PURCHASE AGREEMENT
PURCHASE AGREEMENT (the "Agreement"), dated as of December 15,
1997, between Transmedia Network Inc., a Delaware corporation ("Transmedia") and
East American Trading Company, a North Carolina corporation ("East American").
WHEREAS, Transmedia and East American entered into a Franchise
Agreement, dated November 9, 1992, as amended by an Amendment made on November
9, 1992, and a Receipt, Waiver, Release and Amendment No. 2, dated September 21,
1993 (collectively, the "First Franchise Agreement"), and a Franchise Agreement,
dated March 16, 1994, as amended by an Amendment dated March 16, 1994
(collectively, the "Second Franchise Agreement"), in each case pursuant to which
Transmedia granted East American the right to utilize certain property and
promote and sell certain services owned by Transmedia, upon the terms and
conditions contained in the applicable Agreement; and
WHEREAS, Transmedia and East American desire to terminate and
cancel the First Franchise Agreement and the Second Franchise Agreement and
transfer certain assets of East American to Transmedia in exchange for the
issuance to East American of shares of common stock of Transmedia, all on the
terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
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ARTICLE I
TRANSFER OF ASSETS; CANCELLATION OF FRANCHISE AGREEMENT.
1.1 Transfer of Assets; Cancellation of Franchise Agreement. On the terms
and subject to the conditions in this Agreement, simultaneously with the
execution and delivery of this Agreement, (a) East American shall sell,
transfer, convey, assign and deliver to Transmedia Restaurant Company Inc., a
Delaware corporation ("Transmedia Restaurant"), free and clear of all mortgages,
pledges, assessments, security interests, leases, liens, adverse claims, levies,
charges or other encumbrances of any nature, conditional sale or title retention
contracts, agreements or understandings or any contracts, agreements or
understandings to grant any of the foregoing (collectively, "Liens"), all of its
right, title and interest in, to and under the contractual rights-to- receive
including, without limitation, the food and beverage credits of East American
at, and any loans or advances of East American to, restaurants and other
establishments (including, without limitation, those restaurants and
establishments listed on Exhibit A attached hereto) which were, at the time of
the creation of such right, members of the TRANSMEDIA network, accepted the
TRANSMEDIA card, in operation and for which no bankruptcy (whether voluntary or
involuntary) or liquidation proceedings had been commenced, used or held for use
in connection with East American's business, and all agreements, contracts,
guarantees, instruments, security agreements and other documents evidencing or
securing, and any collateral and security interests securing, such credits,
loans and advances (collectively, the "Rights-to-Receive"), as the same shall
exist on the Closing Date, by the execution and delivery of the General
Assignment and Xxxx of Sale Agreement, in the form attached hereto as Exhibit B,
and (b) East American and Transmedia shall cancel and terminate, effective as of
the Closing Date, East American's rights
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under the First Franchise Agreement and the Second Franchise Agreement, each in
accordance with the terms thereof, by the execution and delivery of the letter,
in the form attached hereto as Exhibit C (together, with the Xxxx of Sale, and
the power of attorney, in the form attached hereto as Exhibit D (the "Power of
Attorney"), the "Additional Agreements"), for the consideration specified in
Section 1.2.
1.2 Purchase Price. In consideration of the transfer of the rights
specified in Section 1.1(a) and the cancellation and termination of East
American's rights under the First Franchise Agreement and the Second Franchise
Agreement, simultaneously with the execution and delivery of this Agreement,
Transmedia shall deliver to East American, certificates for 170,000 shares of
common stock, par value $0.02 per share, of Transmedia (the "Shares"),
registered in the name of East American, which shall bear appropriate legends
stating that the shares evidenced thereby have not been registered under federal
and state securities laws.
1.3 Closing. The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Transmedia, 00000 Xxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxx 00000, or such other location as the parties
shall mutually agree, commencing at 10:00 a.m. local time, on the date of the
execution and delivery of this Agreement (the "Closing Date").
1.4 Further Assurances. If at any time after the Closing it shall be
determined that any further bills of sale, assignments, assurances or any other
actions or things are necessary, desirable or proper to vest, perfect or
confirm, of record or otherwise, in Transmedia, Transmedia Restaurant or any
designee of either its right, title or interest in, to or under any of the
rights, properties or assets of East American acquired as a result of, or in
connection with, the transactions contemplated by this Agreement, or otherwise
to carry out the purposes of this
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Agreement, East American shall deliver such bills of sale, assignments and
assurances and take and do all such other actions and things as may be
necessary, desirable or proper to vest, perfect or confirm any and all right,
title and interest in, to and under such the rights, properties or assets
transferred hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 East American. East American represents, warrants and covenants to
Transmedia as follows:
(a) Organization and Qualification. East American is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of North Carolina, has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted and is duly qualified, registered or licensed and in good standing to
do business in each jurisdiction in which the nature of the business conducted
by it or the ownership or leasing of its properties makes such qualification
necessary, except such jurisdictions, if any, where the failure to be so
qualified would not have a material adverse effect on its business and
operations, taken as a whole.
(b) Authority; Vote Required. East American has the requisite corporate
power and authority to execute and deliver this Agreement and the Additional
Agreements, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Additional Agreements by East American and
the consummation by East American of the
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transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action (including approval by its Board of Directors and
shareholders) and no other corporate proceedings on the part of East American
are necessary to authorize this Agreement or the Additional Agreements or to
consummate the transactions contemplated hereby and thereby. This Agreement and
each of the Additional Agreements has been duly executed and delivered by East
American and, assuming the due authorization, execution and delivery by the
other party hereto or thereto, constitutes the legal, valid and binding
obligation of East American.
2.2 Transmedia. Transmedia represents, warrants and covenants to East
American as follows:
(a) Organization and Qualification. Transmedia is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is duly qualified, registered or licensed and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary, except such jurisdictions, if any, where the failure to be so
qualified would not have a material adverse effect on its business and
operations, taken as a whole.
(b) Authority. Transmedia has the requisite corporate power and
authority to execute and deliver this Agreement and the Additional Agreements,
to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Additional Agreements by Transmedia, and the consummation by
Transmedia of the transactions contemplated hereby and
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thereby, have been duly authorized by all necessary corporate action and no
other corporate proceedings on the part of Transmedia are necessary to authorize
this Agreement or the Additional Agreements. This Agreement and each of the
Additional Agreements has been duly executed and delivered by Transmedia and,
assuming the due authorization, execution and delivery by the other party hereto
or thereto, constitutes the legal, valid and binding obligation of Transmedia.
(c) Shares. Upon issuance at the Closing, the Shares will have been
duly authorized, validly issued and fully paid and nonassessable and not issued
in violation of any preemptive rights.
2.3 Mutual. Each of East American and Transmedia represents, warrants
and covenants to the other as follows:
(a) East American has delivered to Transmedia all sums, documents,
books and records required to be delivered pursuant to Article XVII of the First
Franchise Agreement and Article XVII of the Second Franchise Agreement.
(b) East American has delivered to Transmedia all appropriate UCC-3
Financing Statements, duly executed by an authorized officer, with respect to
each restaurant or establishment against which it has filed a UCC-1 Financing
Statement in connection with or relating to Rights-to-Receive.
(c) East American has delivered to Transmedia the Power of Attorney,
duly executed by an authorized officer.
(d) Transmedia has delivered to East American a certificate
representing the Shares, registered in the name of East American.
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(e) Transmedia has delivered to East American all sums required to be
delivered pursuant to Article XVII of the First Franchise Agreement and Article
XVII of the Second Franchise Agreement.
2.4 Releases.
(a) Transmedia, for itself, its successors and assigns, releases and
forever discharges East American, its officers, directors, stockholders,
employees and agents from any and all claims, demands, actions, causes of
action, suits or judgments, whether in law, equity or otherwise (including
without limitation any unknown or unsuspected claims) that Transmedia had or has
against each of the foregoing arising out of, based upon or resulting from facts
or circumstances of any kind existing on or prior to the Closing Date.
(b) East American, for itself, its successors and assigns, releases and
forever discharges Transmedia, its subsidiaries, and the officers, directors,
stockholders, employees and agents of each of them from any and all claims,
demands, actions, causes of action, suits or judgments, whether in law, equity
or otherwise (including without limitation any unknown or unsuspected claims)
that East American had or has against each of the foregoing arising out of,
based upon or resulting from facts or circumstances of any kind existing on or
prior to the Closing Date.
ARTICLE III
REGISTRATION
3.1 Shelf Registration. If not registered pursuant to an effective
registration statement at the Closing Date, Transmedia shall prepare and file
and use its best efforts to have
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declared effective a registration statement on any appropriate form
pursuant to Rule 415 under the Securities Act of 1933, as amended, and the rules
and regulations thereunder (the "Securities Act"), and/or any similar rule that
may be adopted by the Securities and Exchange Commission (the "SEC") (the "Shelf
Registration Statement"), that shall include all of the Shares (including all
shares of common stock issued as a dividend thereon, collectively, the
"Registrable Securities"), no later than six (6) months from the date hereof
(the "Registration Date"). Transmedia shall use its best efforts to keep such
Shelf Registration Statement continuously effective for such period following
the date on which the Shelf Registration is declared effective until the holders
of the Registrable Securities may sell such shares pursuant to Rule 144 under
the Securities Act. Transmedia shall pay all expenses incident to the
preparation and filing of the Shelf Registration Statement pursuant to this
Agreement, including, without limitation, all registration, filing and
applicable national securities exchange listing and National Association of
Securities Dealers, Inc. fees, all fees and expenses of complying with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel to the underwriters in connection with "blue sky" qualification of the
Registrable Securities under the laws of the various jurisdictions), all
duplicating and printing expenses, all messenger and delivery expenses, and the
fees and disbursements of counsel for Transmedia and of its independent public
accountants; but excluding all underwriters' and brokers' expenses and
underwriting and brokerage fees, discounts and commissions in respect of the
Registrable Securities being registered, transfer taxes or the fees and expenses
of counsel to the holders of such shares in connection with the Shelf
Registration Statement, whether or not it becomes effective. Transmedia shall
not have any obligation to pay any underwriting discounts or commissions
attributable to the sale of Registrable Securities,
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which expenses will be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the securities to
be so registered.
3.2 Postponement. Transmedia shall be entitled to postpone for a
reasonable period of time (but not exceeding the number of days set forth in the
next two sentences) (the "Postponement Period") the filing of any Shelf
Registration Statement required to be prepared and filed by it pursuant to this
Agreement if Transmedia determines, in its reasonable judgment, that such
registration and offering would materially and adversely interfere with any
financing, corporate reorganization or other material transaction or development
involving Transmedia or any subsidiary or would require a premature disclosure
thereof, and shall promptly give the holders of Registrable Securities written
notice of such determination, containing a general statement of the reasons for
such postponement and an approximation of the anticipated delay (which notice,
in the event of a postponement resulting from the registration by Transmedia of
any of its common equity securities under the Securities Act, shall be given to
each holder of Registrable Securities no later than two business days before the
Registration Date). In the event of a postponement resulting from the offer,
sale or distribution or registration under the Securities Act by Transmedia of
any common equity securities, the Postponement Period shall be 90 days. In the
event of a postponement for any other reason, the Postponement Period shall be
45 days.
3.3 Furnish Information. It shall be a condition precedent to the
obligations of Transmedia to take any action pursuant to this Agreement with
respect to the Registrable Securities of any holder that such holder shall
furnish to Transmedia such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
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securities as shall be required to effect the registration of such holder's
Registrable Securities and as may be required from time to time to keep such
registration current in accordance with the terms hereof.
3.4 No Assignment of Registration Rights. The right to cause Transmedia
to register Registrable Securities pursuant to this Agreement may be assigned by
a holder only (x) to a transferee who executes and delivers to Transmedia a
joinder agreement, agreeing to be legally bound by Article III of this Agreement
and who owns on Transmedia's books and records the Registrable Securities and
(y) if, immediately following such transfer, the further disposition of such
securities by the transferee is restricted under the Securities Act.
ARTICLE IV
REPRESENTATIONS AND COVENANTS
WITH RESPECT TO THE SHARES
4.1 Representations. East American represents and warrants to
Transmedia as follows:
(a) East American is an "accredited investor," as such term is defined
in Rule 501(a) of Regulation D under the Securities Act. East American
understands that the Shares have not been registered under the Securities Act or
any state securities laws by reason of exemptions from the registration
requirements of the Securities Act or any state securities laws by reason of
exemptions from the registration requirements of the Securities Act and such
state securities laws which depend upon, among other things, the accuracy of the
representations set forth in this Section 4.1(a). East American is familiar with
the provisions of Rule 144 under the
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Securities Act, which permits the limited resale of restricted securities
subject to the satisfaction of certain conditions. East American (i) is the true
party in interest and is not acquiring any of the Shares for the benefit of any
other person or entity and (ii) is acquiring the Shares for the purpose of
investment and not with a view to the resale or distribution of all or any part
thereof in violation of the Securities Act.
(b) East American understands that the Shares have not been registered
under any state or federal securities laws and cannot be sold, pledged or
otherwise disposed of or transferred without compliance with applicable state
and federal securities laws and the terms of this Agreement.
(c) The certificates evidencing the Shares received by East American
bear a legend in substantially the form set forth below and contain such other
information as Transmedia deems necessary or appropriate:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PURCHASE AGREEMENT DATED AS OF DECEMBER 15, 1997 BETWEEN TRANSMEDIA
NETWORK INC. (THE "COMPANY") AND EAST AMERICAN TRADING COMPANY AS MAY
BE AMENDED FROM TIME TO TIME, AND MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF (A "TRANSFER")
EXCEPT IN ACCORDANCE WITH THE PROVISIONS THEREOF AND ANY TRANSFEREE OF
THESE SECURITIES SHALL BE SUBJECT TO THE TERMS OF SUCH AGREEMENT.
COPIES OF THE PURCHASE
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AGREEMENT, AS AMENDED, ARE MAINTAINED WITH THE CORPORATE RECORDS OF THE
COMPANY AND ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE COMPANY. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR STATE SECURITIES LAWS, AND NO TRANSFER OF THESE
SECURITIES MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR (B) PURSUANT TO AN EXEMPTION THEREFROM WITH
RESPECT TO WHICH THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL FROM THE
HOLDER THAT SUCH TRANSFER IS EXEMPT FROM THE REQUIREMENTS OF THE ACT.
Upon receipt by Transmedia of (i) such documentation as it deems necessary and
appropriate (including an opinion of counsel, with counsel and such opinion
being reasonably satisfactory to Transmedia) to evidence that each of the
foregoing legends may be removed from the certificates evidencing the Shares and
(ii) the certificates for the Shares containing such legends, it shall issue to
the holder of the Shares new certificates for the Shares without such legends.
4.2 Covenants.
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(a) East American covenants that none of the Shares issued to it will
be offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of (each being a "Transfer"), except (i) pursuant to an effective
registration statement under the Securities Act, or (ii) unless such requirement
is waived by the Transmedia, upon receipt by the Transmedia of an opinion of
counsel to East American (which opinion and counsel are reasonably satisfactory
to Transmedia), in either case to the effect that no registration statement is
required in connection with such Transfer because of the availability of an
exemption from registration under the Securities Act and, in each case, after
full compliance with all of the applicable provisions of the Securities Act and
the rules and regulations of the SEC and all applicable state securities laws,
rules and regulations.
(b) Transmedia covenants that it will use its best efforts to obtain
the listing of the Shares on the New York Stock Exchange.
ARTICLE V
MISCELLANEOUS; GENERAL
5.1 Fees and Expenses. Each party hereto shall pay its own expenses
incident to preparing, entering into or carrying out this Agreement and the
consummation of the transactions contemplated hereby.
5.2 Survival. The agreements of East American and Transmedia contained
in Sections 5.1 and 5.6 shall survive the closing of this Agreement.
5.3 Modification or Amendment. This Agreement constitutes the entire
understanding among the parties relating to the subject matter hereof, and no
modification,
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amendment or waiver of any provision of this Agreement will be effective against
Transmedia or East American, unless such modification, amendment or waiver is
approved in writing by Transmedia and East American. The failure of either party
to enforce any of the provisions of this Agreement will in no way be construed
as a waiver of such provisions and will not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
5.4 Waiver of Conditions. The conditions to each party's obligations to
consummate the transactions contemplated hereby are for the sole benefit of such
party and may be waived by such party (in the manner provided for herein) in
whole or in part to the extent permitted by applicable law.
5.5 Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
5.6 Governing Law; Forum; Consent to Jurisdiction. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York applicable to a contract executed and performed in such State without
giving effect to the principles of conflict of laws thereof. Each of the parties
to this Agreement hereby irrevocably and unconditionally (i) consents to submit
to the exclusive jurisdiction of (x) the courts of Dade County, Florida (state
or federal) for any proceeding brought by East American arising in connection
with this Agreement and (y) the courts of Mecklenburg County, North Carolina
(state or federal) for any proceeding brought by Transmedia arising in
connection with this Agreement (and each such party agrees not to commence any
such proceeding, except in such courts), (ii) to the extent such party is not a
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resident of the State of Florida or the State of North Carolina, as applicable,
agrees to accept service of legal process by registered mail at the address
specified in Section 5.7 in any such proceeding against such party with the same
legal force and validity as if served upon such party personally within the
State of Florida or the State of North Carolina, as applicable, and to notify
promptly each other party hereto of any change of address for such service of
process from the address contained in Section 5.7, (iii) waives any objection to
the laying of venue of any such proceeding in the courts of Dade County, Florida
(state or federal) or Mecklenburg County, North Carolina (state or federal, as
applicable), and (iv) waives, and agrees not to plead or to make, any claim that
any such proceeding brought in any court of Dade County, Florida (state or
federal) or Mecklenburg County, North Carolina (state or federal, as
applicable), has been brought in an improper or otherwise inconvenient forum.
5.7 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and shall be
deemed to have been duly given on the next business day after the same is sent,
if delivered personally or sent by telecopy or overnight delivery, or five
calendar days after the same is sent, if sent by registered or certified mail,
return receipt requested, postage prepaid, as set forth below, or to such other
persons or addresses as may be designated in writing in accordance with the
terms hereof by the party to receive such notice.
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If to East American:
East American Trading Company
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile No. (000) 000-0000
Attn: Xxxx X. XxXxxx, Xx.
With a copy to:
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
If to Transmedia:
Transmedia Network Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Chief Executive Officer
With a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
5.8 Assignment. Except as otherwise specifically permitted hereunder,
this Agreement and the rights and obligations of the parties hereto shall not be
assignable, by operation of law or otherwise, or delegable.
5.9 Titles and Captions. The titles, captions and table of contents
contained in this Agreement are inserted herein only as a matter of convenience
and for reference and in no
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way affect, limit, extend or describe the scope of this Agreement or the intent
of any provision hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
hereinabove written.
TRANSMEDIA NETWORK INC.
By:
-----------------------------
Name:
Title:
EAST AMERICAN TRADING COMPANY
By:
-----------------------------
Name:
Title:
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