<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___) 1
Transmedia Network Inc.
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(Name of Issuer)
Common Stock ($.02 per share)
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(Title of Class of Securities)
893767103
------------------
(CUSIP Number)
Minotaur Partners II, L.P.
150 South Wacker Drive, Suite 470
Chicago, Illinois 60606
Attention: E. Finnegan
(312) 621-9000
with a copy to:
Michael Altman
Altheimer & Gray
10 South Wacker Drive
Chicago, Illinois 60606
(312) 715-4000
_____________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 28 and May 1, 2000
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(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. [_]
1The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
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1. Name of Reporting Person:
ValueVision International, Inc.
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2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
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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(e) or 2(f) [_]
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6. Citizenship or Place of Organization: Minnesota
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7. Sole Voting Power: 387,558(1)(2)
Number of
Shares -----------------------------------------------------------
8. Shared Voting Power: none(1)(2)
Beneficially
Owned By -----------------------------------------------------------
Each 9. Sole Dispositive Power: 387,558(1)(2)
Reporting
Person -----------------------------------------------------------
With 10. Shared Dispositive Power: none(1)(2)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person:
387,558(1)(2)
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
[X]
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13. Percent of Class Represented by Amount in Row (11): 2.3%
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14. Type of Reporting Person: CO
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(1) The Reporting Person is a party to the Co-Sale and Voting Agreement dated
as of April 28, 2000 and the Investment Agreement dated as of April 28,
2000, which contains provisions restricting the rights of the Reporting
Person and other persons to vote and dispose of Shares. (See Items 4, 5
and 6)
(2) Pursuant to the Stock Purchase and Sale Agreement dated as of April 28,
2000 and subject to the satisfaction or waiver of certain conditions
precedent, the Reporting Person has agreed to purchase an additional
89,992 shares and warrants to acquire 179,984 shares, within ten business
days of the Issuer's receipt of stockholder approval of such purchase.
(See item 4)
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1. Name of Reporting Person:
Raymond Bank
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2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
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3. SEC Use Only
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4. Source of Funds: PF
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5. Check box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) [_]
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6. Citizenship or Place of Organization: United States
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7. Sole Voting Power: 19,377 (1)(2)
Number of
Shares -----------------------------------------------------------
8. Shared Voting Power: none (1)(2)
Beneficially
Owned By -----------------------------------------------------------
Each 9. Sole Dispositive Power: 19,377 (1)(2)
Reporting
Person -----------------------------------------------------------
With 10. Shared Dispositive Power: none (1)(2)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person:
19,377 (1)(2)
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
[X]
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13. Percent of Class Represented by Amount in Row (11): 0.1%
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14. Type of Reporting Person: IN
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(1) The Reporting Person is a party to the Co-Sale and Voting Agreement dated
as of April 28, 2000 and the Investment Agreement dated as of April 28,
2000, which contains provisions restricting the rights of the Reporting
Person and other persons to vote and dispose of Shares. (See Items 4, 5
and 6)
(2) Pursuant to the Stock Purchase and Sale Agreement dated as of April 28,
2000 and subject to the satisfaction or waiver of certain conditions
precedent, the Reporting Person has agreed to purchase an additional 4,500
shares and warrants to acquire 9,000 shares, within ten business days of
the Issuer's receipt of stockholder approval of such purchase. (See item
4)
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1. Name of Reporting Person:
Dominic Mangone
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2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
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3. SEC Use Only
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4. Source of Funds: PF
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5. Check box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(e) or 2(f) [_]
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6. Citizenship or Place of Organization: United States of America
-----------------------------------------------------------
7. Sole Voting Power: 203,779 (1)(2)
Number of
Shares -----------------------------------------------------------
8. Shared Voting Power: none (1)(2)
Beneficially
Owned By -----------------------------------------------------------
Each 9. Sole Dispositive Power: 203,779 (1)(2)
Reporting
Person -----------------------------------------------------------
With 10. Shared Dispositive Power: none (1)(2)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person:
203,799 (1)(2)
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
[X]
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13. Percent of Class Represented by Amount in Row (11): 1.2%
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14. Type of Reporting Person: IN
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(1) The Reporting Person is a party to the Co-Sale and Voting Agreement dated
as of April 28, 2000 and the Investment Agreement dated as of April 28,
2000, which contains provisions restricting the rights of the Reporting
Person and other persons to vote and dispose of Shares. (See Items 4, 5
and 6)
(2) Pursuant to the Stock Purchase and Sale Agreement dated as of April 28,
2000 and subject to the satisfaction or waiver of certain conditions
precedent, the Reporting Person has agreed to purchase an additional
44,996 shares and warrants to acquire 89,992 shares, within ten business
days of the Issuer's receipt of stockholder approval of such purchase.
(See item 4)
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1. Name of Reporting Person:
Minotaur Partners II, L.P.
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2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
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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(e) or 2(f) [_]
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6. Citizenship or Place of Organization: Illinois
-----------------------------------------------------------
7. Sole Voting Power: 2,112,195 (1)(2)(3)
Number of
Shares -----------------------------------------------------------
8. Shared Voting Power: none (1)(2)
Beneficially
Owned By -----------------------------------------------------------
Each 9. Sole Dispositive Power: 2,112,195 (1)(2)(3)
Reporting
Person -----------------------------------------------------------
With 10. Shared Dispositive Power: none (1)(2)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person:
2,112,195 (1)(2)(3)
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
[X]
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13. Percent of Class Represented by Amount in Row (11): 12.9%
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14. Type of Reporting Person: PN
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(1) The Reporting Person is a party to the Co-Sale and Voting Agreement dated
as of April 28, 2000 and the Investment Agreement dated as of April 28,
2000, which contains provisions restricting the rights of the Reporting
Person and other persons to vote and dispose of Shares. (See Items 4, 5
and 6)
(2) Pursuant to the Stock Purchase and Sale Agreement dated as of April 28,
2000 and subject to the satisfaction or waiver of certain conditions
precedent, the Reporting Person has agreed to purchase an additional
490,456 shares and warrants to acquire 980,912 shares, within ten business
days of the Issuer's receipt of stockholder approval of such purchase.
(See item 4)
(3) Power is exercised through its sole general partner, Minotaur Partners II,
L.L.C.
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1. Name of Reporting Person:
Minotaur Partners II, L.L.C.
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2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
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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(e) or 2(f): [_]
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6. Citizenship or Place of Organization: Illinois
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7. Sole Voting Power: none
Number of
Shares -----------------------------------------------------------
8. Shared Voting Power: 2,112,195 (1)(2)(3)(4)
Beneficially
Owned By -----------------------------------------------------------
Each 9. Sole Dispositive Power: none
Reporting
Person -----------------------------------------------------------
With 10. Shared Dispositive Power: 2,112,195 (1)(2)(3)(4)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person:
2,112,195 (1)(2)(3)(4)
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
[X]
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13. Percent of Class Represented by Amount in Row (11): 12.9%
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14. Type of Reporting Person: OO
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(1) Solely in its capacity as the general partner of Minotaur Partners II,
L.P.
(2) Minotaur Partners II, LP is a party to the Co-Sale and Voting Agreement
dated as of April 28, 2000 and the Investment Agreement dated as of April
28, 2000. (See Items 4, 5 and 6).
(3) Pursuant to the Stock Purchase Agreement (attached hereto) and subject to
the satisfaction or waiver of certain conditions precedent, Minotaur
Partners II, LP has agreed to purchase an additional 490,456 shares and
warrants to acquire 980,912 shares, within ten business days of the
Issuer's receipt of stockholder approval of such purchase. (See item 4)
(4) Power is exercised through its sole manager, Minotaur Partners II, Inc.
<PAGE>
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1. Name of Reporting Person:
Minotaur Partners II, Inc.
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2. Check the Appropriate Box if a Member of a Group:
(a) [_]
(b) [X]
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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(e) or 2(f): [_]
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6. Citizenship or Place of Organization: Illinois
-----------------------------------------------------------
7. Sole Voting Power: none
Number of
Shares -----------------------------------------------------------
8. Shared Voting Power: 2,112,195 (1)(2)(3)
Beneficially
Owned By -----------------------------------------------------------
Each 9. Sole Dispositive Power: none
Reporting
Person -----------------------------------------------------------
With 10. Shared Dispositive Power: 2,112,195 (1)(2)(3)
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11. Aggregate Amount Beneficially Owned by Each Reporting Person:
2,112,195 (1)(2)(3)
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12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
[X]
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13. Percent of Class Represented by Amount in Row (11): 12.9%
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14. Type of Reporting Person: CO
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(1) Solely in its capacity as the general partner of Minotaur Partners II,
L.P.
(2) Minotaur Partners II, LP is a party to the Co-Sale and Voting Agreement
dated as of April 28, 2000 and the Investment Agreement dated as of April
28, 2000. (See Items 4, 5 and 6).
(3) Pursuant to the Stock Purchase Agreement (attached hereto) and subject to
the satisfaction or waiver of certain conditions precedent, Minotaur
Partners II, LP has agreed to purchase an additional 490,456 shares and
warrants to acquire 980,912 shares, within ten business days of the
Issuer's receipt of stockholder approval of such purchase. (See item 4)
<PAGE>
Item 1. Security and Issuer.
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This Statement relates to the common stock, par value $0.02 per share
("Common Stock") of Transmedia Network Inc. (the "Issuer"). The Issuer has its
principal executive offices at 11900 Biscayne Boulevard, Miami, Florida, 33181.
Item 2. Identity and Background.
-----------------------
(a)-(c) This statement is being filed by the following persons:
ValueVision International, Inc., a Minnesota corporation ("ValueVision"),
Raymond Bank ("Bank"), Dominic Mangone ("Mangone"), Minotaur Partners II, L.P.,
an Illinois limited partnership ("MPII"), Minotaur Partners II, L.L.C., an
Illinois limited liability company ("MPLLC") and Minotaur Partners, II, Inc., an
Illinois corporation ("MPCorp"). ValueVision, Bank, Mangone and MPII are
referred to herein, collectively, as the "Purchasers". The sole general partner
of MPII is MPLLC. The sole manager of MPLLC is MPCorp. The Purchasers, MPLLC
and MPCorp are collectively, referred to herein as the "Reporting Persons." The
Reporting Persons are making this single, joint filing because they may be
deemed to constitute a "group" within the meaning of Section 13(d)(3) of the
Act, although neither the fact of this filing nor anything contained herein
shall be deemed to be an admission by the Reporting Persons that a group exists.
The principal business of MPII is investment in securities. The principal
business of MPLLC and MPCorp is the management of MPII. The principal address,
which also serves as the principal office of each of MPII, MPLLC and MPCorp, is
150 S. Wacker Drive, Suite 470, Chicago, Illinois 60606.
The principal business of ValueVision is the integrated direct marketing of
products to consumers through various forms of electronic media. The business
address of ValueVision is 6740 Shady Oak Rd., Minneapolis, Minnesota 55344.
Mangone's business address is 6N271 James Court, Medinah, Illinois 60157.
His present principal occupation is serving as a principal of Merchant Partners
I, an Illinois limited partnership ("Merchant"). The principal business of
Merchant is operating as an investment firm.
Bank's business address is 9690 Deerco, Timonium, Maryland 21093. His
present principal occupation is serving as President and COO of Merchant
Development Corp., a Delaware corporation ("Merchant Corp"). The principal
business of Merchant Corp is operating as an investment firm.
The directors of MPCorp are William A. Lederer, Paul Lapping and Edward
Finnegan. Each of Messrs. Lederer, Lapping and Finnegan is also a Principal of
MPCorp, and as such, they are the only executive officers of MPCorp.
Mr. Lederer's business address is 150 S. Wacker Drive, Suite 470, Chicago,
Illinois 60606. His principal occupation is investment in securities through
various vehicles.
Mr. Finnegan's principal occupation involves management of investment funds
focused on direct marketing, business and consumer service companies. Finnegan's
business address is 150 S. Wacker Drive, Suite 470, Chicago, Illinois 60606.
Mr. Lapping's principal occupation involves management of investment funds
focused on direct marketing, business and consumer service companies. Lapping's
business address is 150 S. Wacker Drive, Suite 470, Chicago, Illinois 60606.
<PAGE>
The directors of ValueVision are Gene McCaffery, Marshall S. Geller, Robert
J. Korkowski, Paul D. Tosetti, Stuart U. Goldfarb, John L. Flannery, Jr., and
Mark W. Begor. Each of Messrs. McCaffery and Goldfarb is also an executive
officer of ValueVision.
Mr. McCaffery's principal occupation is Chairman of the Board, President
and CEO of ValueVision. Mr. McCaffery's business address is 6470 Shady Oak Rd.,
Minneapolis, Minnesota 55344.
Mr. Goldfarb's principal occupation is Vice Chairman of Value Vision. Mr.
Goldfarb's business address is 6470 Shady Oak Rd., Minneapolis, Minnesota 55344.
Mr. Geller's principal occupation is as a Merchant Banker for Geller &
Friend Capital Partners, Inc. Mr. Geller's business address is 433 North Camden
Drive, Suite 500, Beverly Hills , California 902010.
Mr. Korkowski's principal occupation is as a private investor. His
business address is 15802 Nursery Drive, Minnetonka, Minnesota 55345.
Mr. Tosetti's principal occupation is as a Lawyer at Latham & Watkins. His
business address is 633 West Fifth Street, Suite 4000, Los Angeles, California
90071-2007.
Mr. Flannery's principal occupation is a Managing Director of the
Media/Consumer Group of GE Capital Equity Investments, Inc. His business
address is 120 Long Ridge Road, Stamford, Connecticut 06927.
Mr. Begor's principal occupation is Executive Vice President and Chief
Financial Officer of NBC. His business address is 30 Rockefeller Plaza, Room
5224, New York, New York 10112.
The other executive officers of ValueVision are Cary L. Deacon, Steve
Jackel, Richard H. Barnes and Nathan E. Fagre.
Mr. Deacon's principal occupation is President of Marketing of ValueVision.
Mr. Deacon's business address is 6470 Shady Oak Rd., Minneapolis, Minnesota
55344.
Mr. Jackel's principal occupation is President of TV Home Shopping
Operations of ValueVision. Mr. Jackel's business address is 6470 Shady Oak Rd.,
Minneapolis, Minnesota 55344.
Mr. Barnes' principal occupation is Senior Vice President, Chief Financial
Officer and Secretary of ValueVision. Mr. Barnes' business address is 6470
Shady Oak Rd., Minneapolis, Minnesota 55344.
Mr. Fagre's principal occupation is Senior Vice President and General
Counsel of ValueVision. Mr. Fagre's business address is 6470 Shady Oak Rd.,
Minneapolis, Minnesota 55344.
(d) and (e) None of the Reporting Persons nor to the best knowledge of the
Reporting Person, none of the officers or directors of ValueVision or MPCorp has
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.
(f) All of the natural persons identified in this Item 2 are citizens of
the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
<PAGE>
The source and amount of the funds used or to be used by the Reporting
Persons to purchase Shares are as follows:
Name Source of Funds Amount of Funds Amount of Funds
---- --------------- ----------------- ------------------
for First Tranche for Second Tranche
----------------- ------------------
ValueVision Working Capital $ 589,411 $ 410,589
Bank Personal Funds $ 29,469 $ 20,531
MPII Working Capital $3,212,297 $2,237,706
Mangone Personal Funds $ 294,706 $ 205,294
(1) As used herein, the term "Working Capital" includes income from the
business operations of the entity and funds committed to the entity plus sums
borrowed from banks and brokerage firm margin accounts to operate such business
in general. None of the funds reported herein as "Working Capital" were
borrowed or otherwise obtained for the specific purpose of acquiring, handling,
trading or voting the Shares.
(2) As used herein, the term "Personal Funds" includes funds on hand and
sums borrowed from banks and brokerage firm margin accounts, none of which were
borrowed or otherwise obtained for the specific purpose of acquiring, handling,
trading or voting the Shares.
(3) The terms "First Tranche" and "Second Tranche" are described in Item 4
herein.
Item 4. Purpose of Transaction.
----------------------
Pursuant to a Stock Purchase and Sale Agreement dated as of April 28, 2000
(the "Stock Purchase Agreement") by and among each Purchaser and the Issuer, on
May 1, 2000 (the "First Closing"), the Purchasers acquired (i) 904,303 newly
issued shares of Common Stock in the aggregate (the "First Tranche Shares") and
(ii) immediately exercisable warrants to purchase an additional 1,808,606 shares
of Common Stock in the aggregate (the "First Tranche Warrant Shares") for an
aggregate purchase price of $4,125,882. The number of the First Tranche Shares
and First Tranche Warrant Shares subject to warrants purchased by each Purchaser
is set forth with respect to such Purchasers in Item 5 of this Statement.
The Purchasers' acquisition of the First Tranche Shares and warrants to
purchase the First Tranche Warrant Shares was, and the Purchasers' anticipated
acquisition of additional shares of Common Stock and warrants (discussed below)
will be, effected for the purpose of investing in the Issuer.
In connection with the Stock Purchase Agreement, the Purchasers have also
agreed to acquire for an aggregate purchase price of $2,874,120, a total of (i)
629,944 newly issued shares of the Common Stock (the "Second Tranche Shares" and
together with the First Tranche Shares, the "Shares") and (ii) warrants to
purchase an additional 1,259,888 shares of Common Stock (the "Second Tranche
Warrant Shares" and together with the First Tranche Warrant Shares, the "Warrant
Shares"). The closing of the purchase of the Second Tranche Shares and the
warrants for the Second Tranche Warrant Shares ("Second Closing") is subject to
the satisfaction of certain conditions precedent, including the approval by the
Issuer's stockholders of the issuance and sale of the Second Tranche Shares and
the warrants to acquire Second Tranche Shares. The aggregate number of the
Second Tranche Shares and Second Tranche Warrant Shares subject to warrants
purchased by each Purchaser is set forth with respect to such Purchasers in Item
5 of this Statement. The Stock Purchase Agreement is attached hereto as
Exhibit 1 and is incorporated herein by reference.
<PAGE>
The exercise price of each warrant to purchase Warrant Shares is equal to a
specified price (the "Exercise Price") multiplied by the number of shares of
Common Stock that the holder thereof is then purchasing upon exercise of the
warrant. The Exercise Price is $5.93125 per share for one-half of the Warrant
Shares subject to each warrant and $7.30 per share for the other one-half of the
Warrant Shares subject to each warrant. Each warrant may be exercised at any
time after its issuance and will expire on the fifth anniversary of its
issuance. The form of the warrants is attached hereto as Exhibit 2 and is
incorporated herein by reference.
The purchase and sale of the Second Tranche Shares and the warrants to
purchase the Second Tranche Warrant Shares may be abandoned (a) at the election
of the Purchasers, (1) upon notice to the Issuer, if the Second Closing shall
not have occurred on or before the one hundred twentieth day following the First
Closing, 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
required to be performed by it at or prior to the Second Closing; and (2) if the
board of directors of the Issuer shall withdraw, modify or change its approval
or recommendation of the Proxy Proposal (as defined in the Stock Purchase
Agreement attached hereto) in a manner adverse to the Purchasers or shall have
resolved to do so; (b) at the election of the Purchasers or the Issuer, upon
notice to the other, if the Issuer's stockholders fail to adopt the Proxy
Proposal.
In connection with the transactions which are the subject of this
Statement, the Purchasers and the Issuer have also entered into an Investment
Agreement dated as of April 28, 2000 (the "Investment Agreement"), which
contains agreements as to certain aspects of the relationship between the
Purchasers and the Issuer. The Investment Agreement is attached hereto as
Exhibit 3 and is incorporated herein by reference.
Pursuant to the Investment Agreement, the Purchasers agreed that the
Purchaser Group (as defined herein) will not take any of the following actions
prior to the fifth anniversary of the date of the Second Closing (the "Effective
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 (as defined herein) beyond the combined voting power of all
Voting Securities represented by the Shares and the Warrant Shares; provided,
however, that the foregoing limitation shall not prohibit certain purchases of
Voting Securities directly from the Issuer and certain repurchases of Voting
Securities 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 Purchaser Group may engage in any of such activities among
themselves and with any stockholder of the Issuer who is a party to the Co-Sale
and Voting Agreement (as summarized in Item 6); or (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.
For purposes of this Statement "Purchaser Group" means (i) MPII, (ii)
ValueVision, (iii) Mangone, (iv) Bank, (v) any partner or member of MPII, (vi)
any affiliate of MPII, ValueVision, Mangone or Bank, (vii) any affiliate of any
partner or member of MPII under control of, or common control with, any such
partner or member, (viii) any family members of Mangone or Bank, (ix) any trusts
established for the benefit of any family members of Mangone or Bank and (x) any
corporations, partnerships, limited liability companies or other legal entities
that are the affiliates of any of the foregoing. For purposes of this
Statement, "Voting Securities" means, Common Stock, Series A Preferred Stock,
any other preferred stock of the Issuer that is entitled to vote generally for
the election of directors, any other class or series of Issuer securities that
is entitled to vote generally for the election of directors and any other
securities, warrants, options or rights of any nature (whether or not issued by
the Issuer) that are convertible into, exchangeable for, or exercisable for the
purchase of, or otherwise give the holder thereof any rights in respect of
Common Stock, Series A Preferred Stock, any other Issuer preferred stock that is
entitled to vote generally for the election of directors, or any other class or
series of Issuer securities that is entitled to vote generally for the election
of directors.
<PAGE>
Pursuant to the Investment Agreement, so long as Purchasers beneficially
own at least 5 percent (5%) of the combined voting power of the Issuer's Voting
Securities, MPII is entitled to designate one representative, reasonably
acceptable to the independent directors of the Issuer, to serve on the board of
directors ("Board"). Pursuant to the forgoing, William A. Lederer was appointed
a director of the Company as of the date of the First Closing.
Pursuant to the Investment Agreement, the Purchasers agreed that, except to
the extent otherwise provided in the Investment Agreement, the Purchasers would
vote their Voting Securities with respect to the election or removal of
directors of the Issuer in accordance with the recommendations of a majority of
the disinterested directors of the Issuer, provided that the Purchasers may vote
in favor of the election or retention of the director designated by MP II as
described in the preceding paragraph.
Pursuant to the Investment Agreement and subject to certain exceptions, the
Issuer granted to the Purchasers and certain other parties certain shelf
registration rights in connection with certain permitted sales of shares of
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 all Shares and Warrant Shares as soon as
practicable after the Effective Date, 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 Shares and 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 each Purchaser's
ability to margin its stock and does not represent any present intention on
behalf of any Purchaser to dispose of any Shares or Warrant Shares to be covered
thereby.
The summaries contained in this Statement of certain provisions of each of
the Stock Purchase Agreement, the warrants and the Investment Agreement are not
intended to be complete and are qualified in their entirety by reference to each
respective document attached as an Exhibit hereto and incorporated herein by
reference.
Each Purchaser intends to continue to review its investment in Common Stock
and, subject to the limitations of the Investment Agreement described above,
from time to time depending upon certain factors, including without limitation
the financial performance of the Issuer, the availability and price of shares of
Common Stock and other general market and investment conditions, may determine
to acquire through open market purchases or otherwise additional shares of
Common Stock, or may determine to sell through the open market or otherwise.
Except as stated above, neither of the Purchasers has any plans or
proposals of the types referred to in clauses (a) through (j) of Item 4 of
Schedule 13D, as promulgated by the Securities and Exchange Commission.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) and (b) To the best knowledge of the Purchasers, there were 13,632,709
shares of Common Stock outstanding prior to the issuance of the 904,303 First
Tranche Shares. As of the date hereof, the First Tranche Shares and First
Tranche Warrant Shares owned by the Purchasers represent, in the aggregate 16.6%
of the Common Stock issued and outstanding (assuming exercise in full of the
warrants to purchase the First Tranche Warrant Shares). As of the date hereof
and subject to the limitations of the Investment Agreement and the Co-Sale
Agreement described in Item 6, each Purchaser has the sole power to vote or to
direct the vote and to dispose or to direct the disposition of the Shares owned
by such Purchaser. Assuming there is no other change in the number of
outstanding shares of Common Stock, following the Second Closing, the Purchasers
will beneficially own 4,602,741 shares of Common Stock (assuming exercise in
full of the warrants into Warrant Shares), representing approximately 25.2% of
the Common Stock issued and outstanding.
MPII
----
<PAGE>
Including First Tranche Warrant Shares into which currently exercisable
warrants could be exercised, MPII has the sole power to vote, to direct the
vote, to dispose, and to direct the disposition with respect to 2,112,195 shares
of the Issuer, which constitutes approximately 12.9% of the Issuer's outstanding
shares. Such power is subject to agreements with respect to voting and
disposition set out in the Stock Purchase Agreement, the Investment Agreement
and the Co-Sale Agreement (see Item 6). Assuming there is no other change in the
number of outstanding shares of Common Stock, following the Second Closing, MPII
will have the sole power to vote or to direct the vote and to dispose or to
direct the disposition of 3,583,563 shares of Common Stock (assuming exercise in
full of the warrants into Warrant Shares), which constitutes approximately 19.6%
of the total issued and outstanding shares of the Issuer.
MPLLC
-----
Because of its position as the sole general partner of MPII, MPLLC may,
pursuant to Rule 13d-3 of the Act, be deemed to be beneficial owner of the
Shares and Warrant Shares owned by MPII.
MPCorp
------
Because of its position as the sole manager of MPLLC, MPCorp may, pursuant
to Rule 13d-3 of the Act, be deemed to be beneficial owner of the Shares and
Warrant Shares owned by MPII.
ValueVision
-----------
Including First Tranche Warrant Shares as to which warrants could be
currently exercised, ValueVision has the sole power to vote, to direct the vote,
to dispose, and to direct the disposition with respect to 387,558 shares of
Common Stock, which constitutes approximately 2.3% of the Issuer's issued and
outstanding shares. Such power subject to agreements with respect to voting and
disposition set out in the Stock Purchase Agreement, the Investment Agreement
and the Co-Sale Agreement (see Item 6). Assuming there is no other change in the
number of outstanding shares of Common Stock, following the Second Closing,
ValueVision will have the sole power to vote or to direct the vote and to
dispose or to direct the disposition of 657,534 shares of Common Stock (assuming
exercise in full of the warrants into Warrant Shares), which constitutes
approximately 3.6% of the total issued and outstanding shares of the Issuer.
Bank
----
Including First Tranche Warrant Shares into which currently exercisable
warrants could be exercised, Bank has the sole power to vote, to direct the
vote, to dispose, and to direct the disposition with respect to 19,377 shares of
the Issuer, which constitutes approximately 0.1% of the Issuer's issued and
outstanding shares. Such power is subject to agreements with respect to voting
and disposition set out in the Stock Purchase Agreement, the Investment
Agreement and the Co-Sale Agreement (see Item 6). Assuming there is no other
change in the number of outstanding shares of Common Stock, following the Second
Closing, Bank will have the sole power to vote or to direct the vote and to
dispose or to direct the disposition, in the aggregate, of 32,877 shares of
Common Stock (assuming exercise in full of the warrants into Warrant Shares),
which constitutes approximately 0.2% of the total issued and outstanding shares
of the Issuer.
Mangone
-------
Mangone owned 10,000 shares of Common Stock prior to the First Closing.
Including First Tranche Warrant Shares into which currently exercisable warrants
could be exercised, Mangone has the sole power to vote, to direct the vote, to
dispose , and to direct the disposition with respect to 203,779 shares of the
Issuer, which constitutes approximately 1.2% of the Issuer's issued and
outstanding shares. Such power is subject to agreements with respect to voting
and disposition set out in the Stock Purchase Agreement, the Investment
Agreement and the Co-Sale Agreement (see Item 6). Assuming there is no other
change in the number of outstanding shares of Common Stock, following the Second
Closing, Mangone will have the sole power to vote or to direct the vote and to
dispose or to direct the disposition of 338,767 shares of Common
<PAGE>
Stock (assuming exercise in full of the warrants into Warrant Shares), which
constitutes approximately 1.8% of the total issued and outstanding shares of
the Issuer.
In addition to the foregoing, because the Purchasers are parties to the Co-
Sale and Voting Agreement (described in Item 6) the Reporting Persons may,
pursuant to Rule 13d-3 under the Exchange Act be deemed to be members of a
"group" that includes Samstock, LLC, a Delaware limited liability company
("Samstock"), another shareholder of the Issuer, and therefore to jointly
beneficially own 8,416,802 shares of the Issuer held by Samstock. The existence
of any such "group" is not acknowledged by the Purchasers.
At the date hereof, neither the Purchasers, nor to the best knowledge of
the Purchasers, any of the directors or officers of MPCorp or ValueVision owns
any shares of Common Stock other than shares of Common Stock beneficially owned
by the Purchasers, 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) During the last sixty days, the only transactions in the Common Stock
effected by the Reporting Persons and to the best knowledge of the Reporting
Persons, by any of the directors or officers of MPCorp or ValueVision, were the
transactions occurring on the First Closing as described in Items 4 and 6
hereof.
(d) No other person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares owned by
the Purchasers.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect
---------------------------------------------------------------------
to Securities of the Issuer.
- ---------------------------
The Purchasers and Samstock entered into a Co-Sale and Voting Agreement
(the "Co-Sale Agreement") dated as of April 28, 2000. As reported in an
Amendment to Samstock's Schedule 13D dated May 5, 2000, Samstock
beneficially owns 8,416,802 shares of Common Stock. The Co-Sale Agreement
provides that, subject to certain limitations, the Purchasers have certain "Co-
Sale" rights on 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 Purchasers' shares are subject to "drag along" provisions
if Samstock sells all of its shares provided, however, that prior to the first
-------- -------
anniversary of the Co-Sale Agreement, Samstock cannot require the Purchasers to
sell their shares pursuant to this provision if the contemplated transaction
would result in an internal rate of return for the Purchasers on their initial
investment of less than 25%.
In addition, the Co-Sale Agreement provides that, as long as Samstock is
entitled to designate one or two directors, each Purchaser agrees to vote all of
the Voting Securities with respect to which the Purchaser has voting control in
favor of the election of Samstock's designee or designees to the Issuer's board
of directors. The Co-Sale Agreement further provides that, as long as MPII is
entitled to designate one director in accordance with the provisions of the
Investment Agreement, Samstock shall vote all Issuer's Voting Securities with
respect to which Samstock has voting control in favor of the election of MPII's
designee to the Issuer's board of directors.
Pursuant to the Co-Sale Agreement, Samstock also agrees to vote all of the
Issuer's Voting Securities owned of record by Samstock or with respect to which
Samstock has voting control in favor of the Proxy Proposal.
The Co-Sale Agreement will terminate (i) if the Purchasers and their
affiliates cease to own in the aggregate at least 5% of the Issuer's Voting
Securities or (ii) contemporaneously with the termination of the Stock Purchase
Agreement described herein before the transactions contemplated thereby have
been consummated. The Co-Sale Agreement is attached hereto as Exhibit 4 and is
incorporated herein by reference.
<PAGE>
The summary contained in this Statement of certain provisions of the Co-
Sale Agreement is not intended to be complete and is qualified in its entirety
by reference to the Co-Sale Agreement attached as an Exhibit hereto and
incorporated herein by reference.
Except for the matters described herein, no Reporting Person nor, to the
best knowledge of the Reporting Persons, any of the directors or officers of
MPCorp or ValueVision has any contract, arrangement, understanding or
relationship with any person with respect to any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit
- -------
A Agreement Pursuant to Rule 13d-1 (k) (1) (iii)
1 Stock Purchase Agreement
2 Form of Warrant
3 Investment Agreement
4 Co-Sale and Voting Agreement
5 Power of Attorney for Dominic Mangone
6 Power of Attorney for Raymond Bank
<PAGE>
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 8, 2000
MINOTAUR PARTNERS II, L.P.
/s/ Dominic Mangone
- ---------------------------
DOMINIC MANGONE By: Minotaur Partners II, L.L.C.
Its: General Partner
By: Minotaur Partners II, Inc.
Its: Manager
/s/ Raymond Bank By: /s/ Edward Finnegan
- --------------------------- -------------------------------------
RAYMOND BANK Edward Finnegan
Its: Principal
MINOTAUR PARTNERS II, L.L.C.
By: Minotaur Partners II, Inc.
Its: Manager
By: /s/ Edward Finnegan
-------------------------------------
Edward Finnegan
Its: Principal
MINOTAUR PARTNERS II, INC.
By: /s/ Edward Finnegan
-------------------------------------
Edward Finnegan
Its: Principal
VALUEVISION INTERNATIONAL, INC.
By: /s/ Nathan E. Fagre
-------------------------------------
Nathan E. Fagre
Its: Senior Vice President and
General Counsel
<PAGE>
EXHIBIT A
Pursuant to Rule 13d-1(k) (1) (iii) of Regulation 13D-G of the General
Rules and Regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, the undersigned agree that the
statement to which this Exhibit is attached is filed on behalf of each of them
in the capacities set forth herein below.
Dated: May 8, 2000
MINOTAUR PARTNERS II, L.P.
/s/ Dominic Mangone
- --------------------------
DOMINIC MANGONE By: Minotaur Partners II, L.L.C.
Its: General Partner
By: Minotaur Partners II, Inc.
Its: Manager
/s/ Raymond Bank By: /s/ Edward Finnegan
- -------------------------- ------------------------------------
RAYMOND BANK Edward Finnegan
Its: Principal
MINOTAUR PARTNERS II, L.L.C.
By: Minotaur Partners II, Inc.
Its: Manager
By: /s/ Edward Finnegan
-------------------------------------
Edward Finnegan
Its: Principal
MINOTAUR PARTNERS II, INC.
By: /s/ Edward Finnegan
-------------------------------------
Edward Finnegan
Its: Principal
VALUEVISION INTERNATIONAL, INC.
By: /s/ Nathan E. Fagre
-------------------------------------
Nathan E. Fagre
Its: Senior Vice President
and General Counsel
<PAGE>
EXHIBIT 1
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
Minotaur Partners II, L.P., an Illinois limited partnership ("MP II"),
ValueVision International Inc., a Minnesota corporation ("ValueVision"), Dominic
Mangone ("Mangone"), Raymond Bank ("Bank" and, together with MP II, ValueVision
and Mangone, 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) 1,534,247 newly issued
shares of Common Stock in the aggregate (such 1,534,247 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 3,068,494 shares of Common Stock in the aggregate (such
additional 3,068,494 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 Closings, 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 Warrants in
two separate tranches, as follows:
(a) In the first tranche (the "First Tranche"), the Company shall issue
and sell to the Purchasers, and the Purchasers shall so purchase from
the Company, free and clear of all Liens, (i) 904,303 Shares (the
"First Tranche Shares") and (ii) Warrants to purchase 1,808,606
Warrant Shares (the "First Tranche Warrants"); and
(b) In the second tranche (the "Second Tranche"), the Company shall issue
and sell to the Purchasers, and the Purchasers shall so purchase from
the Company, (i) 629,944 Shares (the "Second Tranche Shares") and (ii)
Warrants to purchase 1,259,888 Warrant Shares (the "Second Tranche
Warrants").
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
<PAGE>
between the Purchasers as set forth on Schedule 1 hereto) (i) $4,125,882 in the
----------
aggregate for the First Tranche (the "First Purchase Price") and (ii) $2,874,120
in the aggregate for the Second Tranche (the "Second Purchase Price" and,
together with the First Purchase Price, the "Purchase Price").
ARTICLE II
THE CLOSINGS
2.1 Time and Place. (a) Upon the terms and subject to the satisfaction of
--------------
the conditions contained in this Agreement, the closing of the First Tranche
(the "First Closing") shall take place at the offices of Transmedia Network
Inc., 11900 Biscayne Boulevard, Miami, Florida, at 10:00 a.m. (local time) on
the third business day following the date on which all of the conditions
hereunder have been satisfied or waived, or at such other place or time as the
Purchasers and the Company may agree. The date and time at which the First
Closing actually occurs is hereinafter referred to as the "First Closing Date."
(b) Upon the terms and subject to the satisfaction of the conditions
contained in this Agreement, including but not limited to the Stockholder
Approval, the closing of the Second Tranche (the "Second Closing" and, together
with the First Closing, the "Closings") shall take place at the 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, 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 Second Closing actually occurs is
hereinafter referred to as the "Second Closing Date" and, together with the
First Closing Date, the "Closing Dates."
2.2 Deliveries by the Company. (a) At the First Closing, the Company shall
-------------------------
deliver the following to the Purchasers:
(i) stock certificates representing the First Tranche Shares, in the
names of MP II, ValueVision, Mangone and Bank, dated as of the
First Closing Date, in the respective denominations set forth on
Schedule 1 hereto;
----------
(ii) the First Tranche Warrants, in the names of MP II, ValueVision,
Mangone and Bank, dated as of the First Closing Date, in the
respective denominations set forth on Schedule 1 hereto; and
----------
(iii) all other documents, instruments and writings required to be
delivered by the Company at or prior to the First Closing Date
pursuant to this Agreement.
(b) At the Second Closing, the Company shall deliver the following to the
Purchasers:
-2-
<PAGE>
(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 Second Tranche Shares, in
the names of MP II, ValueVision, Mangone and Bank, dated as of
the Second Closing Date, in the respective denominations set
forth on Schedule 1 hereto;
----------
(iii) the Second Tranche Warrants, in the names of MP II, ValueVision,
Mangone and Bank, dated as of the Second 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 Second Closing Date
pursuant to this Agreement.
2.3 Deliveries by the Purchasers. (a) At the First Closing, the Purchasers
----------------------------
shall deliver the following to the Company:
(i) the First 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 First 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 First Closing
Date pursuant to this Agreement.
(b) At the Second Closing, the Purchasers shall deliver the following to
the Company:
(i) the Second 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 Second 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 Second Closing
Date pursuant to this Agreement.
-3-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to the Purchasers on the
date of this Agreement and again on the First Closing Date, which
representations, warranties and covenants shall survive the Closings to the
extent hereinafter provided, that (except as set forth in the Company's
schedules delivered herewith):
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 First Tranche Shares and the First Tranche Warrants shall
represent approximately 13.23% of the Fully Diluted Common Stock and 19.90% of
the outstanding shares of Common Stock as of the First Closing Date. The Second
Tranche Shares and the Second Tranche Warrants shall represent approximately
8.44% of the Fully Diluted Common Stock and 13.86% of the outstanding shares of
Common Stock as of the Second 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 options granted to employees
- ---------------
of 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
-4-
<PAGE>
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.
3.4 The Shares and the Warrants.
---------------------------
(a) Upon payment of the First Purchase Price, the Purchasers will acquire
good and marketable title to the First Tranche Shares and the First Tranche
Warrants, free and clear of all Liens, and such First Tranche Shares shall be
validly issued, fully paid and nonassessable. Upon exercise of the First Tranche
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 First Tranche
Warrants, the Purchasers will acquire good and marketable title to the First
Warrant Shares, free and clear of all Liens, and such First Warrant Shares shall
be validly issued, fully paid and nonassessable.
(b) Upon payment of the Second Purchase Price, the Purchasers will acquire
good and marketable title to the Second Tranche Shares and the Second Tranche
Warrants, free and clear of all Liens, and such Second Tranche Shares shall be
validly issued, fully paid and nonassessable. Upon exercise of the Second
Tranche 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 Second Tranche
Warrants, the Purchasers will acquire good and marketable title to the Second
Warrant Shares, free and clear of all Liens, and such Second 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 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 Stockholder Approval.
The Board has approved each of the Company Transaction Documents and the
transactions contemplated hereby
-5-
<PAGE>
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, 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.
-6-
<PAGE>
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 Dates, the circumstances or bases for which 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
-7-
<PAGE>
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, 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
-8-
<PAGE>
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.
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
-9-
<PAGE>
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 Second Tranche Shares and the Second
Tranche 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, 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 MP II, ValueVision, Mangone and Bank hereby severally, but not
jointly, represents, warrants and covenants to the Company, with respect to
itself or himself, on the date of this Agreement and again on each of the
Closing Dates, which representations and warranties shall survive the Closings,
as follows:
-10-
<PAGE>
4.1 Organization. MP II is a limited partnership duly organized, validly
------------
existing and in good standing under the laws of the jurisdiction in which it is
organized. ValueVision is a corporation 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 of MP II, ValueVision,
------------------------------------------
Mangone and Bank, 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 MP II, ValueVision, Mangone and/or
Bank to the Company or any of its representatives in connection with the
transactions contemplated hereby or thereby (collectively, "Purchaser
Transaction Documents"), to perform its or his 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 MP II and ValueVision and the consummation by MP II and ValueVision
of the transactions contemplated hereby and thereby have been duly authorized by
the general partner of MP II and an authorized officer of ValueVision, and no
other proceedings on the part of MP II or ValueVision, 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 MP II,
ValueVision, Mangone and/or Bank, as the case may be, and, assuming due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of MP II, ValueVision, Mangone and/or Bank, as the case
may be, enforceable against MP II, ValueVision, Mangone and/or Bank, 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 MP II, ValueVision,
Mangone or Bank, as the case may be, does not and will not: (i) conflict with or
violate the organizational documents of MP II or ValueVision, as the case may
be; (ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to MP II, ValueVision, Mangone or Bank, as the case may be, or
by which any of their properties are bound or affected; (iii) require any
consent, approval, authorization or permit of, action by, filing with or
notification to, any Governmental Entity (other than any filing required under
Section 13(a) or (d), 14, 15(d) or 16(a) of the Exchange Act); or (iv) result in
any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both could become a default) or result in the loss of
a material benefit under, or give rise to any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the property or assets of MP II, ValueVision, Mangone or Bank, as the case may
be, pursuant to, any Contract, Permit or other instrument or obligation to which
MP II, ValueVision, Mangone or Bank, as the case may be, is a party or by which
MP II, ValueVision, Mangone or Bank, 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 MP II, ValueVision, Mangone or Bank,
as the case may be, to perform its obligations under this Agreement.
-11-
<PAGE>
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 MP II, ValueVision, Mangone or Bank.
4.5 Investment Intent. Each of MP II, ValueVision, Mangone and Bank (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 MP II,
---------------
ValueVision, Mangone and Bank 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. MP II, ValueVision, Mangone and/or Bank has on
---------------------
hand and will have on each 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 MP II, ValueVision, Mangone and/or Bank is responsible.
4.9 MP II, ValueVision, Mangone and Bank 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 of MP II, ValueVision, Mangone and
Bank, nor any of their affiliates, is 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,
-12-
<PAGE>
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;
(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.
-13-
<PAGE>
5.4 Board of Directors. At all times prior to the fifth anniversary of the
------------------
First Closing Date, the Company hereby agrees to take all action within its
power to cause one person designated by MP II who is reasonably acceptable to
the Independent Directors ("MP II Designee") to be appointed to the Board of
Directors of the Company (the "Board"). The MP II Designee shall serve on the
Board for as long as the Shares and Warrant Shares held by the Purchasers
constitute at least 5% of the combined voting power of the Company's voting
securities.
5.5 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 Dates 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 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 Closings or
(b) the failure by such party prior to the Closings 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
-14-
<PAGE>
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.
5.10 Indemnification and Insurance.
-----------------------------
(a) The Certificate of Incorporation and By-Laws of the Company shall
contain the provisions with respect to indemnification set forth in the
Certificate of Incorporation and By-Laws of the Company on the date hereof,
which provisions shall not be amended, repealed or otherwise modified in any
manner that would adversely affect the rights to indemnification thereunder of
any current or future directors, officers, employees or agents of the Company,
unless such modification is required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Certificate of Incorporation or By-Laws as in effect
on the First Closing Date and regardless of whether the First Closing occurs,
indemnify and hold harmless each present and former director, officer or
employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties") against any out of pocket costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative incurred by such person by reason of the fact that such person is
or was an Indemnified Party, (x) arising out of or pertaining to the
transactions contemplated by this Agreement and the other Transaction Documents
or (y) otherwise with respect to any acts or omissions occurring on or prior to
the First Closing Date, to the same extent as provided in the Company's
Certificate of Incorporation or By-Laws as in effect on the First Closing Date
or any Material Contract containing an agreement concerning indemnification of
any Indemnified Parties. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the First Closing
Date), (i) any counsel retained by the Indemnified Parties for any period after
the First Closing Date shall be reasonably satisfactory to the Company, (ii)
after the First Closing Date, the Company shall pay the reasonable fees and
expenses of such counsel, promptly after statements therefor are received,
provided the Indemnified Parties first deliver to the Company a written
undertaking to repay such amounts if it is ultimately determined that such
person is not entitled to be indemnified by the Company under this Section 5.10,
and (iii) the Company will cooperate in the defense of any such matter;
provided, however, that the Company shall not be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld). The Indemnified Parties as a group may retain (in addition to local
counsel) only one law firm to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Parties.
(c) For as long as the MP II Designee serves on the Board, the Company
shall maintain in effect directors' and officers' liability insurance covering
those persons who are
-15-
<PAGE>
currently covered by the Company's directors' and officers' liability insurance
policy on terms comparable to those now applicable to directors and officers of
the Company.
(d) The obligations of the Company under this Section 5.10 shall survive
the First Closing, are intended to benefit the Company and the Indemnified
Parties, shall be binding on all successors and assigns of the Company and shall
be enforceable by the Indemnified Parties.
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 each of the Closing Dates 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 each of the Closing Dates;
(d) The Shares and the Warrant Shares to be issued at each of the
Closings shall have been approved for listing by the New York Stock
Exchange upon official notice of issuance; and
(e) Only with respect to the Second Closing, 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 to each of the Closing Dates (except as noted below)
of the following additional conditions:
(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 Dates, and the
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<PAGE>
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 Dates as if made
at and as of each 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 of MP II, ValueVision, Mangone and/or Bank, 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;
(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;
(d) The Purchasers shall have executed and delivered to the Company
the Investment Agreement, and such Investment Agreement shall be in full
force and effect; and
(e) The Purchasers shall have executed and delivered to the Company
the Co-Sale and Voting Agreement, and such Co-Sale and Voting Agreement
shall be in full force and effect.
6.3 Conditions to Obligations of the Purchasers. (a) The obligations of
-------------------------------------------
the Purchasers to effect the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to the First Closing Date of the
following additional conditions:
(i) 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 Dates, 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 Dates (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 each 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;
(ii) 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
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Adverse Effect or to prohibit, restrain, enjoin or restrict the
consummation of the transactions contemplated by this Agreement or the
other Transaction Documents;
(iii) 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;
(iv) 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;
(v) The Company shall have executed and delivered to the Purchasers
the Investment Agreement, and such Investment Agreement shall be in full
force and effect;
(vi) The Company shall have executed and delivered to the Purchasers
the Co-Sale and Voting Agreement, and such Co-Sale and Voting Agreement
shall be in full force and effect; and
(vii) The Company shall have reached agreement with other investors,
including Gene Henderson and Greg Robitaille, reasonably acceptable to the
Purchasers to invest at least $3,000,000 in the securities of the Company
on terms no more favorable than those of the Purchasers.
(b) The obligations of the Purchasers to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Second Closing Date of the following additional conditions:
(i) 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; and
(ii) 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.
6.4 Schedule Updates. At any time prior to two (2) business days prior to
----------------
the First 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
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warranties true and correct as of the First 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
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contemplated by this Agreement may be abandoned at any time prior to either
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; or
(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 breach has not been cured within ten (10) business
days following receipt by the breaching party of notice of such breach.
7.2 Termination Prior to the Second Closing. This Agreement may be
---------------------------------------
terminated with respect to the Second Closing, and the transactions contemplated
by this Agreement in connection with the Second Closing may be abandoned at any
time prior to the Second Closing Date:
(a) By the Purchasers, upon notice to the Company, if the Second
Closing shall not have occurred on or before the one hundred twentieth
(120th) day following the First Closing, 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 Second Closing;
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(b) 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; or
(c) 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 First Closing, the parties shall indemnify
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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 First Closing with the same effect as if originally made
at such 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
Second Closing with the same effect as if originally made at such 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 MP II, ValueVision, Mangone and Bank
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 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 MP II,
-------------------------------------------
ValueVision, Mangone and Bank, severally and not jointly, shall indemnify, save
and keep harmless the
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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.
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
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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, L.L.C., 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.
"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 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
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<PAGE>
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, 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.
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<PAGE>
"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 Second Tranche
Shares and Second Tranche Warrants.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
"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.
"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)
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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:
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
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
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<PAGE>
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, MP II, ValueVision, Mangone or Bank may assign
its or their rights and obligations hereunder to (i) any controlled Affiliate of
MP II, ValueVision, Mangone or Bank, (ii) any partner of MP II, (iii) any
Affiliate of any partner of MP II, (iv) any family member of Mangone or Bank or
(v) any trust established for the benefit of any family member of Mangone or
Bank (each of (i), (ii), (iii), (iv) and (v), a "Permitted Assignee"), upon the
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.
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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.
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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, the
New York Stock Exchange or the NASDAQ 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 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
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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.
-28-
<PAGE>
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:
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 South Wacker Drive
-------------------------------
Suite 470
----------------------------------------
Chicago, Illinois 60606
----------------------------------------
VALUEVISION INTERNATIONAL INC.
/s/ Richard Barnes
----------------------------------------
By: Richard Barnes
Its: Senior Vice President and
Chief Financial Officer
Address: 6740 Shady Oak Road
-------------------------------
Eden Prairie, Minnesota 55344
----------------------------------------
/s/ Dominic Mangone
----------------------------------------
DOMINIC MANGONE
Address: 6N 271 James Court
-------------------------------
Medinah, Illinois 60157
----------------------------------------
/s/ Raymond Bank
----------------------------------------
RAYMOND BANK
Address: P.O. Box 106
-------------------------------
Butler, Maryland 21023
----------------------------------------
-29-
<PAGE>
COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Gene M. Henderson
----------------------------------------
By: Gene M. Henderson, President and
Chief Executive Officer
-30-
<PAGE>
Schedule 1
----------
<TABLE>
<CAPTION>
Minotaur Partners II, L.P. ValueVision International Inc. Dominic Mangone Raymond Bank TOTAL
<S> <C> <C> <C> <C> <C>
First Purchase Price $3,212,297 $ 589,411 $294,706 $29,469 $4,125,882
First Tranche Shares 704,065 129,186 64,593 6,459 904,303
First Tranche Warrants 1,408,130 258,372 129,186 12,918 1,808,606
Second Purchase Price $2,237,706 $ 410,589 $205,294 $20,531 $2,874,120
Second Tranche Shares 490,456 89,992 44,996 4,500 629,944
Second Tranche Warrants 980,912 179,984 89,992 9,000 1,259,888
Purchase Price $5,450,002 $1,000,000 $500,000 $50,000 $7,000,002
Shares 1,194,521 219,178 109,589 10,959 1,534,247
Warrants 2,389,042 438,356 219,178 21,918 3,068,494
</TABLE>
<PAGE>
EXHIBIT 2
---------
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE
DISPOSED OF UNLESS (I) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND SUCH LAWS COVERING SUCH SECURITIES OR (II) SUCH SALE, TRANSFER,
ASSIGNMENT, OFFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THE SECURITIES
EVIDENCED BY THIS CERTIFICATE ARE NON-TRANSFERABLE, EXCEPT AS PROVIDED HEREIN.
TRANSMEDIA NETWORK INC.
WARRANT TO PURCHASE [____________] SHARES OF COMMON STOCK
Void after April 28, 2005
THIS CERTIFIES THAT, for value received, [Minotaur Partners II, L.P., an
Illinois limited partnership] [ValueVision International Inc., a Minnesota
corporation] [Dominic Mangone] [Raymond Bank] (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
------ ------------------------
[1/2 of Shares] $5.93125
[1/2 of 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.
<PAGE>
(b) Method of Exercise.
------------------
(i) Cash Exercise. The purchase rights represented by this
-------------
Warrant may be exercised by the Holder, at any time, in whole, or from time to
time, in part, by the surrender of this Warrant (with the notice of exercise
form attached hereto as Exhibit 1 duly executed) at the principal office of the
---------
Company, and by the payment to the Company, by certified, cashier's or other
check acceptable to the Company, of an amount equal to the aggregate Exercise
Price of the Shares being purchased.
(ii) Net Issue Exercise. In lieu of exercising this Warrant, the
------------------
Holder may elect to receive Shares equal to the value of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with notice of such election, in which event the
Company shall issue to the Holder a number of shares of the Company's Common
Stock computed using the following formula:
X = Y (A-B)
-------
A
Where X = the number of Shares to be issued to the Holder.
Y = the number of Shares purchasable under this Warrant (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
<PAGE>
expired, a new Warrant of identical terms and provisions as those hereof,
representing the shares with respect to which this Warrant shall not have been
exercised shall also be issued to the Holder within such time.
2. Stock Fully Paid; Reservation of Shares. All of the Shares issuable
---------------------------------------
upon the exercise of the rights represented by this Warrant will, upon issuance
and receipt of the Exercise Price therefor, be fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issue thereof.
During the period within which the rights represented by this Warrant may be
exercised, the Company shall at all times have authorized and reserved for
issuance sufficient shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant.
3. Adjustment of Exercise Price and Number of Shares. The number and kind
-------------------------------------------------
of Shares purchasable upon the exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:
(a) Reclassification. In case of any reclassification or change of
----------------
outstanding securities of the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), the
Company shall, as condition precedent to such transaction, execute a new Warrant
providing that the Holder shall have the right to exercise such new Warrant and
upon such exercise to receive, in lieu of each share of stock theretofore
issuable upon exercise of this Warrant, the kind and amount of shares of stock,
other securities, money and property receivable upon such reclassification or
change by a holder of one share of stock. Such new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 3. The provisions of this Section 3(a)
shall similarly apply to successive reclassifications or changes.
(b) Subdivision or Combination of Warrant Shares. If the Company at
--------------------------------------------
any time while this Warrant remains outstanding and unexpired shall subdivide or
combine its stock, the Exercise Price shall be proportionately decreased in the
case of a subdivision or increased in the case of a combination.
(c) Stock Dividends. If the Company at any time while this Warrant is
---------------
outstanding and unexpired shall pay a dividend with respect to stock payable in,
or make any other distribution with respect to stock (except any distribution
specifically provided for in the foregoing Section 3(a) and 3(b)) of stock, then
the Exercise Price shall be adjusted, from and after the date of determination
of stockholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Exercise Price in effect immediately prior to such
date of determination by a fraction (i) the numerator of which shall be the
total number of shares of stock outstanding immediately prior to such dividend
or distribution, and (ii) the denominator of which shall be the total number of
shares of stock outstanding immediately after such dividend or distribution.
<PAGE>
(d) Adjustment of Number of Warrant Shares. Upon each adjustment in
--------------------------------------
the Exercise Price, the number of shares of stock purchasable hereunder shall be
adjusted, to the nearest whole share, to the product obtained by multiplying the
number of Shares purchasable immediately prior to such adjustment in the
Exercise Price by a fraction, the numerator of which shall be the Exercise Price
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price immediately thereafter.
4. Notice of Adjustments. Whenever the number of Shares purchasable
---------------------
hereunder or the Exercise Price thereof shall be adjusted pursuant to Section 3
hereof, the Company shall provide notice by first class mail to the holder of
this Warrant setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the number of Shares which may be purchased and the Exercise
Price therefor after giving effect to such adjustment.
5. Fractional Shares. No fractional shares of Common Stock will be issued
-----------------
in connection with any exercise hereunder. In lieu of such fractional shares the
Company shall make a cash payment therefor based upon the Exercise Price then in
effect.
6. Warrant Exchangeable for Different Denominations. This Warrant is
------------------------------------------------
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for new Warrants of like tenor representing in the aggregate the
purchase rights hereunder, and each of such new Warrants will represent such
portion of such rights as is designated by the Holder at the time of such
surrender. All Warrants representing portions of the rights hereunder are
referred to herein as the "Warrant."
7. Replacement. Upon receipt of evidence reasonably satisfactory to the
-----------
Company (an affidavit of the Holder is deemed to be reasonably satisfactory) of
the ownership and the loss, theft, destruction or mutilation of this Warrant,
and in the case of any such loss, theft or destruction, upon the receipt of
indemnity reasonably satisfactory to the Company, or, in the case of any such
mutilation upon surrender of such Warrant, the Company will (at its expense,
except for the cost of any lost security indemnity bond required which shall be
paid for by the Holder) execute and deliver in lieu of such Warrant a new
Warrant of like kind representing the same rights represented by such lost,
stolen, destroyed or mutilated Warrant and dated the date of such lost, stolen,
destroyed or mutilated Warrant.
8. Restrictive Legend. The Shares issuable upon exercise of this Warrant
------------------
(unless registered under the Act) shall be stamped or imprinted with a legend in
substantially the following form:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be
sold, transferred, assigned, offered, pledged or otherwise
disposed of unless (i) there is an effective registration
statement under such Act and such laws covering such
securities or (ii) such sale, transfer, assignment, offer,
pledge or other disposition is exempt
<PAGE>
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."
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>
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>
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>
EXHIBIT 3
INVESTMENT AGREEMENT
--------------------
INVESTMENT AGREEMENT dated as of April 28, 2000, (as amended, supplemented
or otherwise modified from time to time, this "Agreement"), among Transmedia
Network Inc., a Delaware corporation (the "Company"), 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")(each of the foregoing parties, other than the Company,
individually an "Investor" and collectively the "Investors").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Stock Purchase and Sale Agreement, dated
as of April 28, 2000 (the "Purchase Agreement"), among the Company and the
Investors, the Company (a) upon the First Closing (as defined in the Purchase
Agreement), issued and sold to the Investors an aggregate of 904,303 newly
issued shares (collectively, the "First Tranche Shares") of the Company's Common
Stock, par value $.02 per share ("Common Stock"), and warrants (collectively,
the "First Tranche Warrants") to purchase an additional 1,808,606 shares
(collectively, the "First Tranche Warrant Shares") of Common Stock and (b) will,
upon the Second Closing (as defined in the Purchase Agreement), issue and sell
to the Investors an aggregate of 629,944 newly issued shares (collectively, the
"Second Tranche Shares" and, together with the "First Tranche Shares", the
"Shares") of Common Stock and warrants (collectively, the "Second Tranche
Warrants" and, together with the First Tranche Warrants, the "Warrants") to
purchase an additional 1,259,888 shares (collectively, the "Second Tranche
Warrant Shares" and, together with the First Tranche Warrant Shares, the
"Warrant Shares") of Common Stock;
WHEREAS, the Company, the Investors and Samstock have entered into a Co-
Sale and Voting Agreement, dated as of April 28, 2000 (the "Co-Sale and Voting
Agreement"); and
WHEREAS, the Company and each of the Investors are entering into this
Agreement, with the approval of at least a majority of Disinterested Directors
(as defined herein), to establish certain arrangements with respect to the
relationships between them.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the following
meanings:
1.1 The terms "beneficial ownership," "person" and "group" shall have the
respective meanings ascribed to such terms pursuant to Regulation 13D-G adopted
by the Securities and Exchange Commission (the "SEC") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date
hereof. The term "affiliate" shall have the meaning ascribed to such term
pursuant to Rule 12b-2 under the Exchange Act, as in effect on the date
<PAGE>
hereof.
1.2 The "Combined Voting Power" at any measurement date shall mean the
total number of votes which could have been cast in an election of directors of
the Company had a meeting of the stockholders of the Company been duly held
based upon a record date as of the measurement date if all Company Voting
Securities then outstanding, including for such purpose all Warrant Shares
issuable upon the exercise of Warrants then held by any Investor, and entitled
to vote at such meeting were present and voted to the fullest extent possible at
such meeting.
1.3 "Company Voting Securities" shall mean, collectively, Common Stock,
Series A Preferred Stock, any other preferred stock of the Company that is
entitled to vote generally for the election of directors, any other class or
series of Company securities that is entitled to vote generally for the election
of directors and any other securities, warrants, options or rights of any nature
(whether or not issued by the Company) that are convertible into, exchangeable
for, or exercisable for the purchase of, or otherwise give the holder thereof
any rights in respect of, Common Stock, Series A Preferred Stock, any other
Company preferred stock that is entitled to vote generally for the election of
directors, or any other class or series of Company securities that is entitled
to vote generally for the election of directors.
1.4 "Disinterested Director" means Independent Directors who are
"disinterested directors" as that term is used in Section 144 of the Delaware
General Corporate Law.
1.5 "Effective Date" means the Second Closing Date, as defined in the
Purchase Agreement.
1.6 "Independent Director" means directors of the Company who (i) are not
current or former employees or officers of the Company, (ii) are not serving as
designees of MP II pursuant to Article IV hereof, (iii) are not 5% or greater
stockholders of the Company, and (iv) have no financial interest in and are not
otherwise associated with any of the Investors, the Company, any subsidiary of
the Company or any of their respective affiliates, excluding, however, any
equity interest of not more than 2% of any publicly-held entity. The term
"associated" means having a business, financial or familial relationship that
might reasonably be expected to affect the individual's judgment with respect to
matters in which the Investors might be interested.
1.7 The "Maximum Permitted Voting Power" at any measurement date shall
mean the Combined Voting Power as of such measurement date of all Company Voting
Securities, regardless of the holder thereof, represented by the outstanding
Shares then held or the Warrant Shares issuable upon the exercise of then
outstanding Warrants; provided, however, that, (i) as of and following the
Effective Date, the Maximum Permitted Voting Power shall include the Combined
Voting Power of all Company Voting Securities, regardless of the holder thereof,
represented by the Shares and Warrant Shares issuable upon the exercise of the
Warrants issued to the Investors on the Second Closing Date, as defined in the
Purchase Agreement, and (ii) in the event that the Company issues any Company
Voting Securities after the date hereof, the Maximum Permitted Voting Power
shall be (a) adjusted so that the percentage of the Combined Voting Power
represented by the Maximum Permitted Voting Power shall not be reduced and (b)
2
<PAGE>
increased in the case of the issuance to any Minotaur Investor by the Company of
any Company Voting Securities.
1.8 "Minotaur Investors" means (i) MP II, (ii) ValueVision, (iii) Mangone,
(iv) Bank, (v) any partner or member of MP II, (vi) any affiliate of MP II,
ValueVision, Mangone or Bank, (vii) any affiliate of any partner or member of MP
II under control of, or common control with, any such partner or member, (viii)
any family members of Mangone or Bank, (ix) any trusts established for the
benefit of any family members of Mangone or Bank and (x) any corporations,
partnerships, limited liability companies or other legal entities that are the
affiliates of any of the foregoing, collectively; provided, however, that
publicly held entities that might fall within this definition (a "Public
Minotaur Affiliate") shall not be treated as affiliates of any Minotaur Investor
hereunder unless any Minotaur Investor or any of its affiliates took any action,
directly or indirectly, to suggest, encourage or assist such entity in taking
the relevant action to be attributed to the Minotaur Investors hereunder. For
purposes of the preceding sentence and the similar clause appearing in the
second sentence of Section 3.1, the failure of any Minotaur Investor or any of
its affiliates, upon learning of a Public Minotaur Affiliate's action, to
request that such Public Minotaur Affiliate refrain from taking such action
because of the provisions of this Agreement will be deemed to constitute
"encouraging or assisting" in such action.
1.9 "Samstock" means Samstock, L.L.C., a Delaware limited liability
company.
1.10 "Series A Preferred Stock" means the Series A Senior Convertible
Redeemable Preferred Stock, par value $.10 per share, of the Company.
1.11 "Standstill Provisions" means collectively Article III hereof in its
entirety and Section 4.5 in its entirety.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 Each of MP II, ValueVision, Mangone and Bank severally, but not
jointly, represent and warrant to the Company with respect to itself or himself
as follows:
(a) MP II is a limited partnership duly organized, validly existing and in
good standing under the laws of Illinois. ValueVision is a corporation duly
organized, validly existing and in good standing under the laws of Minnesota.
Each of MP II, ValueVision, Mangone and Bank, as applicable, has the requisite
power and authority to enter into this Agreement and perform its or his
obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered by
each of MP II, ValueVision, Mangone and Bank and constitutes the legal, valid
and binding agreement of each of MP II, ValueVision, Mangone and Bank,
enforceable against each of them in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance by MP
3
<PAGE>
II, ValueVision, Mangone or Bank of its or his obligations hereunder will
conflict with, or result in a breach of, or constitute a default under, any law,
rule, regulation, judgment, order or decree of any court, arbitrator or
governmental agency or instrumentality, or any agreement or instrument to which
MP II, ValueVision, Mangone, Bank or their respective properties are bound or by
which they are affected, or any organizational documents of MP II or
ValueVision.
(d) Except as set forth on Schedule 2.1(d) hereto, as of the date hereof,
---------------
no shares of Common Stock (other than the Shares and the Warrant Shares) were
beneficially owned by MP II, ValueVision, Mangone or Bank.
2.2 The Company represents and warrants to the Investors as follows:
(a) The Company is a validly existing corporation under the laws of the
jurisdiction of its organization and has the corporate power and authority to
enter into this Agreement and perform its obligations hereunder.
(b) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with the terms hereof.
(c) Neither the execution and delivery of this Agreement nor the
performance of its obligations hereunder will conflict with, or result in a
breach of, or constitute a default under, any law, rule, regulation, judgment,
order or decree of any court, arbitrator or governmental agency or
instrumentality, or any agreement or instrument to which the Company is bound or
by which it is affected or any charter documents of the Company.
(d) The execution, delivery and performance of this Agreement by the
Company have been duly and validly authorized by the Board of Directors of the
Company (the "Board") and have been approved 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
this Agreement by the Company.
ARTICLE III
STANDSTILL AGREEMENT
--------------------
3.1 Acquisition of Company Voting Securities. Except as the same may be
----------------------------------------
approved by a majority of the Disinterested Directors in a specific resolution
to that effect adopted prior to the taking of such action, from and after the
Effective Date and prior to the fifth anniversary of the Effective Date, no
Minotaur Investor shall, directly or indirectly, acquire, offer to acquire,
agree to acquire, become the beneficial owner of or obtain any rights in respect
of any Company Voting Securities, by purchase or otherwise, or take any action
in furtherance thereof, if the effect of such acquisition, agreement or other
action would be (either immediately or upon consummation of any such
acquisition, agreement or other action, or expiration of any period of time
provided in any such acquisition, agreement or other action) to increase the
aggregate beneficial ownership of Company Voting Securities by the Minotaur
Investors to such number of
4
<PAGE>
Company Voting Securities that represents or possesses greater than the Maximum
Permitted Voting Power. Notwithstanding the foregoing maximum limitations, no
Minotaur Investor shall be obligated to dispose of any Company Voting Securities
beneficially owned in violation of such maximum limitations if, and solely to
the extent that, its beneficial ownership is or will be increased solely as a
result of (1) a repurchase of any Company Voting Securities by the Company or
any of its subsidiaries if such repurchase was approved by a majority of the
Disinterested Directors or (2) the purchase by any Public Minotaur Affiliate not
otherwise considered a Minotaur Investor in accordance with Section 1.8 hereof
unless any Minotaur Investor took any action, directly or indirectly, to
suggest, encourage or assist in such purchase. For purposes of calculating the
maximum limitations, all Company Voting Securities that are the subject of an
agreement, arrangement or understanding pursuant to which any Minotaur Investor
has the right to obtain beneficial ownership of such securities in the future
(including the Warrant Shares to the extent the Warrants have not been exercised
or has not expired) shall also be deemed to be outstanding and beneficially
owned by the Minotaur Investors or the applicable member thereof.
3.2 Proxy Solicitations, etc. Prior to the fifth anniversary of the
------------------------
Effective Date, no Minotaur Investor shall solicit proxies, assist any other
person in any way, directly or indirectly, in the solicitation of proxies,
become a "participant" in a "solicitation" or assist any "participant" in a
"solicitation" (as such terms are defined in Rule 14a-1 of Regulation 14A under
the Exchange Act) in opposition to the recommendation of a majority of the
Disinterested Directors, submit any proposal for the vote of stockholders of the
Company, in each case (a) without the prior approval of the majority of the
Disinterested Directors or (b) other than with respect to Company Voting
Securities (i) held by any Minotaur Investor or (ii) subject to the Co-Sale and
Voting Agreement.
3.3 No Voting Trusts, Pooling Agreements, or Formation of "Groups".
--------------------------------------------------------------
Except as the same may be approved by a majority of the Disinterested Directors
in a specific resolution to that effect adopted prior to the taking of such
action, prior to the fifth anniversary of the Effective Date, no Minotaur
Investor shall (a) form, join or in any other way participate in a partnership,
pooling agreement, syndicate, voting trust or other "group" with respect to
Company Voting Securities other than (i) the Minotaur Investors or (ii) with any
Company stockholders who are parties to the Co-Sale and Voting Agreement as of
the date hereof or hereafter become parties to the Co-Sale and Voting Agreement
in each case in accordance with the terms thereof as a result of a sale,
assignment or other transfer of Company Voting Securities that are subject to
the Co-Sale and Voting Agreement ("Other Covered Stockholders"); or (b) enter
into any agreement or arrangement or otherwise act in concert with any other
person other than a Minotaur Investor (provided such Minotaur Investor is itself
bound by the terms of this Agreement), or a holder of any interest in any entity
included within the Minotaur Investors, for the purpose of acquiring, holding,
voting or disposing of Company Voting Securities, other than with any Other
Covered Stockholders.
3.4 No Solicitation of Bidders. Prior to the fifth anniversary of the
--------------------------
Effective Date, except as set forth in the Co-Sale and Voting Agreement, no
Minotaur Investor shall directly or indirectly assist, encourage or induce any
person to bid for or acquire outstanding Company
5
<PAGE>
Voting Securities (other than any Company Voting Securities held by the Minotaur
Investors) in any transaction or series of related transactions, unless the
consummation of such transaction or series of related transactions requires
approval of a majority of the Board of Directors. Prior to disclosing any
confidential non-public information concerning the Company to such person, such
person shall have executed and delivered to the Minotaur Investors a
confidentiality and standstill agreement in the form attached hereto as Exhibit
-------
A. Promptly upon the Minotaur Investors entering into any written agreement or
- -
arrangement with such person concerning a transaction covered by this Section
3.4 (including such aforementioned confidentiality and standstill agreement),
the Minotaur Investors shall notify the Company's Board of Directors and provide
the Company's Board of Directors with copies of the same; provided, however,
-------- -------
that the mere sale of Company Voting Securities by any Minotaur Investor shall
not constitute assisting, encouraging or inducing within the meaning of this
Section 3.4.
3.5 Non-Circumvention. Except as the same may be approved by a majority
-----------------
of the Disinterested Directors in a specific resolution to that effect adopted
prior to the taking of such action, prior to the fifth anniversary of the
Effective Date, no Minotaur Investor shall take any action, alone or in concert
with any other person to circumvent the limitations of the provisions of Article
III of this Agreement. Without limiting the generality of the foregoing,
without such approval no Minotaur Investor shall (i) present to the Company or
to any third party any proposal that can reasonably be expected to result in any
increase beyond the Maximum Permitted Voting Power of Company Voting Securities
beneficially owned in the aggregate by the Minotaur Investors, (ii) publicly
suggest or announce its willingness or desire to engage in a transaction or
group of transactions that would result in any increase beyond the Maximum
Permitted Voting Power of Company Voting Securities beneficially owned in the
aggregate by the Minotaur Investors, or (iii) initiate, request, induce or
attempt to induce or give encouragement to any other person to initiate any
proposal that can reasonably be expected to result in any increase beyond the
Maximum Permitted Voting Power of Company Voting Securities beneficially owned
in the aggregate by the Minotaur Investors.
ARTICLE IV
VOTING OF COMPANY SECURITIES AND RELATED MATTERS
------------------------------------------------
4.1 Each Minotaur Investor that is a holder of record of Company Voting
Securities shall be present, and each Minotaur Investor that is a beneficial
owner of Company Voting Securities shall cause the holder of record to be
present, in person or by proxy, at all meetings of stockholders of the Company
so that all Company Voting Securities owned of record or beneficially by the
Minotaur Investors may be counted for the purpose of determining the presence of
a quorum at such meetings.
4.2 So long as MP II is entitled to designate a director in accordance
with the provisions of this Article IV, except to the extent otherwise provided
herein, the Company shall take all necessary or appropriate action to assist in
the nomination and election as director of that individual specified in this
Article IV designated by MP II to be elected as a director of the Company. The
Company hereby agrees and acknowledges that William A. Lederer is reasonably
acceptable to the Independent Directors as a director of the Company.
6
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4.3 For purposes of this Agreement, the director "designated by MP II"
shall include any director designated by MP II as anticipated by this Article
IV, or any other director of the Company (other than the Company's chief
executive officer) affiliated or associated with any Minotaur Investor.
4.4 Pursuant to Section 4.2 hereof, so long as the Investors beneficially
own at least 5% of the Combined Voting Power of all Company Voting Securities
(as so calculated), MP II shall have the right to designate one director of the
Company, provided such designee is reasonably acceptable to the Independent
Directors at the time of his or her designation (it being hereby acknowledged
and agreed by the Company that William A. Lederer will be acceptable to the
Company at the time of designation); provided, however, that at any time when
-------- -------
the Investors shall no longer beneficially own at least 5% of the Combined
Voting Power of all Company Voting Securities (as so calculated), MP II shall
not have the right to designate any directors of the Company under this Section
4.4, MP II's rights under this Section 4.4 shall terminate, MP II shall cause
its designee under this Section 4.4 to resign forthwith such that no designee of
MP II under this Section 4.4 remains on the Board of Directors of the Company
and all of the covenants under Article IV of this Agreement pertaining to MP
II's designee under Section 4.4 shall lapse and no longer be of any force or
effect. In addition, all of the covenants under Article III of this Agreement
shall lapse and no longer be of any force or effect if for any reason the
director designee who is designated by MP II pursuant to the rights granted by
this Article IV, and is reasonably acceptable to the Independent Directors at
the time of his or her designation in accordance with Sections 4.2 and/or 4.4,
(i) shall not be nominated for election as a director of the Company with the
unanimous recommendation of all of the directors of the Company (other than any
director designated by MP II pursuant to this Article IV) at the next election
of directors of the Company following MP II's designation or (ii) shall not be
elected to serve as a director of the Company by the Company's stockholders.
4.5 Except as expressly set forth above or in Section 3.5(a) of the Co-
Sale and Voting Agreement, the Investors shall vote all Company Voting
Securities owned of record by the Investors and shall cause all Company Voting
Securities owned beneficially by the Investors to be voted with respect to the
election or removal of directors of Company in accordance with the
recommendations of a majority of the Disinterested Directors; provided, however,
-------- -------
that notwithstanding the foregoing, the Investors may at all times vote their
Company Voting Securities for the election or retention of any director
designated by MP II in accordance with this Article IV.
ARTICLE V
REGISTRATION RIGHTS
-------------------
5.1 Definitions. For purposes of this Article V:
-----------
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act").
7
<PAGE>
(b) The term "Registrable Securities" means shares of Common Stock,
including the Warrant Shares, from time to time, held by any Minotaur Investor.
(c) The term "Holder" means (i) the Investors and (ii) any Permitted
Assignee who is a party hereto or who executes and delivers to the Company a
joinder agreement, agreeing to be legally bound by this Article V.
(d) The term "Rule 415 Offering" means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Act.
(e) The term "Shelf Registration Statement" means a registration statement
intended to effect a shelf registration in connection with a Rule 415 Offering.
5.2 Shelf Registration.
------------------
(a) Shares and Warrant Shares. As soon as practicable after the Effective
-------------------------
Date, but in any event no later than ninety (90) days after the Effective Date,
the Company shall prepare and file with the SEC a Shelf Registration Statement
(which shall include pledgees of any selling stockholder under the caption "plan
of distribution" contained in such Shelf Registration Statement) with respect to
all Shares and Warrant Shares and use its reasonable efforts to cause such Shelf
Registration Statement to become effective and keep such registration statement
effective until such time as all Shares and Warrant Shares have been sold or
disposed of thereunder or sold, transferred or otherwise disposed of (other than
pursuant to a pledge of such Registrable Securities) to a person that is not a
Holder or, with respect to any Warrant Shares for which the Warrant has not been
exercised prior to its expiration, until such time as the Warrant has expired.
Notwithstanding the foregoing, if the Company shall furnish to the Investors a
certificate stating that, in the good faith judgment of a majority of the
Disinterested Directors, it would be materially detrimental to the Company for
such registration statement to be filed, the Company shall have the right to
defer such filing for a period of not more than 120 days after the Effective
Date.
(b) Schedule 13D Statement. Each of MP II, ValueVision, Mangone and Bank
----------------------
covenant and agree that they will, and that they shall cause each Minotaur
Affiliate which shall at any time hold Shares and/or Warrant Shares subject to
Section 5.2(a) hereof to, include in any Schedule 13D filed by or on behalf of
such Holder a statement to the effect that such Shelf Registration Statement was
put in effect for the sole purpose of facilitating such Holder's ability to
margin its stock and does not represent any present intention on behalf of the
Holder to dispose of any Shares or Warrant Shares covered thereby.
5.3 Additional Obligations of the Company. Whenever the Company has filed
-------------------------------------
a Shelf Registration Statement under this Article V, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC such amendments and supplements to such
Shelf
8
<PAGE>
Registration Statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered thereby.
(b) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities covered by such Shelf
Registration Statement owned by them.
(c) Use its best efforts to register and qualify the securities covered by
such Shelf Registration Statement under such other securities or Blue Sky laws
of such states or other jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions where it is not so subject.
(d) Notify each Holder of Registrable Securities covered by such Shelf
Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and then
use its best efforts to promptly correct such statement or omission.
Notwithstanding the foregoing and anything to the contrary set forth in this
Section 5.3, each Holder acknowledges that the Company shall have the right to
suspend the use of the prospectus forming a part of a Shelf Registration
Statement if such offering would interfere with a pending corporate transaction
or for other reasons until such time as an amendment to the Shelf Registration
Statement has been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. Each Holder hereby covenants that it will (a)
keep any such notice strictly confidential, and (b) not sell any shares of
Common Stock pursuant to such prospectus during the period commencing at the
time at which the Company gives the Holder notice of the suspension of the use
of such prospectus and ending at the time the Company gives the Holder notice
that it may thereafter effect sales pursuant to such prospectus. The Company
shall only be able to suspend the use of such prospectus for periods aggregating
no more than 90 days in respect of any registration.
5.4 Furnish Information. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to this Article V with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities and as may be required from time to time to keep such registration
current.
5.5 Expenses of Shelf Registration. All expenses incurred by or on behalf
------------------------------
of the Company in connection with registrations, filings or qualifications
pursuant to Section 5.2, including, without limitation, all registration, filing
and qualification fees, printers' and
9
<PAGE>
accounting fees, and fees and disbursements of counsel for the Company, shall be
borne by the Company. In no event shall the Company be obligated to bear any
underwriting discounts or commissions or brokerage fees or commissions relating
to Registrable Securities or the fees and expenses of counsel to the selling
Holders.
5.6 Indemnification. In the event any Registrable Securities are included
---------------
in a Shelf Registration Statement under this Article V:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder and the affiliates of such Holder, and their respective
directors, officers, general and limited partners, agents and representatives
(and the directors, officers, affiliates and controlling persons thereof), and
each other person, if any, who controls such Holder within the meaning of the
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus (but only if
such statement is not corrected in the final prospectus) contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading (but only if such omission is not
corrected in the final prospectus), or (iii) any violation or alleged violation
by the Company in connection with the registration of Registrable Securities
under the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, affiliate or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
-------- -------
in this Section 5.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder or controlling person. Each indemnified party shall furnish
such information regarding itself or the claim in question as an indemnifying
party may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities
10
<PAGE>
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this Section 5.6(b) in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
-------- -------
in this Section 5.6(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of such Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this Section 5.6(b) exceed
- --------
the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 5.6
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 5.6, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties. The
failure to deliver written notice to the indemnifying party within a reasonable
time after the commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 5.6 to the extent of such
prejudice, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 5.6. The indemnified party shall have
the right, but not the obligation, to participate in the defense of any action
referred to above through counsel of its own choosing and shall have the right,
but not the obligation, to assert any and all separate defenses, cross claims or
counterclaims which it may have, and the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of such
counsel has been specifically authorized in advance by the indemnifying party,
(ii) there is a conflict of interest that prevents counsel for the indemnifying
party from adequately representing the interests of the indemnified party or
there are defenses available to the indemnified party that are different from,
or additional to, the defenses that are available to the indemnifying party,
(iii) the indemnifying party does not employ counsel that is reasonably
satisfactory to the indemnified party within a reasonable period of time, or
(iv) the indemnifying party fails to assume the defense or does not reasonably
contest such action in good faith, in which case, if the indemnified party
notifies the indemnifying party that it elects to employ separate counsel, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party and the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party; provided, however,
-------- -------
that, the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to one firm acting as
local counsel) for all indemnified parties.
(d) The obligations of the Company and the holders under this Section 5.6
shall survive the completion of any offering of Registrable Securities in a
Shelf Registration Statement
11
<PAGE>
under this Article V.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with any underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
5.7 Reports Under the Exchange Act. With a view to making available to
------------------------------
the holders the benefits of Rule 144 and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company to the
public without registration or pursuant to a registration on Form S-3, the
Company agrees to:
(a) use its best efforts to make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required under the Act and the Exchange Act; and
(c) furnish to any Holder forthwith upon request (i) a written statement
by the Company as to its compliance with the reporting requirements of Rule 144,
or as to whether it qualifies as a registrant whose securities may be resold
pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly report
of the Company and such other reports and documents so filed by the Company, and
(iii) such other information (and the Company shall take such action) as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
5.8 No Assignment of Registration Rights. The rights to cause the Company
------------------------------------
to register Registrable Securities pursuant to this Article V may only be
assigned by a Holder to a transferee or assignee of any Registrable Securities
if (i) such transferee or assignee is a Minotaur Contracting Party (as defined
in Section 7.4 herein) and (ii) immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Act.
5.9 Waiver Procedures. The observance by the Company of any provision of
-----------------
this Article V may be waived (either generally or in a particular instance and
either retroactively or prospectively) with the written consent of the Holders
of a majority of the Registrable Securities, and any waiver effected in
accordance with this paragraph shall be binding upon each Holder of Registrable
Securities.
5.10 "Market Stand-off" Agreement. Any Holder of Registrable Securities,
----------------------------
if requested by an underwriter of any registered public offering of Company
securities being sold in a firm commitment underwriting, agrees not to sell or
otherwise transfer or dispose of any Common Stock (or other Company Voting
Securities) held by such Holder other than shares of Registrable Securities
included in the registration during the seven days prior to, and during a period
of up to 180 days following, the effective date of the registration statement.
Such agreement shall be in writing in a form reasonably satisfactory to the
Company and such
12
<PAGE>
underwriter. The Company may impose stop-transfer instructions with respect to
the securities subject to the foregoing restriction until the end of the
required stand-off period.
5.11 Listing of Shares. The Company shall use its commercially reasonable
-----------------
efforts to cause (i) the Shares and (ii) upon exercise of the Warrant, the
Warrant Shares, to be listed on the New York Stock Exchange as soon as
practicable.
ARTICLE VI
CONFIDENTIALITY
---------------
6.1 Confidential Material.
---------------------
(a) Definitions. For purposes of this Section 6.1:
-----------
(i) The term "Confidential Material" means all information, whether
oral, written or otherwise (including any information furnished prior to the
execution of this Agreement), furnished by the Company to any Minotaur Investor
or any of the Representatives (as defined below), and all notes, reports,
analyses, compilations, studies and other materials prepared by the Minotaur
Investors or any of the Representatives (in whatever form maintained, whether
documentary, computer storage or otherwise) containing or based upon, in whole
or in part, any such information, and the fact that such information has been
delivered to the Minotaur Investors or any of their Representatives. The term
"Confidential Material" does not include information which is or becomes
generally available to the public other than as a result of a disclosure by any
Minotaur Investor or any of the Representatives or becomes available to any
Minotaur Investor or any of the Representatives on a non-confidential basis from
any source that is not known by such Minotaur Investor or such Representative to
be bound by an obligation of confidentiality to the Company.
(ii) The term "Representatives" shall mean any and all employees,
agents, financial advisors, partners, affiliates or other representatives of any
Minotaur Investor.
(b) Each Minotaur Investor and each of the Representatives will preserve
the confidentiality of the Confidential Material and will not disclose any of
the Confidential Material in any manner whatsoever; provided, however, that (i)
-------- -------
the Minotaur Investors may make any disclosure of such information to which the
Company gives its prior consent, (ii) any of such information may be disclosed
to the Representatives who need to know such information, and who are informed
of the confidential nature of the Confidential Material and of the terms of this
Section 6.1 and who agree to keep such information confidential, (iii) any
Minotaur Investor may make any disclosure of such information in connection with
any activity which such Minotaur Investor reasonably believes to be in the best
interests of the Company and not prohibited by this Agreement, provided the
recipient of such information is informed of the confidential nature of the
Confidential Material and of the terms of this Section 6.1 and agrees to keep
such information confidential and (iv) any Minotaur Investor may make any
disclosure of such information to any other Minotaur Investor. In any event, the
Minotaur Investors will be responsible for any actions by the Representatives
which are not in accordance with the
13
<PAGE>
provisions hereof.
(c) If any Minotaur Investors or any of the Representatives are requested
or required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand, any informal or formal
investigation by any government or governmental agency or authority or
otherwise) to disclose any Confidential Material or such person's opinion,
judgment, view or recommendation concerning the Company as developed from the
Confidential Material, the Minotaur Investors agree (i) to promptly notify the
Company of the existence, terms and circumstances surrounding such a request,
(ii) to the extent possible, to consult with the Company on the advisability of
taking legally available steps to resist or narrow such request and (iii) if
disclosure of such information is required, to furnish only that portion of the
Confidential Material which, in the opinion of counsel to the relevant Minotaur
Investor, the Minotaur Investors are legally compelled to disclose, and to
cooperate with any action by the Company to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
the Confidential Material.
(d) Each Investor hereby acknowledges that the United States securities
laws prohibit, in certain circumstances, any person who has received from an
issuer material, non-public information, including certain information that may
be part of the Confidential Material, while such information is non-public, from
purchasing or selling securities of such issuer or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
(e) This Section 6.1 shall survive until the earlier of the fifth
anniversary of this Agreement or two years following the date of termination of
this Agreement.
ARTICLE VII
MISCELLANEOUS
-------------
7.1. Term of Agreement; Certain Provisions Regarding Termination. Unless
-----------------------------------------------------------
this Agreement specifically provides for earlier or later termination with
respect to any particular right or obligation, this Agreement shall terminate if
the Minotaur Investors shall, at any time, sell or otherwise dispose of or
otherwise cease to own Company Voting Securities such that the Minotaur
Investors beneficially own in the aggregate Company Voting Securities
representing less than 5% of the Combined Voting Power of all Company Voting
Securities (calculated in accordance with Section 3.1 and including the Shares
and, to the extent the Warrant has not been exercised or has not expired, the
Warrant Shares).
7.2 Legend and Stop Transfer Order. To assist in effectuating the
------------------------------
provisions of this Agreement, each of the Investors hereby consents to the
placement, in connection with the transactions contemplated by the Purchase
Agreement or otherwise within 10 business days after any Company Voting
Securities become subject to the provisions of this Agreement, of the applicable
legend specified below on all certificates representing ownership of Company
Voting Securities owned of record or beneficially by any Minotaur Investors,
until such shares are sold, transferred or disposed in a manner permitted hereby
to a person who is not then a Minotaur
14
<PAGE>
Investor. The Company agrees to remove promptly all legends and stop transfer
orders with respect to the transfer of Company Voting Securities being made to a
person who is not then a Minotaur Investor in compliance with the provisions of
this Agreement.
Certificates representing any Shares or Warrant Shares held by MP II,
ValueVision, Mangone or Bank shall contain a legend, in substantially the
following form:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be sold,
transferred, assigned, offered, pledged or otherwise disposed of
unless (i) there is an effective registration statement under
such Act and such laws covering such securities or (ii) such
sale, transfer, assignment, offer, pledge or other disposition is
exempt from the registration and prospectus delivery requirements
of such Act and such laws. The securities evidenced by this
certificate are subject to the restrictions on transfer contained
in the 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."
7.3 Remedies.
--------
(a) Each of the Investors and the Company acknowledge and agree that (i)
the provisions of this Agreement are reasonable and necessary to protect the
proper and legitimate interests of the parties hereto, and (ii) the parties
would be irreparably damaged in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that each party shall be entitled
to preliminary and permanent injunctive relief to prevent breaches of the
provisions of this Agreement by the other party (or its affiliates) without the
necessity of proving actual damages or of posting any bond, and to enforce
specifically the terms and provisions hereof and thereof in any court of the
United States or any state thereof having jurisdiction, which rights shall be
cumulative and in addition to any other remedy to which the parties may be
entitled hereunder or at law or equity.
(b) In addition to any other remedy the Company may have under this
Agreement or in law or equity, if any Minotaur Investor shall acquire or
transfer any Company Voting Securities in violation of this Agreement, such
Company Voting Securities which are in excess of the number permitted to be
owned or controlled by the Minotaur Investors or which have been transferred by
a Minotaur Investor in violation of the provisions of this Agreement may not be
voted by the owner thereof or any proxy therefor.
7.4 Additional Minotaur Investor Parties. All of the liabilities and
------------------------------------
obligations under this Agreement of Minotaur Investors shall be several but not
joint. Notwithstanding anything to the contrary in this Agreement, no natural
person or entity that is not a signatory party to this Agreement shall have any
liability or obligation under this Agreement, except as otherwise
15
<PAGE>
provided in Section 7.11 of this Agreement. Each Minotaur Investor that shall
become or have the right to become the beneficial owner, within the meaning and
scope of Section 3.1 hereof, of Company Voting Securities shall, promptly upon
becoming such owner or holder, execute and deliver to the Company a joinder
agreement, agreeing to be legally bound by this Agreement to the same extent as
if it had signed this Agreement as an original signatory as a Minotaur Investor
(each such Minotaur Investor, a "Minotaur Contracting Party"); provided that
--------
failure to execute such an agreement shall not excuse such member's non-
compliance with any provision of this Agreement. No Minotaur Investor shall
transfer securities to another Minotaur Investor unless the transferee shall
agree to be bound by this Agreement in the manner specified above in this
Section 7.4.
7.5 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 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
7.6 Severability. If any term, provision, covenant or restriction of this
------------
Agreement is
16
<PAGE>
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. The parties hereto agree that they will use their best efforts at
all times to support and defend this Agreement.
7.7 Amendments. This Agreement may be amended only by an agreement in
----------
writing signed by each of the parties hereto; provided, however, that any
-------- -------
amendment executed by the Company must prior thereto be approved by a majority
of the Disinterested Directors then in office.
7.8 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.
7.9 Descriptive Headings. Descriptive headings are for convenience only
--------------------
and shall not control or affect the meaning or construction of any provision of
this Agreement.
7.10 Counterparts; Facsimile Signatures. This Agreement shall become
----------------------------------
binding when one or more counterparts hereof, individually or taken together,
bears the signatures of each of the parties hereto. This Agreement may be
executed in any number of counterparts, each of which shall be an original as
against the party whose signature appears thereon, or on whose behalf such
counterpart is executed, but all of which taken together shall be one and the
same agreement. A facsimile copy of a signature of a party to this Agreement or
any such counterpart shall be fully effective as if an original signature.
7.11 Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
7.12 Assignments. Except to the extent provided in Section 5.8 herein, this
-----------
Agreement may not be assigned without the prior written consent of each party
hereto, and any attempt to effect an assignment hereof without such consent
shall be void.
17
<PAGE>
IN WITNESS WHEREOF, each of the Investors and the Company have executed
this Investment Agreement as of the date first above written.
INVESTORS:
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 South Wacker Drive
--------------------------------
Suite 470
-----------------------------------------
Chicago, Illinois 60606
-----------------------------------------
VALUEVISION INTERNATIONAL INC.
/s/ Richard Barnes
-----------------------------------------
By: Richard Barnes
Its: Senior Vice President and
Chief Financial Officer
Address: 6740 Shady Oak Road
--------------------------------
Eden Prairie, Minnesota 55344
-----------------------------------------
/s/ Dominic Mangone
-----------------------------------------
DOMINIC MANGONE
Address: 6N 271 James Court
--------------------------------
Medinah, Illinois 60157
-----------------------------------------
/s/ Raymond Bank
-----------------------------------------
RAYMOND BANK
Address: P.O. Box 106
--------------------------------
Butler, Maryland 21023
-----------------------------------------
<PAGE>
COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Gene M. Henderson
----------------------------------------
By: Gene M. Henderson, President and
Chief Executive Officer
<PAGE>
Exhibit A
---------
CONFIDENTIAL
- ------------
[DATE]
[Addressee]
Dear _______________:
We are furnishing to you and certain business affiliates of yours certain
financial, operational and other information concerning Transmedia Network Inc.
(the "Company") and its business for the purpose of enabling you and your
affiliates to evaluate a potential transaction involving the Company. All such
information and any other information that we or the Company or our or its
representatives or agents furnishes to you and your affiliates whether furnished
before, on or after the date of this Agreement, together with all analyses,
compilations, studies or other documents or records prepared by you and your
affiliates or on your or their behalf which contain or reflect or are generated
from information supplied by us or the Company or our or its representatives or
agents is herein collectively referred to as "Evaluation Material." The term
"Evaluation Material" does not include, however, information which (i) is or
becomes generally available to the public other than as a result of a disclosure
by you or your representatives (as hereinafter defined) in violation of this
Agreement, (ii) was available to you on a nonconfidential basis from a source
other than us or the Company and our or its representatives or agents prior to
its receipt in accordance with this Agreement or (iii) becomes available to you
and your affiliates on a nonconfidential basis from a source other than us or
the Company and our or its representatives or agents; provided that the source,
referred to in clauses (ii) and (iii), is not known by you or your affiliates to
be prohibited from transmitting the information to you and your affiliates by a
contractual, legal or fiduciary obligation.
You agree to keep a record of the Evaluation Material furnished to you and
your affiliates and of the location of such information. If you elect not to
proceed to discussions or negotiations about a potential transaction or, in the
alternative, at the termination of any such discussions or negotiations, you and
they will immediately return to us and the Company any and all Evaluation
Material in your possession or in the possession of your affiliates (other than
any analyses, compilations, studies or other documents or records prepared by
you and your affiliates or on your and their behalf, which may be retained by
you and them subject to the terms hereof).
You agree that the Evaluation Material furnished to you and your affiliates
will be held by you in the strictest confidence, will not be disclosed to any
person who is not one of your representatives (as defined below) and will be
used solely for the purpose of evaluating a potential transaction involving the
Company and you and your affiliates. You further agree that the Evaluation
Material will not be used for any other purpose, including use in any way which
is to the competitive disadvantage or is otherwise detrimental to the Company,
as determined in the
<PAGE>
sole judgment of the Company's management. Notwithstanding the foregoing, you
and your affiliates may disclose Evaluation Material to those of your employees,
accountants, attorneys and bankers (collectively referred to as your
"representatives"), who are actively involved in and have a need to know the
same for the purpose of, assisting you and them in evaluating a potential
transaction involving the Company. You agree to be responsible for any violation
of the terms hereof by your affiliates and your and their representatives.
In the event that you or your affiliates are requested or required (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Evaluation
Material or other confidential information about your and their discussions or
negotiations with us and the Company, you agree that you will promptly notify us
and the Company of such request so that we and the Company, if it deems it
appropriate, may seek a protective order and/or waive compliance by you with the
provisions of this Agreement. If, in the absence of a protective order or an
appropriate waiver, you or they are nonetheless, in the opinion of your or their
counsel, compelled to disclose any Evaluation Material to any tribunal or else
stand liable for contempt or suffer other significant censure or penalty, you
and they may disclose such Evaluation Material to such tribunal without
liability hereunder except to the extent of previous or subsequent disclosure by
you or your affiliates which is not permitted under this Agreement.
You understand that neither the Company nor any of its officers, directors,
employees, agents or representatives nor we make any representation or warranty
as to the accuracy or completeness of the Evaluation Material, and that neither
the Company nor any of them nor we shall have any liability to you or your
affiliates resulting from the use of the Evaluation Material by you or your
affiliates.
Furthermore, without the prior written consent of the Company, you and your
affiliates will not (i) for purposes of conducting any investigation of, or due
diligence with respect to, the Company, contact any person known to you and your
affiliates to be a franchisee, customer or employee of the Company or any of the
Company's participating merchants, (ii) for a period of two years from the date
hereof, solicit the services of or hire or attempt to hire, any person currently
employed by the Company or who may be employed by the Company during such two
year period or (iii) for a period of two years from the date hereof, for any
purpose competitive with the Company, solicit, negotiate with or enter into any
agreement or understanding with any franchisee or customer of the Company or any
of the Company's participating merchants whose name was provided to you by the
Company.
You and your affiliates also agree that for a period of three years from
the date of this Agreement, you and they will not, and you will ensure that your
affiliates and any person acting on behalf of or in concert with you or any of
your affiliates shall not, without the prior written consent of the Company or
its Board of Directors:
(i) acquire, offer to acquire or agree to acquire, directly or indirectly,
by purchase or otherwise, more than 1/2 of 1% of the voting
securities or direct or indirect rights to acquire more than 1/2 of
1% of the voting securities of the Company, or any assets
<PAGE>
of the Company or any subsidiary or division thereof or of any such
successor controlling person;
(ii) make, or in any way participate, directly or indirectly, in, any
"solicitation" for "proxies" to vote (as such terms are used in the
rules of the Securities and Exchange Commission), or seek to advise
or influence any person or entity with respect to the voting of any
voting securities of the Company;
(iii) submit a proposal for, or offer (with or without conditions) of any
extraordinary transaction involving the Company or its securities or
assets; or
(iv) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
in connection with any of the foregoing.
You will promptly advise the Company of any inquiry or proposal made to you
or your affiliates with respect to any of the foregoing.
You understand that we have not made any public announcement of the fact
that we are soliciting any proposals with respect to a potential transaction
and, accordingly, you agree that you and your affiliates will not disclose and
will direct your and their representatives not to disclose to any person, the
fact that you and your affiliates are considering or evaluating a possible
transaction involving the Company or any fact concerning your discussions or
negotiations with us or the Company or any of our or its representatives or
agents, including the status thereof. Without your prior consent, we will not
make any public announcement which specifically identifies you or any of your
affiliates with respect to any transaction or potential transaction involving
you.
You agree to indemnify and hold us and the Company, and our and its
directors, officers, employees, agents and representatives harmless from or
against any actual losses, claims, damages or liabilities arising out of the
breach of this Agreement by you or your affiliates and will reimburse us and the
Company and our and its directors, officers, employees, agents and
representatives for all expenses (including reasonable counsel fees) incurred in
connection therewith. The obligations set forth in this paragraph shall survive
the termination of this Agreement.
You acknowledge and agree that we and the Company would not have an
adequate remedy at law and would be irreparably harmed in the event that any of
the provisions of this Agreement were not performed in accordance with the
specific terms or were otherwise breached. Accordingly, you agree that we and
the Company shall be entitled to injunctive relief to prevent breaches of this
Agreement and to specifically enforce the terms and provisions hereof, in
addition to any other remedy to which we or the Company may be entitled at law
or in equity. It is further understood and agreed that no failure to exercise
or delay in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, and no single or partial
<PAGE>
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
You and your affiliates agree and consent to personal jurisdiction in any
action brought in any court, federal or state, within the State of Florida, in
connection with any matter arising under this Agreement. You, they, we and the
Company agree that service of process in any action brought in any such court
may be made by the mailing of service of process to the respective address of
the other party.
Please acknowledge your agreement to the foregoing by countersigning this
letter in the place provided below and returning it to us.
Very truly yours,
[MINOTAUR ENTITY]
By: _________________________
Accepted and Agreed to:
__________________________
Name:
<PAGE>
EXHIBIT 4
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
<PAGE>
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) 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>
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.
3
<PAGE>
"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
(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.
4
<PAGE>
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:
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.
5
<PAGE>
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
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.
6
<PAGE>
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 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 and Samstock by agreement of MP II,
ValueVision, Mangone, Bank and any of their Permitted Transferees.
7
<PAGE>
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 South Wacker Drive
------------------------------------
Suite 470
---------------------------------------------
Chicago, Illinois 60606
---------------------------------------------
VALUEVISION INTERNATIONAL INC.
/s/ Richard Barnes
----------------------------------------------
By: Richard Barnes
Its: Senior Vice President and
Chief Financial Officer
Address: 6740 Shady Oak Road
-------------------------------------
Eden Prairie, Minnesota 55344
----------------------------------------------
/s/ Dominic Mangone
----------------------------------------------
DOMINIC MANGONE
Address: 6N 271 James Court
-------------------------------------
Medinah, Illinois 60157
----------------------------------------------
/s/ Raymond Bank
----------------------------------------------
RAYMOND BANK
Address: P.O. Box 106
-------------------------------------
Butler, Maryland 21023
----------------------------------------------
<PAGE>
SAMSTOCK, L.L.C.
/s/ Rod F. Dammeyer
----------------------------------------------
By: Rod F. Dammeyer
Its: Vice President
TRANSMEDIA NETWORK INC.
/s/ Gene M. Henderson
----------------------------------------------
By: Gene M. Henderson, President and
Chief Executive Officer
<PAGE>
Exhibit 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Dominic Mangone,
has made, constituted and appointed, and by these presents does hereby make,
constitute and appoint each of Edward Finnegan and Paul Lapping, each with full
power of substitution, his true and lawful attorney-in-fact, for him and in his
name, place and stead to execute, acknowledge, deliver and file any and all
amendments to the Schedule 13D filed by the undersigned and any other reports
required to be filed by the undersigned pursuant to Section 13 or Section 16 of
the Securities Exchange Act of 1934, as amended, with respect to shares of
common stock, $0.02 par value, of Transmedia Network Inc., hereby ratifying and
confirming all that said attorney-in-fact and agent may do or cause to be done
by virtue hereof.
The validity of this Power of Attorney shall not be affected in any
manner by reason of the execution, at any time, of other powers of attorney by
the undersigned in favor of persons other than those named herein.
The undersigned agrees and represents to those dealing with its
attorney-in-fact herein, Edward Finnegan and Paul Lapping, that this Power of
Attorney may be voluntarily revoked only by written notice to such attorney-in-
fact.
WITNESS THE EXECUTION HEREOF this 5TH day of May, 2000, by
Dominic Mangone.
/s/ Dominic Mangone
---------------------------------------
Dominic Mangone
STATE OF _________
COUNTY OF
____________________________________
Notary Public
<PAGE>
Exhibit 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Raymond Bank,
has made, constituted and appointed, and by these presents does hereby make,
constitute and appoint each of Edward Finnegan and Paul Lapping, each with full
power of substitution, his true and lawful attorney-in-fact, for him and in his
name, place and stead to execute, acknowledge, deliver and file any and all
amendments to the Schedule 13D filed by the undersigned and any other reports
required to be filed by the undersigned pursuant to Section 13 or Section 16 of
the Securities Exchange Act of 1934, as amended, with respect to shares of
common stock, $0.02 par value, of Transmedia Network Inc., hereby ratifying and
confirming all that said attorney-in-fact and agent may do or cause to be done
by virtue hereof.
The validity of this Power of Attorney shall not be affected in any
manner by reason of the execution, at any time, of other powers of attorney by
the undersigned in favor of persons other than those named herein.
The undersigned agrees and represents to those dealing with its
attorney-in-fact herein, Edward Finnegan and Paul Lapping, that this Power of
Attorney may be voluntarily revoked only by written notice to such attorney-in-
fact.
WITNESS THE EXECUTION HEREOF this 5th day of May, 2000, by
Raymond Bank.
/s/ Raymond Bank
-------------------------------------------
Raymond Bank
STATE OF _______
COUNTY OF
_______________________________________
Notary Public
