or decree by any court of competent
jurisdiction which prevents the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents or
imposes material conditions with respect thereto shall have been issued
and remain in effect (each party agreeing to use its reasonable efforts
to have any such injunction, order or decree lifted);
(b) No action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any Governmental Entity which
would prevent the consummation of the transactions contemplated by this
Agreement or the other Transaction Documents or impose material
conditions with respect thereto;
(c) All orders, consents and approvals of Governmental
Entities legally required for the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents shall
have been obtained and be in effect at the Closing Date;
(d) The Shares and the Warrant Shares to be issued at the
Closing shall have been approved for listing by the New York Stock
Exchange upon official notice of issuance; and
(e) The Proxy Proposal shall have received Stockholder
Approval.
6.2 Condition to Obligations of the Company. The obligation of the
Company to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior the Closing Date (except as noted below)
of the following additional conditions:
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(a) The Purchasers shall have performed in all material
respects all obligations by the Purchasers required to be performed at
or prior to the Closing Date, and the representations and warranties of
the Purchasers contained in this Agreement shall be true and correct in
all material respects (if not qualified by materiality) and true and
correct (if so qualified) on and as of the date of this Agreement and
at and as of the Closing Date as if made at and as of the Closing Date,
except to the extent that any such representation or warranty expressly
relates to another date (in which case, as of such date) and the
Company shall have received a certificate signed on behalf of each the
Purchasers, to such effect;
(b) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction to
prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents; and
(c) All consents, approvals, authorizations and permits of,
actions by, filing with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made.
6.3 Conditions to Obligations of the Purchasers. The obligations of the
Purchasers to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) The Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at
or prior to the Closing Date, and the representations and warranties of
the Company contained in this Agreement shall be true and correct in
all material respects (if not qualified by materiality) and true and
correct (if so qualified) on and as of the date of this Agreement and
at and as of the Closing Date (as modified by the matters or
circumstances reflected in the Updated Schedules, if any, provided by
the Company to the Purchasers in accordance with Section 6.4 hereof) as
if made at and as of the Closing Date, except to the extent that any
such representation or warranty expressly relates to another date (in
which case, as of such date) and the Purchasers shall have received a
certificate from the Company signed by an executive officer), to such
effect;
(b) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction
which action or proceeding has been brought by a Governmental Entity
and which is reasonably likely to have a Material Adverse Effect or to
prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents;
(c) All consents, approvals, authorizations and permits of,
actions by, filings with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made;
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(d) All conditions to the Second Closing shall have been
satisfied, and such Second Closing shall occur concurrently herewith;
and
(e) The Purchasers shall have received an opinion of Morgan,
Lewis & Bockius LLP, counsel to the Company, 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,
assumptions, definition of firm's "knowledge", qualifications,
limitations and similar matters as shall be reasonably acceptable to
the Company.
6.4 Schedule Updates. At any time prior to two (2) business days prior
to the Closing, the Company shall be entitled to update any schedule referred to
in Article III of this Agreement or add new schedules not referred to in or
contemplated by Article III by written notice to the Purchasers if necessary in
order to make the corresponding representations and warranties true and correct
as of the Closing Date; provided that such updated or new Schedules may only
reflect changes in circumstances or matters arising subsequent to the date of
the execution of this Agreement that are not the result of any action
undertaken, or failure to act, by the Company or the Subsidiaries in breach of
any provision of this Agreement (any such updated or new schedules, "Updated
Schedules"); it being understood that the Company shall not be entitled to
reflect in any Updated Schedules any circumstances, matters or facts which were
in existence as of or prior to the date of this Agreement, whether or not the
Company knew or should have known of such circumstances, matters or facts as of
the date of this Agreement). If, in accordance with the immediately preceding
sentence, new schedules are added, the applicable section or subsection of
Article III corresponding to such new schedule shall be read to include the
words "except as set forth in Schedule [insert applicable section or subsection
number]" or words of similar meaning to appropriately connote the modifications
created by such new schedule. The delivery of any Updated Schedules pursuant to
this Section 6.4 shall not cure any breach of any representation, warranty or
covenant made in this Agreement as of the date of this Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the Closing
Date:
(a) By mutual written consent of the Purchasers and the
Company;
(b) By the Purchasers if there has been a material breach by
the Company of any representation, warranty, covenant or agreement set
forth in this Agreement, which breach has not been cured within ten
(10) business days following receipt by the breaching party of notice
of such breach;
(c) By the Company, if there has been a material breach by the
Purchasers of any representation, warranty, covenant or agreement set
forth in this Agreement which
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breach has not been cured within ten (10) business days following
receipt by the breaching party of notice of such breach;
(d) By the Purchasers, upon notice to the Company, if the
Closing shall not have occurred on or before the one hundred twentieth
(120th) day following the date of this Agreement, unless the absence of
such occurrence shall be due to the failure of the Purchasers to
perform in all material respects each of its obligations under this
Agreement required to be performed by it at or prior to the Closing;
(e) By the Purchasers or the Company, upon notice to the
other, if the Company's stockholders fail to adopt the Proxy Proposal
at the Stockholders' Meeting; and (f) By the Purchasers, if the Board
of Directors of the Company shall withdraw, modify or change its
approval or recommendation of the Proxy Proposal in a manner adverse to
the Purchasers or shall have resolved to do so.
ARTICLE VIII
INDEMNIFICATION
8.1 General. From and after the Closing, the parties shall indemnify
each other as provided in this Article VIII. No specifically enumerated
indemnification obligation with respect to a particular subject matter as set
forth below shall limit or affect the applicability of a more general
indemnification obligation as set forth below with respect to the same subject
matter. For the purposes of this Article VIII, each party shall be deemed to
have remade all of its representations, warranties and covenants contained in
this Agreement at the Closing with the same effect as if originally made at the
Closing, except that the Purchasers shall be deemed to have remade the
representations and warranties contained in Section 4.5 and Section 4.9 at the
Closing with the same effect as if originally made at the Closing. No Person
which may be subject to an indemnification obligation under this Article VIII
shall be entitled to require that any action be brought against any other Person
before action is brought against it hereunder by a Person seeking
indemnification by such Person.
8.2 The Company's Indemnification Obligations. The Company shall
indemnify, save and keep harmless each of the Purchasers and each of 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, breach of or other failure to comply with any representation,
warranty or covenant made by the Company in this Agreement or any other Company
Transaction Document. A claim for indemnification under this Section 8.2 must be
asserted by notice delivered to the Company within ninety (90) days after the
Company files with the SEC its Annual Report on Form 10-K for the year ended
September 30, 2001 (such ninetieth (90th) day, hereinafter the "Survival Date");
provided, however, that any claims for any inaccuracy in, breach of or other
failure to comply with any representation, warranty or covenant made by the
Company under
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<PAGE> 17
Section 3.1, Section 3.5 or Section 3.15 may be made at any time prior to the
expiration of any statute of limitations, if any, applicable to such claims.
Notwithstanding anything to the contrary in this Agreement, no investigation or
lack of investigation by any Purchaser, nor any disclosure in any Schedule
hereto or knowledge of any Purchaser as to any indemnifiable matters referred to
in this Section 8.2, shall in any way limit the Company's indemnification
obligations hereunder.
8.3 The Purchasers' Indemnification Obligations. Each of the
Purchasers, severally and not jointly, shall indemnify, save and keep harmless
the Company and its 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, breach of or failure to comply with any
representation and warranty made by such Purchaser to the Company in this
Agreement or in any other Purchaser Transaction Document. A claim for
indemnification under this Section 8.3 must be asserted by notice delivered to
the party from whom indemnification is sought no later than the Survival Date.
Notwithstanding anything to the contrary in this Agreement, no investigation or
lack of investigation by the Company, nor the knowledge of the Company as to any
indemnifiable matters referred to in this Section 8.3, shall in any way limit
any Purchaser's indemnification obligations hereunder.
8.4 Disputes; Mediation. (a) If the recipient of a notice of a claim
for indemnification under either Section 8.2 or 8.3 desires to dispute such
claim, it shall, within fourteen (14) days after notice of the claim of loss
against it or a notice of dispute is given, give a counter notice, setting forth
the basis for disputing such claim, to the Purchasers or the Company, as the
case may be. If no such counter notice is given within such fourteen (14) day
period, or if the Purchasers or the Company, as the case may be, acknowledge
liability for indemnification, then such loss shall be promptly satisfied.
(b) If the dispute is not promptly resolved, then, within fourteen (14)
days after delivery of the counter notice, or at such later time as may be
mutually agreed upon by the parties, the parties shall meet in person to discuss
and negotiate in good faith a resolution to the dispute. The meeting shall be
conducted in Chicago, Illinois or such other place as may be mutually agreed
upon by the parties.
(c) If the dispute is not resolved within thirty (30) days after the
first meeting of the parties referred to in Section 8.4(b), the parties shall
initiate a voluntary, nonbinding mediation conducted by a mutually agreed upon
mediator. If the parties are unable to agree upon a mediator, they shall request
the clerk of the Circuit Court of Cook County, Illinois to appoint a mediator
for them. Each of the parties shall bear their own costs and expenses (including
attorneys' fees) and their proportionate share of any other costs, fees or
expenses associated with this mediation and endeavor in good faith to resolve
their differences. The mediation shall be conducted in Chicago, Illinois or such
other place as may be mutually agreed upon by the parties.
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<PAGE> 18
ARTICLE IX
DEFINITIONS
"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such first person. As used in this
definition, "control" (including, with correlative meanings, "controlled by" and
"under common control with") shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management or policies, whether
through the ownership of securities or partnership or other ownership interests,
by contract or otherwise.
"Common Stock" means the common stock, $.02 par value per share, of the
Company.
"Contract" means any contract, agreement, commitment, indenture, lease,
note, bond, mortgage, license, plan, arrangement or understanding, whether
written or oral.
"Co-Sale and Voting Agreement" means that certain Co-Sale and Voting
Agreement, dated as of even date herewith, among Samstock, the Purchasers and
the Company.
"Damages" means all liabilities, demands, claims, actions or causes of
action, regulatory, legislative or judicial proceedings or investigations,
assessments, levies, losses, fines, penalties, damages, costs and expenses,
including, without limitation, reasonable attorneys', accountants',
investigators', and experts' fees and expenses, sustained or incurred in
connection with the defense or investigation of any of the foregoing.
"Disinterested Directors" has the meaning set forth in that certain
Second Amended and Restated Investment Agreement dated as of June 30, 1999,
among the Company, Samstock, EGI-Transmedia Investors, L.L.C., a Delaware
limited liability company (formerly known as Transmedia Investors, L.L.C.) and,
solely with respect to Section 5 of this agreement, Robert M. Steiner, as
trustee under declaration of trust dated March 9, 1983, as amended, establishing
the Robert M. Steiner Revocable Trust.
"Employment, Consulting or Severance Agreements" means all oral and
written (i) agreements for the employment for any period of time whatsoever, or
in regard to the employment, or restricting the employment, of any employee of
the Company or any Subsidiary, (ii) consulting, independent contractor or
similar agreements, and (iii) policies, agreements, arrangements or
understandings relating to the payment or provision of severance, termination or
similar pay or benefits to any present or former employees, officers, directors,
consultants, independent contractors or other agents of the Company or any
Subsidiary (including, without limitation, the Company's Senior Executive
Severance Policy, any successor thereto or any similar plan).
"Equity Securities" means, with respect to the Company or any
Subsidiary, as the case may be, (i) any class or series of common stock,
preferred stock or other capital stock, whether voting or non-voting, including,
without limitation, with respect to the Company, Common Stock and Preferred
Stock, (ii) any other equity securities issued by the Company or such
Subsidiary, as the case may be, whether now or hereafter authorized for issuance
by the Company's or such Subsidiary's, as the case may be, Certificate of
Incorporation, (iii) any debt, hybrid or other securities issued by the Company
or such Subsidiary, as the case may be, which are convertible
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<PAGE> 19
into, exercisable for or exchangeable for any other Equity Securities, whether
now or hereafter authorized for issuance by the Company's or such Subsidiary's,
as the case may be, Certificate of Incorporation, (iv) any equity equivalents
(including, without limitation, stock appreciation rights, phantom stock or
similar rights), interests in the ownership or earnings of the Company or such
Subsidiary, as the case may be, or other similar rights, (v) any written or oral
rights, options, warrants, subscriptions, calls, preemptive rights, rescission
rights or other rights to subscribe for, purchase or otherwise acquire any of
the foregoing, (vi) any written or oral obligation of the Company or such
Subsidiary, as the case may be, to issue, deliver or sell, any of the foregoing,
(vii) any written or oral obligations of the Company or such Subsidiary, as the
case may be, to repurchase, redeem or otherwise acquire any Equity Securities,
and (viii) any bonds, debentures, notes or other indebtedness of the Company or
such Subsidiary, as the case may be, having the right to vote (or convertible
into, or exchangeable for securities having the right to vote) on any matters on
which the stockholders of the Company or such Subsidiary, as the case may be,
may vote.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fully Diluted Common Stock" means the total number of shares of Common
Stock outstanding after taking into account the following: (i) all shares of
Common Stock outstanding (exclusive of the Shares); (ii) all Shares and Warrant
Shares (assuming full exercise of the Warrants and issuance of all Warrant
Shares); (iii) all shares of Common Stock issuable upon conversion, exchange or
other exercise of the Company's Equity Securities outstanding; and (iv)
adjustments needed to account or adjust for stock splits, stock dividends,
recapitalizations, recombinations and similar events.
"Governmental Entity" means any court, administrative agency or
commission or other governmental authority or instrumentality, whether domestic
(federal, state or local) or foreign.
"iDine" means iDine.com, Inc., a Delaware corporation and a wholly
owned subsidiary of the Company established to develop an internet based dining
business.
"Independent Directors" means directors of the Company who (i) are not
current or former employees or officers of the Company, (ii) are not holders of
more than 5% of the outstanding Common Stock, and (iii) have no financial
interest in and are not otherwise associated with the Purchasers, the Company,
any Subsidiary or any holder of more than 5% of the outstanding Common Stock or
any of their respective Affiliates, excluding however any equity interest of not
more than 2% of any publicly-held entity other than the Company. 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 the associated person might be interested.
"Investment Agreement" means that certain Investment Agreement, dated
as of even date herewith, among the Company and the Purchasers.
"Lien" means any preemptive or similar rights of any third party,
purchase options, calls, proxies, voting trusts, voting agreements, judgments,
pledges, charges, assessments, levies,
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<PAGE> 20
escrows, rights of first refusal or first offer, transfer restrictions,
mortgages, indentures, claims, liens, equities, mortgages, deeds of trust, deeds
to secure debt, security interests and other encumbrances of every kind and
nature whatsoever, whether arising by agreement, operation of law or otherwise,
other than any created by the Purchasers or the Purchaser Transaction Documents.
"Material Adverse Effect" means a material adverse effect (or any
development which could reasonably be expected to have a material adverse
effect) on the business, operations, assets, financial or other condition,
results of operations or prospects of the Company and the Subsidiaries, taken as
a whole, or that could reasonably be expected to impair or delay the ability of
the Company to perform its obligations under this Agreement.
"Permit" means any permit, certificate, consent, approval,
authorization, order, license, variance, franchise or other similar indicia of
authority issued or granted by any Governmental Entity.
"Person" or "person" means any individual, corporation, partnership,
limited liability partnership, limited liability company, joint venture,
association, joint stock company, trust, unincorporated organization or
Governmental Entity, or any agency or political subdivision thereof, or any
other entity.
"Preferred Stock" means the preferred stock, $.10 par value per share,
of the Company.
"Proxy Proposal" means the following proposal to be included in the
Proxy Statement for Stockholder Approval: the issuance and sale of the Shares
and the Warrants.
"Samstock" means Samstock, L.L.C., a Delaware limited liability
company.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
"Second Closing" shall have the meaning set forth in that certain Stock
Purchase and Sale Agreement, dated as of April 28, 2000, by and among Minotaur
Partners II, L.P., an Illinois limited partnership, ValueVision International
Inc., a Minnesota corporation, Dominic Mangone, Raymond Bank and the Company.
"Series A Preferred Stock" means the Series A Senior Convertible
Redeemable Preferred Stock, par value $.10 per share, of the Company.
"Stockholder Approval" means the requisite approval of the Company's
stockholders under the Company's Organizational Documents and the Delaware
General Corporation Law for the Proxy Proposal.
"Subsidiary" means each of (i) Transmedia Restaurant Company Inc., a
Delaware corporation, (ii) TMN International Incorporated, a Delaware
corporation, (iii) Transmedia Service Company Inc., a Delaware corporation, and
(iv) iDine.
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<PAGE> 21
"Transaction Document" means any Company Transaction Document and any
Purchaser Transaction Document.
ARTICLE X
MISCELLANEOUS
10.1 Restrictive Legend. The Purchasers agree to the placing on the
certificates representing the Shares or the Warrant Shares of 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 Investment
Agreement dated as of April 28, 2000, and the Co-Sale and
Voting Agreement dated as of April 28, 2000, 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."
10.2 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 any Purchaser, at their respective addresses
set forth on the signature pages hereto.
with an additional copy to:
---------------------------
---------------------------
---------------------------
if to the Company:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
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<PAGE> 22
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
10.3 Expenses. Except as otherwise provided in this Agreement, the
Company shall bear all fees and expenses incurred by the Company or any
Subsidiary in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the other Company Transaction
Documents and the consummation of the transaction contemplated hereby and
thereby, including attorneys', accountants' and other professional fees and
expenses. The Purchasers shall bear all fees and expenses incurred by the
Purchasers in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the other Purchaser Transaction
Documents and the consummation of the transaction contemplated hereby and
thereby, including attorneys', accountants' and other professional fees and
expenses.
10.4 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
10.5 Entire Agreement; Amendment; Waiver; Assignment; Nature of
Obligations. This Agreement, together with the other Transaction Documents,
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, 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; provided, however, that, notwithstanding the
foregoing, each Purchaser may assign its or their rights and obligations
hereunder to (i) any controlled Affiliate of such Purchaser, (ii) any officer,
manager, partner or member of such Purchaser, (iii) any Affiliate of any
officer, manager, partner or member of such Purchaser, (iv) any family member of
such Purchaser or (v) any trust established for the benefit of any family member
of such Purchaser (each of (i), (ii), (iii), (iv) and (v), a "Permitted
Assignee"), upon the
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<PAGE> 23
receipt by the Company of the written agreement of any such Permitted Assignee
to be bound by the terms of each of the Purchaser Transaction Documents;
provided further, however, that no such assignment shall relieve the assigning
party of any of its liabilities or obligations under this Agreement. Any
attempted assignment which does not comply with the provisions of this Section
10.5 shall be null and void ab initio.
10.6 Parties in Interest. Subject to the provisions regarding
assignment in Section 10.5 above, 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.
10.7 Publicity. Neither the Company nor the Purchasers will make or
issue, or cause to be made or issued, any announcement or written statements
concerning the Transaction Documents or the transactions contemplated thereby
for dissemination to the general public without the prior written consent of the
Company or the Purchasers, as appropriate, which consent shall not be
unreasonably withheld. This provision will not apply to any announcement or
written statement required to be made by law or the regulations of the SEC or
the New York Stock Exchange, except that the party required to make such
announcement will, whenever practicable, consult with the other parties hereto
concerning the timing and content of such announcement before such announcement
is made.
10.8 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.
10.9 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.
10.10 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.
10.11 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.
10.12 Jurisdiction and Service of Process. THE COMPANY AND THE
PURCHASERS 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 AND
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<PAGE> 24
THE PURCHASERS 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 COMPANY AND THE PURCHASERS 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 OR THE PURCHASERS 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 OR THE
PURCHASERS TO BRING PROCEEDINGS AGAINST THE COMPANY OR THE PURCHASERS IN THE
COURTS OF ANY OTHER JURISDICTION.
10.13 Trial. EACH OF THE COMPANY AND THE PURCHASERS 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 AND THE PURCHASERS
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 THE COMPANY AND
THE PURCHASERS 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 THE COMPANY AND THE PURCHASERS 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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<PAGE> 25
IN WITNESS WHEREOF, the Purchasers and the Company have
executed this Stock Purchase and Sale Agreement as of the date first above
written.
THE PURCHASERS:
-------------------------------------
GENE M. HENDERSON
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
HERBERT M. GARDNER
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
JAMES M. CALLAGHAN
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
GREGORY J. ROBITAILLE
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
JOHN A. WARD
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
GEORGE S. WEIDEMANN
Address:
----------------------------
-------------------------------------
-------------------------------------
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<PAGE> 26
-------------------------------------
CHRISTINE M. DONOHOO
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
FRANK F. SCHMEYER
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
ELLIOT MERBERG
Address:
----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
GERALD FLEISCHMAN
Address:
----------------------------
-------------------------------------
-------------------------------------
SAMSTOCK, L.L.C.
-------------------------------------
By:
Its:
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
TIM LITLE
Address:
----------------------------
-------------------------------------
-------------------------------------
COMPANY:
TRANSMEDIA NETWORK INC.
-------------------------------------
By: Gene M. Henderson, President and
Chief Executive Officer
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<PAGE> 27
EXHIBIT A
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 [____________] SHARES OF COMMON STOCK
VOID AFTER APRIL 28, 2005
THIS CERTIFIES THAT, for value received, [_______________] (the
"HOLDER"), is entitled to subscribe for and purchase from Transmedia Network
Inc., a Delaware corporation (the "COMPANY"), an aggregate of [____________]
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
------ ------------------------
[1/2of Shares] $5.93125
[1/2of Shares] $7.30000
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 April 28, 2005.
(b) Method of Exercise.
<PAGE> 28
(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 (or the portion
thereof being cancelled)
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.
<PAGE> 29
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.
(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
<PAGE> 30
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. The securities evidenced by this certificate are subject
to the
<PAGE> 31
restrictions on transfer contained in the Investment Agreement
dated as of April 28, 2000, and the Co-Sale and Voting
Agreement dated as of April 28, 2000, 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 (i) any
controlled Affiliate of Holder, (ii) [any partner of Holder or (iii) any
Affiliate of any partner of Holder][any family member of Holder or (iii) any
trust established for the benefit of any family member of Holder], upon delivery
to the Company of (i) the Notice of Transfer in the form of Exhibit 2 hereto and
(ii) an opinion of counsel to the Purchasers stating that such transfer of the
Warrant does not violate the Act.
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 28th day of April, 2000.
TRANSMEDIA NETWORK INC.
By:
----------------------------------
Its:
<PAGE> 32
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)
<PAGE> 33
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.
<PAGE> 34
EXHIBIT B
OPINION OF COMPANY COUNSEL
(1) Each of the Company and each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to carry on its business as it is now being conducted. Each of the
Company and each Subsidiary is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction
(including any foreign country) where the character of its properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so
qualified or licensed or in good standing which would not, individually or in
the aggregate, have a Material Adverse Effect.
(2) The certificates of incorporation of the Company and each
Subsidiary and the bylaws of the Company and each Subsidiary as currently in
effect (collectively, the "Organizational Documents") are in full force and
effect, and, to our knowledge after due inquiry, no other organizational
documents are applicable to or binding upon the Company or any Subsidiary.
(3) Upon payment of the Purchase Price, the Purchasers will acquire
good and marketable title to the Shares and the Warrants, free and clear of all
Liens, and such Shares shall be validly issued, fully paid and nonassessable.
Upon exercise of the Warrants, in whole or, from time to time, in part, and upon
payment of the exercise price therefor, in accordance with the terms of the
Warrants, the Purchasers will acquire good and marketable title to the Warrant
Shares, free and clear of all Liens, and such Warrant Shares shall be validly
issued, fully paid and nonassessable.
(4) The Company has all necessary corporate power and authority to
execute and deliver the Purchase Agreement, the Co-Sale and Voting Agreement,
the Investment Agreement, the Warrants and all other documents, instruments and
other writings to be executed and/or delivered by or on behalf of the Company to
the Purchasers or any of its representatives in connection with the transactions
contemplated hereby or thereby (collectively, the "Company Transaction
Documents"), to perform its obligations thereunder and to consummate the
transactions contemplated thereby. The execution, delivery and performance of
each of the Company Transaction Documents by the Company, and the consummation
by the Company of the transactions contemplated thereby, have been duly and
validly authorized by the Board of Directors of the Company (the "Board"), and
no other corporate proceedings on the part of the Company are necessary to
authorize the execution, delivery and performance of the Company Transaction
Documents or the consummation of the transactions contemplated thereby, other
than Stockholder Approval. The Board has approved each of the Company
Transaction Documents and the transactions contemplated hereby and thereby so as
to render inapplicable to such transactions, including, without limitation, the
issuance to the Purchasers of the Shares, the Warrant and Warrant Shares, the
restrictions contained in Article Seventh of the Certificate of Incorporation of
the Company, and the restrictions contained in Section 203 of the Delaware
General Corporation Law. Each of the
<PAGE> 35
Company Transaction Documents has been duly and validly executed and delivered
by the Company and, assuming the due authorization, execution and delivery
hereof and thereof by the Purchasers, each constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally and (ii) general principles of equity (whether
applied in a proceeding at law or in equity).
(5) The execution, delivery and performance of the Company Transaction
Documents by the Company do not and will not: (a) conflict with or violate the
Organizational Documents of the Company or any Subsidiary; (b) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or any Subsidiary or by which its or any of their respective properties
are bound or affected; (c) require any consent, approval, authorization or
permit of, action by, filing with or notification to, any Governmental Entity;
or (d) to our knowledge after due inquiry, 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 by the Company or any Subsidiary
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 properties or assets of the Company or any Subsidiary pursuant to,
any Contract or Permit identified on any schedule to the Purchase Agreement.
(6) The affirmative vote of the holders of no more than a majority of
the outstanding shares of Common Stock and the Series A Preferred Stock, voting
together as a class, is the only vote of the holders of any class or series of
capital stock or other Equity Securities of the Company necessary to approve the
sale of the Shares and the Warrants.
(7) No "fair price", "moratorium", "control share acquisition" or other
similar anti-takeover statute or regulation enacted under state or federal laws
or applicable stock exchange rules or regulations, including, without
limitation, Section 203 of the Delaware General Corporation Law, applicable to
the Company or any Subsidiary is applicable to the transactions contemplated by
the Purchase Agreement or any other Company Transaction Document, taken
individually or in the aggregate.
- ------------
NOTE: Company counsel opinion will be limited to Federal law, the law of New
York State and Delaware General Corporation Law.
<PAGE> 36
Schedule 1
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Investor Purchase Price Shares Warrants
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Gene M. Henderson $250,000 54,795 109,590
- -----------------------------------------------------------------------------
Herbert M. Gardner $150,000 32,877 65,754
- -----------------------------------------------------------------------------
James M. Callaghan $100,000 21,918 43,836
- -----------------------------------------------------------------------------
Gregory J. Robitaille $100,000 21,918 43,836
- -----------------------------------------------------------------------------
John A. Ward $50,000 10,959 21,918
- -----------------------------------------------------------------------------
George S. Wiedemann $50,000 10,959 21,918
- -----------------------------------------------------------------------------
Christine M. Donohoo $50,000 10,959 21,918
- -----------------------------------------------------------------------------
Frank F. Schmeyer $50,000 10,959 21,918
- -----------------------------------------------------------------------------
Gerald Fleischman $50,000 10,959 21,918
- -----------------------------------------------------------------------------
Elliot Merberg $50,000 10,959 21,918
- -----------------------------------------------------------------------------
Samstock L.L.C. $1,850,000 405,479 810,958
- -----------------------------------------------------------------------------
Tim Litle $250,000 54,795 109,590
- -----------------------------------------------------------------------------
TOTAL $3,000,000 657,536 1,315,072
- -----------------------------------------------------------------------------
</TABLE>
<PAGE> 37
Schedule 3.3(c)
Outstanding Equity Securities of the Company
See attached.
<PAGE> 38
Schedule 3.3(d)
Ownership of Capital Stock
See attached.
<PAGE> 39
Schedule 3.7(a)
Employment, Consulting and Severance Agreements
1. Employment Agreements.
(a) Employment Agreement by and between Transmedia Network Inc. and
Gregory J. Robitaille dated April 7, 2000.
(b) Employment Agreement by and between Transmedia Network Inc. and
Gerald J. Hughes dated April 2, 2000.
(c) Employment Agreement by and between iDine.com, Inc. and Russell D.
Dash dated April 18, 2000.
2. Consulting Agreements.
(a) Consulting Agreement by and between Transmedia Network Inc. and
Luminant Worldwide.
(b) Consulting Agreement by and between iDine.com, Inc. and the
etailing group, inc. dated April 15, 2000.
3. Severance Agreements.
None.
<PAGE> 40
Schedule 3.7(b)
Employment, Consulting and Severance Agreement Defaults; Severance Payments
None.
<PAGE> 41
Schedule 3.10
Certain Changes or Events
None.
<PAGE> 42
Schedule 3.11
Litigation; Compliance
None.
<PAGE> 43
Schedule 4.6
Share Ownership of Purchasers
<PAGE> 1
EXHIBIT 11
CO-SALE AND VOTING AGREEMENT
This CO-SALE AND VOTING AGREEMENT ("Agreement") is dated as of April
28, 2000, by and among Transmedia Network Inc., a Delaware corporation (the
"Company"), Samstock, L.L.C., a Delaware limited liability company ("Samstock"),
Minotaur Partners II, L.P., an Illinois limited partnership ("MP II"),
ValueVision International Inc., a Minnesota corporation ("ValueVision"), Dominic
Mangone ("Mangone") and Raymond Bank ("Bank" and, together with MP II,
ValueVision and Mangone, the "New Investors"). Capitalized terms used and not
otherwise defined in this Agreement have the meanings ascribed to them in
Section 5 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 April 28, 2000, (the "Purchase Agreement") among
the Company and the New Investors, pursuant to which the New Investors agreed to
purchase from the Company, and the Company has agreed to sell to the New
Investors, (a) an aggregate of 1,534,247 newly issued shares of common stock of
the Company, par value $.02 per share (the "Common Stock"), and (b) warrants to
purchase an additional 3,068,494 shares of Common Stock in the aggregate; and
(ii) that certain Investment Agreement, dated as of even date herewith, among
the Company and the New Investors (the "Investment Agreement"). Capitalized
terms used and not defined in this Agreement shall have the meanings ascribed to
them in the Investment Agreement.
WHEREAS, the parties desire to establish certain rights and
restrictions related to the transfer of Shares.
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. Co-Sale Rights. In the event that Samstock 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 Samstock, Samstock shall first notify the New
Investors 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 Samstock and shall have no effect on Samstock's or the New
Investors' rights or obligations under this Section 1). The New Investors
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 Samstock; provided,
however, that the New Investors' right to participate in the proposed sale shall
be subordinate to the rights of the Stockholder (as such term is defined in each
of (i) the Amended and Restated Agreement Among Stockholders (the "Agreement
Among Stockholders") dated as of March 3, 1998, by and among Samstock,
EGI-Transmedia Investors, L.L.C., a Delaware limited liability company (formerly
known as Transmedia Investors, L.L.C., "TNI"), Stockholder and the Company, and
(ii) the
<PAGE> 2
Stockholders' Agreement ("Stockholders' Agreement") dated as of March 3, 1998,
by and among Samstock, TNI, Stockholder and the Company) to participate in the
proposed sale. In order to exercise its co-sale rights, the New Investors,
within ten (10) business days after receiving notice from Samstock, shall
deliver to Samstock a written election to participate in the sale to the extent
allowed by this Section 1. If the New Investors have elected to participate in
the proposed sale, the New Investors 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 the New
Investors by the aggregate number of Shares owned by the New Investors and
Samstock multiplied by (ii) (a) the total number of Shares to be sold by them in
the proposed sale less (b) the total number of Shares that Stockholder shall
have elected to sell pursuant to the co-sale rights granted to Stockholder in
each of the Agreement Among Stockholders and the Stockholders' Agreement.
Notwithstanding anything to the contrary in this Section 1, the sale proceeds to
which the New Investors would otherwise be entitled by reason of its
participation in a sale pursuant to this Section 1 shall be reduced by an amount
equal to the product of the New Investors' 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 Samstock in connection with the sale or the
exercise of the New Investors' rights under this Section 1. The New Investors
shall, as promptly as practicable and as a condition to its participation, enter
into such agreements as shall be reasonably requested by Samstock for the sale
of its Shares in the proposed sale.
Section 2. Drag-Along Rights. If Samstock owns more Company Voting
Securities than the New Investors and Samstock 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 Assignees or the New
Investors), in a single arms-length transaction or related series of arms-length
transactions with an independent third party or group of independent third
parties, Samstock may require that the New Investors 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 Samstock has agreed to sell its Shares; provided,
however, that, notwithstanding the foregoing, prior to the first anniversary of
this Agreement, Samstock shall not be entitled to require the New Investors to
sell their Shares if the contemplated transaction would result in an internal
rate of return for the New Investors on their initial investment of less than
25% unless Samstock makes a cash payment to the New Investors in such amount as
to provide the New Investors with an internal rate of return on their initial
investment of 25%. Samstock shall give prompt notice to the New Investors that
Samstock has entered into an agreement of the type described in this Section 2,
and the New Investors shall, as promptly as practicable, enter into such
agreements as shall reasonably be requested by Samstock for the sale of all the
Shares in the proposed sale. Notwithstanding anything to the contrary in this
Section 2, the sale proceeds to which the New Investors would otherwise be
entitled by reason of its participation in a sale pursuant to this Section 2
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 the New Investors, multiplied by
(ii) the sum of any costs, fees and expenses, including, without limitation,
attorneys', accountants' and investment bankers' fees and expenses, incurred by
Samstock in connection with the sale or the exercise of Samstock's rights under
this Section 2.
2
<PAGE> 3
Section 3. Samstock and MP II Board Seat.
(a) So long as Samstock is entitled to designate one or two
directors in accordance with the provisions of Section 4.4 of the Second Amended
and Restated Investment Agreement dated as of June 30, 1999 among the Company,
Samstock, EGI-Transmedia Investors, L.L.C., a Delaware limited liability company
(formerly known as Transmedia Investors, L.L.C.), and, solely with respect to
Section 5 of this agreement, Robert M. Steiner, as trustee under declaration of
trust dated March 9, 1983, as amended, establishing the Robert M. Steiner
Revocable Trust, each New Investor shall vote all Company Voting Securities
owned of record by such New Investor or with respect to which such New Investor
has voting control in favor of the election of Samstock's designee or designees
to the Company's Board of Directors.
(b) So long as MP II is entitled to designate one director in
accordance with the provisions of Section 4.4 of the Investment Agreement,
Samstock shall vote all Company Voting Securities owned of record by Samstock or
with respect to which Samstock has voting control in favor of the election of MP
II's designee to the Company's Board of Directors.
Section 4. Stockholder Proposal. Samstock shall vote all Company Voting
Securities owned of record by Samstock or with respect to which Samstock has
voting control in favor of the Proxy Proposal (as defined in the Purchase
Agreement).
Section 5. 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.
"Permitted Assignee" means:
(i) with respect to the Transfer of Shares by Samstock, any
Affiliate of Samstock or any stockholder, partner or member of any such
Affiliate; and
(ii) with respect to any Transfer of Shares by any New
Investor, any Minotaur Investor.
"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.
3
<PAGE> 4
"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 New Investor which is either approved by
Samstock in writing prior to the pledge, hypothecation or grant of
security interest or is effected by Samstock or any Affiliate of
Samstock shall not constitute a "Transfer" of Shares for any purpose
under this Agreement; and
(ii) any Transfer effected as a result of a New Investor's
death, pursuant to the laws of descent and distribution, by operation
of law or otherwise, to such New Investor'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 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:
Equity Group Investments, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: Rod Dammeyer
Fax: (312) 454-0610
with an additional copy to:
Equity Group Investments, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: Joseph M. Paolucci, Esq.
Vice President, Deputy General Counsel
Fax: (312) 454-0335
4
<PAGE> 5
if to any Investor, at their respective addresses
set forth on the signature pages hereto.
with an additional copy to:
Altheimer & Gray
10 South Wacker Drive, Suite 4000
Chicago, IL 60606
Attention: Michael Altman, Esq.
Fax: (312) 715-4800
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
Section 7. Termination. This Agreement shall terminate and its
provisions shall be of no further force and effect if (i) the Minotaur Investors
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 7.1 thereof.
Section 8. 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 9. 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
5
<PAGE> 6
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 10. 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 11. 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 12. 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 13. 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 14. 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 New Investor shall take any
action, alone or in concert with any other person, to circumvent any of the
provisions of this Agreement.
Section 15. Assignability. This Agreement shall not be assignable by
any party without the prior written consent of each of the other parties;
provided, however, that, notwithstanding the foregoing, MP II, ValueVision,
Mangone or Bank may assign its or their rights and obligations hereunder to any
Permitted Assignee, upon the receipt by the Company of the agreement in writing
of any such Permitted Assignee to be bound by the terms this Agreement.
Section 16. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
Section 17. Joint Action by the New Investors. For purposes of Sections
1 and 2 of this Agreement, MP II, ValueVision, Mangone, Bank and any of their
Permitted Transferees shall
6
<PAGE> 7
act through a single representative; provided that each of the foregoing shall
be entitled to individually determine whether it will exercise its rights under
Section 1 hereof. Such representative shall initially be MP II, c/o Paul Lapping
and Ed Finnegan, and such representative may be replaced upon notice to the
Company by agreement of MP II, ValueVision, Mangone, Bank and any of their
Permitted Transferees.
7
<PAGE> 8
IN WITNESS WHEREOF, the undersigned have executed this Co-Sale and
Voting Agreement as of the day and year first above written.
MINOTAUR PARTNERS II, L.P.
By: Minotaur Partners II, L.L.C.
Its: General Partner
By: Minotaur Partners II, Inc.
Its: Manager
/s/ Edward G. Finnegan, Jr.
---------------------------------
By: Edward G. Finnegan, Jr.
Its: Principal
Address: 150 S. Wacker Drive
-------------------------
Suite 470
---------------------------------
Chicago, IL 60606
---------------------------------
VALUEVISION INTERNATIONAL INC.
/s/ Richard Barnes
---------------------------------
By: Richard Barnes
Its: Sup:CFO
Address: 6740 Shady Oak. Rd.
-------------------------
Eden Prarie, MN 55344
---------------------------------
---------------------------------
---------------------------------
/s/ Dominic Mangone
---------------------------------
DOMINIC MANGONE
Address:
-------------------------
---------------------------------
---------------------------------
/s/ Raymond Bank
---------------------------------
RAYMOND BANK
Address: P.O. Box #106
-------------------------
Butler, MD 21023
---------------------------------
---------------------------------
SAMSTOCK, L.L.C.
/s/ Rod Dammeyer
---------------------------------
By: Rod Dammeyer
Its: Vice President
TRANSMEDIA NETWORK INC.
/s/ Gene M. Henderson
---------------------------------
By: Gene M. Henderson
Its: President and Chief
Executive Officer
<PAGE> 1
EXHIBIT 12
CO-SALE AND VOTING AGREEMENT
This CO-SALE AND VOTING AGREEMENT ("Agreement") is dated as of April 28,
2000, by and among Transmedia Network Inc., a Delaware corporation (the
"Company"), Samstock, L.L.C., a Delaware limited liability company ("Samstock"),
and each of the investors listed on the signature pages hereto (collectively,
the "New Investors"). Capitalized terms used and not otherwise defined in this
Agreement have the meanings ascribed to them in Section 4 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 April 28, 2000, (the "Purchase Agreement") among the
Company and the New Investors, pursuant to which the New Investors agreed to
purchase from the Company, and the Company has agreed to sell to the New
Investors, (a) an aggregate of 657,536 newly issued shares of common stock of
the Company, par value $.02 per share (the "Common Stock"), and (b) warrants to
purchase an additional 1,315,072 shares of Common Stock in the aggregate; and
(ii) that certain Investment Agreement, dated as of even date herewith, among
the Company and the New Investors other than Samstock (the "Investment
Agreement"). Capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to them in the Investment Agreement.
WHEREAS, the parties desire to establish certain rights and restrictions
related to the transfer of Shares.
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. Co-Sale Rights. In the event that Samstock 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 Samstock, Samstock shall first notify the New
Investors 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 Samstock and shall have no effect on Samstock's or the New
Investors' rights or obligations under this Section 1). The New Investors
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 Samstock; provided,
however, that the New Investors' right to participate in the proposed sale shall
be subordinate to the rights of (A) the Stockholder (as such term is defined in
each of (i) the Amended and Restated Agreement Among Stockholders (the
"Agreement Among Stockholders") dated as of March 3, 1998, by and
<PAGE> 2
among Samstock, EGI-Transmedia Investors, L.L.C., a Delaware limited liability
company (formerly known as Transmedia Investors, L.L.C., "TNI"), Stockholder and
the Company, and (ii) the Stockholders' Agreement ("Stockholders' Agreement")
dated as of March 3, 1998, by and among Samstock, TNI, Stockholder and the
Company) and (B) the investors (the "Minotaur Investors") named in that certain
Co-Sale and Voting Agreement (the "Minotaur Co-Sale and Voting Agreement") dated
as of April 28, 2000, by and among the Company, Samstock, Minotaur Partners II,
L.P., an Illinois limited partnership, Dominic Mangone and Raymond Bank), to
participate in the proposed sale. In order to exercise its co-sale rights, the
New Investors, within ten (10) business days after receiving notice from
Samstock, shall deliver to Samstock a written election to participate in the
sale to the extent allowed by this Section 1. If the New Investors have elected
to participate in the proposed sale, the New Investors 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
the New Investors by the aggregate number of Shares owned by the New Investors
and Samstock multiplied by (ii) (a) the total number of Shares to be sold by
them in the proposed sale less (b) the total number of Shares that Stockholder
and/or the Minotaur Investors shall have elected to sell pursuant to the co-sale
rights granted to Stockholder in each of the Agreement Among Stockholders, the
Stockholders' Agreement and the Minotaur Co-Sale and Voting Agreement.
Notwithstanding anything to the contrary in this Section 1, the sale proceeds to
which the New Investors would otherwise be entitled by reason of its
participation in a sale pursuant to this Section 1 shall be reduced by an amount
equal to the product of the New Investors' 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 Samstock in connection with the sale or the
exercise of the New Investors' rights under this Section 1. The New Investors
shall, as promptly as practicable and as a condition to its participation, enter
into such agreements as shall be reasonably requested by Samstock for the sale
of its Shares in the proposed sale.
Section 2. Drag-Along Rights. If Samstock owns more Company Voting
Securities than the New Investors and Samstock 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 Assignees or the New
Investors), in a single arms-length transaction or related series of arms-length
transactions with an independent third party or group of independent third
parties, Samstock may require that the New Investors 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 Samstock has agreed to sell its Shares; provided,
however, that, notwithstanding the foregoing, prior to the first anniversary of
this Agreement, Samstock shall not be entitled to require the New Investors to
sell their Shares if the contemplated transaction would result in an internal
rate of return for the New Investors on their initial investment of less than
25% unless Samstock makes a cash payment to the New Investors in such amount as
to provide the New Investors with an internal rate of return on their initial
investment of 25%. Samstock shall give prompt notice to the New Investors that
Samstock has entered into an agreement of the type described in this Section 2,
and the New Investors shall, as promptly as practicable, enter into such
agreements as shall reasonably be requested by Samstock for the sale of all the
Shares in the proposed sale. Notwithstanding anything to the contrary in this
Section 2, the sale proceeds to which the New Investors would otherwise be
entitled by reason of its participation in a sale pursuant to this Section 2
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 the New Investors, multiplied by
(ii) the sum of any costs, fees and expenses, including, without limitation,
attorneys', accountants' and investment
<PAGE> 3
bankers' fees and expenses, incurred by Samstock in connection with the sale or
the exercise of Samstock's rights under this Section 2.
Section 3. Stockholder Proposal. Samstock shall vote all Company Voting
Securities owned of record by Samstock or with respect to which Samstock has
voting control in favor of the Proxy Proposal (as defined in the Purchase
Agreement).
Section 4. 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.
"Permitted Assignee" means:
(i) with respect to the Transfer of Shares by Samstock, any Affiliate
of Samstock or any stockholder, partner or member of any such Affiliate;
and
(ii) with respect to any Transfer of Shares by any New Investor, any
Management Investor.
"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 New Investor which is either approved by Samstock in writing
prior to the pledge, hypothecation or grant of security interest or is
effected by Samstock or any Affiliate of Samstock shall not constitute a
"Transfer" of Shares for any purpose under this Agreement; and
<PAGE> 4
(ii) any Transfer effected as a result of a New Investor's death,
pursuant to the laws of descent and distribution, by operation of law or
otherwise, to such New Investor'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 5. 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:
Equity Group Investments, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: Rod Dammeyer
Fax: (312) 454-0610
with an additional copy to:
Equity Group Investments, L.L.C.
Two N. Riverside Plaza - Suite 600
Chicago, IL 60606
Attention: Joseph M. Paolucci, Esq.
Vice President, Deputy General Counsel
Fax: (312) 454-0335
if to any Investor, at their respective addresses
set forth on the signature pages hereto.
with an additional copy to:
--------------------------------
--------------------------------
--------------------------------
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
<PAGE> 5
Section 6. Termination. This Agreement shall terminate and its provisions
shall be of no further force and effect if (i) the Management Investors 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 7.1 thereof.
Section 7. 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 8. 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 9. 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 10. 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.
<PAGE> 6
Section 11. 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 12. 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 13. 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 New Investor shall take any
action, alone or in concert with any other person, to circumvent any of the
provisions of this Agreement.
Section 14. Assignability. This Agreement shall not be assignable by any
party without the prior written consent of each of the other parties; provided,
however, that, notwithstanding the foregoing, any Investor may assign its or
their rights and obligations hereunder to any Permitted Assignee, upon the
receipt by the Company of the agreement in writing of any such Permitted
Assignee to be bound by the terms this Agreement.
Section 15. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.
Section 16. Joint Action by the New Investors. For purposes of Sections 1
and 2 of this Agreement, each of the New Investors and any of their Permitted
Transferees shall act through a single representative; provided that each of the
foregoing shall be entitled to individually determine whether it will exercise
its rights under Section 1 hereof. Such representative shall initially be
______________________________, and such representative may be replaced upon
notice to the Company by agreement of the New Investors and any of their
Permitted Transferees.
<PAGE> 7
IN WITNESS WHEREOF, the undersigned have executed this Co-Sale and Voting
Agreement as of the day and year first above written.
THE PURCHASERS:
/s/ Gene M. Henderson
-------------------------------------
GENE M. HENDERSON
Address: Transmedia
-----------------------------
11900 Biscayne Blvd, #460
-------------------------------------
N. Miami, FL 33182
-------------------------------------
/s/ Herbert M. Gardner
-------------------------------------
HERBERT M. GARDNER
Address: 26 Broadway 8472
-----------------------------
New York, NY 10004
-------------------------------------
On behalf of myself and certain
family members.
-------------------------------------
/s/ James M. Callaghan
-------------------------------------
JAMES M. CALLAGHAN
Address: 15 Club Court
-----------------------------
Plesantville, New York 10570
-------------------------------------
-------------------------------------
/s/ Gregory J. Robitalle
-------------------------------------
GREGORY J. ROBITAILLE
Address: 1332 W. Henderson St.
-----------------------------
Chicago, IL 60657
-------------------------------------
-------------------------------------
/s/ John A. Ward
-------------------------------------
JOHN A. WARD
Address: 830 Paris Avenue
-----------------------------
New York, NY 10021
-------------------------------------
-------------------------------------
/s/ George S. Weidemann
-------------------------------------
GEORGE S. WEIDEMANN
Address: 125 Brookside Drive
-----------------------------
Greenwich, CT 06831
-------------------------------------
-------------------------------------
<PAGE> 8
/s/ Christine M. Donohoo
-------------------------------------
CHRISTINE M. DONOHOO
Address: 6807 Seton HouseLane
-----------------------------
Charlotte, NC 28275
-------------------------------------
-------------------------------------
/s/ Frank F. Schmeyer
-------------------------------------
FRANK F. SCHMEYER
Address: 30 Stevens Dr.
-----------------------------
Englewood Cliffs, NJ
-------------------------------------
-------------------------------------
/s/ Elliot Merberg
-------------------------------------
ELLIOT MERBERG
Address: 515 72nd St. Apt. 23C
-----------------------------
New York, NY 10021
-------------------------------------
On behalf of myself and certain
family members.
-------------------------------------
/s/ Gerald Fleischman
-------------------------------------
GERALD FLEISCHMAN
Address: 7997 Travelers Tree Dr.
-----------------------------
Boca Raton, FL 33433
-------------------------------------
-------------------------------------
/s/ Thomas J. Litle
-------------------------------------
THOMAS J. LITLE
Address: C/O Ordertrust
-----------------------------
900 Chelmsford Street
-------------------------------------
Lowell, MA 01851
-------------------------------------
<PAGE> 9
COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Gene M. Henderson
-------------------------------------
By: Gene M. Henderson, President and
Chief Executive Officer
Transmedia
11900 Biscayne Blvd. #460
N. Miami, Fl 33182
SAMSTOCK, L.L.C.
/s/ Rod Dammeyer
-------------------------------------
By: Rod Dammeyer
Its: Vice President
Address: 2 N. Riverside Plaza
----------------------------
Chicago, IL 60606
-------------------------------------
<PAGE> 1
EXHIBIT 13
[iDINE NEWSLETTER]
[iDINE LOGO]
CONTACT: Susan Schneider
(847) 438-4466
[email protected]
FOR IMMEDIATE RELEASE
NEW INTERNET VENTURE REDEFINES DINING -- FIRST TO INTRODUCE YIELD
MANAGEMENT AND FREQUENT DINING LOYALTY PROGRAMS
FOR RESTAURANTS
CHICAGO FIRMS LEAD INVESTMENT
(CHICAGO, May 2, 2000) - iDine.com announced today that it is
establishing a new internet dining venture that will redefine the way
restaurants attract customers and the way consumers choose restaurants.
Chicago-based Minotaur Partners is the lead investor in the new entity.
"Applying the same fundamental principles that changed the airline
industry, iDine.com intends to transform the restaurant industry by offering
dynamic promotions, yield management and loyalty tools to drive incremental
business," says Greg Robitaille, president and chief executive officer for
iDine.com. "Similarly, it will become to diners what frequent flyer programs
have become to air travelers," he adds.
iDine.com is designed to enable restaurant operators to fill empty
tables by delivering restaurant-controlled promotions and incentives to
consumers. The unique service will also enable each restaurant to leverage its
existing credit card processing system, track dining activity, and seamlessly
deliver rewards to consumers. Unlike other online dining tools, iDine.com's
compensation will be performance-based; restaurateurs will pay only when
consumers dine in their restaurants. iDine.com's comprehensive website will let
consumers browse restaurant listings based on varying criteria, make online
reservations, and earn never-before-offered rewards from dining at participating
restaurants.
(MORE)
<PAGE> 2
iDINE.COM
PAGE 2
RESTAURANTS SET REWARDS TO FILL EMPTY TABLES, MARKET TO CONSUMERS
The iDine.com concept is to increase restaurant revenues by providing
variable pricing, yield management and customer relationship management (CRM)
tools and solutions. In doing so, the company will:
- let restaurants continuously adjust rewards based on demand
conditions, and place control of the consumer offering directly
into the hands of the restaurateur;
- offer restaurants the ability to fill empty seats during typically
under-performing day parts; and
- allow restaurants to target-promote to selected customer segments
and engage in one-to-one marketing.
Each restaurateur will set the parameters for the variable incentives offered
through iDine.com and simply "post" the desired level of incentives using phone,
fax, email or through iDine.com's secure web site.
COMPREHENSIVE REWARDS-BASED DINING SITE FOR FREQUENT DINERS
As the most extensive internet resource for up-to-date dining
information, iDine.com intends to be a trusted advisor to frequent diners by
providing fine and casual dining restaurant listings; the ability to search
based on varying criteria (i.e., cuisine, location, price); restaurant profiles
(menus, photos, average cost); ratings and reviews; directions and mapping
assistance; online reservation capabilities; and dynamic promotions and special
offers. Consumers will choose from a variety of reward types including
iDine.com-branded loyalty program "points," frequent flyer miles, restaurant
gift certificates, and cash-off dining. The website will empower frequent diners
by offering a mechanism to provide feedback to restaurants based on their dining
experiences.
iDINE.COM CORPORATE STRUCTURE, SPONSORSHIP AND MANAGEMENT
iDine.com is a wholly owned subsidiary of Transmedia Network, Inc., a
leader in dining savings programs. iDine.com will operate independently but will
have access to Transmedia's offline assets and capabilities - its merchant base
of more than 10,000 restaurants, its more than
(MORE)
<PAGE> 3
iDINE.COM
PAGE 3
2.5 million card members, and its proprietary credit card transaction processing
platform - providing an established initial audience base and enabling it to
deliver restaurant-controlled incentives to consumers seamlessly.
Chicago-based investor Minotaur Partners will fund iDine.com initially.
"The Transmedia/iDine.com opportunity seemed to us to be a highly logical
`clicks and mortar' business strategy that we think is very significant," said
Bill Lederer, chairman and chief executive officer of Minotaur Partners.
iDine.com will receive additional financing from Merchant Partners and Sam
Zell's Equity Group Investments.
The sale of shares and warrants will be consummated in two steps of $4
million initially and $6 million subject to near-term shareholder approval.
Robitaille, who previously served as managing director for Equity Group
Investments, and worked closely with Transmedia management during the past two
years, will lead iDine.com's dedicated management team. Most recently, he
managed the successful integration of the Dining a la Card operation into
Transmedia.
ROLLOUT UNDERWAY; 3Q SITE LAUNCH PLANNED
iDine.com plans aggressive sales and marketing efforts aimed at both
restaurants and consumers, to include trade and consumer online and offline
initiatives, direct sales and marketing campaigns aimed at Transmedia members
and merchants, affiliate programs with online portals and rewards partners, and
national sales consultants in top markets. The company expects to launch its new
website in the early third quarter.
ABOUT iDINE.COM
Chicago-based iDine.com, a wholly owned subsidiary of Transmedia
Network, Inc. (NYSE: TMN), will offer sophisticated yield management and loyalty
reward services to restaurants. For consumers, iDine.com's goal is to become the
most reliable and comprehensive rewards-based on-line resource for helping
consumers make smart and savvy dining decisions.
(MORE)
<PAGE> 4
iDINE.COM
PAGE 4
ABOUT MINOTAUR
Minotaur Partners is part of Minotaur Capital Management, Inc., a
privately held merchant bank with a focus on Midwest-based, New Economy
investments. William A. Lederer, Chairman, CEO and Chief Investment Officer
leads the firm, founded in 1987 and located in Chicago, IL. A team of seasoned
professionals with extensive operating and investment experience joins Lederer.
Minotaur uses a hands-on approach to deliver superior, risk-adjusted returns and
successful outcomes for both its investors and portfolio companies. Portfolio
companies are selected using Economic Value Investing(SM), Minotaur's rigorous
and proprietary evaluation and monitoring process. Additional information about
Minotaur and its portfolio companies can be found at www.minotaurpartners.com.
# # #
Any portion of information presented by iDine.com or Transmedia that relates to
future plans, events, developments or performance are forward-looking
statements. Readers of this document and visitors to our web site are cautioned
that all such statements and information involve risks and uncertainties as
discussed in detail in the Company's filings with the United States Securities
and Exchange Commission. Actual results, events, developments or performances
may differ materially. The public is cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date posted. The
Company undertakes no obligation to post the results of any revisions to any
forward-looking statements that may be made to reflect events or circumstances
after the date posted in this document or on the web site, or to reflect the
occurrence of unanticipated events.
