<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________to_____________________
Commission file number 0-24404
TRANSMEDIA EUROPE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3701141
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
11 ST. JAMES'S SQUARE, LONDON SW1Y 4LB, ENGLAND
(Address of principal executive offices) (zip code)
U.K. 011-44-171-930-0706
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days
Yes [X] No [ ]
The number of shares outstanding of the issuer's common stock, $.00001 par
value, as of May 9, 1997: 13,878,792
<PAGE> 2
INDEX
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
________________________________________________________________________________
PART I : CONDENSED CONSOLIDATED FINANCIAL INFORMATION
ITEM 1 ....................................................... Pages 1-9
Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Operations for the three months ended and
the six months ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited).
Condensed Consolidated Balance Sheets as of:
- - September 30, 1996
- - March 31, 1997 (unaudited)
Condensed Consolidated Statements of Cash Flows for the three months ended and
the six months ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited).
Condensed Consolidated Statement of Changes in Stockholders Equity for the six
months ended March 31, 1997 (unaudited) and for the fiscal years ended September
30, 1995 and 1996.
Notes to the Condensed Consolidated Financial Statements
ITEM 2 ......................................................Pages 10-13
Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II: OTHER INFORMATION .....................................Page 14
SIGNATURES ......................................................Page 15
<PAGE> 3
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Three months Three months Six months Six months
ended ended ended ended
March 31, March 31, March 31, March 31,
1996 1997 1996 1997
(unaudited) (unaudited) (unaudited) (unaudited)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 726,930 $ 841,202 $ 1,524,204 $ 1,752,047
Membership fees 131,415 122,250 277,432 245,250
------------ ------------ ------------ ------------
Total revenues and fees 858,345 963,452 1,801,636 1,997,297
Cost of sales (484,621) (567,750) (1,016,136) (1,169,657)
------------ ------------ ------------
Gross profit 373,724 395,702 785,500 827,640
Selling, general and
administrative expenses (819,328) (1,083,363) (1,680,713) (2,082,108)
------------ ------------ ------------ ------------
Loss from operations (445,604) (687,661) (895,213) (1,254,468)
Share of losses of affiliated company (238,760) (184,885) (300,000) (311,637)
Interest income 5,743 1,331 8,096 5,001
------------ ------------ ------------ ------------
Loss before income taxes (678,621) (871,215) (1,187,117) (1,561,104)
Income taxes -- -- -- --
------------ ------------ ------------ ------------
Net loss before preferred share dividends (678,621) (871,215) (1,187,117) (1,561,104)
Preferred share dividends (33,605) (33,605) (67,210) (67,210)
------------ ------------ ------------ ------------
Net loss after preferred share dividends $ (712,226) $ (904,820) $ (1,254,327) $ (1,628,314)
------------ ------------ ------------ ------------
Loss per common share $ (0.06) $ (0.07) $ (0.11) $ (0.13)
Weighted average number of common
shares outstanding 11,426,680 12,678,792 11,426,680 12,455,681
------------ ------------ ------------ ------------
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
1
<PAGE> 4
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
September 30, March 31,
1996 1997
(unaudited)
------------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 61,661 $ 141,469
Trade accounts receivable 105,167 35,660
Restaurant credits, (net of allowance for irrecoverable
credits of $399,328 at September 30, 1996 and of
$469,007 at March 31, 1997) 1,309,279 1,335,527
Amounts due from related parties (note 3) 114,246 67,352
Prepaid expenses and other current assets 264,478 224,551
---------- ----------
TOTAL CURRENT ASSETS 1,854,831 1,804,559
NON-CURRENT ASSETS
Investment in affiliated company (note 2) 698,141 694,249
Property and equipment (net of accumulated
depreciation of $104,262 at September 30, 1996
and $132,398, at March 31, 1997) 76,357 57,280
Intangible assets (net of accumulated
amortization of $324,248 at September 30, 1996
and $378,300 at March 31, 1997) 1,297,026 1,242,984
Other assets (note 4) -- 406,952
---------- ----------
TOTAL ASSETS $3,926,355 $4,206,024
========== ==========
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
2
<PAGE> 5
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
September 30, March 31,
1996 1997
(unaudited)
----------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 483,229 $ 776,604
Deferred membership fee income 352,542 290,389
Accrued liabilities 438,395 633,050
Amount due to related party (note 3) -- 271,403
----------- ------------
TOTAL CURRENT LIABILITIES 1,274,166 1,971,446
NON-CURRENT LIABILITIES
Deferred license fee income 500,000 500,000
----------- ------------
Total liabilities 1,774,166 2,471,446
----------- ------------
STOCKHOLDERS' EQUITY
6 1/2 % Convertible Preferred Shares, $0.01 par value, 5,000,000 shares
authorised, 590,857 issued and outstanding shares at
September 30, 1996 and March 31, 1997 5,909 5,909
Common stock, $.00001 par value, 95,000,000 shares authorised,
12,319,537 issued and outstanding at September 30, 1996
and 12,875,787 at March 31, 1997 123 128
Additional paid in capital 9,647,072 10,744,567
Accumulated deficit (6,908,928) (8,537,242)
Treasury Stock (196,995 shares) (517,112) (517,112)
Unearned compensation -restricted stock (78,000) --
Cumulative foreign currency translation
adjustment 3,125 38,328
----------- ------------
Total stockholders' equity $ 2,152,189 $ 1,734,578
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,926,355 $ 4,206,024
=========== ============
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
3
<PAGE> 6
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Three months Three months Six months Six months
ended ended ended ended
March 31, March 31, March 31, March 31,
1996 1997 1996 1997
(unaudited) (unaudited) (unaudited) (unaudited)
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Cash flows from Operating Activities:
- Net loss before preferred dividends $(678,621) $(871,215) $(1,187,117) $(1,561,104)
Adjustment to reconcile net loss
to net cash used in operating activities
- Depreciation and amortization 37,677 38,346 75,052 76,760
- Amortization of deferred compensation 81,000 -- 162,000 78,000
- Provision for irrecoverable restaurant credits 21,682 5,631 45,600 69,678
- Share of losses of affiliated company 238,760 184,885 300,000 311,637
Changes in assets and liabilities:
- Trade accounts payable (78,570) 192,347 (60,619) 254,717
- Accrued liabilities 288,199 170,848 249,316 170,900
- Restaurant credits (144,330) 60,126 (216,410) 8,816
- Trade accounts receivable (144,120) (5,840) (62,020) 77,921
- Prepaid expense and other current assets (53,395) 11,426 (53,395) 47,179
- Deferred membership fees (76,133) (69,753) (110,270) (90,356)
--------- --------- ----------- -----------
Net cash used in operating activities (507,851) (283,199) (857,863) (555,852)
--------- --------- ----------- -----------
Cash flows from investing activities:
- Due from/(to) related parties 352,902 260,329 221,721 318,297
- Purchase of property and equipment (20,110) -- (20,110) --
- Loan to affiliated company (103,101) -- (125,567) --
- Net investment in affiliated company -- (315,000) -- (315,000)
- Purchase of NHS option -- (8,205) -- (142,946)
- Purchase of Countdown option -- (264,006) -- (264,006)
--------- --------- ----------- -----------
Net cash (used in)/provided by investing activities 229,691 (326,882) 76,044 (403,655)
--------- --------- ----------- -----------
Cash flows from financing activities:
- Net proceeds received from issuance of
common stock -- -- -- 1,097,500
- Payment of preferred share dividends 34,204 (55,045) (13,998) (78,526)
- Bank overdraft 22,855 -- (14,107) --
--------- --------- ----------- -----------
Net cash (used in)/provided by financing activities 57,059 (55,045) (28,105) 1,018,974
--------- --------- ----------- -----------
Effect of foreign currency on cash 15,973 (41,947) 15,973 20,341
--------- --------- ----------- -----------
Net (decrease)/increase in cash and
cash equivalents (205,128) (707,073) (793,951) 79,808
Cash and temporary cash investments at
beginning of period 208,088 848,542 796,911 61,661
--------- --------- ----------- -----------
Cash and temporary cash investments at
at end of period $ 2,960 $ 141,469 $ 2,960 $ 141,469
========= ========= =========== ===========
</TABLE>
Supplemental disclosures of cash flow information:
No amounts of cash were paid for interest or income taxes for each of the
periods presented See accompanying notes to the financial statements
4
<PAGE> 7
TRANSMEDIA EUROPE, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER OF COMMON NUMBER OF PREFERRED ADDITIONAL TREASURY CUMULATIVE
COMMON SHARES STOCK PREFERRED STOCK PAID-IN STOCK FOREIGN
SHARES CAPITAL CURRENCY
ADJUSTMENT
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30, 1994 11,420,680 $114 -- $ -- $ 6,447,390 -- $ 8,060
Issuance of common stock
due to exercise of options 6,000 -- -- -- 6,000 -- --
Issuance of convertible
preferred stock -- -- 590,857 5,909 2,062,091 -- --
Issue costs -- -- -- -- (103,400) -- --
Net loss after preferred
share dividends -- -- -- -- -- -- --
Effect of foreign currency
translation -- -- -- -- -- -- 2,300
Compensation expense -
restricted stock -- -- -- -- -- -- --
---------- ---- ------- ------ ------------ --------- --------
Balance, September 30, 1995 11,426,680 $114 590,857 $5,909 $ 8,412,081 -- $ 10,360
Issuance of common stock 892,857 9 -- -- 1,249,991 -- --
Issue costs -- -- -- -- (15,000) -- --
Net loss after preferred
share dividends -- -- -- -- -- -- --
Effect of foreign currency
translation -- -- -- -- -- -- (7,235)
Compensation expense -
restricted stock -- -- -- -- -- -- --
Treasury stock -- -- -- -- -- (517,112) --
---------- ---- ------- ------ ------------ --------- --------
Balance, September 30, 1996 12,319,537 $123 590,857 $5,909 $ 9,647,072 $(517,112) $ 3,125
Issuance of common stock 556,250 5 -- -- 1,112,495 -- --
Issue costs -- -- -- -- (15,000) -- --
Net loss after preferred
share dividends -- -- -- -- -- -- --
Effect of foreign currency
translation -- -- -- -- -- -- 35,203
Compensation expense -
restricted stock -- -- -- -- -- -- --
---------- ---- ------- ------ ------------ --------- --------
Balance, March 31, 1997 12,875,787 $128 590,857 $5,909 $ 10,744,567 $(517,112) $ 38,328
========== ==== ======= ====== ============ ========= ========
</TABLE>
<TABLE>
<CAPTION>
UNEARNED ACCUMULATED TOTAL
COMPENSATION DEFICIT
RESTRICTED
STOCK
<S> <C> <C> <C>
Balance, September 30, 1994 $(726,000) $(1,997,952) $ 3,731,612
Issuance of common stock
due to exercise of options -- -- 6,000
Issuance of convertible
preferred stock -- -- 2,068,000
Issue costs -- -- (103,400)
Net loss after preferred
share dividends -- (2,215,452) (2,215,452)
Effect of foreign currency
translation -- -- 2,300
Compensation expense -
restricted stock 324,000 -- 324,000
--------- ----------- -----------
Balance, September 30, 1995 $(402,000) $(4,213,404) $ 3,813,060
Issuance of common stock -- -- 1,250,000
Issue costs -- -- (15,000)
Net loss after preferred
share dividends -- (2,695,524) (2,695,524)
Effect of foreign currency
translation -- -- (7,235)
Compensation expense -
restricted stock 324,000 -- 324,000
Treasury stock -- -- (517,112)
--------- ----------- -----------
Balance, September 30, 1996 $ (78,000) $(6,908,928) $ 2,152,189
Issuance of common stock -- -- 1,112,500
Issue costs -- -- (15,000)
Net loss after preferred
share dividends -- (1,628,314) (1,628,314)
Effect of foreign currency
translation -- -- 35,203
Compensation expense -
restricted stock 78,000 -- 78,000
--------- ----------- -----------
Balance, March 31, 1997 $ -- $(8,537,242) $ 1,734,578
========= =========== ===========
</TABLE>
See accompanying notes to the condensed financial statements.
5
<PAGE> 8
TRANSMEDIA EUROPE, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The consolidated balance sheet as of September 30, 1996 was derived from
the Company's audited financial statements.
The condensed consolidated financial statements included herein have been
prepared in conformity with generally accepted accounting principles in
the United States and should be read in conjunction with the September 30,
1996 Form 10-K filing. The information presented in the unaudited
condensed consolidated financial statements, in the opinion of management,
reflects all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the results for all interim periods.
The results for the three months ended and six months ended March 31, 1997
are not necessarily indicative of the results to be expected for the full
year.
(b) Description of business
Transmedia Europe, Inc. ('the Company') was incorporated in Delaware on
February 9, 1993.
The Company's main business activity through its wholly owned subsidiary
company, Transmedia UK plc, is to make cash advances to restaurants for
food and beverage credits from certain participating restaurants, which
are then recovered as the Company's cardholders utilise their restaurant
charge card (see note 1(c)). Presently, the Company's operations are in
the United Kingdom and there is an affiliate company operating in France.
The Company has been granted a license, (the 'Transmedia License'), to
operate a specialised restaurant charge card business in Europe, Turkey
and the other countries outside of Europe that were formerly part of the
Union of Soviet Socialist Republics (the 'Licensed Territories') by
Transmedia Network Inc. ("Network"), a corporation which is incorporated
in the United States of America. The agreement to purchase the Transmedia
License was initially entered into by Conestoga Partners Inc.
('Conestoga'), a corporation which is related to the Company by virtue of
the majority shareholding in Conestoga held by Edward J Guinan III, the
President, Chief Executive Officer and a Director of the Company (see note
3).
The Company intends to expand operations in other portions of the licensed
territories through wholly-owned subsidiaries, unaffiliated sublicensees
and franchisees or through joint ventures. On April 3, 1997, the Company
purchased 50% of the outstanding capital stock of Countdown Holdings
Limited, a privately owned United Kingdom company based in London, England
("Countdown"). The balance of the outstanding capital stock of Countdown
was simultaneously purchased by Transmedia Asia Pacific, Inc. on similar
terms to the terms of the Company's purchase. The Company's element of the
consideration consisted of $800,000 (500,000 pounds sterling) in cash and
the issuance of 1,200,000 shares of Common Stock in the Company. In
addition, the Company granted an option to purchase up to 250,000 shares
of Common Stock at a purchase price of $1.00 per share to the owner of
Countdown. The cash portion of the purchase price was funded by a
$1,000,000 loan from a director and stockholder of the Company. The loan
matures on September 27, 1997, bears interest at the rate of 12% per annum
and is collateralized by a pledge of all the Countdown shares purchased by
the Company. In connection with the loan, the Company issued the director
and stockholder five-year warrants to purchase up to 125,000 shares of
Common Stock at $1.25 per share.
As of March 31, 1997, Transmedia Europe, Inc. had equity interests in the
following companies:
Name Country of Incorporation % Owned
Transmedia Europe plc United Kingdom 100
Transmedia UK plc United Kingdom 100
Transmedia UK Inc. United States of America 100
Transmedia La Carte Restaurant S.A
('Transmedia France') France 50
(c) Restaurant Credits
Restaurant credits represent the total advances made to participating
restaurants in exchange for credits less the amount by which these credits
are recouped by the Company as a result of Company cardholders utilising
their cards at participating restaurants. The amount by which such credits
are recouped amounts to approximately 50% of the retail value of food and
beverages consumed by cardholders. The Company reviews recoverability of
credits and establishes an allowance for credits to restaurants that have
ceased operations or whose credits may not be utilised by cardholders.
6
<PAGE> 9
TRANSMEDIA EUROPE, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(c) Restaurant Credits (continued)
The funds advanced to participating restaurants are generally unsecured
and are recoverable as cardholders utilise their restaurant charge card at
the respective restaurant. In certain cases, the Company may request a
personal guarantee from the owner of a restaurant with respect of the
recoverability of the advance if the restaurant ceases operations or
ceases to be a participating restaurant. Generally, no other forms of
collateral or security are obtained from the restaurant owners.
(d) Revenues
Revenues represent the retail value of food and beverages acquired from
participating restaurants by the Company's cardholders, less the 20% or
25% discount offered to cardholders. Membership fees collected on the 25%
discount card are deferred and recognised as revenue in equal monthly
instalments over the periods benefited.
(e) License Cost
The Company evaluates the carrying value of its investment in License
Costs for impairment based on an estimate of future undiscounted net cash
flows that are expected to be generated and are directly attributable to
the Transmedia License. If the sum of those estimated future undiscounted
cash flows is less than the carrying value of the license costs, it is the
policy of the Company to measure impairment on the basis of the fair value
of the license costs, using a discounted cash flow technique. In the
opinion of management, there was no permanent impairment in the carrying
value of the license costs at September 30, 1996 or at March 31, 1997.
2. INVESTMENT IN AFFILIATED COMPANY
The investment in Transmedia France consists of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1996 1997
(unaudited)
------------- -----------
<S> <C> <C>
Cost of investment $ 1,800,000 $ 2,115,000
Less: Share of license fee (466,667) (450,001)
----------- -----------
1,333,333 1,664,999
Share of losses (635,192) (970,750)
----------- -----------
$ 698,141 $ 694,249
=========== ===========
</TABLE>
Due to the provision of "put" and "call" options in the shareholders
agreement which establish a basis under which Transmedia France may become
a wholly owned subsidiary, $500,000 of the $1,000,000 sub-license fee paid
to the Company by Transmedia France in 1995 has not been recognised but
instead has been deferred until such time as these options are exercised
or expire. The remaining balance of $500,000 has also been deferred
against the investment in Transmedia France and is being amortised over a
15 year period commencing October 1995.
The Transmedia License requires the payment of a royalty to Network in the
event that the Company opens in another country being the greater of
$250,000 or 25% of the initial fee.
On April 19, 1996 Transmedia France completed a rights issue of shares.
Whilst the Company declined to subscribe, it did acquire 15,000 shares, in
an unrelated transaction, from International Advance, Inc., a company of
which Edward J Guinan III, President of the Company, is the principal
shareholder and an officer and director, in exchange for $300,000 and
certain rights to jointly develop systems unrelated to the business of
Transmedia France. Accordingly, the Company's interest was reduced to 36%.
On January 17, 1997 the Company acquired 5,300 shares from other
shareholders in Transmedia France and in addition subscribed for 67,500
partly paid shares, increasing the Company's interest to 50%. In January
1997 the Bank of France granted Transmedia France an unconditional banking
license, replacing its previous provisional license. The Company has
committed to acquiring a further 32,200 shares from other shareholders,
which would increase the Company's interest to 60%.
7
<PAGE> 10
TRANSMEDIA EUROPE, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. INVESTMENT IN AFFILIATED COMPANY (CONTINUED)
In December 1996 the Company reached an agreement with Transmedia France
under which it will grant sub-licenses for Belgium/Luxembourg, Spain,
Italy and French speaking Switzerland for 9,250,000Ffr (approximately
$1,780,000). Network has agreed to defer the 25% royalties due upon the
completion of the agreement ($800,000 in aggregate) with payment to be
made of $250,000 as each country area is opened, except for $50,000 for
French speaking Switzerland. Under certain circumstances the payment
schedule can be accelerated.
3. RELATED PARTY TRANSACTIONS
The net amounts due from/(to) related parties consist of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1996 1997
------------- ---------
<S> <C> <C>
E Guinan III $ -- $ 25,693
International Advance, Inc. 20,946 41,659
Transmedia Asia Pacific, Inc. 93,300 (271,403)
--------- ---------
$ 114,246 $(204,051)
========= =========
</TABLE>
The loans are unsecured, non interest bearing and repayable on demand.
Information regarding the activity with respect to the amounts due
from/(to) related parties is as follows:
<TABLE>
<CAPTION>
E Guinan III International Transmedia
------------ ------------- ----------
Advance, Inc. Asia Pacific, Inc.
------------- ------------------
<S> <C> <C> <C>
Balance at September 30, 1996 $ -- $ 20,946 $ 93,300
Additions 162,993 285,133 42,056
Amounts charged -- 196,908 441,991
Amounts collected (137,300) (461,328) (848,750)
--------- --------- ---------
Balance at March 31, 1997 $ 25,693 $ 41,659 $(271,403)
========= ========= =========
</TABLE>
4. OTHER ASSETS
The other assets consist of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1996 1997
---- --------
<S> <C> <C>
Investment in option to acquire:
- National Helpline Services Pty Limited $ -- $142,946
- Countdown Holdings Limited -- 264,006
---- --------
$ -- $406,952
==== ========
</TABLE>
In October 1996 the Company made an investment of $134,741, subsequently
increasing to $142,946 for ongoing legal costs, to acquire a renewable 6
month option to acquire 50% of the share capital of National Helpline
Services Pty Limited ('NHS'). Transmedia Asia Pacific, Inc. acquired an
option, on identical terms to the Company, over the remaining 50% share
capital of NHS. Although the 6 month option has expired, the Company is
currently in ongoing negotiations with the NHS management to acquire 50%
of that company. The Company currently believes that the option cost will
be offset against the purchase consideration on completion.
On March 27, 1997 International Advance, Inc., a company of which Edward J
Guinan III, Chairman of the Company, is the principal shareholder and an
officer and a director , assigned the Countdown option agreement at cost
to the Company and Transmedia Asia Pacific, Inc. for a consideration of
approximately $205,000 (125,000 sterling) each and related legal costs of
$59,006 each.
8
<PAGE> 11
TRANSMEDIA EUROPE, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
5. PROPOSED MERGER
The Company entered into an Agreement and Plan of Reorganization (the
'Agreement'), dated as of February 10, 1997, with Transmedia Asia Pacific,
Inc., a Delaware corporation, the Common Stock of which is quoted on the
NASDAQ Small Cap Market ('Transmedia Asia'), Transmedia Europe Acquisition
Corporation, a Delaware corporation and wholly-owned subsidiary of the
Company ('Europe Acquisition'), and Transmedia Asia Acquisition
Corporation, a Delaware corporation and wholly-owned subsidiary of the
Company ('Asia Acquisition').
Under the terms of the Agreement, among other things (i) the Company will
make a contribution to the capital of Europe Acquisition by conveying
substantially all of the Company's assets, except for its equity interest
in Transmedia La Carte Restaurant S.A. , to Europe Acquisition; and (ii)
immediately thereafter Asia Acquisition will merge with and into
Transmedia Asia pursuant to which Transmedia Asia will be the surviving
entity and become a wholly-owned subsidiary of the Company and holders of
Common Stock of Transmedia Asia will be entitled to receive 0.9109 of a
share of Common Stock of the Company for each Transmedia Asia share
previously owned.
6. POST BALANCE SHEET EVENT
On April 3, 1997, the Company purchased 50% of the outstanding capital
stock of Countdown Holdings Limited, a privately owned United Kingdom
company based in London, England ("Countdown"). The balance of the
outstanding capital stock of Countdown was simultaneously purchased by
Transmedia Asia Pacific, Inc. on similar terms to the terms of the
Company's purchase.
7. CONTINGENT LIABILITY
The Company did not withhold any amount from Edward J Guinan III's
remuneration with respect to either U.S. or U.K. taxes through March 31,
1997. Such treatment was used pending resolution by Edward J Guinan III
of his tax residence. Mr. Guinan has committed 500,000 shares of the
Company's Common Stock and 500,000 shares of Transmedia Asia Pacific,
Inc.'s Common Stock to be privately sold in order to provide an aggregate
of pound sterling 300,000 of tax guarantees against any potential tax
liabilities of the Company and Transmedia Asia Pacific, Inc.. Any excess
proceeds will be first used to repay any loans of Mr. Guinan and his
affiliates with the balance of the proceeds to be paid to him. There can
be no assurance as to whether such sale will be affected and/or whether
the proceeds will be adequate to cover any potential liabilities of the
Company.
9
<PAGE> 12
ITEM 2
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
GENERAL
The discussion and analysis of financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
related disclosures.
The nature of the Company's business is such that there is a lead time before
profitable operations can be anticipated. This is demonstrated in the financial
results for the three month periods ended March 31, 1997 and 1996 and the six
month periods ended March 31, 1997 and 1996. The success of the Company is
dependent upon increasing the number of cardholders ('Company Cardholders') of
the Company's card ('The Restaurant Card') and the number of restaurants
('Company Participating Restaurants'), as well as obtaining increased usage of
The Restaurant Card by Company Cardholders. The Company's joint venture
marketing partners are predominantly large size organisations, with lengthy
internal procedures. Consequently, preparing campaigns for launch and the
resulting anticipated increase in Company Cardholders is taking considerably
longer than was initially anticipated. As of May 9, 1997 the Company had
approximately 49,000 Company Cardholders and 420 Company Participating
Restaurants.
Certain statements in this Report under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation,
statements regarding future cash requirements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: the loss of a large number of
Company Cardholders or Company Participating Restaurants; general economic and
business conditions; industry capacity; industry trends; demographic changes;
competition; changes in business strategy or development plans; quality of
management; availability, terms and deployment of capital; business abilities
and judgment of personnel; availability of qualified personnel; changes in, or
the failure to comply with, government regulations; and other factors referenced
in this Report.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
The Company generated revenues of $841,202, an increase of 16% over 1996 (2%
after deducting for foreign exchange movements) for the three months ended March
31, 1997. The 2% increase in revenues is principally due to an increased number
of Company Cardholders. These grew from approximately 19,600 at March 31, 1996
to 48,800 at March 31, 1997 largely as a result of the 26,000 Company
Cardholders produced by the MBNA campaign since August 1996. The card usage
levels by MBNA campaign Company Cardholders have not exceeded 13% to date
resulting in the marginal increase in revenues. The Company decreased its number
of Company Participating Restaurants from 480 at March 31, 1996 to 420 at March
31, 1997. This decrease is attributable to the Company's policy of rationalising
Participating Restaurants with low levels of business. Membership fees for the
three months ended March 31, 1997 of $122,250 are 7% lower than for the three
months ended March 31, 1996. This decrease is as a result of a combination of
membership fees in the UK being subject to UK sales tax (VAT) since May 1996,
which the Company has borne as a cost, together with an increased number of 20%
saving Company Cardholders (no membership fee payable), netted against an
overall increase in the Cardholder base.
Cost of sales amounted to $567,750, an increase of 17% over 1996 (4% after
deducting for foreign exchange movements) for the three months ended March 31,
1997, in line with the 16% increase in revenues. Cost of sales are approximately
50% of the gross food and beverages value consumed by Company Cardholders and
represents the recovery of the advances ('Restaurant Credits') made by the
Company to the respective Company Participating Restaurants. Selling, general
and administrative expenses, consisting primarily of the costs of operations,
for the three months ended March 31, 1997 amounted to $1,083,363 representing an
increase of 32% over 1996. The increase can be mainly attributed to professional
fees of $256,000 incurred through the end of the quarter for work on the
proposed merger with Transmedia Asia Pacific, Inc.
Transmedia France incurred losses of approximately $378,353 after revenues of
$56,370 for the three months ended March 31, 1997. After taking account of the
amortisation of the Company's share of the license fee and the dividend
receivable from Transmedia France, the Company's share of those losses amounted
to $184,885. For the three months ended March 31, 1996 Transmedia France
incurred pre-trading losses of approximately $477,520. The Company's share of
those losses amounted to $238,760.
The Company earned $1,331 and $5,743 for the three months ended March 31, 1997
and 1996, respectively, from the temporary investment of excess cash funds. The
Company remains in a net operating loss carry forward position for income tax
purposes and no tax benefit has been recognised for the three months ended March
31, 1997. The Company incurred a net loss of $904,820 (increase of 27% over
1996) for the three months ended March 31, 1997. This increase is due to the 16%
increase in revenues being far outweighed by the 32% in selling, general and
administrative expenses as detailed above.
10
<PAGE> 13
ITEM 2
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED MARCH 31, 1997 COMPARED TO SIX MONTHS ENDED MARCH 31, 1996
The Company generated revenues of $1,752,047, an increase of 15% over 1996 (7%
after deducting for foreign exchange movements) for the six months ended March
31, 1997. The 7% increase in revenues is principally due to the increase in the
number of Company Cardholders. Membership fees for the six months ended March
31, 1997 of $245,250 are 12% lower than 1996. This decrease is as a result of a
combination of membership fees in the UK being subject to UK sales tax (VAT)
since May 1996, which the Company has borne as a cost, together with an
increased number of 20% saving Company Cardholders (no membership fee payable),
netted against an overall increase in the Cardholder base.
Cost of sales amounted to $1,169,657, an increase of 15% over 1996 (7% after
deducting for foreign exchange movements) for the six months ended March 31,
1997, in line with the 15% increase in revenues. Selling, general and
administrative expenses, consisting primarily of the costs of operations, for
the six months ended March 31, 1997 amounted to $2,082,108 representing an
increase of 24% over 1996. The increase can be attributed to professional fees
of $256,000 incurred through the end of the six month period for work on the
proposed merger with Transmedia Asia Pacific, Inc. and incremental overhead
costs associated with the MBNA campaign and the subsequent large increase in
Company Cardholder numbers together with other marketing related costs.
Transmedia France incurred losses of approximately $661,828 after revenues of
$107,554 , for the six months ended March 31, 1997, being its first full year of
operations which commenced on a trial basis in April 1996. After taking account
of the amortisation of the Company's share of the license fee and the dividend
receivable from Transmedia France, the Company's share of those losses amounted
to $311,637. For the six months ended March 31, 1996 Transmedia France incurred
pre-trading losses of approximately $600,000. The Company's share of those
losses amounted to $300,000.
The Company earned $5,001 and $8,096 for the six months ended March 31, 1997 and
1996, respectively, from the temporary investment of excess cash funds. The
Company remains in a net operating loss carry forward position for income tax
purposes and no tax benefit has been recognised for the six months ended March
31, 1997.
The Company incurred a net loss of $1,628,314 (increase of 30% over 1996) for
the six months ended March 31, 1997. This increase is due to the 15% increase in
revenues being exceeded by the 15% increase in cost of sales and 24% increase in
selling, general and administrative expenses as detailed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company was initially capitalised with 6,206,896 shares of Common Stock,
(after giving retroactive effect to stock dividends), for consideration of $500.
On August 11, 1993, the Company issued 3,718,784 shares of Common Stock of which
(i) 225,000 shares were issued to Conestoga, a corporation which is related to
the Company by virtue of the majority shareholding in Conestoga being held by
Edward J. Guinan III, the President, Chief Executive Officer and Director of the
Company, in consideration of costs incurred on behalf of the Company by
Conestoga, with respect to raising capital for the Company; (ii) 496,284 shares
were issued to Network, as partial consideration for the purchase of the
Transmedia License; (iii) 275,000 shares were issued to Conestoga as
reimbursement for a down payment of $275,000 made by Conestoga to Network for
the purchase of the Transmedia License; and (iv) the remaining 2,722,500 shares
were sold to private investors in a private placement at an offering price of $1
per share. In addition, the Company issued 85,000 shares of Common Stock as
consideration for services rendered in connection with the raising of capital in
the Company's private placement of shares in August 1993. Of the cash proceeds
of $2,722,500, $850,000 was paid to Network for further consideration for the
purchase of the Transmedia License from the private placement of shares, leaving
a balance, after issue costs, of $1,744,623 available to the Company for use as
working capital in respect of the utilisation by the Company of its rights under
the Transmedia License.
In February 1994, the Company completed a second private placement of 700,000
shares of Common Stock at a price of $3 per share. The net proceeds of such
private placement were used as working capital in respect of the utilisation by
the Company of its rights under the Transmedia License. In addition, the Company
separately issued 10,000 shares of Common Stock as consideration for services
rendered in connection with the raising of capital in the second private
placement in February 1994.
On October 15, 1993 the Company entered into an agreement with Bostoner
International, pursuant to which Bostoner International agreed to Provide
certain consulting and financial advisory services to the Company through
December 31, 1996. Pursuant to such agreement, the Company has issued 700,000
shares of restricted Common Stock to Bostoner International.
In July 1995 the Company issued 590,857 shares of 6 1/2 % Convertible Preferred
Stock at a price of $3.50 per share. The net proceeds of $1,964,600 have been
used to finance the Company's investment in Transmedia France and to provide
working capital to existing operations.
11
<PAGE> 14
ITEM 2
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
In July 1996 the Company completed a private placement of 892,857 shares of
Common Stock at a price of $1.40 per share. The net proceeds of $1,235,000 have
been used to provide working capital to existing operations. In December 1996
the Company issued, in a private placement, 556,250 shares of Common Stock at a
price of $2.00 per share together with warrants to purchase 185,417 shares of
Common Stock, which expire in December 1999 and have an exercise price of $2.00
per share. The net proceeds of $1,097,500 are being used to provide working
capital to existing operations.
In December 1996 Transmedia Network, Inc. and its affiliate Transmedia
International, Inc. agreed, at the Company's request, to amend the Transmedia
License. The principal revisions allowed the Company to expand into new
businesses, acquire Countdown and undertake a corporate restructuring. In
consideration a $750,000 fee was paid on April 3, 1997 when the acquisition of
Countdown was completed. This fee was split between the Company and Transmedia
Asia Pacific, Inc. and took the form of $125,000 each in cash to TMNI and each
agreed to issue a promissory note in the principal amount of $250,000 and
bearing interest at the rate of 10% per annum. The promissory notes are to be
convertible at the holder's option into common stock of the issuer at the rate
of $1.20 per share. A $250,000 fee, split between the Company and Transmedia
Asia Pacific, Inc. subject to joint and several liability, will also be payable
when, and if, a corporate restructuring is completed.
In October 1996 the Company made an investment of $134,741, subsequently
increasing to $142,946 for ongoing legal costs, to acquire a renewable 6 month
option to acquire 50% of the share capital of National Helpline Services Pty
Limited ('NHS'). NHS is an Australian business based in Sydney which operates an
innovative telephone helpline and medical evacuation business. Its main clients
are businesses in the financial services sector who are seeking to augment the
package offered to their customers. As of December, 1996, NHS had approximately
4 million members in Australia. Transmedia Asia Pacific, Inc. acquired an
option, on identical terms to the Company, over the remaining 50% share capital
of NHS. A further $8,205 for NHS-related legal fees has been capitalised within
the investment cost of the NHS option during the three months ended March 31,
1997. Although the 6 month option has expired, the Company is currently in
ongoing negotiations with the NHS management to acquire 50% of that company. The
Company currently believes that the option cost will be offset against the
purchase consideration on completion.
In addition to the investments above, there were cash inflows from related
parties of $260,329 and $352,902 for the three months ended March 31, 1997 and
1996, respectively. There were cash inflows from related parties of $318,297 and
$221,721 for the six months ended March 31, 1997 and 1996, respectively. On
March 27, 1997 International Advance, Inc., a company of which Edward J Guinan
III, Chairman of the Company, is the principal shareholder and an officer and
director , assigned the Countdown option agreement at cost to the Company and
Transmedia Asia Pacific, Inc. for a consideration of approximately $205,000
(125,000 sterling) each and related legal costs of $59,006 each.
Net cash used in operating activities for the three months ended March 31, 1997
and 1996 was $283,199 and $507,851, respectively, and for the six months ended
March 31, 1997 and 1996 was $555,852 and $857,863, respectively, mainly
resulting from the net loss for the relevant periods. Of these amounts $60,126
represents the net cash inflow and $144,330 represents the net cash outflow for
the three months ended March 31, 1997 and 1996, respectively, and $8,816
represents the net cash inflow and $216,410 represents the net cash outflow for
the six months ended March 31, 1997 and 1996, respectively, for advances to
Company Participating Restaurants. The cash outflows were funded by the two 1996
issues of Common Stock.
The Restaurant Credits are generally unsecured and are recoverable only as
Company Cardholders utilise The Restaurant Card at the respective Company
Participating Restaurant. In a small number of cases, the Company may request a
personal guarantee from the owner. Generally, no other forms of collateral or
security are obtained from restaurant owners. Recovery of Restaurant Credits as
well as generation of gross profit from operations is strongly dependent upon
the frequency of use by existing Company Cardholders of The Restaurant Card. The
Company makes provisions for irrecoverable restaurant credits.
With the exception of the commitments made to the joint venture in France and
those made under the Transmedia License as disclosed above, the Company has not
made any other significant capital commitment. The Company does not have an
immediate plan to make other significant capital commitments related to the
operation of its business in the United Kingdom.
Although the Company anticipates that its current cash, together with revenues
expected to be derived from operations, should, based upon its internal
calculations, be sufficient to fund operating, and other capital needs for the
next year, the Company will be required to seek additional financing during such
period in the event it either intends to make acquisitions or that there are
delays, cost overruns, sales declines or unanticipated expenses. While the
Company is confident that sufficient funds will be available to meet its
anticipated business expansion needs for the next year there can be no assurance
that the Company will be able to obtain such additional financing in the
remainder of fiscal year 1997.
12
<PAGE> 15
ITEM 2
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
The Company entered into an Agreement and plan of Reorganization (the
'Agreement'), dated as of February 10, 1997, with Transmedia Asia Pacific, Inc.,
a Delaware corporation, the Common Stock of which is quoted on the NASDAQ Small
Cap Market ('Transmedia Asia'), Transmedia Europe Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of the Company ('Europe
Acquisition'), and Transmedia Asia Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of the Company ('Asia Acquisition').
Under the terms of the Agreement, among other things (i) the Company will make a
contribution to the capital of Europe Acquisition by conveying substantially all
of the Company's assets, except for its equity interest in Transmedia La Carte
Restaurant S.A. , to Europe Acquisition; and (ii) immediately thereafter Asia
Acquisition will merge with and into Transmedia Asia pursuant to which
Transmedia Asia will be the surviving entity and become a wholly-owned
subsidiary of the Company and stockholders of Common Stock of Transmedia Asia
will be entitled to receive 0.9109 of a share of Common Stock of the Company.
The Company did not withhold any amount from Edward J Guinan III's remuneration
with respect to either U.S. or U.K. taxes through March 31, 1997. Such
treatment was used pending resolution by Edward J Guinan III of his tax
residence. Mr. Guinan has commited 500,000 shares of the Company's Common Stock
and 500,000 shares of Transmedia Asia Pacific, Inc.'s Common Stock to be
privately sold in order to provide an aggregate of pound sterling 300,000 of
tax guarantees against any potential tax liabilities of the Company and
Transmiedia Asia Pacific, Inc. Any excess proceeds will be first used to repay
any loans of Mr. Guinan and his affiliates with the balance of the proceeds to
be paid to him. There can be no assurance as to whether such sale will be
affected and/or whether the proceeds will be adequate to cover any potential
liabilities of the Company.
On April 3, 1997, the Company purchased 50% of the outstanding capital stock of
Countdown Holdings Limited, a privately owned United Kingdom company based in
London, England ("Countdown"). The balance of the outstanding capital stock of
Countdown was simultaneously purchased by Transmedia Asia Pacific, Inc. on
similar terms to the terms of the Company's purchase. The Company's element of
the consideration consisted of $800,000 (500,000 pounds sterling) in cash and
the issuance of 1,200,000 shares of Common Stock in the Company. In addition,
the Company granted an option to purchase up to 250,000 shares of Common Stock
at a purchase price of $1.00 per share to the owner of Countdown. The cash
portion of the purchase price was funded by a $1,000,000 loan from a director
and stockholder of the Company. The loan matures on September 27, 1997, bears
interest at the rate of 12% per annum and is collateralized by a pledge of all
the Countdown shares purchased by the Company. In connection with the loan, the
Company issued the director and stockholder five-year warrants to purchase up to
125,000 shares of Common Stock at $1.25 per share.
INFLATION AND SEASONALITY
The Company does not believe that its operations have been materially influenced
by inflation. The business of individual Company Participating Restaurants may
be seasonal depending on their location and the type of food and beverages
served. However, the Company at this time has no basis on which to project
seasonal effects, if any, to its business as a whole.
13
<PAGE> 16
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
PART II: OTHER INFORMATION
Item 2: Recent sales of unregistered securities
On April 3, 1997 the Company issued 1,200,000 shares of Common Stock to C.E.C.
Radbone as part payment of the consideration for the acquisition of 50% of the
outstanding capital stock of Countdown Holdings Limited. In addition, the
Company granted an option to purchase up to 250,000 shares of Common Stock at a
purchase price of $1.00 per share to C.E.C. Radbone. In connection with the loan
of $1,000,000 received from J.V. Vittoria on April 3, 1997, the Company issued
J.V. Vittoria five-year warrants to purchase up to 125,000 shares of Common
Stock at $1.25 per share. The Company has claimed an exemption from the
registration requirements of the Securities Act of 1933, as amended
('Securities Act') by relying on section 4 (2) of the Securities Act, which
allows for an exemption for transactions by an issuer not involving a public
offering, and the rules and regulations thereunder.
Item 6: Exhibits and Reports on Form 8-K
a) Exhibits:
10.1 (s) Service Agreement dated as of April 3, 1997, between Countdown
plc and C.E.C. Radbone
10.1 (t) Common Stock Purchase Warrant dated as of April 3, 1997, between
the Company and J.V. Vittoria
10.1 (u) Loan Facility Agreement dated as of March 27, 1997, between the
Company and J.V. Vittoria
10.1 (v) Share Pledge Agreement dated as of April 3, 1997 between the
Company and J.V. Vittoria
10.1 (w) Master License Amendment dated as of December 20, 1996, by and
among the Company, Transmedia Network, Inc. and TMNI International
Incorporated
10.1 (x) Registration Rights Agreement dated as of April 3, 1997 by and
among the Company, Transmedia Asia Pacific, Inc. and C.E.C. Radbone
10.1 (y) Agreement dated December 6, 1996, by and among Transmedia
Network, Inc., Transmedia International Incorporated, the Company
and Transmedia Asia Pacific, Inc., as amended by Amendment No. 1 thereto
dated as of April 1, 1997.
b) Reports on Form 8-K - A report on Form 8-K was filed on April 18, 1997
regarding the acquisition of 50% of the outstanding capital of Countdown
Holdings Limited.
14
<PAGE> 17
TRANSMEDIA EUROPE INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused their Report to be signed on its behalf by the
undersigned thereunto duly authorised.
TRANSMEDIA EUROPE, INC.
By /s/ William H. Price
- -----------------------
WILLIAM H. PRICE
Chief Financial Officer and Duly Authorised Representative
May 14, 1997
15
<PAGE> 18
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
10.1 (s) Service Agreement dated as of April 3, 1997, between Countdown
plc and C.E.C. Radbone
10.1 (t) Common Stock Purchase Warrant dated as of April 3, 1997, between
the Company and J.V. Vittoria
10.1 (u) Loan Facility Agreement dated as of March 27, 1997, between the
Company and J.V. Vittoria
10.1 (v) Share Pledge Agreement dated as of April 3, 1997 between the
Company and J.V. Vittoria
10.1 (w) Master License Amendment dated as of December 20, 1996, by and
among the Company, Transmedia Network, Inc. and TMNI
International Incorporated
10.1 (x) Registration Rights Agreement dated as of April 3, 1997 by and
among the Company, Transmedia Asia Pacific, Inc. and C.E.C.
Radbone
10.1 (y) Agreement dated December 6, 1996, by and among Transmedia
Network, Inc., Transmedia International Incorporated, the
Company and Transmedia Asia Pacific, Inc., as amended by
Amendment No. 1 thereto dated as of April 1, 1997.
27 Financial Data Schedule
<PAGE> 1
DATED 3 APRIL 1997
-----------------------------------------------------------------
COUNTDOWN PLC
-AND-
C.E.C. RADBONE, ESQ.
-----------------------------
SERVICE AGREEMENT
-----------------------------
LEWIS SILKIN
WINDSOR HOUSE
50 VICTORIA STREET
LONDON SW1H ONW
TEL: 0171 227 8000
<PAGE> 2
THIS DEED OF AGREEMENT is made the 3rd day of April 1997
BETWEEN:
(1) Countdown Plc whose registered office is at 42 Doughty Street, London
WC1N 9IY ("the Company"); and
(2) Christopher E.C. Radbone of 19 Calonne Road, London, SW19 5HH ("the
Executive")
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
Defined terms and phrases for the purposes of this Agreement are set out in
Schedule 1.
2. JOB TITLE
2.1 The Company shall employ the Executive and the Executive shall
serve the Company as the Managing Director.
3. JOB DESCRIPTION, DUTIES AND RESPONSIBILITIES
3.1 The Executive shall carry out such duties, exercise such
powers and responsibilities as the Company may require from
time to time provided that such duties, powers and
responsibilities are consistent with the Executive's position.
3.2 During the period of his employment with the Company, the
Executive shall:-
3.2.1 report to the Board and/or such other person(s) as
the Company shall determine from time to time;
3.2.2 comply with such lawful directions as the Company or
any Associated Company to which he shall be seconded
shall give from time to time and with such rules and
regulations concerning his employment as shall apply
from time to time;
3.2.3 carry out his duties and exercise his powers and
responsibilities faithfully, efficiently and
diligently and use his utmost endeavours to maintain,
extend, develop and promote the interests and
reputation of the Company and the Associated
Companies;
3.2.4 keep the Company fully informed of his activities and
promptly provide such information and explanations as
may be requested from time to time by the Company
regarding such activities;
3.2.5 unless incapacitated by illness or injury, devote the
whole of his working time, attention and ability to
his duties under this Deed of Agreement;
<PAGE> 3
- 2 -
3.2.6 undertake such travel both outside and inside the
United Kingdom in such manner, on such occasions and
for such periods as the Company may reasonably
require for the proper performance of his duties.
3.3 Subject to any written regulations issued by the Company, the
Executive shall not without the prior consent of the Company
directly or indirectly receive or obtain any fee, gratuity,
commission, rebate, discount or other payment or benefit
whether in kind or otherwise from any Person as a consequence
of business transacted by the Company or any Associated
Company or otherwise as a result of his employment with the
Company.
3.4 The Executive shall not without the written prior approval of
the Board properly recorded by way of a Board minute:-
3.4.1 incur expenditure of an exceptional level or in
excess of such sums as may be authorised from time to
time;
3.4.2 dismiss any Key Person;
3.4.3 engage or employ a Key Person in circumstances where
such employee will receive a total annual
remuneration in excess of (pound)30,000 or such other
sum as the Board shall determine from time to time or
whose notice entitlement exceeds one month;
3.4.4 enter into on behalf of the Company or any Associated
Company any commitment, contract or arrangement
outside the scope of his normal duties or of an
unusual or onerous or long term nature or otherwise
than in the normal course of business.
4. TERM AND NOTICE
4.1 The Executive's employment with the Company under this Deed of
Agreement will commence on the date hereof.
4.2 The Executive's period of continuous employment with the
Company commenced in December 1970.
4.3 Subject to the provisions for earlier termination contained in
this Deed of Agreement, the Executive's employment shall
continue for an initial term of three years from the date
hereof and thereafter until terminated by either party giving
to the other not less than 3 months' written notice.
4.4 The Company reserves the right, at its discretion, to pay
basic salary in lieu of notice and to pay to the Executive a
sum in lieu of any of the benefits which the Executive is
contractually entitled to receive by virtue of his employment
under this Deed of Agreement during his notice period, such
sum to be equivalent to the value of providing such benefits
whether notice is given by the Company or by the Executive.
<PAGE> 4
- 3 -
5. REMUNERATION
5.1 During his employment with the Company, the Company shall pay
to the Executive:-
5.1.1 a basic salary at the rate of (pound)103,054 per
annum which shall accrue from day to day and be
payable by equal monthly instalments on or around the
last working day of each month or on such other day
in accordance with the Company's accounting practices
from time to time. Payment is made on that day in
respect of the whole calendar month.
5.1.2 the Executive's basic salary shall be reviewed by the
Company on or around 1 August each year and may be
increased by the Company with effect from that date
or such other date as the Company shall determine by
such amount (if any) as the Company shall determine
at its absolute discretion (without obligation).
5.2 The Company shall be entitled to deduct from the Executive's
salary and such other monies as may be payable or reimbursable
to the Executive all sums from time to time owing or otherwise
payable from the Executive to the Company or any Associated
Company.
5.3 Any benefits provided by the Company or any Associated Company
to the Executive which are not expressly referred to in this
Deed of Agreement shall be regarded as ex gratia and made at
the absolute discretion of the Company and shall not confer
any contractual entitlement upon the Executive or any third
party.
6. HOURS OF WORK
6.1 The Executive shall normally work 40 hours per week (Monday to
Friday inclusive) together with such additional hours outside
these hours, including hours at weekends or during holidays,
as are reasonably necessary for the proper performance of the
Executive's duties. The Executive shall not be entitled to
additional remuneration for work performed outside normal
working hours.
7. PLACE OF WORK
7.1 The Executive's place of work shall initially be the Company's
premises in London but the Company may require the Executive
to work either temporarily or permanently at such location in
the United Kingdom as the Company shall require from time to
time.
8. BENEFITS AND EXPENSES
8.1 Company Car
8.1.1 The Company shall provide the Executive with a Jaguar
motor car, or another motor car of an equivalent make
and
<PAGE> 5
- 4 -
model commensurate with the Executive's position, for
the Executive's business and personal use. The
company car may be used by members of the Executive's
immediate family at the Company's absolute discretion
from time to time.
8.1.2 The Company shall be responsible for the costs of
maintaining, servicing, taxing and insuring the
company car.
8.1.3 The Executive shall take good care of the company car
and comply with all regulations laid down by the
Company from time to time regarding its company cars
and shall forthwith notify the Company of any
accidents involving the company car and of any
charges brought against him or other users of the
company car arising from driving offences and on the
termination of his employment the Executive shall
forthwith return the company car to the Company at
its head office or such other location as the Company
shall direct together with all keys and other
documents relating to the company car.
8.1.4 Subject to 8.1.1, the company car may be replaced
from time to time at the Company's sole discretion
with a car of equivalent value.
8.1.5 The Company may withdraw the provision of the company
car if the Executive is disqualified from driving or
otherwise fails to maintain a valid current driving
licence entitling him to drive in the United Kingdom
but in such circumstances and provided that the
company car is not subject to lease, lease purchase
or hire purchase, the Executive shall be entitled to
additional salary in lieu thereof.
8.2 Pension
8.2.1 The Company shall, subject to statutory limits,
continue to pay the sum equivalent of (pound)20,000
per annum into the Countdown Self Administered
Pension Scheme on behalf of the Executive.
8.2.2 There is a contracting out certificate in force in
relation to the Executive's employment under this
Deed of Agreement.
8.3 Benefits Schemes
8.3.1 Subject always to their terms and conditions and
rules the Executive shall be entitled to participate
at the Company's expense in the following insurance
schemes from time to time:
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8.3.1.1 the Company's private medical insurance scheme;
8.3.1.2 the Company's permanent health insurance scheme;
8.3.1.3 an annual travel insurance scheme.
8.3.1.4 a Scottish equitable life insurance policy in favour
of Countdown plc (2) Executive Retirement and Death
Benefit Scheme.
8.3.2 The Company reserves the right to amend, substitute or replace
the above schemes.
8.4 Expenses
8.4.1 The Executive shall be reimbursed all reasonable
expenses properly, wholly and exclusively incurred by
him in the proper performance of his duties under
this Deed of Agreement subject to the approval of the
Company on the production of valid receipts or such
other supporting documentary evidence as the Company
may require and compliance with the Company's then
current regulations relating to expenses.
8.4.2 Where the Company issues a company credit or charge
card to the Executive, he shall use such card only
for expenses reimbursable by the Company and shall
return and cancel the card forthwith upon the
termination of his employment.
9. HOLIDAY
9.1 The Company's holiday year shall run from 1 January to 31
December.
9.2 In addition to Bank and other public holidays but subject to
the provisions of this Clause the Executive shall be entitled
to 30 working days' holiday in each holiday year at such
time(s) as may be convenient to the Company and which right
shall accrue from day to day. Any accrued entitlement to a
part day's holiday shall be rounded down.
9.3 Save with the prior written consent of the Company, the
Executive shall not be entitled to carry forward any accrued
holiday entitlement from one year to another.
9.4 Any holiday taken shall be in accordance with the Company's
rules and regulations governing holidays from time to time.
9.5 On the termination of the Executive's employment he shall be
entitled to be paid in lieu of accrued untaken holiday on a
pro rata basis and at the rate of 1/240 of his basic annual
salary for each untaken day's
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accrued holiday entitlement. If on the termination of his
employment the Executive has exceeded his approved pro rata
holiday entitlement for that holiday year, the excess will be
deducted at such rate from any sums due to the Executive and
to the extent that such deduction is insufficient such excess
will become repayable by the Executive at such rate.
9.6 The Company may require the Executive to take outstanding
holiday entitlement during any period of notice.
9.7 Holiday entitlement shall only accrue during any absence due
to illness or injury at the absolute discretion (without
obligation) of the Company.
10. INCAPACITY
10.1 If the Executive shall at any time be absent from work due to
illness or injury he shall as soon as reasonably practicable
inform the Company of the reason for his absence and its
anticipated duration and shall keep the Company informed of
such matters at such intervals as the Company may reasonably
require.
10.2 If the Executive is absent from work due to illness or injury
for more than seven days (including non-working days), he
shall as soon as is reasonably practicable thereafter send to
the Company a statement of his incapacity signed by a
registered medical practitioner and shall send such further
statements at such intervals as the Company may reasonably
require (which shall not be more than once weekly) to cover
the full period of absence. On each occasion that a medical
practitioner's certificate expires and the Executive does not
anticipate returning to work, he must notify the Company as
soon as practicable.
10.3 For Statutory Sick Pay purposes, the Executive's qualifying
days shall be his normal working days, which shall be Monday
to Friday.
10.4 The Company may at its expense at any time, if the Executive
is then incapacitated, require the Executive to undergo such
medical examinations and/or tests by such doctor(s) (and other
suitable medically qualified person(s)) as shall be nominated
by the Company and the Executive authorises such doctor(s) or
other person(s) to disclose to and discuss with the Company
and/or its medical adviser(s) the results of such examinations
and/or tests provided such disclosure is restricted to matters
which could affect the Executive's employment with the
Company.
10.5 If the Executive is absent due to illness or injury, providing
that he shall have complied with the terms of this Deed of
Agreement and the Company's then current regulations relating
to incapacity he shall be paid Company Sick Pay equivalent to
his basic salary for up to 13 weeks absence in aggregate in
any period of twelve months after which sick
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pay will be paid for such period as the Company in its
absolute discretion (without obligation) considers reasonable
in the circumstances.
10.6 Company Sick Pay payable to the Executive shall be reduced by
any Statutory Sick Pay received by the Executive and any State
or other benefits recoverable by the Executive (whether or not
recovered).
11. ASSOCIATED COMPANIES
11.1 The Company shall be entitled for such period(s) as the
Company may require from time to time to require the Executive
to hold such offices as the Company shall direct with any
Associated Company subject to the Executive's consent such
consent not to be unreasonably withheld or delayed.
12. DISCIPLINARY SICKNESS AND POOR PERFORMANCE PROCEDURE AND GRIEVANCE
PROCEDURES
12.1 There is no specific disciplinary procedure applicable to the
Executive's employment nor any specific provisions for dealing
with grievances. In the case of any grievance, the Executive
should apply to the Chairman.
12.2 In order to investigate any allegation of misconduct the
Company is entitled to suspend the Executive on full pay and
benefits for such period as the Company shall, at its absolute
discretion, determine appropriate in order to carry out a
proper investigation. During such investigation, the Executive
shall co-operate with the Company in its investigation into
the alleged misconduct.
13. TERMINATION
13.1 The Company shall be entitled to terminate the Executive's
employment summarily by notice if the Executive:-
13.1.1 is guilty of gross misconduct;
13.1.2 has committed a serious breach of a material term of
this Deed of Agreement other than a breach which
(being capable of being remedied) is fully remedied
by the Executive to the satisfaction of the Company
within a reasonable period of his being called upon
to do so;
13.1.3 has wilfully neglected or refused to discharge his
duties hereunder;
13.1.4 is grossly incompetent in the performance of his
duties;
13.1.5 acts or omits to act in such a way as likely to
prejudice the interests or reputation of the Company
or any Associated Company;
13.1.6 is convicted of any indictable offence excluding
offenses which do not affect the Executive's position
and excluding minor road traffic offenses not
resulting in imprisonment;
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13.1.7 becomes prohibited by law or disqualified from being
a director of a company;
13.1.8 becomes of unsound mind or a patient for the purpose
of any statute relating to mental heath;
13.1.9 commits an offence relating to insider dealing or is
in breach of the Model Code for Securities
Transactions by Directors of Listed Companies or any
other rules or regulations relating to any Recognised
Investment Exchange;
13.1.10 becomes bankrupt or makes any arrangement or
composition with or for the benefit of his creditors;
13.1.11 commits any act of dishonesty relating to and
adversely affecting the reputation or business of the
Company, any Associated Company.
13.2 The Executive will have no claim against the Company for
breach of contract if his employment is terminated with
immediate effect by reason of the liquidation of the Company
for purposes of amalgamation or reconstruction provided that
he is offered employment with the reconstructed or amalgamated
company on terms no less favourable than the terms of this
Agreement.
13.3 During any period of notice, and provided that the Company
continues to pay the Executive his salary and to provide all
benefits or to pay a sum in lieu of cost to the Company of
such benefits to him to which he is contractually entitled
until the termination of his employment, then the Company
shall be entitled at its discretion:-
13.3.1 to require the Executive not to carry out his duties
or to exercise his powers or responsibilities under
this Deed of Agreement during the remaining period of
his employment (or any part of such period);
13.3.2 to require the Executive to resign immediately from
any offices he may hold in the Company or in any
Associated Company;
13.3.3 to require the Executive not to attend his place of
work or any other premises of the Company or any
Associated Company during the remaining period of his
employment (or any part of such period);
13.3.4 to require the Executive to return to the Company all
documents, computer disks and other property
(including summaries, extracts or copies) belonging
to the Company or any Associated Company or to their
clients or customers containing confidential
information;
13.3.5 to appoint one or more persons to undertake the
Executive's duties and/or responsibilities and/or to
assume the Executive's position.
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13.4 Retirement
This Deed of Agreement shall terminate automatically on the
Executive reaching his normal retirement age (which is 65).
13.5 Obligations on Termination
On the termination of this Deed of Agreement for whatever
reason the Executive shall:
13.5.1 immediately return to the Company's offices or such
other location as the Company shall direct all
equipment, documents, credit or charge cards,
computer disks, computer software and hardware,
portable telephones, notes, specifications, Board
minutes and papers, plans, prototypes, keys, customer
or client lists, technical information and data,
reports and any other property (including copies,
summaries and excerpts) belonging to or relating to
the business of the Company or any Associated
Company, or created by the Executive in the course of
his employment by the Company, which are in the
Executive's possession or under his control;
13.5.2 at the Company's request resign as a director of and
from any other office held in the Company or any
Associated Company and the Executive having failed to
do so within twenty-one days of such request the
Company is hereby irrevocably authorised to appoint
some person to act as the Executive's attorney and in
his name and on his behalf to sign and execute any
documents and do such other acts to give effect to
this clause and the Executive agrees to ratify and
confirm all such acts done pursuant to any such power
of attorney.
13.6 The Executive will both during and at any time after the
termination of his employment under this Deed of Agreement
provide the Company or any Associated Company with such
assistance as it may require in the conduct of such
proceedings in any Court, Tribunal or other body of competent
jurisdiction as may arise in respect of which the Company any
Associated Company or its or their legal advisers believe the
Executive may be able to provide assistance provided that the
Company shall pay his reasonable out-of-pocket expenses
properly incurred in providing such assistance as they are
incurred.
14. RESTRICTIONS DURING EMPLOYMENT
14.1 The Executive shall not during his employment with the
Company, without the prior consent of the Company, be
Materially Interested in any other Person where this may
interfere, conflict or compete with the
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interests of the Company or any Associated Company or the
efficient performance of his duties.
14.2 The Executive shall not during his employment with the
Company, Directly or Indirectly, entice away or attempt to
entice away from the Company or any Associated Company or
otherwise discourage from being employed by the Company or any
Associated Company any employee of the Company or of any
Associated Company.
15. CONFIDENTIALITY
15.1 Without prejudice to the generality of the Executive's duty of
good faith, during the term of his employment under this Deed
of Agreement the Executive shall not, other than in the proper
course of his employment, use, publish or otherwise disclose
to any other Person any information relating to the Company,
any Associated Company its or their clients, affairs, finances
or business which:-
15.1.1 the Company or any Associated Company regards or may
regard as confidential; or
15.1.2 which has been made known to the Company or any
Associated Company or its or their officers,
employees or agents in circumstances in which an
obligation of confidentiality arose.
15.2 Without prejudice to any obligations of confidence owed by the
Executive to the Company (whether by virtue of an implied
contractual duty, an equitable duty of confidence or
otherwise) the Executive shall not at any time after the
termination of the Executive's employment under this Deed of
Agreement either use, publish or otherwise disclose to any
Person any trade secrets or confidential information capable
of such protection relating to the Company or any Associated
Company its or their clients, affairs, finances or business
and which, for the avoidance of doubt, shall include, without
limitation:-
15.2.1 lists or details of the Company's or any Associated
Company's actual or potential clients;
15.2.2 details of relationships or arrangements with or
knowledge of the needs or requirements of the
Company's or any Associated Company's actual or
potential clients;
15.2.3 information supplied in confidence by clients or any
third party to which the Company or any Associated
Company owes an obligation of confidentiality;
15.2.4 lists of and details of contracts with the Company's
or any Associated Company's Discounters;
15.2.5 information of a personal or otherwise of a
confidential nature relating to fellow employees
and/or Directors of the Company;
15.2.6 details of the Company's or any Associated Company's
business methods, finances, prices or pricing
strategy,
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marketing or development plans, product development
plans or strategies;
15.2.7 the Company's or any Associated Company's know-how;
15.2.8 confidential computer software.
This list is not exhaustive.
15.3 This clause shall not apply to information which might come
into the public domain other than in consequence of the
Executive's default.
15.4 The Executive shall not without the Company's prior consent
communicate with the press, broadcasting or other media
regarding the Company, any Associated Company or any of its or
their respective clients, officers or employees.
16. INTELLECTUAL PROPERTY
16.1 The Executive agrees and acknowledges that because of the
nature of his duties and responsibilities arising from his
employment, he is under a special obligation to further the
interests of the business of the Company and of any Associated
Company. Consequently, any invention made by the Executive in
the course of his employment shall belong to the Company.
16.2 The Executive assigns to the Company (by way of assignment of
all present and future Intellectual Property Rights) all
Intellectual Property Rights that vest in the Executive in all
or any Relevant Intellectual Property and the Executive agrees
to disclose promptly to the Company any such Relevant
Intellectual Property.
16.3 The Executive agrees to waive any moral rights including any
rights conferred by Sections 77-83 of the Copyright Designs
and Patents Act 1988 he has or may have in any Relevant
Intellectual Property against the Company, any Associated
Company, its or their employees, officers or agents.
16.4 The Executive agrees, at the Company's request, to exercise
during his employment by the Company or at any time after the
Termination Date any moral rights he has or may have pursuant
to Sections 77-83 of the Copyright Designs and Patents Act
1988 or otherwise in any Relevant Intellectual Property
against such third party as the Company shall request and in
accordance with the Company's directions and the Executive
agrees not to exercise such moral rights other than in
accordance with this Clause.
16.5 The Executive agrees that he will execute such deeds and
documents and do such other acts and things as may be
necessary or desirable in the opinion of the Company to
substantiate, protect and/or maintain the Intellectual
Property Rights of the Company. The Executive
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acknowledges that, save as provided for by law, no further
remuneration or compensation other than that provided for in
this Deed of Agreement is or may become due to the Executive
in respect of the performance of his obligations under this
Clause. The assignment contained in this Clause shall not be
affected by reason of the termination of this Deed of
Agreement.
16.6 Decisions as to the substantiation, protection and/or
maintenance of any Intellectual Property Rights in any
Intellectual Property originated by the Executive shall be at
the sole discretion, without obligation, of the Company and
the Executive agrees that he shall have no claim or other
right of action against the Company should it decide not to
substantiate, protect or maintain any Intellectual Property
Rights originated wholly or partly by the Executive.
16.7 The Executive appoints the Company to be his attorney in his
name and on his behalf to execute, sign and do all such deeds,
instruments or things and generally to use the Executive's
name for the purposes of giving to the Company or its nominee
the full benefit of rights conferred under this Clause.
16.8 The Executive agrees to offer to the Company on arm's length
terms to be agreed with the Company, and to give the Company a
reasonable opportunity to acquire, any Intellectual Property
Rights in any Relevant Intellectual Property which do not vest
in the Company immediately such Intellectual Property Rights
shall come into effect and in the absence of agreement such
terms shall be determined by an arbitrator appointed by
agreement between the Company and the Executive (or in the
absence of agreement by the auditors of the Company) whose
costs shall be borne equally by the Company and the Executive.
17. RESTRICTIVE COVENANTS
17.1 The Executive agrees with and undertakes to the Company for
itself and as agent for every Associated Company that he will
not Directly or Indirectly following the Termination Date:-
17.1.1 for the period of 12 months be Materially Interested
in any Person providing Restricted Goods and/or
Services within the Restricted Area in competition
with the Company or any Relevant Associated Company;
17.1.2 for the period of 12 months entice away or endeavour
or attempt to entice away from the Company or any
Relevant Associated Company the Restricted Business;
17.1.3 for the period of 12 months solicit or attempt or
endeavour to solicit the custom of any Customer in
competition with the Company or any Relevant
Associated Company in order to supply Restricted
Goods and/or Services within the Restricted Area;
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17.1.4 for the period of 12 months supply Restricted Goods
and/or Services to any Customer in competition with
the Company or any Relevant Associated Company;
17.1.5 for the period of 12 months solicit or entice away
from the Company or any Relevant Associated Company
any Key Person;
17.1.6 for the period of 12 months offer employment to or
employ or enter into partnership or association with
(or offer so to do) or retain the services (or offer
to do so) whether as agent, consultant or otherwise
of any Key Person; or
17.1.7 for the period of 12 months solicit or attempt to
solicit or accept of place orders for or in any way
interfere with the supply or goods or services from
any Discounter where as a consequence such Discounter
may or is likely to cease supplying, reduce its
supply to or vary detrimentally the terms on which it
supplies such goods or services to the Company or any
Relevant Associated Company or any Joint Venture
Partner or any Licencee or any of their Customers; or
17.1.8 for the period of 12 months enter into contract with
or otherwise deal with any Joint Venture Partner or
any Licensee in competition with the Company or any
relevant Associated Company.
17.2 Each of the restrictions set out in this Clause shall be
considered separate from one another and it is acknowledged
that each sub-clause may contain more than one restriction.
For the avoidance of doubt each restriction insofar as it
applies to Associated Companies shall be separate from the
equivalent restriction as it applies to the Company.
17.3 While the restrictions set out in this Clause and the
definitions of "Customer", "Key Person", "Restricted Area",
"Restricted Business", "Restricted Goods and/or Services",
"Joint Venture Partner", "Licencee" and "Discounter" as set
out herein are considered by the parties to be reasonable in
all the circumstances it is agreed that if any one or more of
such restrictions or definitions shall either taken by itself
or themselves together be adjudged to go beyond what is
reasonable in all the circumstances for the protection of the
legitimate interests of the Company or any Associated Company
but would be adjudged reasonable if any particular restriction
or definition were deleted or if any part of the wording of
such restriction or definition were deleted then the parties
further agree that the said restrictions and definitions shall
apply with such deletions.
17.4 The restrictions set out in this Clause shall not prevent the
Executive from being a holder directly or indirectly by way of
bona fide investment only and subject to prior disclosure to
the Company of up to 3% of securities of any company which are
listed or dealt in on any Recognised Investment Exchange.
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18. GENERAL
18.1 This Deed of Agreement shall take effect in substitution for
all previous agreements or arrangements whether written, oral
or implied between the Executive and the Company relating to
the services or employment of the Executive and the Executive
warrants to the Company that he is not entering into this Deed
of Agreement in reliance on any representation not expressly
set out in this Deed of Agreement.
18.2 The Executive shall not make at any time, either during his
employment or at any time after its termination, any statement
or permit or authorise any statement to be made which is
calculated or reasonably likely to damage the reputation or
cause other damage to the Company, any Associated Company or
its or their employees or officers.
18.3 The Executive shall not at any time after the termination of
his employment with the Company wrongfully represent himself
as being employed by or otherwise connected in any way with
the Company or any Associated Company.
18.4 The failure or delay by either party in exercising any rights
under this Deed of Agreement shall not operate as a waiver of
such rights and also any single or partial exercise by either
party of any right shall not preclude any further exercise of
such rights or any other rights.
18.5 The Executive warrants that he is not subject to any
agreement, arrangement or understanding or subject to any
other restriction which in any way directly or indirectly
restricts or prohibits him from entering into this Deed of
Agreement or from fully performing his duties and
responsibilities set out in this Deed of Agreement.
18.6 The various clauses, sub-clauses, paragraphs, sub-paragraphs,
phrases and sentences in this Deed of Agreement are severable
and if any clause, sub-clause, paragraph or sub-paragraph or
any identifiable part is held to be invalid, void or
unenforceable by any Court, Tribunal or other body or person
of competent jurisdiction, this shall not affect the validity
or enforceability of the remaining provisions or identifiable
parts.
18.7 The construction, validity and performance of this Deed of
Agreement shall be governed by the laws of England and Wales
and the parties submit to the non-exclusive jurisdiction of
the Courts of England and Wales as regards any claim or matter
arising in respect of this Deed of Agreement.
18.8 No variation or amendment to this Deed of Agreement shall be
legally binding unless and until such variation or amendment
is confirmed in writing and signed by the Executive and a duly
authorised representative of the Company.
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18.9 References in this Deed of Agreement to statutes or other
legislation shall include any statute or legislation
modifying, re-enacting or made pursuant to such statute or
legislation.
18.10 Headings are for ease of reference and shall not be taken into
account in the construction of this Deed of Agreement.
18.11 The Schedule annexed to this Deed of Agreement forms an
integral part of this Deed of Agreement and any reference to
this Deed of Agreement shall be deemed to include a reference
to the Schedule.
18.12 There are no collective agreements which affect the
Executive's employment.
19. NOTICE
19.1 Any notice required to be given pursuant to this Agreement
shall be in writing and shall be deemed to have been duly
served if hand delivered or sent by facsimile or first class
post addressed to the relevant party's address as specified in
this Agreement or such other address as such party may
designate from time to time and in the case of the Company,
marked for the attention of the Company Secretary.
19.2 Any notice shall be deemed to have been served:-
19.2.1 if hand delivered, at the time of delivery (excluding
weekends and public holidays);
19.2.2 if sent by facsimile, at the time of transmission
(excluding weekends and public holidays);
19.2.3 if sent by post in the United Kingdom, 48 hours after
posting (excluding weekends and public holidays),
provided that delivery or transmission outside business hours shall be deemed to
have been served on the next business day.
THIS DEED OF AGREEMENT is executed as a Deed and is delivered on the date set
out at the commencement of this Deed of Agreement.
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SCHEDULE 1
DEFINITIONS
In this Agreement the following words or phrases shall, unless the context
requires otherwise, have the following meanings:
"ASSOCIATED COMPANY"
means a subsidiary of the Company, or a holding company of the Company, or
another subsidiary of a holding company of the Company or which is an
"associated undertaking" of the Company within the meaning of Paragraph 20(1) of
Schedule 4A of the Companies Act 1985 where "subsidiary" and "holding company"
have the meanings given by Section 736 of the Companies Act 1985 and any other
company designated by the Company as an Associated Company;
"THE BOARD"
means the Board of Directors of the Company (or any director or committee of
directors authorised by the Board of Directors of the Company);
"CUSTOMER"
means any Person who or which at any time during the period of 12 months
immediately prior to the Termination Date was the holder of a discount or other
card issued by the Company or any Relevant Associated Company or who otherwise
was entitled to receive the benefit of their schemes for members;
"DIRECTLY OR INDIRECTLY"
means (without prejudice to the generality of the expression) whether as
principal or agent; whether alone, jointly, in partnership with another or for
or on behalf of another; whether as a shareholder, director (including a shadow
director), agent, principal, partner, consultant, employee or otherwise; or by
virtue of providing financial assistance;
"DISCOUNTER"
means any Person who or which at any time during the period of 12 months prior
to the Termination Date has agreed to provide or provided goods and/or services
and/or concessions (by way of discount or otherwise) to Customers and/or to the
Company and/or to any Relevant Associated Company and/or to any Licencee and/or
to any Joint Venture Partner whether on favourable terms or otherwise;
"INTELLECTUAL PROPERTY"
includes (without prejudice to the generality of the expression) inventions,
designs, processes, notations, improvements, know-how, goodwill, reputation,
get-up, trade names, trade marks, logos, devices, plans, computer software,
models and literary, dramatic, musical and artistic works as defined by the
Copyright Designs and Patents Act 1988;
"INTELLECTUAL PROPERTY RIGHTS"
means the following rights for the full period such rights subsist and all
extensions and renewals of such rights in any part of the world:
(a) copyright;
(b) design rights (whether or not registered);
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(c) all accrued goodwill in any trade or service name (whether or
not registered), trading style or get-up;
(d) any patents or patent applications;
(e) any trade or service marks (whether or not registered)
including applications for such marks;
(f) all other industrial or intellectual property rights;
(g) rights under any licence or other agreement granted by or to
any other Person in respect of the use of any of the rights
listed above;
"JOINT VENTURE PARTNER"
means any Person
(a) with whom the Company or any Relevant Associated Company has
entered into a joint venture agreement for:-
(i) the development and/or exploitation of a business or
businesses the same as or similar to the Restricted
Business and/or;
(ii) the use and/or exploitation of the Intellectual
Property Rights owned or used by the Company or any
Relevant Associated Company; and
(b) with whom the Executive shall have had dealings in the course
of his employment under this Agreement;
"KEY PERSON"
means a person who was at any time during the period of 12 months immediately
prior to the Termination Date engaged or employed as an employee in a senior
position in receipt of remuneration of over (pound)25,000 per annum, director,
consultant (other than a professional adviser) or agent of the Company or any
Associated Company and who was a person with whom the Executive personally dealt
during his employment by the Company;
"LICENCEE"
means any Person:-
(a) with or whom the Company or any Relevant Associated Company
has entered into a licence agreement for:-
(i) the development and/or exploitation of a business or
businesses the same or similar to the Restricted
Business and/or;
(ii) the use and/or exploitation of the Intellectual
Property Rights owned by or used by the Company or
any Relevant Associated Company; and
(b) with whom the Executive shall have had dealings in the course
of his employment under this Agreement;
"MATERIALLY INTERESTED"
means employed or engaged by or concerned or interested in (whether directly or
indirectly) other than as a shareholder holding directly or indirectly by way of
bona fide investment only and subject to prior disclosure to the Company up to
3% in nominal value of the issue shares or other securities of any class of any
company listed or dealt in on any Recognised Investment Exchange;
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"ORIGINATE"
means (without prejudice to the generality of the word) originate, compose,
write, invent, create, generate, discover, design, develop or manufacture;
"PERSON"
means person, firm, company, association, corporation or other organisation or
entity;
"RECOGNISED INVESTMENT EXCHANGE"
means a body which is a recognised investment exchange for the purposes of the
Financial Services Act 1986;
"RELEVANT ASSOCIATED COMPANY"
means any Associated Company to which the Executive has rendered services both
in the period of 12 months immediately prior to the Termination Date and in the
course of his employment by the Company;
"RELEVANT INTELLECTUAL PROPERTY"
means Intellectual Property Originated by the Executive during the term of his
employment by the Company (whether in the course of his employment or otherwise
and whether alone or in conjunction with another Person or other Persons) but
excluding any Intellectual Property Originated by the Executive during the term
of his employment but outside the course of his employment where such work
either:-
(a) does not directly or indirectly relate to the business of the
Company or any Associated Company; or
(b) could not be used by or from which no benefit could be
acquired by the Company or any Associated Company in the
course of its or their business.
"RESTRICTED AREA"
means the United Kingdom and any other geographical area in which the Company or
any Relevant Associated Company provides goods and/or services and in the supply
of which the Executive has had material involvement;
"RESTRICTED BUSINESS"
means the business of the Company or any Relevant Associated Company within a
period of 12 months prior to the Termination Date;
"RESTRICTED GOODS AND/OR SERVICES"
means goods and/or services of a type or which compete with those:-
(a) provided by the Company or any Relevant Associated Company in
the ordinary course of its or their business during the period
of 12 months immediately prior to the Termination Date; and
(b) in the provision of which the Executive was concerned or
engaged during his employment by the Company;
"TERMINATION DATE"
means the date of the termination of the Executive's employment with the
Company.
<PAGE> 20
- 19 -
EXECUTED and DELIVERED as a Deed by the Company in the presence of:
P Harrison Director
Director/Secretary
SIGNED and DELIVERED as a Deed by the Executive in the presence of:
Simon Witney
222 Gray's Inn Road
London WC1
Solicitor
<PAGE> 1
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE
SECURITIES LAWS, BUT HAVE BEEN ACQUIRED FOR THE PRIVATE INVESTMENT
OF THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL (A) A
REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS
SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (B) IN THE OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY REGISTRATION UNDER THE ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED IN CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.
This Common Stock Purchase Warrant is issued this 3rd day of April,
1997, by Transmedia Europe, Inc., a Delaware corporation (the "Company"), to Mr
J V Vittoria ("Holder").
W I T N E S S E T H:
1. Issuance of Warrant; Term. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company hereby grants to Holder, subject to the provisions hereinafter set
forth, the right to purchase 125,000 shares of the Company's Common Stock,
$.00001 par value per share (the "Common Stock"), (this "Warrant"). The shares
of Common Stock issuable upon exercise of this Warrant are hereinafter referred
to as the "Shares". This Warrant shall be exercisable at any time after the date
hereof and on or before 5:00 p.m. on the 2nd day of April, 2002. The number of
Shares issuable upon exercise of this Warrant shall be subject to adjustment as
hereinafter set forth.
2. Exercise Price. The exercise price per share for which all
or any of the Shares may be purchased pursuant to the terms of this Warrant
shall be $1.25, subject to adjustment as hereinafter set forth (hereinafter
referred to as the "Exercise Price").
3. Exercise.
(a) This Warrant may be exercised by the Holder (but
only on the conditions hereinafter set forth) in whole or in part, upon delivery
of written notice to the Company, specifying the number of Shares which the
Holder has elected to purchase, at the following address: 11 St. James's Square,
London SW1Y 4LB, England, Attention: President, or such other address as the
Company shall designate in written notice to the Holder hereof, together with
this Warrant and payment (in the manner described in Section 3(b) below) for the
aggregate Exercise Price of the Shares so purchased. Upon exercise of this
Warrant as aforesaid, the Company shall as promptly as practicable execute and
deliver to
<PAGE> 2
the Holder a certificate or certificates for the total number of whole Shares
for which this Warrant is being exercised in such names and denominations as are
requested by such Holder. If this Warrant shall be exercised with respect to
less than all of the Shares, the Holder shall be entitled to receive a new
Warrant covering the number of Shares in respect of which this Warrant shall not
have been exercised, which new Warrant shall in all other respects be identical
to this Warrant.
(b) Payment for the Shares to be purchased upon
exercise of this Warrant shall be made by the delivery of a certified or
cashier's check payable to the Company for the aggregate Exercise Price of the
Shares to be purchased.
(c) If on any exercise of this Warrant the Holder
would be entitled to acquire a fraction of a share of Common Stock, in lieu of
such fraction of a share, the Holder of this Warrant otherwise entitled to a
fraction of such share of Common Stock shall receive, upon surrender to the
Company of the Warrant held by such Holder, a cash amount for such fraction of a
share equal to the product obtained by multiplying (i) such fraction of a share
of Common Stock, by (ii) the amount obtained by subtracting the Exercise Price
from the average of the bid and asked prices for a share of Common Stock in the
over-the-counter market at the close of business on the date of exercise of the
Warrant, as reported by the National Association of Securities Dealers Automated
Quotation System.
4. Covenants and Conditions. The above provisions are subject
to the following:
(a) Neither this Warrant nor the Shares have been
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws ("Blue Sky Laws"). This Warrant has been acquired by
Holder for investment purposes and not with a view to distribution or resale and
may not be made subject to a security interest, pledged, hypothecated, sold or
otherwise transferred without an effective registration statement for this
Warrant under the Act and such applicable Blue Sky Laws or an opinion of counsel
reasonably satisfactory to the Company and its counsel that registration is not
required under the Act and under any applicable Blue Sky Laws. Transfer of the
Shares issued upon the exercise of this Warrant shall be restricted in the same
manner and to the same extent as this Warrant, and the certificates representing
such Shares shall bear substantially the following legend:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED FOR THE
PRIVATE INVESTMENT OF THE HOLDER
-2-
<PAGE> 3
HEREOF AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED UNTIL (A) A
REGISTRATION STATEMENT UNDER THE ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO OR (B)
IN THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY REGISTRATION UNDER
THE ACT OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.
Other legends as required by applicable federal and state laws may be placed on
this Warrant and such certificates. The Holder and the Company agree to execute
such other documents and instruments as counsel for the Company reasonably deems
necessary to effect the compliance of the issuance of this Warrant and any
Shares issued upon exercise hereof with applicable federal and state securities
laws. The Holder agrees that the Company may decline to permit a transfer of
this Warrant if such transfer would result in this Warrant being held by more
than 35 persons, exclusive of "accredited" investors as defined under Regulation
D promulgated under the Act, or if such proposed transferee does not meet then
applicable qualifications for investors in securities offerings exempt from
registration. Furthermore, the unexercised Warrant may be transferred in full
(subject to the provisions hereof) but not in part.
(b) The Company covenants and agrees that all Shares
which may be issued upon exercise of this Warrant shall, upon issuance and
payment therefor in accordance with the terms hereof, be legally and validly
issued and outstanding, fully paid and nonassessable. The Company shall at all
times reserve and keep available for issuance upon the exercise of this Warrant
such number of authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of this Warrant and all other
outstanding Warrants.
5. Warrant Holder Not Shareholder. This Warrant does
not confer upon the Holder hereof, as such, any right or privilege whatsoever as
a shareholder of the Company until the Holder shall have delivered the notice
and tendered payment as required under the provisions of Sections 2 and 3
hereof.
6. Anti-Dilution. Wherever this Warrant specifies a
number of Shares or an Exercise Price per share, the specified number of Shares
or the specified Exercise Price per share shall be changed to reflect
adjustments required by this section. If prior to the expiration or exercise of
this Warrant there shall be any change in the capital structure of the Company,
the Shares covered by this Warrant and the Exercise Price payable therefor shall
be adjusted as follows:
(a) If a stock dividend is declared on the Common
Stock, there shall be added to the shares of Common Stock issuable
-3-
<PAGE> 4
under this Warrant the number of shares of Common Stock ("total additional
shares") which would have been issuable to the Holder had the Holder been the
holder of record only of the number of shares of Common Stock covered by this
Warrant but not exercised at the stock dividend record date. Such additional
shares resulting from such stock dividend shall be delivered without additional
cost, upon the exercise of this Warrant, and, in the event that less than all of
the Shares covered by this Warrant are purchased, the number of additional
shares to be delivered shall be the same fraction of the total additional shares
as the number of shares purchased bears to the total number of shares of Common
Stock covered by this Warrant. Any distribution to the holders of the Common
Stock of the Company, other than a distribution of cash as a dividend out of
surplus or net profits or a distribution by way of granting of rights to
subscribe for shares of capital stock of the Company, shall be treated as a
stock dividend.
(b) If an increase shall be effected in the number of
outstanding shares of Common Stock by reason of a subdivision of such shares,
the number of shares which may thereafter be purchased under this Warrant shall
be increased by the number of shares that would have been received by the Holder
on such subdivision had he been the holder of record only of the number of
shares of Common Stock covered by this Warrant at the effective date of the
subdivision. In such event, the Exercise Price per share shall be decreased by
multiplying the Exercise Price theretofore in effect by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately prior to such subdivision and the denominator of which is the number
of shares of Common Stock outstanding immediately after the subdivision.
(c) If a decrease shall be effected in the number of
outstanding shares of Common Stock by reason of a combination or reverse stock
split, the number of shares which may thereafter be purchased under this Warrant
shall be changed to the number of shares which would have been held by the
Holder after said combination or reverse stock split had he been the holder only
of the number of shares of Common Stock covered by this Warrant at the effective
date of the combination or reverse stock split. In such event, the Exercise
Price per share shall be increased by multiplying the Exercise Price theretofore
in effect by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately prior to the combination or reverse stock
split and the denominator of which is the number of shares of Common Stock
outstanding immediately after the combination or reverse stock split.
(d) If there is any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation or
merger of the Company with any other corporation
-4-
<PAGE> 5
or corporations, or any sale or distribution of all or substantially all of the
Company's property and assets, adequate provision shall be made by the Company
so that there shall remain and be substituted under this Warrant the stock,
securities, or assets that would have been issuable or payable in respect of or
in exchange for the shares of Common Stock then remaining under this Warrant and
not theretofore purchased and issued hereunder, as if the Holder had been the
owner of such shares on the applicable record date. Until the expiration or
exercise of this Warrant, any shares of stock so substituted under this Warrant
shall be subject to adjustment as provided in this Section 6 in the same manner
and to the same effect as the shares of Common Stock covered by this Warrant.
7. Registration Rights. The Company covenants and
agrees as follows:
(a) Rights in Connection with a Public Offering by
the Company. At any time the Company intends to make a public offering of its
securities under any form of registration statement suitable for secondary
offerings, the Company shall so notify the Holder hereof in writing, no less
than 30 days before the intended filing of such registration statement, and
shall permit the Holder to include any or all of his Shares in such offering
(limited only by the provisions of paragraph (d) of this Section 7), provided
the Holder notifies the Company in writing within 15 days of the date of such
notice of his desire to be included in such offering. Thereafter, the Company
shall use its best efforts to (i) file with all due promptness and endeavor to
make effective, as soon as reasonably practicable, a registration statement
under the Act covering any and all shares proposed (the number being limited
only by the provisions of paragraph (d) of this Section 7) to be sold or
otherwise disposed of by the Holder; (ii) qualify such shares under the Blue Sky
laws of the jurisdiction(s) in which the offers and sales or other dispositions
are proposed to be made; (iii) qualify such shares under the rules of any
appropriate self-regulatory organization or stock exchange; (iv) maintain the
effectiveness of the registration statement for a reasonable period of time but
in no event to exceed 30 days and from time to time (within any such period of
effectiveness) advise any Holder whose securities are being registered of any
stop order or any event or development requiring amendment of the registration
statement and prospectus or rendering it inadvisable to use the prospectus until
it is supplemented or amended; and (v) with reasonable promptness prevent the
issuance or cause to be removed any stop order, and amend or supplement the
registration statement and prospectus used in connection therewith to the extent
necessary or appropriate in order to comply with the Act. Notwithstanding
anything else to the contrary contained herein, once the Holder has been
afforded the right to have all of its Shares registered under the Act and has
elected to have some or
-5-
<PAGE> 6
all of its Shares so registered this Section 7 shall be of no further force or
effect if all of such request has been effected.
(b) Expenses. All expenses (including, but not
limited to, all registration fees paid to the Securities and Exchange
Commission, fees and expenses of accountants, fees and expenses of counsel,
printing and engraving expenses, transfer agent fees, escrow fees, N.A.S.D.
registration or exchange listing fees, but not including underwriting discounts
and commissions relating to Shares of any holder being offered thereby and fees
and expenses of any special counsel of any selling shareholder) of any
registration(s) made pursuant to paragraph (a) hereof shall be borne and paid by
the Company. Underwriting discounts and commissions shall be borne pro rata by
any selling shareholder in proportion to the number of shares being offered by
such selling shareholder.
(c) Indemnification. The Company shall indemnify and
hold harmless the Holder, and any officer, director, partner or controlling
person of each, against any claim, liability, loss, damage, cost or expense
(including attorneys' fees) arising out of any violation of federal or state
securities laws or any alleged material misstatement or omission in any
registration statement filed pursuant to paragraph (a) hereof, or in documents
incorporated therein by reference, unless such misstatement or omission is
contained in, or relates to, information furnished or to have been furnished by
the Holder, provided the Company receives prompt written notice of any claim of
any such misstatement or omission and is afforded a reasonable opportunity, if
it so elects, to participate in or control the defense of such claim.
(d) Underwriting. If any registration is intended to
be an underwritten public offering, the Company shall so advise the Holder as a
part of the written notice given pursuant to paragraph (a) hereof. In such
event, the right of the Holder to registration, pursuant to paragraph (a)
hereof, shall be conditioned upon the Holder's participation in such
underwriting and the inclusion of the Holder's Company Common Stock in the
underwriting to the extent provided herein. The Holder proposing to distribute
its securities through such underwriting shall (together with the Company and
any other persons distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the underwriter or
underwriters or representative thereof, selected for such underwriting by the
Company (hereinafter the "Underwriter"). Notwithstanding any other provision of
paragraph (a), if the Underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the Underwriter may
exclude some of the Holder's shares of stock from such registration and
underwriting, provided that shares of stock
-6-
<PAGE> 7
proposed to be sold by stockholders other than the Holder are first excluded and
provided further that in any joint primary or secondary offering, no less than
one-third (1/3) of the aggregate number of shares offered thereby are offered by
the Holder (or such lesser fraction as will include all of the shares which the
Holder then desire to so offer). The number of shares of stock that may be
included in the registration and underwriting shall be allocated to each Holder
proposing to sell, in proportion, as nearly as practicable, to the number of
shares of capital stock of the Company held by such Holder at the time of filing
of the registration statement. If any such Holder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written notice to
the Company and the Underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(e) Assignment of Registration Rights. The rights to
cause to register securities granted the Holder under paragraph (a) may be
assigned to a transferee or assignee, provided that the Company shall be
notified of any such transfer within thirty (30) days of the date such
transaction is effected, and provided further that: (i) such assignee or
transferee agrees to be bound by the terms of this Plan; and (ii) such assignee
or transferee is unable to publicly transfer such stock without registration.
8. Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally, given by
prepaid telegram or mailed first class, postage prepaid, registered or certified
mail as follows:
If to the Company: Transmedia Europe, Inc.
11 St. James's Square
London SW1Y 4LB
England
Attention: Edward J. Guinan, III
If to Holder: Mr J V Vittoria
1616 Ocean Boulevard
Palm Beach
Florida 33480
9. Governing Law. This Warrant shall be construed and
enforced in accordance with the laws of the state of New York.
10. Successors, Assigns. This Warrant shall be
binding upon and inure to the benefit of any successor or successors of the
Company, and shall inure to the benefit of and shall be
-7-
<PAGE> 8
enforceable by the Holder and the Holder's legal representatives, successors,
heirs and permitted assigns.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed and delivered by its duly authorized officer as of the date first above
written.
TRANSMEDIA EUROPE, INC.
By: /s/ Paul L Harrison
-------------------------------
Paul L Harrison
COO, Director
-8-
<PAGE> 1
FACILITY AGREEMENT
From: Joseph Vittoria
To: Transmedia Europe Inc.
Dated 27 March 1997
Dear Sirs,
I write to confirm that I am prepared to grant loan facilities to Transmedia
Europe Inc ("TMNE") on the following terms and conditions:-
1. AMOUNT
US$1,000,000 the principal amount to be made available or any amount
from time to time outstanding being herein called the "Loan"
2. AVAILABILITY
In such tranches on any business day or days during the term described
in paragraph 5 below as may be chosen by TMNE such day in relation to
each tranche being herein the "Drawdown Date".
3. PURPOSE
To satisfy part of the consideration to acquire the entire issued
share capital of Countdown Holdings Limited and to provide working
capital.
4. RATE OF INTEREST
12% per annum (gross of any withholding tax which may be payable) such
interest to be calculated pro rata in respect of each tranche from the
relevant Drawdown Date. Such interest shall accrue daily and be due
and payable upon repayment of the Loan.
5. TERM/REPAYMENT
The Loan shall be repaid together with the accrued interest thereon
upon the expiry of the term that is to say 27th September 1997.
- 1 -
<PAGE> 2
6. EARLY REPAYMENT
Early repayment may be made of the whole or any part of the Loan at
any time.
7. REPAYMENT ON DEFAULT
The whole of the Loan with accrued interest thereon will become
immediately due and payable upon the occurrence of any of the
following (and you will promptly notify me in writing of the
occurrence thereof):-
(a) TMNE fails duly to perform or observe any obligation contained in
this letter;
(b) an order is made or effective resolution is passed for the
dissolution or winding-up of TMNE or any other resolution is
passed or order made having like effect in the jurisdiction in
which it is passed or made;
(c) TMNE is insolvent or calls a meeting of its creditors or makes any
arrangement or composition with its creditors or does or suffers
anything having like effect in any jurisdiction to which it is
from time to time subject;
(d) a receiver or trustee is appointed over the whole or any of the
assets of TMNE any person is appointed to manage the affairs of
TMNE or receive or dispose of its assets pursuant to any security
issued or entered into by TMNE or to an order of a court of
competent jurisdiction;
(e) TMNE ceases to carry on any substantial part of its business or
ceases to be entitled so to carry it on or disposes of any part of
its business or assets (otherwise than in the normal course of its
business);
(f) any execution or distress or distraint is levied against TMNE or
the whole or any of its assets which remains undischarged for 14
days or if any assets of TMNE are seized or fall to be disposed
of pursuant to an order of a court of competent jurisdiction
provided that notwithstanding the foregoing the proposed merger of TMNE and
Transmedia Asia Pacific Inc. and any consequential hive-down of assets
shall not constitute an event of default.
8. WARRANTIES
You represent and warrant on the date of your acceptance of this letter and
on the date of the actual or proposed utilisation under this facility
that:-
(a) you are duly established and have full power to own your assets
and carry on your business;
- 2 -
<PAGE> 3
(b) No Event of Default or Potential Event of Default has occurred and
remains unremedied;
(c) your execution of the acceptance of this letter and/or of any
other document referred to herein has been validly authorised and
the obligations expressed as being assumed by you hereunder
constitute valid legal and binding obligations enforceable against
you in accordance with their terms.
9. GOVERNING LAW
The terms of this facility letter and the rights and obligations arising
hereunder or otherwise relating to the Loan or to any security for the Loan
shall be governed in all respects by English Law and the parties submit to
the jurisdiction of the English Courts.
If the foregoing terms and conditions are acceptable, then kindly arrange for
one copy of this letter to be signed and returned to me.
Yours faithfully,
/s/ J Vittoria
J VITTORIA
We accept the terms of the facility letter of which this is a duplicate copy.
Dated 3 April 1997
Signed Paul Harrison
Director duly authorised
for and on behalf of
TRANSMEDIA EUROPE INC
- 3 -
<PAGE> 1
THIS DEED is dated 27th March 1997
(1) TRANSMEDIA EUROPE INC whose registered office is at c/o United Corporate
Services Inc. 15 East North Street City of Dover County of Kent Delaware
USA ("TMNE");
IN FAVOUR OF
(2) JOSEPH V VITTORIA of 1616 South Ocean Boulevard Palm Beach Florida 33480
USA ("JV").
WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Charge unless the context otherwise requires:
"DERIVATIVE ASSETS" means all stocks, shares, warrants or other securities
rights dividends interest or other property whether of a capital or income
nature accruing offered issued or deriving at any time by way of dividend
bonus redemption exchange purchase substitution conversion consolidation
sub-division preference option or otherwise attributable to any of the
Shares or any Derivative Assets previously described.
"ENCUMBRANCE" means any mortgage charge pledge lien assignment
hypothecation security interest title retention preferential right or
trust arrangement or other security arrangement or agreement or any right
conferring a priority of payment.
"EVENT OF DEFAULT" means any event set out in Clause 7 of the Facility
Letter.
1
<PAGE> 2
"FACILITY LETTER" means the letter dated the date hereof issued by JV in
favour of TMNE.
"LOAN" means the sum of US$ 1,000,000 (one million US dollars) referred to
as the "Loan" in the Facility Letter.
"LPA" means the Law of Property Act 1925
"SHARES" means 50% of the entire issued share capital of Countdown
Holdings Limited.
1.2 References to Clauses are to the clauses to this Charge.
1.3 Clause headings are inserted for ease of reference only and are not to
affect the interpretation of this Charge.
1.4 References to any person or company are to be construed to include
references to that person's or company's successors transferees and
assigns whether direct or indirect.
2. COVENANT TO PAY
2.1 TMNE covenants with JV that it will on demand pay and discharge the Loan
when due to JV in accordance with the Facility Letter.
2.2 TMNE shall pay interest to the date of payment or discharge of the Loan
(notwithstanding any demand or any judgment obtained by JV) at the rate
applicable under the Facility Letter.
3. CHARGE
TMNE as beneficial owner (but not registered owner) pending registration
of the Shares in the name of TMNE (with the intent that the security so
constituted shall extend to all beneficial interests of TMNE in the Shares
and
2
<PAGE> 3
to any proceeds of sale or other realisation of the Shares or any part of
them) and as continuing security for the payment and discharge of the Loan
and interest thereon charges the Shares and the Derivative Assets to JV.
4. DEPOSIT OF TITLE DOCUMENTS AND FURTHER ASSURANCE
4.1 TMNE shall, forthwith upon the issue to it of share certificates for the
Shares following proper stamping of the transfers in its favour, deposit
with JV all stock or share certificates or other documents of title to or
representing the Shares together with such duly executed transfers or
assignments in favour of JV to vest the same in JV or any purchaser only
after the occurrence of an Event of Default to the intent that JV may at
any time after the occurrence of an Event of Default (but not before)
present them for registration.
4.2 TMNE shall subject to clause 4.3 upon the accrual offer issue or receipt
of any Derivative Assets deliver or pay to JV or procure the delivery or
payment to JV of all such Derivative Assets or the stock or share
certificates or other documents of title to or representing them together
with such duly executed transfers or assignments in favour of JV with the
name of the transferee, date and consideration left blank on the same
terms as Clause 4.1
4.3 TMNE shall exercise all voting and other rights and powers attached to the
Shares or the Derivative Assets in its absolute discretion provided that
such voting does not adversely affect the Shares or the Derivative Assets
and is not otherwise inconsistent with this Charge.
4.4 Without prejudice to anything else contained in this Charge, TMNE shall at
the request of JV promptly sign seal execute deliver and do all deeds and
other instruments necessary for creating perfecting or protecting the
security over the Shares or any part of thereof or, if JV shall become so
entitled hereunder, for facilitating their realisation.
3
<PAGE> 4
5. REPRESENTATIONS WARRANTIES AND COVENANTS BY TMNE
5.1 TMNE represents and warrants to JV and undertakes that:
5.1.1 it is and will be the sole absolute and beneficial owner and will be
upon the due registration of the transfer of the Shares in its
favour from C.E.C Radbone the registered holder of all of the Shares
free from all Encumbrances with full title guarantee and will not
create or attempt to create or permit to arise or subsist any
Encumbrance (other than this Charge) on or over the Shares;
5.1.2 it will procure insofar as it is reasonably able that the transfers
of the Shares to TMNE are stamped as soon as is reasonably
practicable with the appropriate amount of stamp duty;
5.1.3 it has not sold or otherwise disposed of or agreed to sell or
otherwise dispose of or granted or agreed to grant any option in
respect of all or any of its right title and interest in and to the
Shares or any of them and will not do any of the foregoing at any
time during the subsistence of this Charge provided that TMNE may
transfer the Shares to Transmedia Asia Pacific, Inc. or complete the
proposed merger with Transmedia Asia Pacific, Inc.;
5.1.4 the Shares have been and will at all times be duly authorised and
validly issued and are and will at all times be free from any
restriction on transfer or right of pre-emption;
5.1.5 it has and will at all times have the necessary power to enter into
and perform its obligations under this Charge;
5.1.6 this Charge constitutes its legal valid binding and enforceable
obligations and save as disclosed herein is a security over all and
every part of the Shares effective in accordance with its terms;
4
<PAGE> 5
5.1.7 this Charge does not and will not conflict with or result in any
breach of or constitute a default under any agreement instrument or
obligation to which TMNE is a party or by which it is bound;
5.1.8 all necessary authorisations and consents to enable or entitle it to
enter into this Charge have been obtained and will remain in full
force and effect at all times during the subsistence of the security
constituted by this Charge; and
5.1.9 it will procure due compliance with its obligations in this Charge
by all its nominees (if any) in whose name or names any Shares are
registered or holding any certificates or other documents of title
relating to any Shares.
5.2 TMNE undertakes to JV to provide a copy of any report accounts circular or
notice received in respect of or in connection with any of the Shares to
JV forthwith upon the receipt by TMNE.
5.3 TMNE shall promptly pay all calls or other payments due and will discharge
all other obligations in respect of any of the Shares and if TMNE fails to
fulfil any such obligations JV may, but shall not be obliged to, make such
payments on behalf of TMNE in which event any sums so paid shall be
reimbursed on demand by TMNE to JV together with interest at the rate
referred to in the Facility Letter from the date of payment by JV until
repayment whether before or after judgment.
5.4 TMNE shall indemnify JV on a full indemnity basis against calls or other
payments relating to the Shares and any defect in TMNE's title to the
Shares and against all actions proceedings losses costs claims and demands
suffered or incurred in respect of anything done or omitted in any way
relating to the Shares or in the exercise or purported exercise of the
powers contained in this Charge by JV.
5
<PAGE> 6
5.5 TMNE shall not do or cause or permit anything to be done which may
adversely affect the security created or purported to be created by this
Charge or which is a variation or abrogation of the rights attaching to or
conferred by all or any of the Shares without the prior written consent of
JV and shall take such action as JV may in its discretion direct in
relation to any proposed compromise arrangement reorganisation conversion
repayment offer or scheme of arrangement affecting all or any part of the
Shares.
6. RIGHTS OF JV
6.1 JV may at its discretion (in the name of TMNE or otherwise) only after the
occurrence of any Event of Default (but not before) and without any
consent or authority on the part of TMNE at such time exercise the
following rights and powers in respect of the Shares:
6.1.1 any voting rights and any powers or rights which may be exercised by
the person or persons in whose name or names the Shares are
registered; and
6.1.2 all the powers given to trustees by Section 10(3) and (4) of the
Trustee Act 1925 (as amended by Section 9 of the Trustee Investments
Act 1961) in respect of securities or property subject to a trust.
6.2 Following the occurrence of an Event of Default all dividends interest and
other income forming part of the Shares shall, unless otherwise agreed
between JV and TMNE, be paid without any set-off or deduction whatsoever
to an interest bearing account and retained by JV until applied as
hereinafter provided as part of the Shares and any such monies which may
be received by TMNE shall pending such payment he held in trust for JV.
7. ENFORCEMENT
7.1 If any Event of Default shall occur and be continuing then:
6
<PAGE> 7
7.1.1 the security constituted by the Charge shall become immediately
enforceable and the power of sale and other powers conferred by
Section 101 of the LPA (as varied or extended by this Charge) shall
become immediately exercisable without the restrictions contained in
the LPA as to the giving of notice or otherwise.
7.2 Section 103 of the LPA (restricting the power of sale) and Section 93 of
the LPA (restricting the right of consolidation) shall not apply to this
Charge.
8. POWER OF SALE
8.1 At any time after the security constituted by this Charge has become
enforceable JV may without further notice to TMNE exercise the power to
sell or otherwise dispose of the whole or any part of the Shares, in such
manner and on such terms and for such consideration (whether payable
immediately or by instalments) as JV shall in his absolute discretion
think fit and without liability for loss whatsoever, and may (without
prejudice to any right which it may have under any other provision of this
Charge) treat such part of the Shares as consists of money as if it were
the proceeds of such sale or other disposal. JV shall apply the proceeds
without prejudice to the right of JV to recover any shortfall from TMNE in
paying the costs of sale and in or towards the discharge of the Loan in
such order as JV in its absolute discretion thinks fit and the surplus (if
any) of such proceeds shall be paid to the person or persons entitled to
it.
9. PROTECTION OF THIRD PARTIES
9.1 No purchaser mortgagee or other person dealing with JV shall be concerned
to enquire whether the Loan has become payable or whether any power which
it is purporting to exercise has become exercisable or whether any money
is due under this Charge or as to the application of any money paid raised
or borrowed or as to the propriety or regularity of any sale by or other
dealing with JV. All the protection to purchasers contained in Sections
104 and 107 of
7
<PAGE> 8
the LPA shall apply to any person purchasing from or dealing with JV as if
the Loan had become due and the statutory powers of sale in relation to
the Shares had arisen on the date of this Charge.
10. POWER OF ATTORNEY
10.1 TMNE by way of security irrevocably appoints JV to be the attorney of TMNE
(with full powers of substitution and delegation) for TMNE and in its name
or otherwise and on its behalf and as its act and deed to sign seal
execute deliver perfect and do all deeds instruments transfers
renunciations proxies notices documents acts and things which TMNE may or
ought to do under the covenants and provisions contained in this Charge
and generally in its name and on its behalf to exercise all or any of the
powers authorities and discretions conferred by or pursuant to this Charge
or by the LPA on JV and to execute and deliver and otherwise perfect any
deed assurance agreement instrument or act and to do anything which it may
deem proper in the exercise of all or any of the powers authorities or
discretions conferred on JV pursuant to this Charge.
10.2 TMNE ratifies and confirms and agrees to ratify and confirm anything such
attorney shall lawfully and properly do or purport to do by virtue of
clause 10.1 and all money expended by any such attorney shall be deemed to
be expenses incurred by JV under this Charge.
11. DISCHARGE OF SECURITY
11.1 The security constituted by this Charge shall be continuing and shall not
be considered as satisfied or discharged by any intermediate payment or
settlement of any part of the Loan or any other matter or thing whatsoever
including the insolvency liquidation or administration of TMNE and shall
be binding until the Loan has been unconditionally and irrevocably paid
and discharged in full.
8
<PAGE> 9
11.2 Upon the irrevocable payment or discharge in full of the Loan JV will or
will procure that he will at the request and cost of TMNE retransfer if
appropriate to TMNE all JV's right title and interest in or to the Shares
freed from this Charge.
12. AVOIDANCE OF PAYMENTS
No assurance security or payment which may be avoided or adjusted under
any enactment relating to bankruptcy or insolvency binding on TMNE in any
jurisdiction and no release settlement or discharge given or made by JV on
the faith of any such assurance security or payment shall prejudice or
affect the right of JV to recover from TMNE (including the right to
recover any monies which it may have been compelled by due process of law
to refund under the provisions of any relevant legislation and any costs
payable by it pursuant to or otherwise incurred in connection with such
process) or to enforce the security created by or pursuant to this Charge
to the full extent of the Loan.
13. CUSTODY
JV shall be entitled to provide for the safe custody by third parties of
all stock and share certificates and documents of title deposited with JV
relating to the Shares and shall not be responsible for any loss or damage
to any such certificates or documents.
14. COMMUNICATIONS
14.1 Every notice demand or other communication under this Charge shall be in
writing and may be delivered personally or by letter facsimile
transmission despatched by JV to TMNE at its address specified at the head
of this Charge or to the following numbers:-
Facsimile
for the attention of
9
<PAGE> 10
or to such other address and or facsimile number as may be notified
in accordance with this clause by the relevant party to the other
party for such purpose.
14.2 Every notice demand or other communication shall be deemed to have been
received (if sent by post) twenty-four hours after being posted first
class postage prepaid (if posted from and to an address within the United
Kingdom) or 5 working days after being posted prepaid airmail (if posted
from or to an address outside the United Kingdom) and (if delivered
personally or despatched by facsimile transmission) at the time of
delivery or despatch if during normal business hours in the place of
intended receipt on a working day in the place of intended receipt and
otherwise at the opening of business in that place on the next succeeding
such working day.
15. MISCELLANEOUS
15.1 No delay or omission on the part of JV in exercising any right or remedy
under this Charge shall impair that right or remedy or operate as or be
taken to be a waiver of it nor shall any single partial or defective
exercise of any such right or remedy preclude any other or further
exercise under this Charge or that or any other right or remedy.
15.2 JV's rights under this Charge are cumulative and not exclusive of any
rights provided by law and may be exercised from time to time and as often
as JV deems expedient.
15.3 Any waiver by JV of any terms of this Charge or any consent or approval
given by JV under it shall only be effective if given in writing and then
only for the purpose and upon the terms and conditions if any on which it
is given.
15.4 If at any time any one or more of the provisions of this Charge is or
becomes illegal invalid or unenforceable in any respect under any law of
any jurisdiction neither the legality validity or enforceability of the
remaining provisions of this Charge nor the legality validity or
enforceability of such
10
<PAGE> 11
provision under the law of any other jurisdiction shall be in any way
affected or impaired as a result.
16. LAW AND JURISDICTION
This Charge is governed by and shall be construed in accordance with
English law and TMNE hereby irrevocably submits to the jurisdiction of the
English courts in relation to any claim or dispute which may arise
hereunder and hereby agree for the purpose of Order 10 Rule 3 of the Rules
of the Supreme Court of England (or any modification or re-enactment
thereof) and in any proceedings in any other jurisdiction that any process
may be served on any of them in the manner therein provided.
IN WITNESS whereof TMNE and JV have executed and delivered this Charge as a Deed
the day and year first before written.
SIGNED as a Deed and DELIVERED by )
TRANSMEDIA EUROPE INC ) Paul Harrison
in the presence of:- ) W H Price
A C Nicholson
25 Trooper Road
Aldbury
Herts
SIGNED as a Deed and DELIVERED by )
JOSEPH VITTORIA in the presence )
of:-
11
<PAGE> 1
Amendment No. 1 dated as of April 1, 1997 ("Amendment No. 1") to
Agreement dated December 6, 1996 ("Restructuring Agreement"), by and among
TRANSMEDIA Network, Inc., TMNI International Incorporated (TRANSMEDIA Network,
Inc. and TMNI International Incorporated are collectively referred to herein as
"Network"), TRANSMEDIA Europe, Inc. and TRANSMEDIA Asia Pacific, Inc.
(TRANSMEDIA Europe Inc. and TRANSMEDIA Asia Pacific, Inc. are individually
referred to as "TMNE" and "TMNA" respectively and are collectively referred to
as the "Network Licensees")
WHEREAS the parties wish to amend the Restructuring Agreement as set
forth herein.
NOW, THEREFORE the parties, intending to be legally bound, agree as
follows:
1. Except as otherwise specifically defined herein, capitalized
terms used herein shall have the same meanings ascribed to them in the
Restructuring Agreement.
2. Section 5 of the Restructuring Agreement shall be amended by
deleting it in its entirety and substituting the following:
"5. Countdown Businesses. Notwithstanding the provisions of paragraph 3
above, New Corp. or a subsidiary of New Corp shall have the right to
acquire and conduct on a worldwide basis the business of Countdown,
plc, Holding Corp. ("Countdown") in exchange for the payment to Network
of the sum of U.S. $750,000 of which $250,000 shall be made by wire
transfer to a bank account designated by Network on the closing and
$500,000 shall be paid one year thereafter to a bank account designated
by Network plus interest at 10% per annum. Such $500,000 obligation
shall be evidenced by a convertible promissory note of the Licensees in
form to be agreed within one week after the date hereof pursuant to
which Network shall have the option to convert some or all of the
$500,000 owed into shares of the Network Licensees (in equal amouants)
at $1.20 per share (or the equivalent for any successor of the Network
Licensees). The conversion purchase price shall be adjusted to reflect
stock splits and dividends, issuance to stockholders of warrants and
rights with below market exercise prices, distributions to stockholders
of securities (other than common stock) or of cash exceeding 10% of
market capitalization, restructurings, consolidations or the like. New
Corp. and the Network Licensees shall not permit Countdown to use the
Network Business Entities' list of Cardholder or their list of Member
Restaurants in connection with any activities of Countdown or any other
member of the New Corp. Group which
<PAGE> 2
would be competitive with the Business. The foregoing shall not
prohibit an interest owner of a Network Business Entity from at the
same time also owning an interest in Countdown, plc, provided that the
limitation on use of the Cardholder and the Member Restaurants list is
maintained. The business of Countdown shall not be conducted under the
Marks and shall not use the system of operations described under the
term Business in Section 1.2 of the Licenses."
3. Except as amended by Amendment No. 1, the Restructuring
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed and delivered this Agreement the day and year
first above written. TRANSMEDIA NETWORK INC.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
TMNI INTERNATIONAL INCORPORATED.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
TRANSMEDIA EUROPE, INC.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
TRANSMEDIA ASIA PACIFIC, INC.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of April 3, 1997, between Transmedia Europe, Inc.
and Transmedia Asia Pacific, Inc., each Delaware corporations (collectively, the
Buyer" and references to "Buyer" shall mean either or both of them as the
context may allow), having an address at 11 St. James's Square, London SW1Y4LB
England and Christopher E.C. Radbone, an individual (the "Seller"), having an
address at 19 Calonne Road, Wimbledon, London SW19 5HH.
WHEREAS, the Buyer and the Seller have entered into an Agreement dated
as of March __, 1997 (the "Purchase Agreement;" all capitalized terms used
herein without definition shall have the meanings assigned to such terms in the
Purchase Agreement); and
WHEREAS, as a condition to the closing under the Purchase Agreement the
Buyer has agreed to register the Asia Shares and the Europe Shares (hereinafter
referred to as the "Sellers Shares" which term shall mean either or both of them
as the context may allow), pursuant to the terms of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the parties hereto
mutually agree as follows:
1. Registration of the Shares.
(a) If, at any time commencing after the date of this
Agreement and expiring three (3) years thereafter, the Buyer proposes to file a
registration statement or statements under the Securities Act of 1933 (the
"Act") for sale of Buyer shares for cash (other than in connection with a merger
or pursuant to Form S-4, Form S-8 or their successor forms, it will give written
notice, at least forty five (45) days prior to the filing of each such
registration statement, to the Seller of its intention to do so. If the Seller
notifies the Buyer in writing within twenty (20) business days after receipt of
any such notice of his desire to include the Seller Shares or any of them in
such proposed registration statement, the Buyer shall afford the Seller the
opportunity to have the Seller Shares registered under such registration
statement; provided, however, that in the case of an underwritten offering, if
the Buyer notifies the Seller in writing that the managing underwriter has
notified the Buyer that the inclusion in the registration statement of any
portion of the Seller Shares would have an adverse effect on such underwritten
offering, then the managing underwriter may limit the number of Seller Shares to
be included in such registration statement only to the extent necessary to avoid
such adverse effect; and provided, further, however, that in the event
securities of the Buyer held by any person or entity other than the Buyer or the
Seller ("Third Party Securities") are to be included in such underwritten
offering, and the managing underwriter shall have determined to limit the number
of Seller Shares or Third Party Securities to be so included, then such
limitation shall be applied to the Seller Shares and the Third Party Securities,
pro rata based on the number of Seller Shares and Third Party Securities
requested to be included in such underwritten offering. Notwithstanding the
provisions of this Section 1(a), the Buyer shall have the right at any time
after it shall have given written notice pursuant to this Section 1(a)
(irrespective of whether a written request for inclusion of any such securities
shall have been made) to elect not to file
<PAGE> 2
any such proposed registration statements or to withdraw the same after the
filing but prior to the effective date thereof.
(b) In the event that Seller has not been afforded the
opportunity under Section 1(a) hereof during the two year period commencing on
the date hereof and ending two years thereafter to have all of the Sellers
Shares included in one or more Registration Statements, Seller shall have the
right upon written notice to Buyer to demand, one time only, the filing of a
Registration Statement under the Act covering that number of Seller Shares
specified in writing to the Buyer. Buyer agrees that it shall use its reasonable
commercial efforts to have said Registration Statement declared effective and
thereafter to be kept current for a minimum of 90 days thereafter. Buyer may
defer the filing of the Registration Statement for up to 90 days to permit Buyer
to use periodic reports otherwise prepared by Buyer in connection with such
filing. Such demand right shall not apply if, notwithstanding the opportunity
provided to Seller under Section 1(a), Seller has not elected to include the
maximum number of Seller Shares in the Registration Statements provided for
therein. Except as otherwise provided herein, the terms of this Agreement shall
be equally applicable to Seller Shares registered under Section 1(a) and 1(b).
(c) Following the effective date of any registration statement
including any Seller Shares, the Buyer shall, upon the request of the Seller,
forthwith supply such reasonable number of copies of the registration statement,
prospectus and other documents necessary or incidental to the registration as
shall be reasonably requested by the Seller to permit the Seller to make a
public distribution of the Seller Shares. The Buyer will use its best efforts to
qualify the Seller Shares for sale in such states as the Seller shall reasonably
request, provided that no such qualification will be required in any
jurisdiction where, solely as a result thereof, the Buyer would be subject to
general service of process or to taxation or qualification as a foreign
corporation doing business in such jurisdiction. The obligations of the Buyer
hereunder with respect to the Seller Shares are expressly conditioned on the
Seller furnishing to the Buyer such appropriate information concerning the
Seller and the Seller Shares as the Company may reasonably request.
(d) The relevant Buyer shall bear the entire cost and expense
of the registration of the Seller Shares; provided, however, that the Seller
shall be solely responsible for the fees of any counsel retained by the Seller
in connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Seller Shares sold by the
Seller pursuant thereto.
(e) Neither the filing of such registration statement by the
Buyer pursuant to this Agreement nor the making of any request for prospectuses
by the Seller shall impose upon the Seller any obligation to sell the Seller
Shares.
(f) The Seller, upon receipt of notice from the Buyer that an
event has occurred which requires a post-effective amendment to any registration
statement including any Seller Shares or a supplement to the prospectus included
therein, shall promptly discontinue the sale of the Seller Shares until the
Seller receives a copy of a supplemented or amended
2
<PAGE> 3
prospectus from the Buyer, which the Buyer shall provide as soon as practicable
after such notice.
2. Indemnification.
(a) The Buyer shall indemnify and hold harmless the Seller
from and against any and all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses and
reasonable costs of investigation (collectively "Damages") arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any registration statement including the Seller Shares filed by the
Buyer under the Act, any post-effective amendment to such registration
statement, or any prospectus included therein required to be filed or furnished
by reason of this Agreement or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except, insofar as such Damages are
caused by any such untrue statement or omission based upon information furnished
in writing to the Buyer by the Seller expressly for use therein; provided,
however, that the indemnification in this paragraph 2(a) with respect to any
prospectus shall not inure to the benefit of the Seller on account of any such
Damage arising from the sale of the Shares by the Seller, if a copy of a
subsequent prospectus correcting the untrue statement or omission in such
earlier prospectus was delivered to the Seller by the Buyer prior to the subject
sale and the subsequent prospectus was not delivered or sent by the Seller to
the purchaser prior to such sale; and provided further, that the Buyer shall not
be obligated to so indemnify the Seller unless the Seller shall at the same time
indemnify the Buyer, its directors, each officer signing such registration
statement and each person, if any, who controls the Buyer within the meaning of
the Act, from and against any and all Damages caused by any untrue statement of
a material fact contained in such registration statement, any post-effective
amendment to such registration statement or any prospectus required to be filed
or furnished by reason of this Agreement or caused by any omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, insofar as such Damages are caused by any
untrue statement or omission based upon information furnished in writing to the
Buyer by the Seller expressly for use therein.
(b) If for any reason the indemnification provided for in the
preceding subparagraph is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any Damages referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by the
indemnified party as a result of such Damages in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations.
3
<PAGE> 4
3. Rule 144 Requirements
The Buyer represents and warrants to the Seller that the
Common Stock of the Buyer (including the Seller Shares) is registered under
Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act").
Accordingly the Buyer agrees to:
(a) comply with the requirements of Rule 144(c) under the
Act with respect to current public information about
the Buyer;
(b) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of
the Buyer under the Act and the Exchange Act;
(c) furnish to any holder of Seller Shares upon request
(i) a written statement by the Buyer as to its
compliance with the requirements of the Act and the
Exchange Act, (ii) a copy of the most recent annual
or quarterly report of the Buyer, and (iii) such
other reports and documents of the Buyer as such
holder may reasonably request to avail itself of any
similar rule or regulation of the SEC allowing it to
sell any such securities without registration under
the Act.
4. Mergers etc.
The Buyer shall not, directly or indirectly, enter into any
merger, consolidation or reorganization in which the Buyer shall not be the
surviving corporation unless the proposed surviving corporation shall, prior to
the merger, consolidation or reorganization, agree in writing to assume the
obligations of the Buyer hereunder and for that purpose references hereunder to
"Seller Shares" shall be deemed to be references to the securities that the
Seller would be entitled to receive in exchange for the Seller Shares under any
such merger, consolidation or reorganization; provided, however that the
provision of this Section 4 shall not apply in the event of any merger,
consolidation or reorganization in which the Buyer is not the surviving
corporation if the Seller is entitled to receive in exchange for his Seller
Shares consideration consisting solely of (i) cash, (ii) securities of the
acquiring corporation that may be immediately sold to the public with
registration under the Act, or (iii) securities of the acquiring corporation
that the acquiring corporation has agreed to register for resale to the public
under the Act within 90 days of completion of the transaction and thereafter
such securities are so registered or (iv) any combination of (i) (ii) or (iii).
5. Transfers of Rights.
This Agreement, and the rights and obligations of the Seller
hereunder, may be assigned by the Seller to (i) his spouse or lineal descendants
or (ii) a trust, the beneficiaries of which are the Seller and/or the spouse or
lineal descendants of the Seller, provided that the transferee provides written
notice of such assignment to the Buyer. Except as provided in this
4
<PAGE> 5
Section 5, no party to this Agreement may transfer or assign any of its rights
hereunder without the prior written consent of the other parties hereto.
6. Governing Law.
(a) This Agreement shall be deemed to have been made and
delivered in the State of New York and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
laws of the State of New York.
7. Amendment. This Agreement may only be amended by a written
instrument executed by the Buyer and the Seller.
8. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
9. Execution in Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
10. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand, facsimile or five days after such notice is mailed by
registered or certified mail, postage prepaid, return receipt requested on one
day after delivery to an overnight courier or express company to the address set
forth on the first page of this Agreement.
11. Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
12. Severability. Any provision of this Agreement which is held by
a court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction if the rights or obligations of any party
hereto under this Agreement will not be materially and adversely affected
thereby.
5
<PAGE> 6
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.
TRANSMEDIA EUROPE, INC.
By: /s/ Paul L. Harrison
--------------------------------
Name: Paul L. Harrison
Title: Chief Financial Officer
TRANSMEDIA ASIA PACIFIC, INC.
By: /s/ Paul L. Harrison
--------------------------------
Name: Paul L. Harrison
Title: Chief Financial Officer
/s/ C. Radbone
------------------------------------
Christopher E.C. Radbone
6
<PAGE> 1
Amendment No. 1 dated as of April 1, 1997 ("Amendment No. 1") to
Agreement dated December 6, 1996 ("Restructuring Agreement"), by and among
TRANSMEDIA Network, Inc., TMNI International Incorporated (TRANSMEDIA Network,
Inc. and TMNI International Incorporated are collectively referred to herein as
"Network"), TRANSMEDIA Europe, Inc. and TRANSMEDIA Asia Pacific, Inc.
(TRANSMEDIA Europe Inc. and TRANSMEDIA Asia Pacific, Inc. are individually
referred to as "TMNE" and "TMNA" respectively and are collectively referred to
as the "Network Licensees")
WHEREAS the parties wish to amend the Restructuring Agreement as set
forth herein.
NOW, THEREFORE the parties, intending to be legally bound, agree as
follows:
1. Except as otherwise specifically defined herein, capitalized
terms used herein shall have the same meanings ascribed to them in the
Restructuring Agreement.
2. Section 5 of the Restructuring Agreement shall be amended by
deleting it in its entirety and substituting the following:
"5. Countdown Businesses. Notwithstanding the provisions of paragraph 3
above, New Corp. or a subsidiary of New Corp shall have the right to
acquire and conduct on a worldwide basis the business of Countdown,
plc, Holding Corp. ("Countdown") in exchange for the payment to Network
of the sum of U.S. $750,000 of which $250,000 shall be made by wire
transfer to a bank account designated by Network on the closing and
$500,000 shall be paid one year thereafter to a bank account designated
by Network plus interest at 10% per annum. Such $500,000 obligation
shall be evidenced by a convertible promissory note of the Licensees in
form to be agreed within one week after the date hereof pursuant to
which Network shall have the option to convert some or all of the
$500,000 owed into shares of the Network Licensees (in equal amouants)
at $1.20 per share (or the equivalent for any successor of the Network
Licensees). The conversion purchase price shall be adjusted to reflect
stock splits and dividends, issuance to stockholders of warrants and
rights with below market exercise prices, distributions to stockholders
of securities (other than common stock) or of cash exceeding 10% of
market capitalization, restructurings, consolidations or the like. New
Corp. and the Network Licensees shall not permit Countdown to use the
Network Business Entities' list of Cardholder or their list of Member
Restaurants in connection with any activities of Countdown or any other
member of the New Corp. Group which
<PAGE> 2
would be competitive with the Business. The foregoing shall not
prohibit an interest owner of a Network Business Entity from at the
same time also owning an interest in Countdown, plc, provided that the
limitation on use of the Cardholder and the Member Restaurants list is
maintained. The business of Countdown shall not be conducted under the
Marks and shall not use the system of operations described under the
term Business in Section 1.2 of the Licenses."
3. Except as amended by Amendment No. 1, the Restructuring
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed and delivered this Agreement the day and year
first above written. TRANSMEDIA NETWORK INC.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
TMNI INTERNATIONAL INCORPORATED.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
TRANSMEDIA EUROPE, INC.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
TRANSMEDIA ASIA PACIFIC, INC.
ATTEST: By: ___________________________________
___________________________________ Title: ________________________________
<PAGE> 3
Agreement dated December 6, 1996, by and among Transmedia Network,
Inc., TMNI International Incorporated (Transmedia Network, Inc. and TMNI
International Incorporated are collectively referred to herein as "Network"),
Transmedia Europe, Inc. and Transmedia Asia Pacific, Inc. (Transmedia Europe
Inc. and Transmedia Asia Pacific, Inc. are individually referred to as "TMNE"
and "TMNA" respectively and are collectively referred to as the "Network
Licensees")
WHEREAS Network and TMNE are parties to a Master License Agreement
dated December 14, 1992 as amended (the "TMNE License");
WHEREAS Network and TMNA are parties to a Master License Agreement
dated March 21, 1994 (the "TMNA License").
WHEREAS the parties wish to enter into certain agreements set forth
herein which either directly or by operation of such agreements modify the terms
of the TMNE License and the TMNA License (collectively called the "Licenses").
NOW, THEREFORE the parties, intending to be legally bound, agree as
follows:
1. Definitions. Except as otherwise specifically defined herein,
capitalized terms used herein shall have the same meanings ascribed to them in
the Licenses.
2. Restructuring. The Network Licensees and certain affiliates of
the Network Licensees intend to enter into a corporate restructuring (the
"Restructuring") pursuant to which a holding company (herein called "New Corp.")
will be established. The Network Licensees (which may be merged into one
entity), together with any other entity to which any rights under the Licenses
are granted (collectively with the Network Licensees, the "Network Business
Entities"), and other entities that are not engaged in the "Business" will
comprise direct or indirect subsidiaries of New Corp. (New Corp. and all such
subsidiaries being referred to collectively as the "New Corp. Group"). It is
likely that New Corp. will be a publicly traded company. Subject to the terms
and conditions set forth in this Agreement, Network agrees that the
Restructuring and the establishment of the New Corp. Group will not constitute a
breach of the Licenses. Upon the completion of the Restructuring, New Corp.
shall pay to Network the sum of U.S. $250,000 which payment shall be made by
wire transfer to a bank account designated by Network.
3. Permitted Operations of the New Corp. Group. The members of
the New Corp. Group, other than the Network Business Entities, may engage in any
business or activity of any nature whatsoever other than activities which are in
competition with the "Business" under the terms of the Licenses provided that
all such non-competitive businesses and activities shall not be conducted under
the Marks; no member of the New Corp. Group shall have any liability or
obligation to Network as a result of engaging in such non-competitive
activities.
<PAGE> 4
4. Operations of the Network Business Entities. The operations of
the Network Business Entities shall be conducted exclusively in one or more
separate corporations, none of which shall engage in any business or activity
except in connection with the Business. Nothing contained herein or in the
Licenses shall prohibit the Network Business Entities from being owned by one or
more other members of the New Corp. Group.
5. Countdown Businesses. Notwithstanding the provisions of
paragraph 3 above, New Corp. or a subsidiary of New Corp. shall have the
right to acquire and conduct on a worldwide basis the business of
Countdown, plc, Holding Corp. ("Countdown") in exchange for the payment to
Network on the closing of such acquisition of the sum of U.S. $750,000 which
payment shall be made by wire transfer to a bank account designated by Network.
New Corp. and the Network Licenses shall not permit Countdown to use the
Network Business Entities' list of Cardholders or their list of Member
Restaurants in connection with any activities of Countdown or any other member
of the New Corp. Group which would be competitive with the Business. The
foregoing shall not prohibit an interest owner of a Network Business Entity
from at the same time also owning an interest in Countdown, plc, provided that
the limitation on use of the Cardholder and the Member Restaurants list is
maintained. The business of Countdown shall not be conducted under the Marks
and shall not use the system of operations described under the term Business in
Section 1.2 of the Licenses.
6. Modification of Licenses. In addition to modifications or
amendment to the Licenses resulting from the provisions or paragraphs 1 through
5 hereof, the Licenses shall be modified and amended as follows:
(i) The definition of the term "Licensees" shall be
modified to include all members of the New Corp. Group who
succeed to the interest of such Licenses by Transfer or
operation of law as permitted by the Licenses or this
Agreement
(ii) Solely to facilitate transfers among members of the
New Corp. Group the Licenses shall be amended to eliminate any
requirement for prior Network approval of transfers of Control
of the Licensee from any member of the New Corp. Group to any
other member of the New Corp. Group as well as to eliminate
any other restriction on transferability among members of the
New Corp. Group. In addition, the Licenses shall be amended by
eliminating Section 22.5.
(iii) (A) The first sentence of Section 1.3 of each License
Agreement shall be amended by inserting
<PAGE> 5
the words "direct or indirect (as such term is used in Section
22.3(g) hereof)" prior to the words "beneficial ownership" and
the words "other than a member of the New Corp. Group"
immediately after the words "beneficial ownership."
(B) Section 22.3 of each License Agreement shall be amended by
(i) deleting "or" at the end of each clause (e) thereof, (ii)
inserting "; or" in lieu of the period at end of each clause
(f) thereof, and (iii) inserting the following clause (g) in
each such Section 22.3:
"(g) any person or group other than a member of the
New Corp. Group shall acquire, directly or indirectly,
beneficial ownership of thirty percent or more of the equity
of the Licensee, without the prior written consent of the
Licensor. For purposes of Section 1.3 and this clause (g), a
person or group shall be deemed to acquire beneficial
ownership, indirectly, of a proportional percentage of the
equity of the Licensee by acquiring beneficial ownership,
directly or indirectly, of an equity interest in any other
person which itself beneficially owns, directly or indirectly,
an equity interest in the Licensee. The terms "acquires,"
"group" "directly and indirectly" and "beneficially own" shall
have the respective meanings and usages ascribed to them under
Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13D-G thereunder."
(iv) Section 21.1 shall be amended by deleting the first
sentence thereof and substituting the following: "Licensee
covenants that during the Term of this Agreement, except as
otherwise approved in writing by Licensor, Licensee's
designated manager, who shall be approved in writing by
Licensor, shall devote sufficient time, energy and efforts
necessary for the management and operation of the Business.
(v) The New Corp. Group shall take all reasonable steps
to ensure that the Network
<PAGE> 6
Licensees shall maintain sufficient working capital necessary
to conduct the Business in the ordinary course. In this
regard, the Licenses shall be amended by adding a new
subsection (l) to Section 22.2 as follows, "(l) failure to
maintain working capital adequate to conduct Licensee's
Business in the ordinary course".
7. Permitted Operations of Network. Network may engage in any
business or activity of any nature whatsoever other than activities which are in
competition with the "Business" under the terms of the Licenses in the
Territories under the Licenses. Network shall have no liability or obligation as
a result of engaging in such non-competitive activities. Such non-competitive
businesses shall not be conducted under the Marks. In addition, Network may
establish, acquire and operate in the Territories a competitive business similar
to that conducted by Countdown provided that such competitive business shall not
be conducted under the Marks and shall not use the system of operations
described under the term Business in Section 1.2 of the Licenses.
8. Conflicts: Reaffirmation of Licenses. In the event of any
explicit conflict between the terms and provisions of the Licenses and the terms
and provisions of this Agreement, the terms and provisions of this Agreement
shall govern. Except as modified and amended hereby, the Licenses shall remain
in full force and effect in accordance with their terms.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed, sealed and delivered this Agreement the day and year
first above written.
TRANSMEDIA NETWORK INC.
ATTEST: By: ________________________________
___________________________ Title: _____________________________
TMNI INTERNATIONAL INCORPORATED.
ATTEST: By: ________________________________
___________________________ Title: _____________________________
<PAGE> 7
TRANSMEDIA EUROPE, INC.
ATTEST: By: ________________________________
___________________________ Title: _____________________________
TRANSMEDIA ASIA PACIFIC, INC.
ATTEST: By: ________________________________
___________________________ Title: _____________________________
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