SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
TRANSMEDIA NETWORK INC.
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(Name of Registrant as Specified In Its Charter)
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Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[Letterhead of Transmedia Network Inc.]
FELLOW STOCKHOLDERS:
Our Board of Directors has called a Special Meeting of Stockholders as
described in the enclosed Notice of Special Meeting of Stockholders and Proxy
Statement. The Special Meeting is being called so that our stockholders may
consider and act upon certain matters that require their approval to enable
Transmedia to raise additional capital through a private placement sale of our
common stock and warrants to the purchasers named in the attached Proxy
Statement. At the Special Meeting, our stockholders will be asked to approve the
issuance and sale of 1,287,480 shares of our common stock and five-year warrants
to purchase 2,574,960 shares of our common stock.
The principal reason we are seeking your approval for the issuance and
sale of our common stock is that we intend to use substantially all of the
proceeds to develop our iDine.com business on the Internet. The development of
our Internet business is an important component of our business strategy.
The Board of Directors has approved the proposal, and recommends that
our stockholders vote for the proposal. If the proposal is approved, it is
anticipated that the sale of the stock and warrants will close promptly
thereafter.
The Company will hold the Special Meeting of Stockholders at 10:00 a.m.
(Eastern Time) on _____________, July __, 2000, at
_________________________________________________________________
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
YOUR VOTE IS IMPORTANT
Please complete, date, sign and promptly return your proxy card in the
enclosed envelope regardless of whether you plan to attend the Special Meeting.
Sincerely yours,
Gene M. Henderson
President and Chief
Executive Officer
<PAGE>
TRANSMEDIA NETWORK INC.
11900 Biscayne Boulevard
Miami, Florida 33181
--------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
--------------------
Date: ___________, July __, 2000
Time: 10:00 a.m., Eastern Time
Place:
TO THE STOCKHOLDERS:
At our Special Meeting we will ask you to:
1. Approve the issuance and sale of 1,287,480 shares of our common stock
and five-year warrants to purchase 2,574,960 shares of our common
stock.
2. Vote on such other business as may properly come before the meeting or
any adjournments or postponements thereof.
If you were a stockholder of record at the close of business on June
__, 2000, you may vote at the Special Meeting.
A list of our stockholders as of the close of business on June __,
2000, will be available for inspection by you during normal business hours from
10:00 a.m., June __, 2000, through 5:00 p.m., July __, 2000, at the Company's
offices located at 11900 Biscayne Boulevard, Miami, Florida 33181.
By Order of the Board of Directors,
KEITH KIPER
Secretary
Miami, Florida
June __, 2000
YOUR VOTE IS IMPORTANT
In order to ensure your representation at the Special Meeting, you are
requested to complete, sign and date the enclosed proxy card as promptly as
possible and return it in the enclosed envelope.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING........................................................
Why Did You Send Me This Proxy Statement?......................................................
How Many Votes Do I Have?......................................................................
What Proposals Will Be Addressed At The Special Meeting?.......................................
How Do I Vote In Person?.......................................................................
Why Would The Special Meeting Be Postponed?....................................................
How Do I Vote By Proxy?........................................................................
May I Revoke My Proxy? ........................................................................
Where Are Transmedia's Principal Executive Offices?............................................
What Vote Is Required To Approve The Proposal?.................................................
Are There Any Dissenters' Rights Of Appraisal?.................................................
Who Bears The Cost Of Soliciting Proxies?......................................................
BACKGROUND..............................................................................................
Introduction...................................................................................
Use of Proceeds................................................................................
Board of Directors' Review and Approval of the Private Placement...............................
Purchase Agreements............................................................................
Related Agreements.............................................................................
Purchasers.....................................................................................
No Rights of Appraisal.........................................................................
Board Recommendation...........................................................................
OTHER PROPOSED ACTION...................................................................................
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.........................................................
OTHER BUSINESS..........................................................................................
PROPOSALS OF STOCKHOLDERS...............................................................................
PROVISION OF CERTAIN ADDITIONAL INFORMATION.............................................................
WHERE YOU CAN FIND MORE INFORMATION.....................................................................
APPENDICES
ATTACHMENT: PROXY CARD
</TABLE>
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TRANSMEDIA NETWORK INC.
------------------------------------
PROXY STATEMENT
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SPECIAL MEETING OF STOCKHOLDERS
to be held on _____________, July __, 2000
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
Why Did You Send Me This Proxy Statement?
We have sent you this proxy statement and the enclosed proxy card
because the Board of Directors of Transmedia Network Inc. is soliciting your
proxy vote at a Special Meeting of Stockholders. This proxy statement summarizes
the information you need to know to vote at the Special Meeting. However, you do
not need to attend the Special Meeting to vote your shares. Instead, you may
complete, sign and return the enclosed proxy card.
How Many Votes Do I Have?
We will be sending this proxy statement, the attached Notice of Special
Meeting and the enclosed proxy card on or about June __, 2000. Stockholders who
owned our common stock or our Series A Preferred Stock at the close of business
on June __, 2000 (the "Record Date") are entitled to one vote for each share of
Voting Stock they held on that date, on all matters properly brought before the
Special Meeting. The total number of shares and the total votes at the Special
Meeting is 18,686,390.
What Proposals Will Be Addressed At The Special Meeting?
We will address the following proposals at the Special Meeting:
1. The approval of the issuance and sale of 1,287,480 shares of our common
stock and five-year warrants to purchase 2,574,960 shares of our common
stock, with an exercise price per share of $5.93 per share for one half
of the shares subject to the warrants and $7.30 per share for the
remaining half of the shares subject to the warrants. The purchasers of
the shares and warrants are listed herein. See
"BACKGROUND--Purchasers."
2. The transaction of such other business as may properly come before the
Special Meeting or any adjournment thereof.
How Do I Vote In Person?
If you plan to attend the Special Meeting at 10:00 a.m. Eastern Time in
___________________ on ___________, July __, 2000, or a later date due to
postponement, and vote in person, we will provide you with a ballot when you
arrive. However, if your shares are held in the name of your broker, bank or
other nominee, you must bring a power of attorney executed by the broker, bank
or other nominee that owns the shares of record for your benefit and authorizing
you to vote the shares.
Why Would The Special Meeting Be Postponed?
The Special Meeting will be postponed if a quorum is not present on
July __, 2000. If more than half of all shares of stock entitled to vote at the
Special Meeting are present in person or by proxy, a quorum will be present and
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<PAGE>
business can be transacted at the Special Meeting. If a quorum is not present,
the Special Meeting may be postponed to a later date when a quorum is obtained.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business, but are not
counted as affirmative votes for purposes of determining whether a proposal has
been approved.
In addition, if sufficient votes rendered in person or by proxy in
favor of any one of the proposals set forth in this proxy statement are not
received on the date of, or prior to the conclusion of, the Special Meeting, we
may, in our sole discretion, propose one or more adjournments of the Special
Meeting to permit us to solicit more proxies. Any such adjournment will require
the affirmative vote of the holders of a majority of Voting Stock present in
person or by proxy at the Special Meeting.
How Do I Vote By Proxy?
Whether you plan to attend the Special Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and return it promptly in the
envelope provided. Returning the proxy card will not affect your ability to
attend the Special Meeting and vote.
If you properly fill in your proxy card and send it to us in time to
vote, your "proxy" (one of the individuals named on your proxy card) will vote
your shares as you have directed. If you sign the proxy card, but do not make
specific choices, your proxy will vote your shares as recommended by the Board
as Directors as follows:
o FOR the approval of the issuance and sale of 1,287,480 shares
of our common stock and warrants to purchase 2,574,960 shares
of our common stock, with an exercise price per share of $5.93
per share for one half of the shares and $7.30 per share for
the remaining half of the shares.
May I Revoke My Proxy?
If you give a proxy, you may revoke it at any time before it is
exercised. You may revoke your proxy in any one of three ways:
o You may send in another proxy with a later date.
o You may notify us in writing (by you or your attorney
authorized in writing or, if the stockholder is a corporation,
under its corporate seal, by an officer or attorney of the
corporation), at our principal executive offices before the
Special Meeting, that you have revoked your proxy.
o You may vote in person at the Special Meeting.
Where Are Transmedia's Principal Executive Offices?
Our principal executive offices are located at 11900 Biscayne
Boulevard, Miami, Florida 33181.
What Vote Is Required To Approve The Proposal?
The proposal must be approved by a majority of the votes cast on the
proposal, provided that the total votes cast represent more than 50% of all
Voting Stock outstanding on the Record Date and entitled to vote on the
proposal. Abstentions and broker non-votes will have no effect, other than to
render more difficult obtaining votes constituting 50% of all Voting Stock
outstanding on the Record Date.
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Any other matter will be approved by a majority of the votes cast,
except as may otherwise be provided in our Certificate of Incorporation or
By-laws, by the rules of the New York Stock Exchange or by the General
Corporation Law of the State of Delaware. Abstentions and broker non-votes will
have no effect with respect to any other matter.
Are There Any Dissenters' Rights Of Appraisal?
The Board of Directors has not proposed any action for which the laws
of the State of Delaware, the Certificate of Incorporation or By-laws of
Transmedia provide a right to stockholders to dissent and obtain payment for
their shares.
Who Bears The Cost Of Soliciting Proxies?
We will bear the cost of soliciting proxies in the accompanying form
and will reimburse brokerage firms and others for those expenses involved in
forwarding proxy materials to beneficial owners and soliciting their execution.
We have made arrangements with brokers and other custodians, nominees and
fiduciaries to send proxies and the proxy materials to their principals. We have
engaged the firm _____________________ to assist us in the distribution and
solicitation of proxies and have agreed to pay a fee of $______ plus
out-of-pocket costs and expenses for these services.
BACKGROUND
Introduction
The proposed sale of common stock and warrants is being made to enable
Transmedia to substantially fund the initial development and operation of our
internet-based dining program, iDine.com. The issuance of the securities as the
source of funding for the venture is also part of our plan to comply with The
New York Stock Exchange requirements that we increase the book value of the
Company.
At the direction of the Board of Directors, the Company engaged
Luminant Worldwide, an Internet consulting firm in the fall of 1999 and began
exploring various e-commerce strategies. After reaching consensus on a
conceptual framework for delivering discount dining promotions and benefits
on-line while simultaneously providing real-time yield management options to
participating restaurants, the Company prepared an Internet business plan and
began to seek funding for the venture.
Over the next few months, numerous investment alternatives were pursued
through discussions with various venture capital firms and other strategic
investors. Despite these efforts, and a considerable level of interest in the
Internet venture, the Company was unable to find the appropriate level of
capital at an acceptable valuation and level of return on the investment. The
Company also considered a public securities offering but, given the low level of
participation by shareholders in the $10 million rights offering consummated in
November 1999, rejected this alternative as a viable option.
Transmedia believes that it currently has a unique position in the fine
dining arena with its enabling credit card processing technology and a national
sales force with restaurant relationships in over 35 cities across the country.
To appropriately leverage this position, the Company believed it was imperative
to move quickly to establish a similar dominant position in the internet dining
space.
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At a Board of Directors meeting in March 2000, the Company was
authorized to pursue the merits of a private placement of equity securities
proposed by a group of Chicago led investors. The private placement involved the
sale of common stock of the Company at a price to be determined based on the 10
day trailing average of the closing price of the Company's common stock prior to
the signing of the term sheet. The 10 day average was $4.5625 per share. Initial
proceeds from the private placement were earmarked solely for the Internet
strategy. Management was authorized to seek up to $10 million under these terms.
In April 2000, the Board formally approved the terms of the private
placement. On May 1, 2000, upon securing $10 million in committed funding from a
combination of new outside investors, existing investors and several Company
directors and officers, a first tranche of the private placement was completed
with the sale of 904,303 shares of common stock and 1,808,606 warrants. The
common stock was sold at a price of $4.5625 per share and raised $4,125,882 of
capital. Based on the common stock price, the exercise price of the warrants was
set one half at $5.93 and one half at $7.30. The aggregate common shares and
warrants issued in the first tranche represented approximately 19.9% of the then
outstanding common shares.
The proposals set forth in this proxy statement seek your approval for
a second tranche of the private placement. The second tranche has the same price
per share of common stock and exercise prices for the warrants as the first
tranche. The second tranche consists of the sale of an aggregate of 1,287,480
common shares, accompanied by 2,574,960 warrants. Initial cash proceeds from
this issuance will be $5,874,118.
Shareholder approval is being sought to satisfy rules of the New York
Stock Exchange. The rules require shareholder approval for the Company to sell
shares in a private placement in excess of 20% of the number of its outstanding
shares and to sell shares in excess of 1% of its outstanding shares to Company
officers, directors, or substantial shareholders ("Related Parties").
Use of Proceeds
The proceeds from the private placement are to be used for the
completion of the website development and for operating expenses and marketing
costs of our iDine.com internet venture.
Board of Directors' Review and Approval of the Private Placement
The Board considered the terms of the transactions at meetings held on
March 21, 2000 and April 17, 2000. The Board unanimously approved the terms of
the private placement at the April 17, 2000 meeting.
Purchase Agreements
General. The material terms and provisions of the transaction documents
are summarized below. However, the summary of the two Stock Purchase and Sale
Agreements (referred to collectively as the "Purchase Agreements") does not
purport to be complete and is qualified in its entirety by the terms of the
Purchase Agreements which are attached as Appendices A and B to this Proxy
Statement, respectively.
On April 28, 2000, the Company entered into a Stock Purchase and Sale
Agreement with four outside investors led by Minotaur Partners II, L.P. (the
"First Purchase Agreement"). The First Purchase Agreement regards the purchase
of 1,534,247 shares of common stock and warrants to purchase 3,068,494 shares of
common stock. On May 1, 2000, the investors under the First Purchase Agreement
purchased an aggregate of 904,303 shares of common stock and immediately
exercisable warrants to purchase
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1,808,606 shares of common stock, for an aggregate purchase price of $4,125,882.
The remaining shares of common stock and warrants to be purchased under the
First Purchase Agreement will be sold by the Company in a second tranche
simultaneously with the closing of the purchases under the Second Purchase
Agreement (described below). The First Purchase Agreement is attached hereto as
Appendix A.
On April 28, 2000, the Company entered into a Stock Purchase and Sale
Agreement with Samstock, L.L.C. and certain Related Parties (the "Second
Purchase Agreement"). The Second Purchase Agreement relates to the purchase of
657,536 shares of common stock and warrants to purchase 1,315,072 shares of
common stock. All of the common stock and warrants to be purchased under the
Second Purchase Agreement will be sold by the Company in the second tranche on
the terms and conditions described below. The Second Purchase Agreement is
attached hereto as Appendix B.
The two Purchase Agreements have substantially identical terms and
conditions, except that the First Purchase Agreement provided for the first
tranche to be closed on April 28, 2000 and the sale of the remaining shares and
warrants as part of the second tranche to be closed after approval by the
shareholders at the Special Meeting.
Purchase Price and Closing. The purchase price for the shares of common
stock and the warrants to be purchased in accordance with the Purchase
Agreements in the second tranche totals $5,874,120 (comprised of $2,874,120 from
purchasers who are parties to the First Purchase Agreement and $3,000,000 from
purchasers who are parties to the Second Purchase Agreement). As noted above,
$4,125,882 was raised in the first tranche. Each warrant is exercisable with
respect to one half of the shares subject thereto at $5.93 per share and, with
respect to the other half of the shares subject to the warrants, at $7.30 per
share. The warrants also contain customary anti-dilution provisions.
Representation and Warranties. In each of the Purchase Agreements, the
Company made customary representations and warranties to the purchasers,
including, without limitation, representations and warranties regarding the
Company's capital stock, financial statements, liabilities, properties,
litigation, material contracts, employee benefit plans, assets, taxes,
intellectual property and environmental compliance. The purchasers also made
customary representations and warranties to the Company, including, without
limitation, a representation they have the funds available to complete the
investment.
Closing Conditions. The obligation of the Company to consummate the
closing of the second tranche under each of the Purchase Agreements is subject
to the satisfaction or waiver of certain conditions precedent, including, among
other things, (i) approval of the proposal set forth in this Proxy Statement by
the Company's stockholders, (ii) receipt of all necessary regulatory and
third-party consents and approvals, (iii) the accuracy on the closing date of
the representations and warranties of the purchasers contained in the applicable
Purchase Agreement, (iv) the performance or compliance by the purchasers in all
material respects with all agreements and covenants contained in the applicable
Purchase Agreement and required to be performed or complied with by it on or
prior to the closing date and (v) the absence of litigation or proceedings
prohibiting or restricting the investment.
The obligation of the purchasers to consummate the investment under
each of the Purchase Agreements is subject to the satisfaction or waiver of
certain conditions, including (i) approval of the proposal set forth in this
Proxy Statement by the Company's stockholders, (ii) receipt of all necessary
regulatory and third-party consents and approvals, (iii) the accuracy on the
closing date of the representations and warranties of the Company contained in
the applicable Purchase Agreement, (iv) the performance or compliance by the
Company in all material respects with all agreements and covenants contained in
the applicable Purchase Agreement and (v) the absence of certain pending actions
or proceedings.
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Indemnification. Each of the Company and purchasers has agreed to
indemnify the other, and the other's agents and representatives, from and
against all damages sustained or incurred by any of them resulting from or
arising out of any inaccuracy or breach of any representation, warranty or
covenant contained in any transaction documents.
Termination. Each of the Purchase Agreements may be terminated at any
time (A) by mutual written consent of the Company and the purchasers party
thereto; (B) by the purchasers, upon notice to the Company if, among other
things, (i) the closing of the second tranche shall not have occurred on or
before August 26, 2000, unless the absence of such occurrence is due to the
purchasers' failure to perform in all material respects each of its obligations
under the applicable Purchase Agreement required to be performed by them at or
prior to the closing, (ii) there has been a material breach by the Company of
any representation, warranty, covenant or agreement set forth in the applicable
Purchase Agreement, which breach has not been cured within ten business days
following receipt by the breach party of notice of such breach, (iii) if the
Board fails to recommend, or revokes or otherwise modifies its recommendation
of, the proxy proposal or resolves to do so, or (iv) the stockholders fail to
approve the sale; or (C) by the Company, upon notice to the purchasers, if (i)
there has been a material breach by the purchasers party thereto of any
representation, warranty, covenant or agreement set forth in the applicable
Purchase Agreement which breach has not been cured within ten business days
following receipt by the breaching party of notice of such breach or (ii) the
stockholders fail to approve the sale.
Warrants. Each warrant permits the holder to acquire one share of
Company common stock upon payment to the Company of the exercise price. One half
of the warrants have an exercise price of $5.93 and the remaining half have an
exercise price of $7.30. The warrants expire if not exercised on or prior to
April 28, 2005. The warrants also provide for cashless exercise. Upon cashless
exercise, the difference between the exercise price of the warrants and the
market price of the common stock is multiplied times the number of warrants held
by the warrant holder. The value determined is then used to pay the purchase
price of warrants in lien of cash. The number of warrants and the exercise price
will be adjusted to reflect any Company stock splits or stock dividends.
Related Agreements
In connection with each of the Purchase Agreements described above, the
purchasers and the Company have also entered into Investment Agreements and
Co-Sale and Voting Agreements.
Standstill. The purchasers under the First Purchase Agreement have
agreed that they will not take any of the following actions prior to April 28,
2005 without the approval of a majority of the Company's disinterested
directors, subject to specified limited exceptions: (a) increase their ownership
of voting securities beyond the combined voting power of all voting securities
represented by the shares and the warrants; provided, however, that the
foregoing limit shall not prohibit certain purchasers of voting securities
directly from the Company and certain repurchases of voting securities by the
Company; (b) solicit proxies or assist any other person or otherwise become a
"participant" in the "solicitation" of proxies in opposition to the
recommendation of a majority of disinterested directors; (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 Company; (d) assist,
encourage or induce any person to bid for or acquire outstanding voting
securities of the Company unless the completion of the transaction requires the
approval of the Board of Directors and the Company obtains a suitable
confidentiality and standstill agreement from the party; or (e) take any action
to seek to circumvent any of the foregoing limitations.
Additional Covenants. Prior to April 28, 2005, Minotaur Partners II,
L.P., one of the new outside investors, will be entitled to designate one
representative, reasonably acceptable to the independent directors of the
Company, to serve on the Board of Directors as long as Minotaur Partners II,
L.P. beneficially owns at least 5% of the combined voting power of the Company's
outstanding voting securities (including, for these purposes, the shares
issuable upon exercise of the warrants until such time as the warrants expire).
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Voting Arrangements. Pursuant to the Co-Sale and Voting Agreements,
each purchaser under the First Purchase Agreement agreed that, so long as
Samstock, L.L.C. is entitled to designate one or two directors to the Company's
board of directors, the purchaser would vote all of its shares of Company voting
securities in favor of Samstock's designee or designees. In addition, Samstock
agreed that, so long as Minotaur Partners II, L.P. is entitled to designate a
director to the Company's board of directors, Samstock would vote all of its
voting securities in favor of Minotaur's designee. Samstock also agreed to vote
its shares in favor of the proposal being considered at the Special Meeting of
Stockholders. The purchasers agreed that, except to the extent otherwise
provided in the Investment Agreement, the purchasers would vote their shares
with respect to the election or removal of directors of the Company in
accordance with the recommendations of a majority of the disinterested directors
of the Company, provided that the purchasers may vote in favor of the election
or retention of the director designated by Minotaur.
Co-Sale and Drag-Along Rights. The purchasers have "co-sale" rights if
Samstock sells more than 10% of the shares of Company common stock held by it.
In such an event, the purchasers can require that their shares also be purchased
on the same terms and conditions.
The purchasers are also subject to "drag-along" provisions if Samstock
sells all of its shares of Company common stock. In such event, Samstock can
require the purchasers to sell their shares on the same terms and conditions.
However, Samstock cannot require the purchasers to sell their shares prior to
April 28, 2001, if the sale would result in an internal rate of return to the
purchasers on their investment of less than 25%.
Registration Rights. The Company has agreed to file a shelf
registration statement with respect to the shares of common stock sold in the
first and second tranches and the shares of common stock issuable upon exercise
of the warrants and to maintain the effectiveness of the registration statement
until all of the shares have been sold and the warrants expired.
Purchasers
The purchasers in the second tranche are as follows:
Number Number
Purchaser of Shares of Warrants
--------- --------- -----------
Gene M. Henderson 54,795 109,590
Thomas J. Litle 54,795 109,590
Herbert M. Gardner 32,877 65,754
James M. Callaghan 21,918 43,836
Gregory J. Robitaille 21,918 43,836
John A. Ward 10,959 21,918
George S. Wiedemann 10,959 21,918
Christine M. Donohoo 10,959 21,918
Frank F. Schmeyer 10,959 21,918
Gerald Fleischman 10,959 21,918
Elliot Merberg 10,959 21,918
Samstock, L.L.C. 405,479 810,958
Minotaur Partners II, L.P. 490,456 980,912
ValueVision International, Inc. 89,992 179,984
Dominic Mangone 44,996 89,992
Raymond Bank 4,500 9,000
------- -------
TOTAL 1,287,480 2,574,960
Certain of the parties named above are directors, officers and/or
holders of more than 5% of the common stock of the Company. See "Security
Ownership of Certain Beneficial Owners" below.
No Rights of Appraisal
Dissenting stockholders will not have any rights of appraisal upon
approval or consummation of the private placement.
Board Recommendation
The Board of Directors unanimously recommends a vote FOR the approval
of the proposal.
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OTHER PROPOSED ACTION
The Board of Directors does not intend to bring any other matters
before the Special Meeting, nor does the Board know of any other matters that
others intend to bring before the Special Meeting. If, however, other matters
not mentioned in this Proxy Statement properly come before the Special Meeting,
the persons named in the accompanying proxy card will vote thereon in accordance
with the recommendation of the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Except as otherwise specified, the following table sets forth certain
information, as of May 1, 2000, regarding beneficial ownership of the Company's
Voting Stock by each director and executive officer of Transmedia, and each
person who is known by the Company to own beneficially more than 5% of its
Voting Stock and includes options and warrants to purchase shares of Common
Stock which will become exercisable within 60 days of May 1, 2000. Except as
otherwise specified, each such stockholder has sole voting and investment power
with respect to the shares beneficially owned by such stockholder.
<TABLE>
<CAPTION>
Amount of Options and
Amount of Series A Warrants Percent of
Common Stock Preferred Stock Exercisable Total
Beneficially Beneficially Within Total Voting Voting
Name and Address Owned Owned(1) 60 Days Stock Stock
---------------- ------------ --------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Melvin Chasen ....................... 745,839 - - 745,839(2) 3.8%
Minotaur Partners II, L.P. 704,065 - 1,408,130 2,112,195(3) 10.2%
150 South Wacker Drive, #470
Chicago, Illinois 60606
Samstock, L.L.C. .................... 2,020,519 2,840,489 1,972,823(4) 8,395,326(5)(6) 31.0%
Halmostock Limited Partnership 438,305 206,204 171,147(7)
(see footnote 6 for addresses)
Pioneering Investment ............... 1,286,000(8) - - 1,286,000 6.4%
Management Inc.
60 State Street
Boston, Massachusetts 02109
F. Philip Handy ..................... 272,347 84,632 78,121 435,100(9) 2.3%
Gene M. Henderson ................... 150,000 46,613 88,612 285,225(10) 1.5%
James M. Callaghan .................. 85,662 27,153 170,023 282,838(11) 1.5%
Rod F. Dammeyer ..................... -- -- 10,500 10,500(12) *
Paul A. Ficalora .................... 186,035 -- 34,000 220,035(13) 1.2%
Herbert M. Gardner .................. 294,401 91,486 46,815 423,702(14) 2.3%
Stephen E. Lerch .................... -- -- 28,750 28,750(15) *
Christine M. Donohoo ................ 25,000 -- 37,500 62,500(16) *
George S. Wiedemann ................. 6,000 -- 39,632 45,632(17) *
Lester Wunderman .................... 26,000 -- 64,632 90,632(18) *
All directors and executive officers
as a group (10 persons).............. 1,045,445 249,884 598,585 1,893,914 9.2%
persons)
</TABLE>
------------
* Represents less than 1%.
(1) Each share of Series A Preferred Stock is presently convertible into
1.02386 shares of Common Stock at the option of the holder.
(2) Includes for Mr. Chasen (i) 366,961 shares of Common Stock held by Mr.
Chasen, (ii) 178,100 shares of Common Stock held by a family
partnership jointly controlled by Mr. Chasen and his wife and (iii)
200,778 shares of Common Stock held by Mr. Chasen's wife. Mr. Chasen
disclaims beneficial ownership of 200,778 shares of Common Stock held
by his wife. Subject to the terms of the Amended and Restated Agreement
Among Stockholders (the "Agreement Among Stockholders"), dated as of
March 3, 1998, among EGI-Transmedia Investors, L.L.C., Samstock, L.L.C.
and Mr. Chasen and his wife, the Chasen's beneficially owned shares of
Common Stock are subject
10
<PAGE>
to shared voting and disposition power with Samstock, L.L.C. and
EGI-Transmedia Investors, L.L.C., which are affiliates of Equity Group
Corporate Investments of which Rod F. Dammeyer is managing partner.
(3) Includes shares and warrants purchased in the first tranche and does
not include 490,456 shares of common stock and warrants to purchase
980,912 shares of common stock to be purchased by Minotaur Partners II,
L.P. in the second tranche.
(4) Includes 67,774 of the 2,908,263 shares of Common Stock issuable upon
the conversion of the 2,840,489 shares of Series A Preferred Stock held
by Samstock, L.L.C. (representing the additional voting power Samstock,
L.L.C. would gain upon conversion of it shares of Series A Preferred
Stock due to the conversion rate of 1.02386 shares of Common Stock per
each share of Series A Preferred Stock converted).
(5) Includes 745,839 shares of Common Stock which are owned by Mr. Chasen
and his wife, but which are subject to the voting and disposition
restrictions contained in the Agreement Among Stockholders.
(6) Based in part: (i) upon information set forth in Amendment No. 3 to the
Schedule 13D filed on November 13, 1999 by Samstock, L.L.C., (ii) other
information available to the Company and (iii) pursuant to a
Stockholders' Agreement (the "Stockholders' Agreement"), dated as of
March 3, 1998, among the referenced entities. According to the
Stockholders' Agreement, each entity appointed Samstock, L.L.C. and
EGI-Transmedia Investors, L.L.C. its true and lawful attorney and
proxy, during the period of such Stockholders' Agreement, to appear
for, represent, and vote the shares of Common Stock held by each
stockholder, as defined in the Stockholders' Agreement. The warrants to
purchase share of Common Stock held by each stockholder are exercisable
in equal parts at $6.00 per share, $7.00 per share and $8.00 per share
and expire in March 2003. The addresses for these entities are as
follows: Samstock, L.L.C. at Two North Riverside Plaza, Chicago,
Illinois 60606 and Halmostock Limited Partnership at 21 W. Las Olas
Boulevard, Fort Lauderdale, Florida 33301.
(7) Includes 4,920 of the 211,124 shares of Common Stock issuable upon the
conversion of the 206,204 shares of Series A Preferred Stock held by
Halmostock Limited Partnership (representing the additional voting
power Halmostock Limited Partnership would gain upon conversion of it
shares of Series A Preferred Stock due to the conversion rate of
1.00286 shares of Common Stock per each share of Series A Preferred
Stock converted).
(8) Based on Amendment No. 1 to Schedule 13G filed on January 15, 1999 by
Pioneering Investment Management Inc.
(9) Includes for Mr. Handy (i) 272,347 shares of Common Stock beneficially
owned by Mr. Handy, (ii) 84,632 shares of Series A Preferred Stock
beneficially owned by Mr. Handy, (iii) options to purchase 5,000 shares
of Common Stock at an exercise price of $5.8750 per share, which
options were granted under the 1996 Plan and expire in March 2008, (iv)
options to purchase 5,500 shares of Common Stock at an exercise price
of $4.56, which options were granted under the 1996 Plan and expire in
March 2009, (v) warrants to purchase 56,470 shares of Common Stock,
which are exercisable in equal parts at $6.00 per share, $7.00 per
share and $8.00 per share and expire in March 2003, (vi) 9,132 shares
of Common Stock that Mr. Handy may elect to take as a deferred stock
award under the 1996 Plan in lieu of his annual director's fees and
(vii) 2,019 of the 86,651 shares of Common Stock issuable upon the
conversion of the 84,632 shares of Series A Preferred Stock held by Mr.
Handy (representing the additional voting power Mr. Handy would gain
upon conversion of his shares of Series A Preferred Stock due to the
conversion rate of 1.02386
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<PAGE>
shares of Common Stock per each share of Series A Preferred Stock
converted). Does not include options which were granted under the 1996
Plan to purchase 6,000 shares of Common Stock, which are not
exercisable within 60 days of May 1, 2000.
(10) Includes for Mr. Henderson (i) 150,000 shares of Common Stock
beneficially owned by Mr. Henderson, (ii) 46,613 shares of Series A
Preferred Stock beneficially owned by Mr. Henderson, (iii) options to
purchase 62,500 shares of Common Stock at an exercise price of $2.00
per share, which were granted under the 1996 plan and expire in October
2008, (iv) options to purchase 25,000 shares of Common Stock at an
exercise price of $2.375 per share, which were granted under the 1996
Plan and expire in October 2008 and (iv) 1,112 of the 47,725 shares of
Common Stock issuable upon the conversion of the 46,613 shares of
Series A Preferred Stock held by Mr. Henderson (representing the
additional voting power Mr. Henderson would gain upon conversion of his
shares of Series A Preferred Stock due to the conversion rate of
1.02386 shares of Common Stock per each share of Series A Preferred
Stock converted). Does not include options which were granted under the
1996 Plan to purchase 262,500 shares of Common Stock, which are not
exercisable within 60 days of May 1, 2000.
(11) Includes for Mr. Callaghan (i) 59,125 shares of Common Stock
beneficially owned by Mr. Callaghan, (ii) 26,537 shares of Common Stock
held in Mr. Callaghan's Individual Retirement Account, (iii) 27,153
shares of Series A Preferred Stock beneficially owned by Mr. Callaghan,
(iv) options to purchase 84,375 shares of Common Stock at an exercise
price of $4.8333 per share, which options were granted under the 1987
Plan and expire in May 2002, (v) options to purchase 33,751 shares of
Common Stock at an exercise price of $7.4445 per share, which options
were granted under the 1987 Plan and expire in September 2003, (vi)
options to purchase 22,500 shares of Common Stock at an exercise price
of $5.8750 per share, which options granted under the 1987 Plan and
expire in March 2004 (the exercise price of these options was adjusted
in March 1998 from $15.00 per share to $5.8750 per share, which was the
closing price of the Common Stock on the effective date of the grant),
(vii) options to purchase 11,250 shares of Common Stock at an exercise
price of $5.8750 per share, which options were granted under the 1987
Plan and expire in March 2005 (the exercise price of these options was
adjusted from $12.25 per share to $5.8750 per share, which was the
closing price of the Common Stock on the effective date of the grant),
(viii) options to purchase 3,750 shares of Common Stock at an exercise
price of $4.3750 per share, which options were granted under the 1996
Plan and expire in April 2007 and (ix) 648 of the 27,801 shares of
Common Stock issuable upon the conversion of the 27,153 shares of
Series A Preferred Stock held by Mr. Callaghan (representing the
additional voting power Mr. Callaghan would gain upon conversion of his
shares of Series A Preferred Stock due to the conversion rate of
1.02386 shares of Common Stock per each share of Series A Preferred
Stock converted). All of such options are presently exercisable. Does
not include (x) options issued under the 1987 and 1996 Plans to
purchase 39,000 shares of Common Stock, which are not exercisable
within 60 days of May 1, 2000, or (y) 5,724 shares of Common Stock held
in the Individual Retirement Account of Mr. Callaghan's wife, as to all
of which shares Mr. Callaghan disclaims beneficial ownership.
(12) Includes for Mr. Dammeyer (i) options to purchase 5,000 shares of
Common Stock at an exercise price of $5.8750 per share, which options
were granted under the 1996 Plan and expire in March 2008 and (ii)
options to purchase 5,500 shares of Common Stock at an exercise price
of $4.56 per share, which options were granted under the 1996 Plan and
expire in March 2009.
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<PAGE>
(13) Includes for Mr. Ficalora (i) options to purchase 15,750 shares of
Common Stock at an exercise price of $7.4445 per share, which options
were granted under the 1987 Plan and expire in September 2003, (ii)
options to purchase 4,500 shares of Common Stock at an exercise price
of $4.3750 per share, which options were granted under the 1996 Plan
and expire in April 2007, (iii) options to purchase 10,000 shares of
Common Stock at an exercise price of $5.8750 per share, which options
were granted under the 1996 Plan and expire in March 2005 (the exercise
price of these options was adjusted in March 1998 from $12.25 per share
to $5.8750 per share, which was the closing price of the Common Stock
on the effective date of the grant) and (iv) options to purchase 3,750
shares of Common Stock at an exercise price of $4.50 per share, which
options were granted under the 1996 Plan and expire in August 2008. All
of such options are presently exercisable. Does not include (x) options
to purchase 22,750 shares of Common Stock, which were granted under the
1996 Plan and are not exercisable within 60 days of May 1, 2000, (y)
6,075 shares of Common Stock held by Mrs. Ficalora and (z) 1,350 shares
of Common Stock held by Mr. Ficalora's child, as to all of which shares
Mr. Ficalora disclaims beneficial ownership.
(14) Includes for Mr. Gardner (i) 294,401 shares of Common Stock
beneficially owned by Mr. Gardner, (ii) 91,486 shares of Series A
Preferred Stock beneficially owned by Mr. Gardner, (iii) options to
purchase 7,500 shares of Common Stock at an exercise price of $15.00
per share, which options were granted under the 1987 Plan and expire in
March 2004, (iv) options to purchase 5,000 shares of Common Stock at an
exercise price of $12.25 per share, which options were granted under
the 1987 Plan and expire in March 2005, (v) options to purchase 5,000
shares of Common Stock at an exercise price of $7.875 per share, which
options were granted under the 1996 Plan and expire in March 2006, (vi)
options to purchase 5,500 shares of Common Stock at an exercise price
of $4.3750 per share, which options were granted under the 1996 Plan
and expire in June 2007, (vii) options to purchase 6,000 shares of
Common Stock at an exercise price of $5.8750 per share, which options
were granted under the 1996 Plan and expire in March 2008, (viii)
options to purchase 6,500 shares of Common Stock at an exercise price
of $4.56 per share, which options were granted under the 1996 Plan and
expire in March 2009, (ix) 9,132 shares of Common Stock that Mr.
Gardner may elect to take as a deferred stock award under the 1996 Plan
in lieu of his annual director's fees and (x) 2,183 of the 93,669
shares of Common Stock issuable upon the conversion of the 91,486
shares of Series A Preferred Stock held by Mr. Gardner (representing
the additional voting power Mr. Gardner would gain upon conversion of
his shares of Series A Preferred Stock due to the conversion rate of
1.02386 shares of Common Stock per each share of Series A Preferred
Stock converted). Does not include (x) options which were granted under
the 1996 Plan to purchase 7,000 shares of Common Stock, which are not
exercisable within 60 days of May 1, 2000, (y) 3,834 shares of Common
Stock held by Mr. Gardner's wife individually or as custodian for their
children and (z) 1,191 shares of Series A Preferred Stock held by Mr.
Gardner's wife individually or as custodian for their children, as to
all of which shares Mr. Gardner disclaims beneficial ownership.
(15) Includes for Mr. Lerch (i) options to purchase 15,000 shares of Common
Stock at an exercise price of $5.25 per share, which options were
granted under the 1996 Plan and expire in February 2007, (ii) options
to purchase 7,500 shares of Common Stock at an exercise price of
$4.3750 per share, which options were granted under the 1996 Plan and
expire in April of 2007 and (iii) options to purchase 6,250 shares of
Common Stock at an exercise price of $4.50 per share, which options
were granted under the 1996 Plan and expire in August of 2008. Does not
include options which were granted under the 1996 Plan to purchase
76,250 shares of Common Stock, which are not exercisable within 60 days
of May 1, 2000.
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<PAGE>
(16) Includes for Ms. Donohoo (i) 25,000 shares of Common Stock owned by Ms.
Donohoo and (ii) options to purchase 37,500 shares of Common Stock at
an exercise price of $2.63 per share, which options were granted under
the 1996 Plan and expire in February 2009. Does not include options
which were granted under the 1996 Plan to purchase 112,500 shares of
Common Stock, which are not exercisable within 60 days of May 1, 2000.
(17) Includes for Mr. Wiedemann (i) 6,000 shares of Common Stock owned by
Mr. Wiedemann, (ii) options to purchase 25,000 shares of Common Stock
at an exercise price of $5.8750 per share, which options were granted
under the 1996 Plan and expire in March 2008, (iii) options to purchase
5,500 shares of Common Stock at an exercise price of $4.56 per share,
which options were granted under the 1996 Plan and expire in March 2009
and (iv) 9,132 shares of Common Stock that Mr. Wiedemann may elect to
take as a deferred stock award under the 1996 Plan in lieu of his
annual director's fees. Does not include options which were granted
under the 1996 Plan to purchase 6,000 shares of Common Stock, which are
not exercisable within 60 days of May 1, 2000.
(18) Includes for Mr. Wunderman (i) 26,000 shares of Common Stock owned by
Mr. Wunderman, (ii) options to purchase 50,000 shares of Common Stock
at an exercise price of $5.8570 per share, which options were granted
under the 1996 Plan and expire in March 2008, (iii) options to purchase
5,500 shares of Common Stock at an exercise price of $4.56 per share,
which options were granted under the 1996 Plan and expire in March 2009
and (iv) 9,132 shares of Common Stock that Mr. Wunderman may elect to
take as a deferred stock award under the 1996 Plan in lieu of his
annual director's fees. Does not include options which were granted
under the 1996 Plan to purchase 6,000 shares of Common Stock, which are
not exercisable within 60 days of May 1, 2000.
OTHER BUSINESS
It is not intended to bring before the Special Meeting any matters
except those proposed herein. Management is not aware at this time of any other
matters that are to be presented for action. If, however, any other matters
properly come before the meeting, the persons named as proxies in the enclosed
form of proxy intend to vote in accordance with their judgment on the matters
presented.
PROPOSALS OF STOCKHOLDERS
Proposals, if any, of our stockholders that are intended to be
presented by such stockholders at our Annual Meeting of Stockholders in 2001
must be received by the Secretary of the Company no later than October 14, 2000,
in order to be considered for possible inclusion in the proxy statement and form
of proxy relating to the 2001 Annual Meeting. Any proposals submitted outside
the processes of Rule 14a-8 of the Securities Exchange Act of 1934 must be
received by December 27, 2000, to be considered for presentation at the 2001
Annual Meeting. All proposals must be mailed to the Company's principal
executive offices at 11900 Biscayne Boulevard, Miami, Florida 33181, Attention:
Secretary.
PROVISION OF CERTAIN ADDITIONAL INFORMATION
Attached to this Proxy Statement are the following appendices:
APPENDIX A - Stock Purchase and Sale Agreement with new outside
investors
APPENDIX B - Stock Purchase and Sale Agreement with Samstock, L.L.C.
and certain officers and directors
14
<PAGE>
In addition, the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1999, and Quarterly Reports on Form 10-Q for the
quarters ended December 31, 1999 and March 31, 2000 are being furnished with
this Proxy Statement.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the public reference facilities in Washington, D.C., Chicago, Illinois and New
York, New York. Please call the SEC at 1-800-SEC-0330 for further information
about the public reference rooms. Our SEC filings are also available to the
public on the SEC web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered a part of this proxy statement. We incorporate by reference the
following documents, which contain important information about us and our
finances:
(1) Annual Report on Form 10-K for the fiscal year ended September
30, 1999;
(2) Quarterly Reports on Form 10-Q for the quarters ended December
31, 1999 and March 31, 2000; and
(3) Registration Statement on Form 8-A, filed on June 14, 1995.
Copies of each of Transmedia's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q referred to above accompany this Proxy Statement. You may
request a copy of these filings, at no cost, by writing or telephoning us at the
following address:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Attn.: Mr. Stephen E. Lerch
Executive Vice President
and Chief Financial Officer
Tel: (305) 892-3306
By Order of the Board of Directors,
KEITH KIPER
Secretary
15
<PAGE>
Appendix A
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").
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1.2 Consideration. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, the Purchasers shall pay to the
Company (in such proportions as between the Purchasers as set forth on Schedule
1 hereto) (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:
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(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.
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<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 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
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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 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
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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.
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
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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 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.
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(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 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
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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 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).
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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:
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
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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.
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
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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,
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
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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.
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
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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 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
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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 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
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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 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;
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(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 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
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(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 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
contemplated by this Agreement may be abandoned at any time prior to either
Closing Date:
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(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;
(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.
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ARTICLE VIII
INDEMNIFICATION
8.1 General. From and after the First Closing, the parties shall
indemnify each other as provided in this Article VIII. No specifically
enumerated indemnification obligation with respect to a particular subject
matter as set forth below shall limit or affect the applicability of a more
general indemnification obligation as set forth below with respect to the same
subject matter. For the purposes of this Article VIII, each party shall be
deemed to have remade all of its representations, warranties and covenants
contained in this Agreement at the 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 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
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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
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.
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"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 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.
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"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.
"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.
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"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) 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):
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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 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
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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.
10.6 Parties in Interest. Subject to the provisions regarding
assignment in Section 10.5 above, this Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
10.7 Publicity. Neither the Company nor the Purchasers will make or
issue, or cause to be made or issued, any announcement or written statements
concerning the Transaction Documents or the transactions contemplated thereby
for dissemination to the general public without the prior written consent of the
Company or the Purchasers, as appropriate, which consent shall not be
unreasonably withheld. This provision will not apply to any announcement or
written statement required to be made by law or the regulations of the SEC, 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
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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 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
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WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON
THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF THE COMPANY AND THE
PURCHASERS FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS
WAIVER WITH SUCH PARTY'S LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES SUCH PARTY'S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
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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
------------------------------------------
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COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Gene M. Henderson
--------------------------------------
By: Gene M. Henderson, President and
Chief Executive Officer
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Appendix B
STOCK PURCHASE AND SALE AGREEMENT
STOCK PURCHASE AND SALE AGREEMENT, dated as of April 28, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), among each of the purchasers listed on the signature pages hereto
(collectively, the "Purchasers"), and Transmedia Network Inc., a Delaware
corporation (the "Company"). All capitalized terms used and not otherwise
defined herein have the meanings ascribed to them in Article IX hereof.
WHEREAS, the Company desires to issue and sell to the Purchasers, and
the Purchasers desire to purchase from the Company, (i) 657,536 newly issued
shares of Common Stock in the aggregate (such 657,536 newly issued shares,
collectively the "Shares") at a price of $4.5625 per share (the "Share Purchase
Price") and (ii) warrants (the "Warrants") in the form of Exhibit A hereto to
purchase an additional 1,315,072 shares of Common Stock in the aggregate (such
additional 1,315,072 shares of Common Stock in the aggregate issuable from time
to time upon the exercise of the Warrants, collectively the "Warrant Shares").
NOW, THEREFORE, in consideration of the premises, representations and
warranties and the mutual covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES AND WARRANTS
1.1 Purchase and Sale of the Shares and Warrants. Upon the terms and
subject to the satisfaction of the conditions contained in this Agreement, at
the Closing, the Company shall issue and sell to the Purchasers (in such
proportions as between the Purchasers as set forth on Schedule 1 hereto), and
the Purchasers shall so purchase from the Company, the Shares and the Warrants,
in each case free and clear of all Liens.
1.2 Consideration. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, the Purchasers shall pay to the
Company (in such proportions as between the Purchasers as set forth on Schedule
1 hereto) $3,000,000 in the aggregate (the "Purchase Price") for the Shares and
the Warrants.
ARTICLE II
THE CLOSING
2.1 Time and Place. Upon the terms and subject to the satisfaction of
the conditions contained in this Agreement, including but not limited to the
Stockholder Approval and the approval by the Disinterested Directors of the
Company of the purchase by Samstock of the Shares and Warrants pursuant to this
Agreement, the closing of the issuance and sale of the
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Shares and the Warrants contemplated by this Agreement (the "Closing") 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 and concurrently with the Second
Closing, or at such other place or time as the Purchasers and the Company may
agree, but in no event at any time prior to the receipt of the Stockholder
Approval. The date and time at which the Closing actually occurs is hereinafter
referred to as the "Closing Date."
2.2 Deliveries by the Company. At the Closing, the Company shall
deliver the following to the Purchasers:
(iii) a certificate of the Secretary or any Assistant
Secretary of the Company certifying as to the receipt
by the Company of the Stockholder Approval;
(iv) stock certificates representing the Shares, in the
names of each of the Purchasers, dated as of the
Closing Date, in the respective denominations set
forth on Schedule 1 hereto;
(v) the Warrants, dated as of the Closing Date, in the
names of each of the Purchasers, dated as of the
Closing Date, in the respective denominations set
forth on Schedule 1 hereto; and ----------
(vi) all other documents, instruments and writings
required to be delivered by the Company at or prior
to the Closing Date pursuant to this Agreement.
2.3 Deliveries by the Purchasers. At the Closing, the Purchasers shall
deliver the following to the Company:
(iii) the Purchase Price by wire transfer of immediately
available funds to such accounts designated in a
writing delivered by the Company to the Purchasers no
less than two (2) business days prior to the Closing
Date or by such other means as may be agreed upon in
writing by the Company and the Purchasers; and
(iv) all other documents, instruments and writings
required to be delivered by the Purchasers at or
prior to the Closing Date pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to the Purchasers on the
date of this Agreement, which representations, warranties and covenants shall
survive the Closing to the extent hereinafter provided, that (except as set
forth in the Company's schedules delivered herewith):
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3.1 Organization and Qualification. Each of the Company and each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to carry on its business as it is now
being conducted. Each of the Company and each Subsidiary is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction (including any foreign country) where the character of its
properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed or in good standing which would not, individually or in
the aggregate, have a Material Adverse Effect.
3.2 Certificate of Incorporation and Bylaws. The Company has heretofore
made available to the Purchasers a complete and correct copy of the certificates
of incorporation of the Company and iDine and the bylaws of the Company and
iDine as currently in effect (collectively, the "Organizational Documents").
Such Organizational Documents are in full force and effect, and no other
organizational documents are applicable to or binding upon the Company or any
Subsidiary (including, without limitation, any joint venture, investment or
other agreement). Neither the Company nor iDine is in violation of any of the
provisions of its Organizational Documents.
3.3 Capitalization; Subsidiaries.
(a) The authorized capital stock of the Company consists of 70,000,000
shares of Common Stock and 10,000,000 shares of Preferred Stock. As of March 31,
2000, (i) 13,632,709 shares of Common Stock were issued and outstanding, (ii)
4,149,378 shares of Series A Preferred Stock were issued and outstanding and
(iii) no shares of Common Stock or Preferred Stock were held in the treasury of
the Company.
(b) The Shares and the Warrants shall represent approximately 8.10% of
the Fully Diluted Common Stock and 14.47% of the outstanding shares of Common
Stock as of the Closing Date.
(c) Except as set forth above in Section 3.3(a) and as set forth in
Schedule 3.3(c) hereto, and except with respect to any Equity Securities issued
by the Company in the ordinary course of business, there were as of March 31,
2000 no outstanding Equity Securities of the Company. Schedule 3.3(c) includes a
true and correct table summarizing all outstanding stock options, warrants and
other rights to acquire Equity Securities of the Company or any Subsidiary,
including the identity and title of the holder (other than the holders of the
Series A Preferred Stock), the number of shares covered, the vesting schedule
therefor, the exercise price therefor, and the termination date therefor.
(d) Each of the outstanding shares of capital stock of each Subsidiary
is duly authorized, validly issued, fully paid and nonassessable, and all such
shares are owned by the Company free and clear of all Liens, and there are no
outstanding Equity Securities of any Subsidiary other than such shares. Except
as set forth on Schedule 3.3(d) hereto, the Company does not own, directly or
indirectly, any capital stock or other equity interest in any Person other than
the Subsidiaries.
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3.4 The Shares and the Warrants. Upon payment of the Purchase Price,
the Purchasers will acquire good and marketable title to the Shares and the
Warrants, free and clear of all Liens, and such Shares shall be validly issued,
fully paid and nonassessable. Upon exercise of the Warrants, in whole or, from
time to time, in part, and upon payment of the exercise price therefor, in
accordance with the terms of the Warrants, the Purchasers will acquire good and
marketable title to the Warrant Shares, free and clear of all Liens, and such
Warrant Shares shall be validly issued, fully paid and nonassessable.
3.5 Power and Authority. The Company has all necessary corporate power
and authority to execute and deliver this Agreement, the Co-Sale and Voting
Agreement, the Investment Agreement, the Warrants and all other documents,
instruments and other writings to be executed and/or delivered by or on behalf
of the Company to the Purchasers or any of their representatives in connection
with the transactions contemplated hereby or thereby (collectively, the "Company
Transaction Documents"), to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of each of the Company Transaction Documents by the
Company, and the consummation by the Company of the transactions contemplated
hereby and thereby, have been duly and validly authorized by the Board of
Directors of the Company (the "Board") and by a majority of the Disinterested
Directors of the Company, and no other corporate proceedings on the part of the
Company are necessary to authorize the execution, delivery and performance of
the Company Transaction Documents or the consummation of the transactions
contemplated hereby and thereby, other than the Stockholder Approval. The Board
has approved each of the Company Transaction Documents and the transactions
contemplated hereby and thereby so as to render inapplicable to such
transactions, including, without limitation, the issuance to the Purchasers of
the Shares, the Warrants and Warrant Shares, the restrictions contained in
Article Seventh of the Certificate of Incorporation of the Company and the
restrictions contained in Section 203 of the Delaware General Corporation Law.
Each of the Company Transaction Documents has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof and thereof by the Purchasers, each constitutes a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms.
3.6 No Conflict; Required Filings and Consents. The execution, delivery
and performance of the Company Transaction Documents by the Company do not and
will not: (a) conflict with or violate the Organizational Documents of the
Company or any Subsidiary; (b) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any
Subsidiary or by which its or any of their respective properties are bound or
affected; (c) require any consent, approval, authorization or permit of, action
by, filing with or notification to, any Governmental Entity (other than any
filing required under Section 13(a) or (d), 14, 15(d) or 16(a) of the Exchange
Act); or (d) result in any breach or violation of or constitute a default (or an
event which with notice or lapse of time or both could become a default) or
result in the loss by the Company or any Subsidiary of a material benefit under,
or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the properties or
assets of the Company or any Subsidiary pursuant to, any Contract, Permit or
other instrument or obligation to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of their respective properties
are bound or affected; other than (i) in the case of clauses (b) and (d) for
such
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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.
3.8 Compliance; No Violation. Each of the Company and each Subsidiary
is in compliance with, and is not in default or violation of, (i) its respective
Organizational Documents and (ii) all Contracts, Permits and other instruments
or obligations to which any of them are a party or by which any of them or any
of their respective properties may be bound or affected, except, in the case of
clause (ii), for any such failures of compliance, defaults and violations which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Since January 1, 2000, neither the Company nor any
Subsidiary has received notice of any revocation or modification of any federal,
state, local or foreign Permit material to the Company and its subsidiaries
taken as a whole.
3.9 SEC Documents; Undisclosed Liabilities.
(a) Since September 30, 1998, the Company has filed all required
reports, schedules, forms, proxy, registration and other statements and other
documents with the SEC (collectively, the "SEC Documents"). As of the date of
this Agreement, the last SEC Document filed by the Company was its Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999. As of their
respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents. As of their respective filing dates, none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent such statements have been modified or
superseded by a later SEC Document filed and publicly available prior to the
Closing Date, the circumstances or bases for which modifications or
supersessions have not and will not individually or in the aggregate
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result in any material liability or obligation on behalf of the Company under
the Securities Act, the Exchange Act, the rules promulgated under the Securities
Act or the Exchange Act, or any federal, state or local anti-fraud, blue-sky,
securities or similar laws. The consolidated financial statements of the Company
included in the SEC Documents (as amended or supplemented by any later filed SEC
Document filed and publicly available prior to January 1, 2000), comply as to
form in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in
notes thereto) and fairly present the consolidated financial position of the
Company and the Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
Except as set forth in the SEC Documents, neither the Company nor any Subsidiary
has any obligation or liability of any nature whatsoever (direct or indirect,
matured or unmatured, absolute, accrued, contingent or otherwise) either (i)
required by generally accepted accounting principles to be set forth on a
consolidated balance sheet of the Company and the Subsidiaries or in the notes
thereto or (ii) which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect whether or not required by generally
accepted accounting principles to be provided or reserved against on a balance
sheet prepared in accordance with generally accepted accounting principles;
other than liabilities and obligations reflected or reserved against in the
consolidated financial statements of the Company and its consolidated
subsidiaries included in the Company's quarterly report on Form 10-Q for the
quarter ended December 31, 1999, or incurred since the date of the balance sheet
included in such financial statements in the ordinary course of business which
are not individually or collectively material to the Company and the
Subsidiaries taken as a whole.
(b) At the date the Proxy Statement is first mailed to the Company's
stockholders or at the time of the Stockholders' Meeting, the Proxy Statement
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement shall comply in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder except that the Company makes no representation, warranty or covenant
with respect to any written information supplied by the Purchasers specifically
for inclusion in the Proxy Statement.
3.10 Absence of Certain Changes or Events. Except as disclosed in the
SEC Documents, since January 1, 2000, the Company and the Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice, and there has not occurred any event, condition,
circumstance, change or development (whether or not in the ordinary course of
business) that, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing, except as set forth on Schedule 3.10 hereto or as disclosed in
any SEC Documents filed with the SEC and publicly available prior to January 1,
2000, since January 1, 2000, there has not been (i) any change by the Company in
its accounting methods, principles or practices, (ii) any revaluation by the
Company of any of its or any Subsidiary's material assets, including but not
limited to, 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
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business by the Company or any Subsidiary into any commitments or transactions
material, individually or in the aggregate, to the Company and the Subsidiaries
taken as a whole, (iv) any declaration, setting aside or payment of any
dividends or distributions in respect of the shares of Common Stock or, any
redemption, purchase or other acquisition of any of its securities, other than
semi-annual cash dividends of $.02 per share on outstanding Common Stock
consistent with past practices, (v) any grant or issuance of any Equity
Securities of the Company or any Subsidiary; or (vi) any increase in,
establishment of or amendment of any Employment, Consulting or Severance
Agreement, bonus, insurance, deferred compensation, pension, retirement, profit
sharing, stock option (including without limitation the granting of stock
options, stock appreciation rights, performance awards, or restricted stock
awards), stock purchase or other employee benefit plan or agreement or
arrangement, or any other increase in the compensation payable or to become
payable to any present or former directors, officers or employees of the Company
or any Subsidiary, except for increases in compensation in the ordinary course
of business consistent with past practice.
3.11 Absence of Litigation; Compliance. Except as set forth on Schedule
3.11 hereto or as disclosed in any SEC Documents filed with the SEC and publicly
available prior to January 1, 2000, there are no suits, claims, actions,
proceedings or investigations pending or, to the Company's knowledge, overtly
threatened against the Company or any Subsidiary, or any properties or rights of
the Company or any Subsidiary, before any arbitrator or Governmental Entity,
that (i) if determined adversely to the Company or any Subsidiary could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or (ii) seek to delay or prevent the consummation of the
transactions contemplated by this Agreement or any other Transaction Document.
Neither the Company nor any Subsidiary nor any of their respective properties is
or are subject to any order, writ, judgment, injunction, decree, determination
or award having, or which in the future could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or could prevent or
delay the consummation of the transactions contemplated by this Agreement or any
other Transaction Document. Neither the Company nor any Subsidiary is in
violation of, nor has the Company or any Subsidiary violated, any applicable
provisions of any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise, or other instrument or obligations to which the
Company or any Subsidiary is a party or by which the Company, any Subsidiary or
any of their respective properties are bound or affected except for any such
violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Except as disclosed in the SEC
Documents filed with the SEC and publicly available prior to January 1, 2000,
the Company and its Subsidiaries are in compliance with all applicable statutes,
laws, ordinances, rules, orders and regulations of any Governmental Entity
(including, without limitation, with respect to employment and employment
practices, immigration laws relevant to employment, and terms and conditions of
employment and wages and hours) except for any failures to comply which could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except as disclosed in the SEC Documents filed with the SEC and
publicly available prior to January 1, 2000, no investigation by any
Governmental Entity with respect to the Company or any Subsidiary is pending or
threatened.
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
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"Material Contracts") have been filed with or described in the Company's SEC
Documents. Neither the Company nor any Subsidiary is, or has received any notice
or has any knowledge that any other party is, in default in any respect under
any Material Contract, except for those defaults which would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and there has not occurred any event that with the lapse of time
or the giving of notice or both would constitute such a default by the Company
or any Subsidiary or, to the Company's knowledge, by any other party. To the
Company's knowledge, no party to any Material Contract has threatened to
terminate such Material Contract (or modify such Material Contract in a manner
detrimental to the Company or any Subsidiary).
3.13 Intellectual Property. The Company and each of its Subsidiaries
owns, or is licensed to use (in each case, free and clear of any Liens) all
patents, trademarks, trade names, copyrights, technology, know-how, trade
secrets, processes and computer software (including, without limitation, all
documentation and source and object codes with respect to such software) used in
or necessary for the conduct of its business as currently conducted which are
material to the business, operations, assets, prospects, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole. To
the Company's knowledge, the use of such patents, trademarks, trade names,
copyrights, technology, know-how, trade secrets, processes and computer software
(including, without limitation, all documentation and source and object codes
with respect to such software) by the Company and its Subsidiaries does not
infringe or otherwise violate the rights of any person. To the Company's
knowledge, no person is infringing any right of the Company or any Subsidiary
with respect to any such patents, trademarks, trade names, copyrights,
technology, know-how, processes or computer software (including, without
limitation, all documentation and source and object codes with respect to such
software).
3.14 Vote Required. The affirmative vote of the holders of no more than
a majority of the outstanding shares of Common Stock and the Series A Preferred
Stock, voting together as a class, is the only vote of the holders of any class
or series of capital stock or other Equity Securities of the Company necessary
to approve the issuance and sale of the Shares and the Warrants.
3.15 Takeover Status. No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws or applicable stock exchange rules or regulations,
including, without limitation, Section 203 of the Delaware General Corporation
Law, applicable to the Company or any Subsidiary is applicable to the
transactions contemplated hereby or by any other Transaction Document, taken
individually or in the aggregate.
3.16 Compliance with Securities Laws. The Company has not taken, and
will not take, any action which would subject the issuance and sale of the
Shares, the Warrants and/or the Warrant Shares pursuant to this Agreement to the
provisions of Section 5 of the Securities Act, or violate the registration or
qualification provisions of any securities or blue sky laws of any applicable
jurisdiction, and, based in part on the representations of the Purchasers in
Section 4.5, 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.
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3.17 Brokers. No broker, finder, investment banker or other person is
entitled to receive from the Purchasers any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by the Company
Transaction Documents based upon arrangements made by or on behalf of the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby severally, but not jointly, represents,
warrants and covenants to the Company, with respect to itself, himself or
herself, on the date of this Agreement and again on the Closing Date, which
representations and warranties shall survive the Closing, as follows:
4.1 Organization. Each Purchaser, as applicable, is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized.
4.2 Authority Relative to This Agreement, etc. Each Purchaser, as
applicable, has the requisite power and authority to execute and deliver this
Agreement, the Investment Agreement, the Co-Sale and Voting Agreement and all
other documents, instruments and other writings to be executed and/or delivered
by or on behalf of such Purchaser to the Company or any of its representatives
in connection with the transactions contemplated hereby or thereby
(collectively, "Purchaser Transaction Documents"), to perform its, his or her
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of each
of the Purchaser Transaction Documents by such Purchaser and the consummation by
such Purchaser of the transactions contemplated hereby and thereby have been
duly authorized by the requisite officer, manager, partner or member of such
Purchaser, and no other proceedings on the part of such Purchaser, are necessary
to authorize the execution, delivery and performance of the Purchaser
Transaction Documents or the transactions contemplated hereby or thereby. Each
of the Purchaser Transaction Documents has been duly executed and delivered by
such Purchaser, as the case may be, and, assuming due authorization, execution
and delivery by the Company, constitutes a legal, valid and binding obligation
of such Purchaser, as the case may be, enforceable against such Purchaser, as
the case may be, in accordance with its terms.
4.3 No Conflict; Required Filings and Consents. The execution, delivery
and performance of the Purchaser Transaction Documents by such Purchaser, as the
case may be, does not and will not: (i) conflict with or violate the
organizational documents of such Purchaser, as the case may be; (ii) conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to such Purchaser, as the case may be, or by which any of their properties are
bound or 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
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of termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the property or assets of such Purchaser, as the
case may be, pursuant to, any Contract, Permit or other instrument or obligation
to which such Purchaser, as the case may be, is a party or by which such
Purchaser, as the case may be, or any of its properties are bound or affected,
except, in the case of clauses (ii), (iii) and (iv), for any such conflicts,
violations, breaches, defaults or other occurrences which could not,
individually or in the aggregate, reasonably be expected to impair or delay the
ability of such Purchaser, as the case may be, to perform its obligations under
this Agreement.
4.4 Brokers. No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by the Purchaser Transaction Documents based
upon arrangements made by or on behalf of such Purchaser.
4.5 Investment Intent. Each of the Purchasers (i) agrees that the
Shares, the Warrants and the Warrant Shares have not been registered under the
Securities Act or any state securities laws and may not be sold or transferred
except pursuant to a registration statement or pursuant to an exemption from the
Securities Act, (ii) is purchasing the Shares and the Warrants and will purchase
the Warrant Shares for its own account for investment, and not with a view to,
or for resale in connection with, any public distribution of the Shares, the
Warrants or any Warrant Shares and (iii) agrees to include in any Schedule 13D
filed with the SEC covering the Shares and the Warrant Shares a statement
asserting their investment intent, such statement to be in a form that is
reasonably satisfactory to the Company.
4.6 Share Ownership. Except as set forth on the Purchasers' Schedule
4.6, the Purchasers do not beneficially own any Equity Securities.
4.7 Proxy Statement. The information supplied or to be supplied by the
Purchasers in writing specifically for inclusion in the Proxy Statement will
not, at the date the Proxy Statement is first mailed to the Company's
stockholders or at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
4.8 Availability of Funds. Each Purchaser has on hand and will have on
the Closing Date sufficient funds to pay the Purchase Price then payable in
accordance with the terms of this Agreement and all fees and expenses incurred
in connection with the transactions contemplated hereby for which each Purchaser
is responsible.
4.9 The Purchasers not "Interested Stockholders". Except to the extent
that they may be deemed such by virtue of this Agreement and the Co-Sale and
Voting Agreement, neither the Purchasers, nor any of their affiliates, are an
"interested stockholder" of the Company within the meaning of Section 203 of the
Delaware General Corporation Law or Article 7 of the Company's Certificate of
Incorporation.
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ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access to Information. The Purchasers are entitled to continue
their due diligence investigation of the Company and the Subsidiaries, including
without limitation, any business, legal, financial or environmental due
diligence as the Purchasers deem appropriate. The Company will permit the
Purchasers and their authorized representatives, accountants, attorneys,
advisors and consultants full access to the Company's and the Subsidiaries'
property and all records and other data with respect to the Company, the
Subsidiaries, and their respective properties, assets, operations, sales and
marketing activities, and products and services, as is reasonably requested, and
will provide such assistance as is reasonably requested. Upon prior notification
to the Company, the Purchasers are entitled to contact and communicate with
employees, participating merchants (i.e., restaurants, other vendors and credit
card companies), legal advisors and accountants of the Company and the
Subsidiaries.
5.2 Filings. As promptly as practicable after the date of this
Agreement, the Company and the Purchasers shall make or cause to be made all
filings and submissions under laws and regulations applicable to the Company and
the Purchasers, if any, as may be required for the consummation of the
transactions contemplated by this Agreement. The Purchasers and the Company
shall coordinate and cooperate in exchanging such information and providing such
reasonable assistance as may be requested by any of them in connection with the
filings and submissions contemplated by this Section 5.2.
5.3 Stockholders' Meeting. The Company acting through the Board shall,
in accordance with applicable law, as soon as practicable:
(a) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Stockholders' Meeting") for the purpose of considering
and taking action upon the Proxy Proposal;
(b) include in the proxy statement (the "Proxy Statement") to be
distributed to the Company's stockholders in connection with the Proxy Proposal,
including any amendments or supplements thereto (which Proxy Statement shall be
in form and content reasonably satisfactory to the Purchasers), the
recommendation of the Board that the stockholders of the Company vote in favor
of the approval of the Proxy Proposal;
(c) provide a reasonable opportunity for the Purchasers and their
counsel to review and provide comment on the Proxy Statement prior to its
filing;
(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
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(e) cause the Proxy Statement (i) not to contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (ii) to comply as
to form in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations thereunder, provided that the Company makes no
covenant with respect to any written information supplied by the Purchasers
specifically for inclusion in the Proxy Statement.
5.4 Agreement to Cooperate; Further Assurances. Subject to the terms
and conditions of this Agreement, each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the other Transaction Documents, including providing
information and using reasonable efforts to obtain all necessary or appropriate
waivers, consents and approvals, and effecting all necessary registrations and
filings. In case at any time after the Closing Date any further action is
necessary or desirable to transfer any Shares, the Warrants or the Warrant
Shares to the Purchasers or otherwise to carry out the purposes of this
Agreement and the other Transaction Documents, the Company and the Purchasers
shall execute such further documents and shall take such further action as shall
be necessary or desirable to effect such transfer and to otherwise carry out the
purposes of this Agreement and the other Transaction Documents, in each case to
the extent not inconsistent with applicable law.
5.6 Public Announcements. Any public announcement made by or on behalf
of any Purchaser or the Company prior to the termination of this Agreement
pursuant to Article VII hereof concerning this Agreement, the transactions
described herein or in any other Transaction Document or any other aspect of the
dealings heretofore had or hereafter to be had between the Company and the
Purchasers and their respective Affiliates must first be approved in writing by
the other (any such approval not to be unreasonably withheld), subject to the
Company's obligations under applicable law or New York Stock Exchange rules and
listing requirements as a public company (but the Company shall use its best
efforts to consult with the Purchasers as to all such public announcements).
5.7 Notification of Certain Matters. The Company shall promptly provide
the Purchasers (or their counsel) with copies of all filings made by the Company
with the SEC or any other Governmental Entity in connection with this Agreement,
the other Transaction Documents and the transactions contemplated hereby and
thereby.
5.8 Representations and Warranties. The Company shall give prompt
notice to the Purchasers, and the Purchasers shall give prompt notice to the
Company, of (a) any representation or warranty made by such party contained in
this Agreement that is qualified as to materiality becoming untrue or inaccurate
in any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect prior to the Closing or
(b) the failure by such party prior to the Closing to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by such party under this Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
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5.9 Use of Proceeds. Unless otherwise approved by the Board, the
proceeds raised by the Company pursuant to this Agreement shall be used solely
for the development of iDine.
ARTICLE VI
CONDITIONS AND SCHEDULE UPDATES
6.1 Conditions to Obligation of Each Party. The respective obligations
of each party to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or decree by any court of competent
jurisdiction which prevents the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents or
imposes material conditions with respect thereto shall have been issued
and remain in effect (each party agreeing to use its reasonable efforts
to have any such injunction, order or decree lifted);
(b) No action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any Governmental Entity which
would prevent the consummation of the transactions contemplated by this
Agreement or the other Transaction Documents or impose material
conditions with respect thereto;
(c) All orders, consents and approvals of Governmental
Entities legally required for the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents shall
have been obtained and be in effect at the Closing Date;
(d) The Shares and the Warrant Shares to be issued at the
Closing shall have been approved for listing by the New York Stock
Exchange upon official notice of issuance; and
(e) The Proxy Proposal shall have received Stockholder
Approval.
6.2 Condition to Obligations of the Company. The obligation of the
Company to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior the Closing Date (except as noted below)
of the following additional conditions:
(a) The Purchasers shall have performed in all material
respects all obligations by the Purchasers required to be performed at
or prior to the Closing Date, and the representations and warranties of
the Purchasers contained in this Agreement shall be true and correct in
all material respects (if not qualified by materiality) and true and
correct (if so qualified) on and as of the date of this Agreement and
at and as of the Closing Date as if made at and as of the Closing Date,
except to the extent that any such representation or warranty expressly
relates to another date (in which case, as of such
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date) and the Company shall have received a certificate signed on
behalf of each the Purchasers, to such effect;
(b) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction to
prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents; and
(c) All consents, approvals, authorizations and permits of,
actions by, filing with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made.
6.3 Conditions to Obligations of the Purchasers. The obligations of the
Purchasers to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to the Closing Date of the following
additional conditions:
(a) The Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at
or prior to the Closing Date, and the representations and warranties of
the Company contained in this Agreement shall be true and correct in
all material respects (if not qualified by materiality) and true and
correct (if so qualified) on and as of the date of this Agreement and
at and as of the Closing Date (as modified by the matters or
circumstances reflected in the Updated Schedules, if any, provided by
the Company to the Purchasers in accordance with Section 6.4 hereof) as
if made at and as of the Closing Date, except to the extent that any
such representation or warranty expressly relates to another date (in
which case, as of such date) and the Purchasers shall have received a
certificate from the Company signed by an executive officer), to such
effect;
(b) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction
which action or proceeding has been brought by a Governmental Entity
and which is reasonably likely to have a Material Adverse Effect or to
prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents;
(c) All consents, approvals, authorizations and permits of,
actions by, filings with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made;
(d) All conditions to the Second Closing shall have been
satisfied, and such Second Closing shall occur concurrently herewith;
and
(e) The Purchasers shall have received an opinion of Morgan,
Lewis & Bockius LLP, counsel to the Company, containing the opinions in
the form attached hereto as Exhibit B with such provisions concerning
scope of firm's inquiry, law covered by opinion, reliance by the firm,
assumptions, definition of firm's "knowledge",
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qualifications, limitations and similar matters as shall be reasonably
acceptable to the Company.
6.4 Schedule Updates. At any time prior to two (2) business days prior
to the Closing, the Company shall be entitled to update any schedule referred to
in Article III of this Agreement or add new schedules not referred to in or
contemplated by Article III by written notice to the Purchasers if necessary in
order to make the corresponding representations and warranties true and correct
as of the Closing Date; provided that such updated or new Schedules may only
reflect changes in circumstances or matters arising subsequent to the date of
the execution of this Agreement that are not the result of any action
undertaken, or failure to act, by the Company or the Subsidiaries in breach of
any provision of this Agreement (any such updated or new schedules, "Updated
Schedules"); it being understood that the Company shall not be entitled to
reflect in any Updated Schedules any circumstances, matters or facts which were
in existence as of or prior to the date of this Agreement, whether or not the
Company knew or should have known of such circumstances, matters or facts as of
the date of this Agreement). If, in accordance with the immediately preceding
sentence, new schedules are added, the applicable section or subsection of
Article III corresponding to such new schedule shall be read to include the
words "except as set forth in Schedule [insert applicable section or subsection
number]" or words of similar meaning to appropriately connote the modifications
created by such new schedule. The delivery of any Updated Schedules pursuant to
this Section 6.4 shall not cure any breach of any representation, warranty or
covenant made in this Agreement as of the date of this Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the Closing
Date:
(a) By mutual written consent of the Purchasers and the
Company;
(b) By the Purchasers if there has been a material breach by
the Company of any representation, warranty, covenant or agreement set
forth in this Agreement, which breach has not been cured within ten
(10) business days following receipt by the breaching party of notice
of such breach;
(c) By the Company, if there has been a material breach by the
Purchasers of any representation, warranty, covenant or agreement set
forth in this Agreement which breach has not been cured within ten (10)
business days following receipt by the breaching party of notice of
such breach;
(d) By the Purchasers, upon notice to the Company, if the
Closing shall not have occurred on or before the one hundred twentieth
(120th) day following the date of this Agreement, unless the absence of
such occurrence shall be due to the failure of the Purchasers to
perform in all material respects each of its obligations under this
Agreement required to be performed by it at or prior to the Closing;
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(e) By the Purchasers or the Company, upon notice to the
other, if the Company's stockholders fail to adopt the Proxy Proposal
at the Stockholders' Meeting; and
(f) By the Purchasers, if the Board of Directors of the
Company shall withdraw, modify or change its approval or recommendation
of the Proxy Proposal in a manner adverse to the Purchasers or shall
have resolved to do so.
ARTICLE VIII
INDEMNIFICATION
8.1 General. From and after the Closing, the parties shall indemnify
each other as provided in this Article VIII. No specifically enumerated
indemnification obligation with respect to a particular subject matter as set
forth below shall limit or affect the applicability of a more general
indemnification obligation as set forth below with respect to the same subject
matter. For the purposes of this Article VIII, each party shall be deemed to
have remade all of its representations, warranties and covenants contained in
this Agreement at the Closing with the same effect as if originally made at the
Closing, except that the Purchasers shall be deemed to have remade the
representations and warranties contained in Section 4.5 and Section 4.9 at the
Closing with the same effect as if originally made at the Closing. No Person
which may be subject to an indemnification obligation under this Article VIII
shall be entitled to require that any action be brought against any other Person
before action is brought against it hereunder by a Person seeking
indemnification by such Person.
8.2 The Company's Indemnification Obligations. The Company shall
indemnify, save and keep harmless each of the Purchasers and each of their
respective officers, directors, employees, agents, representatives, Affiliates,
successors and permitted assigns against and from all Damages sustained or
incurred by any of them resulting from or arising out of or by virtue of any
inaccuracy in, breach of or other failure to comply with any representation,
warranty or covenant made by the Company in this Agreement or any other Company
Transaction Document. A claim for indemnification under this Section 8.2 must be
asserted by notice delivered to the Company within ninety (90) days after the
Company files with the SEC its Annual Report on Form 10-K for the year ended
September 30, 2001 (such ninetieth (90th) day, hereinafter the "Survival Date");
provided, however, that any claims for any inaccuracy in, breach of or other
failure to comply with any representation, warranty or covenant made by the
Company under Section 3.1, Section 3.5 or Section 3.15 may be made at any time
prior to the expiration of any statute of limitations, if any, applicable to
such claims. Notwithstanding anything to the contrary in this Agreement, no
investigation or lack of investigation by any Purchaser, nor any disclosure in
any Schedule hereto or knowledge of any Purchaser as to any indemnifiable
matters referred to in this Section 8.2, shall in any way limit the Company's
indemnification obligations hereunder.
8.3 The Purchasers' Indemnification Obligations. Each of the
Purchasers, severally and not jointly, shall indemnify, save and keep harmless
the Company and its officers, directors, employees, agents, representatives,
Affiliates, successors and permitted assigns against and from
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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
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.
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"Contract" means any contract, agreement, commitment, indenture, lease,
note, bond, mortgage, license, plan, arrangement or understanding, whether
written or oral.
"Co-Sale and Voting Agreement" means that certain Co-Sale and Voting
Agreement, dated as of even date herewith, among Samstock, the Purchasers and
the Company.
"Damages" means all liabilities, demands, claims, actions or causes of
action, regulatory, legislative or judicial proceedings or investigations,
assessments, levies, losses, fines, penalties, damages, costs and expenses,
including, without limitation, reasonable attorneys', accountants',
investigators', and experts' fees and expenses, sustained or incurred in
connection with the defense or investigation of any of the foregoing.
"Disinterested Directors" has the meaning set forth in that certain
Second Amended and Restated Investment Agreement dated as of June 30, 1999,
among the Company, Samstock, EGI-Transmedia Investors, L.L.C., a Delaware
limited liability company (formerly known as Transmedia Investors, L.L.C.) and,
solely with respect to Section 5 of this agreement, Robert M. Steiner, as
trustee under declaration of trust dated March 9, 1983, as amended, establishing
the Robert M. Steiner Revocable Trust.
"Employment, Consulting or Severance Agreements" means all oral and
written (i) agreements for the employment for any period of time whatsoever, or
in regard to the employment, or restricting the employment, of any employee of
the Company or any Subsidiary, (ii) consulting, independent contractor or
similar agreements, and (iii) policies, agreements, arrangements or
understandings relating to the payment or provision of severance, termination or
similar pay or benefits to any present or former employees, officers, directors,
consultants, independent contractors or other agents of the Company or any
Subsidiary (including, without limitation, the Company's Senior Executive
Severance Policy, any successor thereto or any similar plan).
"Equity Securities" means, with respect to the Company or any
Subsidiary, as the case may be, (i) any class or series of common stock,
preferred stock or other capital stock, whether voting or non-voting, including,
without limitation, with respect to the Company, Common Stock and Preferred
Stock, (ii) any other equity securities issued by the Company or such
Subsidiary, as the case may be, whether now or hereafter authorized for issuance
by the Company's or such Subsidiary's, as the case may be, Certificate of
Incorporation, (iii) any debt, hybrid or other securities issued by the Company
or such Subsidiary, as the case may be, which are convertible 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
B-18
<PAGE>
may be, having the right to vote (or convertible into, or exchangeable for
securities having the right to vote) on any matters on which the stockholders of
the Company or such Subsidiary, as the case may be, may vote.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fully Diluted Common Stock" means the total number of shares of Common
Stock outstanding after taking into account the following: (i) all shares of
Common Stock outstanding (exclusive of the Shares); (ii) all Shares and Warrant
Shares (assuming full exercise of the Warrants and issuance of all Warrant
Shares); (iii) all shares of Common Stock issuable upon conversion, exchange or
other exercise of the Company's Equity Securities outstanding; and (iv)
adjustments needed to account or adjust for stock splits, stock dividends,
recapitalizations, recombinations and similar events.
"Governmental Entity" means any court, administrative agency or
commission or other governmental authority or instrumentality, whether domestic
(federal, state or local) or foreign.
"iDine" means iDine.com, Inc., a Delaware corporation and a wholly
owned subsidiary of the Company established to develop an internet based dining
business.
"Independent Directors" means directors of the Company who (i) are not
current or former employees or officers of the Company, (ii) are not holders of
more than 5% of the outstanding Common Stock, and (iii) have no financial
interest in and are not otherwise associated with the Purchasers, the Company,
any Subsidiary or any holder of more than 5% of the outstanding Common Stock or
any of their respective Affiliates, excluding however any equity interest of not
more than 2% of any publicly-held entity other than the Company. The term
"associated" means having a business, financial or familial relationship that
might reasonably be expected to affect the individual's judgment with respect to
matters in which the associated person might be interested.
"Investment Agreement" means that certain Investment Agreement, dated
as of even date herewith, among the Company and the Purchasers.
"Lien" means any preemptive or similar rights of any third party,
purchase options, calls, proxies, voting trusts, voting agreements, judgments,
pledges, charges, assessments, levies, 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.
B-19
<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 Shares
and the Warrants.
"Samstock" means Samstock, L.L.C., a Delaware limited liability
company.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
"Second Closing" shall have the meaning set forth in that certain Stock
Purchase and Sale Agreement, dated as of April 28, 2000, by and among Minotaur
Partners II, L.P., an Illinois limited partnership, ValueVision International
Inc., a Minnesota corporation, Dominic Mangone, Raymond Bank and the Company.
"Series A Preferred Stock" means the Series A Senior Convertible
Redeemable Preferred Stock, par value $.10 per share, of the Company.
"Stockholder Approval" means the requisite approval of the Company's
stockholders under the Company's Organizational Documents and the Delaware
General Corporation Law for the Proxy Proposal.
"Subsidiary" means each of (i) Transmedia Restaurant Company Inc., a
Delaware corporation, (ii) TMN International Incorporated, a Delaware
corporation, (iii) Transmedia Service Company Inc., a Delaware corporation, and
(iv) iDine.
"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:
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<PAGE>
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be
sold, transferred, assigned, offered, pledged or otherwise
disposed of unless (i) there is an effective registration
statement under such Act and such laws covering such
securities or (ii) such sale, transfer, assignment, offer,
pledge or other disposition is exempt from the registration
and prospectus delivery requirements of such Act and such
laws. The securities evidenced by this certificate are subject
to the restrictions on transfer contained in the Investment
Agreement dated as of April 28, 2000, and the Co-Sale and
Voting Agreement dated as of April 28, 2000, in each case, to
which the Company is a party, as amended, supplemented or
otherwise modified from time to time, and may not be
transferred except in compliance therewith."
10.2 Notices. All notices, and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile, to
the appropriate address or facsimile number set forth below (or at such other
address or facsimile number for a party as shall be specified by like notice):
if to any Purchaser, at their respective addresses
set forth on the signature pages hereto.
with an additional copy to:
---------------------------
---------------------------
---------------------------
if to the Company:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Attention: Chief Executive Officer
Fax: (305) 892-3342
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
B-21
<PAGE>
arising out of the execution, delivery and performance of this Agreement and the
other Company Transaction Documents and the consummation of the transaction
contemplated hereby and thereby, including attorneys', accountants' and other
professional fees and expenses. The Purchasers shall bear all fees and expenses
incurred by the Purchasers in connection with, relating to or arising out of the
execution, delivery and performance of this Agreement and the other Purchaser
Transaction Documents and the consummation of the transaction contemplated
hereby and thereby, including attorneys', accountants' and other professional
fees and expenses.
10.4 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible
10.5 Entire Agreement; Amendment; Waiver; Assignment; Nature of
Obligations. This Agreement, together with the other Transaction Documents,
constitutes the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof and thereof. No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision of this
Agreement, whether or not similar, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided. This Agreement shall not be assigned
by operation of law or otherwise; provided, however, that, notwithstanding the
foregoing, each Purchaser may assign its or their rights and obligations
hereunder to (i) any controlled Affiliate of such Purchaser, (ii) any officer,
manager, partner or member of such Purchaser, (iii) any Affiliate of any
officer, manager, partner or member of such Purchaser, (iv) any family member of
such Purchaser or (v) any trust established for the benefit of any family member
of such Purchaser (each of (i), (ii), (iii), (iv) and (v), a "Permitted
Assignee"), upon the receipt by the Company of the written agreement of any such
Permitted Assignee to be bound by the terms of each of the Purchaser Transaction
Documents; provided further, however, that no such assignment shall relieve the
assigning party of any of its liabilities or obligations under this Agreement.
Any attempted assignment which does not comply with the provisions of this
Section 10.5 shall be null and void ab initio.
10.6 Parties in Interest. Subject to the provisions regarding
assignment in Section 10.5 above, this Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
10.7 Publicity. Neither the Company nor the Purchasers will make or
issue, or cause to be made or issued, any announcement or written statements
concerning the Transaction
B-22
<PAGE>
Documents or the transactions contemplated thereby for dissemination to the
general public without the prior written consent of the Company or the
Purchasers, as appropriate, which consent shall not be unreasonably withheld.
This provision will not apply to any announcement or written statement required
to be made by law or the regulations of the SEC or the New York Stock Exchange,
except that the party required to make such announcement will, whenever
practicable, consult with the other parties hereto concerning the timing and
content of such announcement before such announcement is made.
10.8 Governing Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware applicable to contracts
made in that State.
10.9 Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.10 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender (including neutral gender) shall extend to and
include all genders.
10.11 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
10.12 Jurisdiction and Service of Process. THE COMPANY AND THE
PURCHASERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREE THAT, SUBJECT TO THE
OTHER PROVISIONS OF THIS AGREEMENT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT WHICH MAY BE LITIGATED SHALL BE LITIGATED IN SUCH
COURTS. EACH OF THE COMPANY AND THE PURCHASERS ACCEPTS FOR SUCH PARTY AND IN
CONNECTION WITH SUCH PARTY'S PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE COMPANY AND THE
PURCHASERS AGREES TO ACCEPT SERVICE OF ALL PROCESS BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED BY EACH SUCH PARTY TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. IF ANY AGENT APPOINTED BY THE COMPANY OR THE
PURCHASERS REFUSES TO ACCEPT SERVICE, SUCH PARTY HEREBY AGREES THAT SERVICE UPON
SUCH PARTY BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE COMPANY OR THE PURCHASERS TO BRING PROCEEDINGS AGAINST
B-23
<PAGE>
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.
B-24
<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:
-------------------------------------
GENE M. HENDERSON
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
HERBERT M. GARDNER
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
JAMES M. CALLAGHAN
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
GREGORY J. ROBITAILLE
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
JOHN A. WARD
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
GEORGE S. WEIDEMANN
Address:
-----------------------------
-------------------------------------
-------------------------------------
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<PAGE>
-------------------------------------
CHRISTINE M. DONOHOO
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
FRANK F. SCHMEYER
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
ELLIOT MERBERG
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
GERALD FLEISCHMAN
Address:
-----------------------------
-------------------------------------
-------------------------------------
SAMSTOCK, L.L.C.
-------------------------------------
By:
Its:
Address:
-----------------------------
-------------------------------------
-------------------------------------
-------------------------------------
TIM LITLE
Address
-----------------------------
-------------------------------------
-------------------------------------
B-26
<PAGE>
COMPANY:
TRANSMEDIA NETWORK INC.
-------------------------------
By: Gene M. Henderson, President
and Chief Executive Officer
B-27
<PAGE>
TRANSMEDIA NETWORK INC.
Special Meeting of Stockholders
To be Held on July __, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Gene M. Henderson and Keith Kiper, and
each of them, proxies, with full power of substitution, to appear on behalf of
the undersigned and to vote all shares of Common Stock, par value $.02 per
share, of Transmedia Network Inc. (the "Company") which the undersigned is
entitled to vote at the Special Meeting of Stockholders to be held at
______________________________________ on ____________, July __, 2000, at 10:00
a.m., Eastern Standard Time, and at any adjournment thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO
INSTRUCTIONS ARE SPECIFIED, THIS PROXY WILL BE VOTED FOR APPROVAL OF THE
INVESTMENT.
(Continued and to be signed on reverse side)
<PAGE>
Please Detach and Mail in the Envelope Provided
1. Approval of the issuance and sale of 1,287,480 shares of Company common
stock and five-year warrants to purchase 2,574,960 shares of Company
common stock.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. In their discretion, the proxy holders are authorized to vote upon such
other business as may properly come before the Special Meeting and any
adjournment thereof.
Please sign, date and return the proxy card promptly using the enclosed
envelope.
PLEASE CHECK HERE IF YOU PLAN TO [_]
ATTEND THE SPECIAL MEETING
Signature____________________ Signature__________________ Dated: ________, 2000
NOTE: Please sign exactly as your name appears above. When signing as an
attorney, executor, administrator, trustee or guardian, please give
your full title. If shares are held jointly, each holder should sign.
