Exhibit 10.15
PURCHASE AGREEMENT
PURCHASE AGREEMENT dated as of November 15, 1996, between The
Western Transmedia Company, Inc., a Delaware corporation (the "Seller") and
Transmedia Network Inc., a Delaware corporation (the "Purchaser").
R E C I T A L S
WHEREAS, Seller wishes to sell certain of its assets to the
Purchaser and the Purchaser wishes to purchase such assets from the Seller all
upon the terms set forth herein; and
WHEREAS, the Seller has entered into a franchise agreement
with the Purchaser (the "Franchise Agreement") pursuant to which the Seller has
the exclusive right (the "Franchise") to acquire "Rights to Receive" from
participating restaurants and other establishments located in the States of
California, Oregon, Washington and parts of Nevada that accept The Transmedia
Card and to sell such "Rights to Receive" to holders of The Transmedia Card, and
the Seller and the Purchaser wish to terminate the Franchise and the Franchise
Agreement upon the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants, agreements and conditions herein
contained, the parties agree as follows:
ARTICLE
THE TRANSACTIONS
/bullet/ THE TRANSACTIONS. On the terms and conditions set
forth in this Agreement, at the Closing (as hereinafter defined):
() the Purchaser shall purchase from the Seller, and
the Seller shall sell, assign, transfer and convey to the Purchaser, the
following assets, properties and rights existing on the Closing Date, as
hereinafter defined (collectively, the "Assets"):
(i) all of the Seller's "Rights to Receive"
consisting of the food and beverage credits of the Seller and its affiliates at,
and any loans or advances of the Seller and its affiliates to, restaurants and
other establishments that participate in the network of such establishments that
accept The Transmedia Card and any 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");
(ii) all of the Seller's furniture, fixtures and
equipment (the "Furniture, Fixtures and Equipment"), including, without
limitation, all POS terminals purchased from the Purchaser and all computer and
automatic machinery software and programs and disks, program documentation,
tapes, manuals and other related materials;
(iii) leases for the real estate and equipment
listed on Exhibit A hereto, including all security deposits deposited by or on
behalf of the Seller as lessee or sublessee, or held by or on behalf of the
Seller as lessor or sublessor, under such leases (the "Assumed Leases");
(iv) the Seller's prepaid expenses and items
listed in Exhibit B hereto (the "Prepaid Expenses"); and
(v) all rights of the Seller and its affiliates in
any intellectual property (the "Intellectual Property") relating to the business
conducted by the Seller and its affiliates pursuant to the Franchise Agreement,
including any patents, trademarks, service marks,
trade names, slogans, trade secrets, advertising and promotional materials, and
copyrights (and any applications to register and licenses to use any of the
foregoing); and
() the Seller and the Purchaser shall terminate the
Franchise Agreement, the Franchise and any associated rights and licenses with
immediate effect.
/bullet/ THE CONSIDERATION.
(a) At the Closing, the Purchaser shall pay to the
Seller, by certified check or wire transfer of immediately available funds to an
account at such bank in the United States as the Seller shall specify in writing
to the Purchaser at least two business days prior to the Closing Date, as
consideration:
(i) for the Rights to Receive, an amount equal to
the excess of the gross amount of the Rights to Receive (as specified on
Schedule 1.2(i) of the Seller Disclosure Letter (as hereinafter defined)), over
the amount equal to the sum of (1) the Rights to Receive which the Seller has
determined are uncollectible or unrealizable (as specified on Schedule 1.2(ii)
of the Seller Disclosure Letter); (2) $70,000, which is the amount currently
reserved by the Seller in its accounting records for uncollectible or
unrealizable Rights to Receive (the "Reserve Amount"); and (3) any accounts
payable in respect of the Rights to Receive being assumed by the Purchaser (as
specified on Schedule 1.2(iii) of the Seller Disclosure Letter);
(ii) for the Franchise Agreement, the Franchise
and the Intellectual Property (if any), the sum of $4,750,000;
(iii) for the Furniture, Fixtures and Equipment,
(including the POS terminals) the sum of $28,500;
(iv) for the Prepaid Expenses, the amount shown on
Exhibit B; and
(v) $8,865 (which is the amount of the security
deposits under the Assumed Leases for the real property).
(b) As further consideration for the Assets, the
Purchaser shall assume and perform the following contractual liabilities and
obligations (the "Assumed Liabilities") of the Seller: (i) the Seller's
liabilities and obligations under the Assumed Leases to the extent such
obligations arise and are to be performed after the Closing Date (but not any
liability or obligation for any breach or default (by the Seller), or penalty
arising out of the use or occupancy of the subject premises or equipment, or any
rent, additional rent, tax or expense due with respect to any period ending on
or prior to the Closing Date) and (ii) the Seller's liabilities and obligations,
disclosed in Exhibit C hereto, arising under any of the agreements, contracts,
guarantees, instruments, security agreements and other documents evidencing or
securing the Rights to Receive, including agreements obligating participating
restaurants in the Franchise territory to sell Rights to Receive to the Seller
(but not any liability or obligation for any breach or default (by the Seller)
or penalty under such agreement, contract, guaranty, instrument or security
agreement). The Purchaser is not assuming and shall not be obligated to pay,
perform or discharge, and the Seller shall indemnify the Purchaser and its
affiliates against, any other liability or obligation of the Seller or any of
its affiliates arising out of the conduct of their business, the ownership or
use of the Assets and the occupancy or use of the premises and equipment subject
to the Assumed Leases on or prior to the Closing Date. The Purchaser has not
agreed to hire or extend any offer of employment to any employee of the Seller
or any of its affiliates other than Xxxxxx X. Xxxxxxx.
(c) FORM 8594. The Purchaser and the Seller shall
agree upon the allocation of consideration to the Assets for tax purposes. The
Purchaser and the Seller shall each file the Asset Acquisition Statement on IRS
Form 8594 by the due date of their respective income tax returns for the taxable
year that includes the Closing Date and otherwise report the sale and purchase
of the Assets for all tax purposes in accordance with such allocation and
consistent with one another.
/bullet/ CLOSING.
() DATE AND PLACE. The closing of the transactions
contemplated hereby (the "Closing") shall take place at the offices of Xxxxxx,
Xxxxx & Bockius LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, commencing at 10:00 a.m. local time, on the
fifth business day following the date on which the last of the conditions set
forth herein in Article VI hereof shall be fulfilled or waived in accordance
with this Agreement, or at such other place and time as the parties may agree in
writing. The "Closing Date" shall be the date on which the Closing occurs.
() TRANSFER, ASSUMPTION AND PURCHASE.
(i) On the Closing Date, the Seller will convey,
transfer, assign and deliver to the Purchaser (or its designees), and put the
Purchaser (or its designees) in full possession and quiet enjoyment of the
Assets. In furtherance thereof, the Seller shall deliver to the Purchaser (or
its designees):
(1) a general assignment and xxxx of sale in the form
of Exhibit D hereto;
(2) such other specific assignments, bills of sale
and forms of transfer to such of the Assets, and in such form, as the Purchaser
may reasonably request;
(3) an assignment of each of the Assumed Leases and
of any other agreement, contract or arrangement to be assumed by the Purchaser
(or its designees), in form and substance satisfactory to the Purchaser and
indemnifying, defending and holding harmless the Purchaser from and against all
claims, actions, proceedings, losses, liabilities and expenses (including,
without limitation, reasonable attorneys' fees) imposed upon or incurred by the
Purchaser by reason of the Seller's failure to perform the obligations under the
Assumed Leases or such other agreements, contracts or arrangements prior to the
Closing, with any necessary or appropriate executed consents of lessors or other
persons attached and any related transfer tax forms;
(4) a FIRPTA affidavit in the form of Exhibit E
hereto; and
(5) such other assignments, financing statements,
instruments or other documents as the Purchaser may reasonably request. In
addition, the Seller
shall use its best efforts to obtain an estoppel certificate from each of the
landlords under the Assumed Leases in form and substance satisfactory to the
Purchaser, dated not more than ten (10) days prior to the Closing Date, but the
receipt of such certificate shall not be a condition of Closing.
(ii) On the Closing Date, the Purchaser shall execute
and deliver to the Seller an assumption agreement substantially in the form of
Exhibit D hereto whereby the Purchaser shall agree to assume the Assumed
Liabilities.
(iii) From and after the Closing Date, except as
provided in Section 1.3(e), the Purchaser, in the name of the Seller but on
behalf of and for the benefit of the Purchaser, may at its own cost or expense
collect, assert or enforce any claim, right or title of any kind in, with
respect to or to any of the Assets (including, without limitation, instituting
and prosecuting any proceedings in connection therewith), or defend or
compromise any and all claims, actions, suits or proceedings in respect of any
of the Assets, and otherwise to do all such acts and things in relation to the
Assets as the Purchaser shall deem advisable (including, without limitation,
asserting any rights under any Assets or performing or accepting performance
under any agreements), and the Purchaser shall retain for its own account any
amounts collected pursuant to the foregoing, including any sums payable as
interest in respect thereof.
() REAL PROPERTY. At the Closing, the Purchaser and
the Seller will apportion the amount of any fixed and additional rent, real
estate taxes, and utility expenses, including, without limitation, expenses for
gas, electricity, telephone and water, with respect to the real property subject
to the Assumed Leases for the month or other relevant period during which the
Closing occurs.
() POST-CLOSING ADJUSTMENT. As soon as practicable,
but in any event within 60 days after the Closing Date, the Purchaser shall
cause to be prepared, without audit, as of the Closing Date a statement of the
Prepaid Expenses (the "Final Statement of Prepaid Expenses") and a statement of
the Rights to Receive (the "Final Statement of the Rights to Receive", and
together with the Final Statement of Prepaid Expenses, the "Final Statements").
The Final Statement of Prepaid Expenses shall set forth as of the Closing Date
the amount of the Prepaid Expenses.
The Final Statement of Rights to Receive shall set
forth as of the Closing Date the value of the Rights to Receive determined as
follows: the gross amount of the Rights to Receive as of the Closing Date, less
the sum of (i) the amount of specifically identified unrealizable or
uncollectible accounts set forth in Schedule 1.2(ii) as of the date of this
Agreement, (ii) the Reserve Amount, (iii) any accounts payable in respect of the
Rights to Receive being assumed by the Purchaser and (iv) the amount of any
Rights to Receive (not reflected on Schedule 1.2(ii)) which prior to the Closing
Date became unrealizable or uncollectible (but excluding any Right to Receive in
excess of $10,000 that is acquired by the Seller after the date hereof and prior
to the Closing Date with the consent of the Purchaser). The Final Statement of
the Rights to Receive shall specifically identify the value of each of the
Rights to Receive designated on Schedule 1.3(e) of the Seller's Disclosure
Letter (which shall be the amount paid for such Rights to Receive for purposes
of Section 1.3(e)). In the event any of such Rights to Receive designated on
Schedule 1.3(e) become unrealizable or uncollectible between the date hereof and
the Closing Date, the provisions of Section 1.3(e) shall apply with respect
thereto.
The Purchaser shall furnish the Final Statements to
the Seller. Upon receipt by the Seller of the Final Statements, the Seller shall
be permitted during the ten (10) day period following such receipt (the "Review
Period") to review the Prepaid Expenses and the Rights to Receive and deliver a
written statement to the Purchaser of any objection it has to the Final
Statements. If no such statement of objection is delivered to the Purchaser by
the Seller within the Review Period, the Prepaid Expenses and the Rights to
Receive shall be that set forth in the Final Statement. If, however, the Seller
delivers such a statement of objection to the Purchaser, then the Seller and the
Purchaser shall attempt to resolve the objections contained therein. Failing
their agreement, such objections shall be resolved by a firm of independent
certified public accountants, mutually acceptable to the Seller and Purchaser,
whose determination
as to each of the Final Statements shall be conclusive and binding upon the
parties. The fees and expenses of such independent certified public accountants
shall be borne equally by the Seller and Purchaser. The Seller and the Purchaser
each agree that the San Francisco office of the accounting firms of Ernst &
Young LLP and Deloitte & Touche LLP are mutually acceptable independent
certified public accountants to resolve any objections hereunder.
If the aggregate value of the Prepaid Expenses and
the Rights to Receive as of the Closing Date as determined in accordance with
this Section 1.3(d) is (i) greater than the amounts paid the Seller by the
Purchaser pursuant to Sections 1.2(a)(i) and 1.2(a)(iv), then the Purchaser
shall pay the Seller the amount of the difference, or (ii) less than the amount
paid the Seller by the Purchaser pursuant to Sections 1.2(a)(i) and 1.2(a)(iv),
then the Seller shall promptly pay the Purchaser the amount of the difference.
Any such payment shall be made within five (5) business days after the
determination of the value of the Prepaid Expenses and the Rights to Receive
from the Final Statements.
() OTHER ADJUSTMENTS. If any of the Rights to Receive
which are designated on Schedule 1.3(e) of the Seller's Disclosure Letter become
uncollectible or unrealizable within twelve (12) months after the Closing Date,
the Seller shall refund to the Purchaser the full amount paid for such Rights to
Receive at the Closing less the amount, if any, the Purchaser has collected on
such Rights to Receive, and such Rights to Receive shall be reassigned to the
Seller.
() DETERMINATION OF UNCOLLECTIBLE OR UNREALIZABLE
RIGHTS TO RECEIVE. For purposes of Sections 1.2(a)(i), 1.3(d) and 1.3(e) hereof,
Rights to Receive shall be deemed to be uncollectible or unrealizable if (i) the
counterparty thereto does not accept The Transmedia Card, (ii) the counterparty
thereto ceases business operations or (iii) the counterparty thereto seeks to
take advantage of, or any involuntary action is taken with respect to it under,
any bankruptcy, insolvency or other law for the relief of debtors. In addition,
for purposes of Section 1.3(e) only, Rights to Receive shall also be deemed to
be uncollectible or unrealizable if the value of Rights to Receive previously
purchased from the counterparty thereto and in any 60-day period sold to holders
of The Transmedia Card is less than 50% of the product of (x) the value of such
Rights to Receive sold to holders of The Transmedia Card during the one-year
period immediately preceding the Closing Date and (y) .164383561.
/bullet/ FURTHER ASSURANCES.
() On the Closing Date and from time to time
thereafter, the Seller shall take all actions that may be required to put the
Purchaser in the position to take actual possession and control of all of the
Assets. The Seller and its affiliates shall on the Closing Date and thereafter
from time to time execute and deliver at the request of the Purchaser all such
further assignments, instruments, financing statements, licenses, applications
and any other documents which the Purchaser may reasonably request, in form and
substance reasonably satisfactory to the Purchaser and its counsel, in order to
effectuate the sale and transfer of the Assets to the Purchaser as contemplated
by this Agreement and to terminate the Franchise and the Franchise Agreement.
() From the date hereof, the Seller agrees to use its
best efforts to obtain any required or appropriate consent of any third party to
the transactions contemplated hereby. To the extent that the full benefit of any
of the Assumed Leases or any of the other Assets to be assigned, sold and
conveyed to the Purchaser (or its designees) or any of the Assumed Liabilities
to be assumed by the Purchaser (or its designees) hereunder, cannot be obtained
for the Purchaser or its designees without the consent of a third party or
without giving rise to an event of default or a right of cancellation or
acceleration in favor of a third party, and despite the best efforts of the
Seller to obtain such consent of the other party or parties on or before the
Closing Date, such consent is not obtained by such date, any such Assets,
Assumed Leases or Assumed Liabilities shall be deemed to be excluded from the
Assets, the Assumed Leases or the Assumed Liabilities, as the case may be,
hereunder and the Seller agrees to cooperate with the Purchaser or its designees
in any reasonable arrangements, at the Seller's expense (other than filing fees
for the Financing Statements, as hereinafter defined, which shall be borne by
the Purchaser up to the first $5,000, and shared equally by the Purchaser and
the Seller
to the extent they exceed the first $5,000), designed to obtain such consent and
to provide for the Purchaser or its designees the benefits under any such
Assets, Assumed Leases or Assumed Liabilities, including enforcement for the
account of the Purchaser or its designees after the Closing Date of any and all
rights of the Seller against the other party thereto arising out of the breach,
cancellation or acceleration thereof by such other party or otherwise.
ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents, warrants and covenants to the Purchaser that,
except as disclosed in a letter (the "Seller Disclosure Letter") delivered by
the Seller to the Purchaser at the date of this Agreement containing schedules
(the "Schedules") specifically referencing the particular representations and
warranties to which such Schedules relate:
/bullet/ ORGANIZATION; POWER; CAPITAL STOCK, ETC.
() The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Seller has the requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Seller and the consummation by it of the transactions
contemplated hereby have been duly authorized by the Board of Directors of the
Seller and no other corporate proceedings, other than the approval of the
transactions contemplated by this Agreement and of the Charter Amendment (as
hereinafter defined) by the holders of a majority of the outstanding common
stock of the Seller (the "Stockholder Approval"), are necessary to authorize
this Agreement or the consummation of the transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by the Seller
and, assuming the due authorization, execution and delivery by the Purchaser,
constitutes the legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms.
() As of the record date of the meeting of the
Seller's stockholders to be held pursuant to Section 5.3 hereof, the authorized
and outstanding capital stock of the
Seller consists of 25,000,000 shares of Common Stock, par value $.60 per share,
of which 7,903,421 shares are outstanding, and 2,000,000 shares of Preferred
Stock, par value $.10 per share, none of which are outstanding; and a total of
2,783,821 shares of Common Stock are reserved for issuance upon outstanding
options, warrants, conversion and other rights.
/bullet/ NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
() The execution, delivery and performance of this
Agreement by the Seller do not, and the consummation of the transactions
contemplated hereby will not, (i) conflict with or violate the Certificate of
Incorporation or By-Laws of the Seller; (ii) conflict with or violate any
federal, state, local or foreign laws, rules, ordinances, regulations, licenses,
judgments, orders or decrees (collectively "Laws") applicable to the Seller or
the Assets or by which the Seller or any of its properties is bound or affected;
or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to any
other persons any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or encumbrance on any of the properties
or assets of the Seller (including the Assets) pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, mortgage, license, permit,
franchise or other instrument or obligation to which the Seller is a party or by
which the Seller or any of its properties is bound or affected, the result of
which conflict, breach or default would be material and adverse to the business,
properties, condition (financial or otherwise) or results of operations of the
Seller, or to any of the Assets, the Assumed Leases or the Assumed Liabilities
(a "Material Adverse Effect") or any thereof.
() The execution, delivery and performance of this
Agreement by the Seller and the consummation by it of the transactions
contemplated hereby do not require the Seller or any of its affiliates to
receive any consent, approval, authorization or permit from, or make any filing
with or notification to, any governmental authority or court or any other
person, except for the filing with the Securities and Exchange Commission (the
"SEC") of a proxy statement in definitive form relating to the meeting of the
Seller's stockholders to be held in
connection with the transactions contemplated hereby and the Charter Amendment
(the "Proxy Statement").
/bullet/ PERMITS; COMPLIANCE. The Seller and its affiliates
are in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary for it to own the Assets or to carry on its business pursuant to the
Franchise Agreement as it is now being conducted (the "Seller Permits"), except
for those Seller Permits the failure of which to obtain or maintain would not
result in a Material Adverse Effect, and no suspension, revocation or
cancellation of any such Seller Permits is pending, or to the knowledge of the
Seller, threatened. All such Seller Permits are listed on Schedule 2.3 of the
Seller's Disclosure Letter. The Seller and its affiliates have not operated such
business in conflict with, or in default or violation of, (i) any Law applicable
to it or by which it or any of its properties is bound or affected or (ii) any
of the Seller Permits (except in either case for any such conflicts, defaults or
violations which would not have a Material Adverse Effect), and the Seller has
not received any notice to that effect. Anything in the foregoing representation
and warranty to the contrary notwithstanding, no representation or warranty is
made as to compliance by the Seller with laws relating to the extension of
credit, the protection of consumers or the billing or reporting of transactions
under The Transmedia Card, or the possession by the Seller of franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders that may be required with respect
thereto.
/bullet/ TITLE TO ASSETS; ABSENCE OF LIENS AND ENCUMBRANCES;
DEFAULTS. The Seller has good, valid and marketable title to, and full right to
sell, assign and convey, all of the Assets, and at the Closing will convey the
Assets to the Purchaser, free and clear of any liens, charges and encumbrances
of any kind whatsoever, including any rights of first refusal, set-off,
reduction and counterclaim, but excluding (i) liens for taxes, fees, levies,
imposts, duties or governmental charges of any kind which are not yet delinquent
or are being contested in good faith by appropriate proceedings which suspend
the collection thereof and which are not material in amount individually or in
the aggregate; (ii) liens for mechanics, materialmen, laborers, employees,
suppliers or others which are not yet delinquent or are being contested in good
faith
by appropriate proceedings and which are not material in amount individually or
in the aggregate; (iii) liens created in the ordinary course of business in
connection with the leasing or financing of office, computer and related
equipment and supplies; (iv) easements and similar encumbrances ordinarily
created for xxxxxx utilization and enjoyment of property; and (v) liens or
defects in title or leasehold rights that either individually or in the
aggregate do not and will not have a Material Adverse Effect. The Assumed Leases
and the Assumed Liabilities are in full force and effect and are valid, binding
and enforceable in accordance with their respective terms and there exists no
material default on the part of the Seller in the performance of its covenants
and obligations under any of the Assumed Leases or the Assumed Liabilities. No
party to any Assumed Lease or any Assumed Liability has given written notice of
or made a written claim with respect to, and the Seller is not otherwise aware
of, any breach or default or any event which with notice or lapse of time or
both would constitute a breach or default by any party under any of the Assumed
Leases or the Assumed Liabilities. To the knowledge of the Seller, none of the
properties covered by any Assumed Lease is subject to any sublease, license or
other agreement granting to any person (other than the Seller) any right to use,
occupy or enjoy such property or any portion thereof. Correct and complete
copies of the Assumed Leases, together with any letters or agreements amendatory
thereto, have heretofore been provided to the Purchaser by the Seller. Each item
of personal property to be included among the Assets (with a book value of
$1,000 or more) is in good and useable condition, ordinary wear and tear
excepted.
/bullet/ ABSENCE OF LITIGATION.
() There is no claim, action, suit, litigation,
proceeding, arbitration or investigation of any kind involving the Seller (or
any affiliate of the Seller) and any of the Assets, the Franchise, the Franchise
Agreement or the business conducted by the Seller pursuant to the Franchise
Agreement, at law or in equity (including actions or proceedings seeking
injunctive relief), which are pending or, to the knowledge of the Seller, are
threatened. There is no action pending, or to the knowledge of the Seller,
threatened, seeking to enjoin or restrain or
otherwise make it imprudent to consummate any of the transactions contemplated
by this Agreement.
() Neither the Seller nor any of its affiliates is
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement, or, to the knowledge of the Seller, continuing
investigation by, any governmental authority, or any judgment, order, writ,
injunction, decree or award of any governmental authority, or any arbitrator,
including, without limitation, cease-and-desist or other orders, which relates
to any of the Assets, the Franchise, the Franchise Agreement or the business
conducted by the Seller and its affiliates pursuant to the Franchise Agreement.
/bullet/ CONTRACTS; NO DEFAULT; ETC..
() Schedule 2.6(a) of the Seller's Disclosure Letter
sets forth a list of each agreement, contract, guarantee, instrument, security
agreement or other document included among the Assets (collectively the "Seller
Contracts") and any and all financing statements and filings made by or on
behalf of the Seller to perfect any security interest or liens securing any
Rights to Receive or loans or advances or any of the other Assets by the Seller
(the "Financing Statements"). Correct and complete copies of all written Seller
Contracts, together with all amendments, supplements and side letters thereto,
have been delivered to the Purchaser or made available to the Purchaser for its
review and the material terms of all oral Seller Contracts, if any, have been
disclosed to the Purchaser.
() Each Seller Contract and any liens or security
interests securing any Rights to Receive or loans or advances, are valid,
subsisting and enforceable, save only that such enforceability may be affected
by bankruptcy, insolvency, fraudulent conveyance, moratorium and similar laws
affecting the rights of creditors generally and by general principles of equity
(whether considered in a proceeding at law or in equity). There is no material
default (or any event known to the Seller which, with the giving of notice or
lapse of time or both, would be a material default) by the Seller or, to the
knowledge of the Seller, any other party, in the timely performance of any
obligation to be performed or paid under any Seller Contract, which default
would reasonably be anticipated to have a Material Adverse Effect. The Seller
has not received
any written notice of a filing or proposed filing under any bankruptcy,
insolvency or other law for the relief of debtors by any restaurant or other
establishment whose Rights to Receive or loans or advances are included among
the Assets. The Seller has not agreed to modify, extend, impair, reduce,
compromise or cancel any such Rights to Receive, loans or advances.
() No restaurant or other establishment from which
the Seller or any of its affiliates has purchased any Rights to Receive or to
which the Seller or any of its affiliates has loaned or advanced moneys, has
notified the Seller in writing that it has canceled, not renewed or otherwise
terminated, or will cancel, not renew or otherwise terminate, its relationship
with the Seller or its agreement to accept The Transmedia Card.
() The Reserve Amount, which is the reserve for
unrealizable or uncollectible Rights to Receive recorded in the accounting
records of the Seller, is fairly estimated and is calculated on a basis
consistent with that used in the preparation of the audited financial statements
of the Seller included in the Seller's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
/bullet/ INTELLECTUAL PROPERTY RIGHTS. Except for the rights
granted to the Seller under the Franchise Agreement, neither the Seller nor any
of its affiliates owns, licenses or uses any Intellectual Property. Schedule 2.7
of the Seller Disclosure Letter lists each assumed name and trade name under
which the Seller has done business pursuant to the Franchise Agreement.
/bullet/ BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller or any of its affiliates.
/bullet/ NO MATERIAL MISSTATEMENTS OR MISLEADING STATEMENTS.
No representation or warranty by the Seller contained in or made pursuant to
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
ARTICLE
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
The Purchaser hereby represents and warrants to the Seller that:
/bullet/ ORGANIZATION; POWER; ETC. The Purchaser is a
corporation, duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. The Purchaser has the requisite
corporate power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by the Purchaser and the consummation by it of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Purchaser and no other corporate proceedings on the part of the
Purchaser are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Purchaser and, assuming the due authorization, execution and delivery by the
Seller, constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against it in accordance with its terms.
/bullet/ NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
() The execution and delivery of this Agreement by
the Purchaser does not, and the performance hereof by it will not, (i) conflict
with or violate the Certificate of Incorporation or By-Laws of the Purchaser,
(ii) conflict with or violate any Laws applicable to the Purchaser or by which
it or any of its properties is bound or affected, or (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of the Purchaser pursuant to
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Purchaser is a
party or by which the Purchaser or any of its properties is bound or affected,
the result of which conflict,
breach or default would be material or adverse to the business, properties,
condition (financial or otherwise) or results of operations of the Purchaser.
() The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by it of the transactions
contemplated hereby do not require the Purchaser to receive any consent,
approval, authorization or permit from, or make filing with or notification to,
any governmental authority or any other person.
/bullet/ ABSENCE OF LITIGATION.
() There is no action pending, or to the knowledge of
the Purchaser, threatened, seeking to enjoin or restrain or otherwise make it
imprudent to consummate any of the transactions contemplated by this Agreement.
() Neither the Purchaser nor any of its affiliates is
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement, or, to the knowledge of the Purchaser,
continuing investigation by, any governmental authority, or any judgment, order,
writ, injunction, decree or award of any governmental authority, or any
arbitrator, including, without limitation, cease-and-desist or other orders,
which relates to the acquisition of the Assets by the Purchaser.
/bullet/ BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser or any of its affiliates.
/bullet/ NO MATERIAL MISSTATEMENTS OR MISLEADING STATEMENTS.
No representation or warranty by the Purchaser contained in or made pursuant to
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
ARTICLE
AGREEMENTS OF THE PARTIES
/bullet/ ORDINARY COURSE OF BUSINESS. Prior to the Closing
Date, and except as otherwise expressly contemplated by this Agreement, or
approved in writing by the Purchaser, the Seller covenants and agrees that:
() The Seller and its affiliates will carry on their
business pursuant to the Franchise Agreement in the ordinary course
substantially in the manner carried on as of the date hereof, and will not
engage in any activity or transaction or enter into any agreement or commitment
other than in the ordinary course of its business as heretofore conducted;
provided, however, that the Purchaser acknowledges that with its acquiescence,
the Seller has ceased the activities required of it in order to expand its
operations into Washington, Oregon and Nevada;
() The Seller and its affiliates will use their
reasonable best efforts to preserve their business organization intact, to keep
available the services of their employees and to preserve for the Purchaser the
Seller's relationships with restaurants and other establishments that accept The
Transmedia Card, with holders of The Transmedia Card and with others having
business relationships with the Seller and its affiliates; provided, however,
that the Seller (i) makes no representation that any of its employees will
become an employee of the Purchaser; and (ii) shall not be obligated to make any
material capital or out of the normal course expenditures prior to the Closing
to comply with this covenant;
() The Seller shall not, without the consent of the
Purchaser, acquire any Rights to Receive from any one counterparty or group of
affiliated counterparties in excess of $10,000;
() Neither the Seller nor any of its affiliates will
modify, impair, reduce, compromise or cancel any material Asset or any material
amount of the Assets or, without the Purchaser's prior written consent, amend,
modify, terminate or extend any of the Assumed Leases or the Assumed
Liabilities;
() Without limiting the foregoing, the Seller will
consult with the Purchaser regarding all material developments, transactions and
proposals relating to the business of the Seller and its affiliates conducted
pursuant to the Franchise Agreement and the Assets;
() Neither the Seller nor any of its affiliates will
sell, assign, transfer, or otherwise dispose of any material Asset or material
amount of the Assets, or subject any material Asset or material amount of the
Assets to any liens, pledges, restrictions, encumbrances or claims;
() The Seller will maintain all the tangible Assets
in their current condition, ordinary wear and tear excepted, and make all
ordinary and necessary repairs to the Assets; and
() The Seller will not take, or agree to commit to
take, or permit any of its affiliates to take, any action that would make any
representation or warranty of the Seller contained herein inaccurate in any
material respect.
/bullet/ PURCHASER'S ACTIONS. The Purchaser will not take, or
agree to commit to take, or permit any of its affiliates to take, any action
that would make any representation or warranty of the Purchaser contained herein
inaccurate in any respect.
ARTICLE
ADDITIONAL AGREEMENTS
/bullet/ PREPARATION OF THE PROXY STATEMENT. The Seller shall
promptly prepare and submit to the SEC the Proxy Statement in preliminary form,
a copy of which will be furnished to counsel to the Purchaser, and promptly
respond to any SEC comments received in respect of such Proxy Statement.
/bullet/ CHANGE OF SELLER'S NAME. Subject to the approval of
its stockholders, the Seller shall promptly prepare and file a Certificate of
Amendment of its Certificate of Incorporation (the "Charter Amendment") for the
purpose of changing its corporate name to a
name not containing the word "Transmedia" or any derivative of "Transmedia," or
any other trademark, service xxxx, trade name or slogan of the Purchaser.
/bullet/ MEETING. The Seller shall call a meeting of its
stockholders to be held as promptly as practicable consistent with the
requirements of the Securities Laws and the Delaware General Corporation Law for
the purpose of voting upon the transactions contemplated in this Agreement and
the Charter Amendment. The Seller will, through its Board of Directors, subject
to their fiduciary duties to the stockholders of the Seller under applicable
law, recommend to the stockholders of the Seller approval of such transactions
and the Charter Amendment.
/bullet/ LEGAL CONDITIONS TO TRANSACTION. Each of the parties
will take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to the transactions
contemplated hereby and in connection with required approvals of or filings with
any other governmental authorities and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their respective affiliates. The Seller will take all
reasonable actions necessary to obtain (and the Purchaser will cooperate with
the Seller in obtaining) any consent, authorization, order or approval of, or
any exemption by, any governmental authority or other public or private third
party required to be obtained or made by the Seller in connection with the
transactions contemplated by this Agreement. By the Closing Date, the Seller
shall use its best efforts to obtain and deliver to the Purchaser: (i) all
necessary consents to the assignment to the Purchaser of the Assets and the
assumption of the Assumed Leases, and any other agreements, contracts and
arrangements to be assumed by the Purchaser or its designees, and (ii) any other
consents that the Purchaser may reasonably require. All such consents shall be
in form and substance reasonably satisfactory to the Purchaser and its counsel.
/bullet/ TAXES. The Seller shall pay all sales and other
transfer taxes arising as a result of the transfer of the Assets pursuant to
this Agreement. The Purchaser shall pay the costs of amending the Financing
Statements and assigning the security interests evidenced thereby up to the
first $5,000, and the Purchaser and the Seller shall share such costs to the
extent they exceed the first $5,000.
/bullet/ CONFIDENTIALITY.
(a) The Seller and its affiliates will hold and keep
confidential and will not disclose or use (i) any information provided to them
or any of their representatives by or on behalf of the Purchaser or any of its
affiliates in connection with the transactions contemplated hereby; and (ii)
after the Closing, any confidential or proprietary information regarding any of
the Assets, the Franchise, the Franchise Agreement, the business conducted
pursuant to the Franchise Agreement or the Assumed Liabilities or the Assumed
Leases or any confidential or proprietary information relating to the business
of the Purchaser; PROVIDED, that this Section 5.6 shall not apply to (1)
information which is publicly available at the time of disclosure (through no
act of the Seller or any of its affiliates); or (2) disclosures which are
required to be made by the Seller or any of its affiliates under legal process
or by applicable laws or regulations, or which are requested by the Purchaser or
any of its affiliates.
(b) The Seller agrees that damages may be an
inadequate remedy for any breach of the terms or provisions of this Section 5.6
and that the Purchaser shall, whether or not it is pursuing any potential
remedies at law, be entitled to equitable relief in the form of preliminary and
permanent injunctions, without having to post any bond or other security, upon
any breach or threatened breach of any of such term or provision.
(c) The parties agree that nothing in this Agreement
shall be construed to limit or negate the common law of torts or trade secrets
where it provides the Purchaser or any of its affiliates with any broader,
further or other remedy or protection than that provided herein.
/bullet/ ACCESS TO INFORMATION. Upon reasonable notice
provided that there is no unreasonable interference with the business of the
Seller, the Seller shall (and shall cause its affiliates to) afford to the
officers, employees, accountants, counsel and other representatives of the
Purchaser, access, during normal business hours during the period prior to the
Closing Date, to all of its properties, books, contracts, commitments and
records relating to the Assets and
the Assumed Liabilities and, during such period, the Seller shall (and shall
cause its affiliates to) furnish promptly to the Purchaser (a) a copy of each
report, schedule, registration statement and other document filed or received by
it during such period pursuant to the requirements of federal securities laws
and (b) all other information concerning its business, the Assets and the
Assumed Liabilities as the Purchaser may reasonably request. Unless otherwise
required by law, the Purchaser will hold any such information which is nonpublic
in confidence until such time as such information otherwise becomes publicly
available through no wrongful act of either party, and in the event of
termination of this Agreement for any reason the Purchaser shall promptly return
all nonpublic documents obtained from the Seller or its affiliates, and any
copies made of such documents, to the Seller.
ARTICLE
CONDITIONS TO CLOSING
/bullet/ CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The
obligations of the Purchaser to consummate the transactions contemplated hereby
is subject to the fulfillment at or prior to the Closing of the following
conditions, any or all of which may be waived in whole or in part by the
Purchaser to the extent permitted by applicable law:
() REPRESENTATIONS AND WARRANTIES; COVENANTS. The
representations and warranties of the Seller set forth in this Agreement or in
any certificate or document delivered pursuant hereto shall be true and correct
in all material respects when made and on and as of the Closing Date, as if made
on such date, and the Seller shall have duly performed and complied in all
material respects with all of its agreements, covenants, conditions and
obligations contained in this Agreement. The Purchaser shall have received a
certificate dated the Closing Date signed by the Chief Executive Officer or the
Chief Financial Officer of the Seller to the effect that the conditions of this
paragraph have been satisfied. (The parties recognize and agree that the Seller
makes no representation, warranty or agreement as to its results of operations
and, accordingly, the incurrence of operating losses by the Seller prior to the
Closing
shall not, in and of itself, constitute the breach of any representation,
warrant or covenant herein or the failure of any condition herein).
() STOCKHOLDER APPROVAL. The Stockholder Approval
shall have been obtained.
() OTHER CONSENTS AND FILINGS. All material approvals
and consents of or filings with governmental authorities, and all material
approvals and consents of any other persons, required to permit the consummation
of all of the transactions contemplated hereby shall have been obtained or made
to the reasonable satisfaction of the Purchaser.
() DOCUMENTS OF TRANSFER. All bills of sale,
instruments of transfer and assignment and other statements, instruments and
documents contemplated by Article I hereof shall have been duly executed and
delivered by the Seller, and the Seller shall have furnished the Purchaser with
copies of all such items, and such other certificates and documents as the
Purchaser and its counsel may reasonably request, in sufficient time prior to
the Closing Date to permit review and evaluation thereof and the making of
preliminary arrangements for any necessary recording and filing thereof on the
Closing Date.
() FRANCHISE AGREEMENT. An instrument (the "Franchise
Termination") in the form of Exhibit F hereto terminating the Franchise
Agreement, the Franchise and any associated rights and licenses and providing
for a mutual release between the parties shall have been duly executed and
delivered by the Seller.
() OPINION OF COUNSEL. Xxxxxx Xxxxxxxx Frome &
Xxxxxxxxxx LLP, counsel to the Seller, shall have delivered a legal opinion to
the Purchaser, in the form of Exhibit G hereto, to the effect that the
provisions of section 9(c) of the Warrant Agreement, dated as of June 25, 1993,
between the Seller and the American Stock Transfer & Trust Company, as amended
(the "Warrant Agreement") are not applicable to the transactions contemplated by
this Agreement and no holder of any warrants issued thereunder has any rights to
require the
Purchaser to assume any obligations of the Seller thereunder or to receive any
securities or property from the Purchaser.
() ABSENCE OF LITIGATION. No action shall be pending
seeking to enjoin or restrain or otherwise make it imprudent to consummate any
of the transactions contemplated by this Agreement.
/bullet/ CONDITIONS TO THE OBLIGATIONS OF THE SELLER. The
obligations of the Seller to consummate the transactions contemplated hereby is
subject to the fulfillment at or prior to the Closing of the following
conditions, any or all of which may be waived in whole or in part by the Seller
to the extent permitted by applicable law:
() REPRESENTATIONS AND WARRANTIES; COVENANTS; The
representations and warranties of the Purchaser set forth in this Agreement or
in any certificate or document delivered pursuant hereto shall be true and
correct in all material respects when made and on and as of the Closing Date, as
if made on such date, and the Purchaser shall have duly performed and complied
in all material respects with all of its agreements, covenants, conditions and
obligations contained in this Agreement. The Seller shall have received a
certificate dated the Closing Date signed by the Chief Executive Officer or the
Chief Financial Officer of the Purchaser to the effect that the conditions of
this paragraph have been satisfied.
() STOCKHOLDER APPROVAL. The Stockholder Approval
shall have been obtained.
() OTHER CONSENTS AND FILINGS. All material approvals
and consents of or filings with governmental authorities, and all material
approvals and consents of any other persons, required to permit the consummation
of all of the transactions contemplated hereby shall have been obtained or made
to the reasonable satisfaction of the Seller.
() DOCUMENTS OF ASSUMPTION. The assumption agreement
contemplated by Article I hereof shall have been duly executed and delivered by
the Purchaser, and the Purchaser shall have furnished the Seller with a copy of
such agreement in sufficient time prior to the Closing Date to permit review and
evaluation thereof by the Seller and its counsel.
() FRANCHISE AGREEMENT. The Franchise Termination
shall have been duly executed and delivered by the Purchaser.
() OTHER CONSIDERATION. At the Closing, the Purchaser
shall have delivered to the Seller (i) a certified check or wire transfer of
immediately available funds for an amount equal to the sum of the amounts listed
in paragraphs (i), through (v) of Section 1.2(a).
() ABSENCE OF LITIGATION. No action shall be pending
seeking to enjoin or restrain or otherwise make it imprudent to consummate any
of the transactions contemplated by this Agreement.
ARTICLE
TERMINATION
/bullet/ TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date, before or after the approval by the stockholders
of the Seller:
() by the mutual consent of the Seller and the
Purchaser, by action of their respective Boards of Directors;
() by either the Purchaser or the Seller if there has
been a material breach of any representation, warranty, covenant or agreement on
the part of the other set forth in this Agreement which breach has not been
cured within five business days following receipt by the breaching party of
notice of such breach, or if any permanent injunction or other order of a court
or other competent authority preventing the consummation of the transactions
contemplated hereby shall have become final and non-appealable;
() by either the Purchaser or the Seller if the
transactions contemplated herebyshall not have been consummated before January
31, 1997, provided that the party seeking to terminate this Agreement are not
otherwise in breach in any material respect of any of its obligations hereunder;
or
() by either the Purchaser or the Seller if the
Stockholder Approval shall not have been obtained by reason of the failure to
obtain the required affirmative vote at a duly held meeting of its stockholders
or at any adjournment thereof.
/bullet/ EFFECT OF TERMINATION. In the event of termination of
this Agreement by either the Purchaser or the Seller as provided in Section 7.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of the Purchaser or the Seller, or their respective
officers or directors, except (y) with respect to Sections 5.5, Article VIII
(with respect to any claim for breach of the representation in Sections 2.8 or
3.4) and 9.1 and (z) to the extent that such termination results from the breach
by a party hereto of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
ARTICLE
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION
/bullet/ SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement, any schedule and any
certificate, written statement, or other document delivered at the Closing
pursuant to this Agreement by or on behalf of the Seller or the Purchaser shall
be deemed to have been relied upon notwithstanding any investigation heretofore
or hereafter made or omitted by any party hereto and shall survive for a period
of six (6) months after the Closing Date, except for all such representations
and warranties relating to (i) the Rights to Receive specified on Schedule
1.3(e) which shall survive for a period of one year after the Closing Date and
(ii) the Rights to Receive other than those specified on Schedule 1.3(e) which
shall not survive the Closing Date.
/bullet/ SELLER'S INDEMNIFICATION OBLIGATIONS. Subject to the
terms and conditions of this Article 8, the Seller agrees to defend, indemnify
and hold the Purchaser and the officers, directors, agents, attorneys,
employees, representatives and other affiliates of the Purchaser harmless
against any and all liabilities, losses, costs and expenses including, without
limitation, legal and other expenses (collectively "Damages"), resulting from or
relating to:
() any misrepresentation or breach of any
representation or warranty of the Seller contained in this Agreement or in any
Schedule of the Seller Disclosure Letter or any certificate, written statement
or other document delivered by or on behalf of the Seller pursuant to this
Agreement;
() any breach of any covenant, agreement or
obligation of the Seller contained in this Agreement;
() any debt, liability or obligation of the Seller or
any of its affiliates other than the Assumed Liabilities;
() the conduct of the business of the Seller and its
affiliates, and the ownership, use and operation of the Assets, on or prior to
the Closing Date;
() any failure of the Seller to comply with the
provisions of the Uniform Commercial Code pertaining to bulk sales; and
(f) any obligation, liability or expense imposed upon
or affecting the Purchaser under the Warrant Agreement; and any and all actions,
suits, demands, assessments or judgments with respect to any claim arising out
of or relating to the subject matter of the indemnification; PROVIDED, HOWEVER,
that the sole remedy of the Purchaser for any breach of any representation or
warranty as to the validity or enforceability of (i) any Right to Receive
specified on Schedule 1.3(e) shall be limited to the remedy set forth in Section
1.3(e) of this Agreement and (ii) any Right to Receive other than those
specified on Schedule 1.2(ii) or Schedule 1.3(e) shall be limited to the remedy
set forth in Section 1.3(d) of this Agreement.
/bullet/ PURCHASER'S INDEMNIFICATION OBLIGATIONS. Subject to
the terms and conditions of this Article 8, the Purchaser agrees to defend,
indemnify and hold the Seller and the officers, directors, agents, attorneys,
employees, representatives and other affiliates of the Seller harmless against
any and all Damages resulting from or relating to:
() any misrepresentation or breach of any
representation or warranty of the Purchaser contained in this Agreement or in
any certificate, written statement or other document delivered by or on behalf
of the Purchaser pursuant to this Agreement;
() any breach of any covenant, agreement or
obligation of the Purchaser contained in this Agreement; and
() any Assumed Liabilities; and any and all actions,
suits, demands, assessments or judgments with respect to any claim arising out
of or relating to the subject matter of the indemnification.
/bullet/ CLAIMS FOR INDEMNIFICATION; DEFENSE OF INDEMNIFIED
CLAIMS; LIMITATIONS ON INDEMNIFICATION.
() For purposes of this Section, the party entitled
to indemnification shall be known as the Indemnified Party and the party
required to indemnify shall be known as the Indemnifying Party. In the event
that the Indemnifying Party shall be obligated to the Indemnified Party pursuant
to this Article VIII or in the event that a suit, action, investigation, claim
or proceeding is begun, made or instituted as a result of which the Indemnifying
Party may become obligated to the Indemnified Party hereunder, the Indemnified
Party shall give prompt written notice to the Indemnifying Party of the
occurrence of such event; provided, however, that the failure to give such
notice shall not constitute a waiver of the right to indemnification hereunder
unless the Indemnifying Party is prejudiced in a material respect thereby. The
Indemnifying Party agrees to defend, contest or otherwise protect against any
such suit, action, investigation, claim or proceeding at the Indemnifying
Party's own cost and expense with counsel of its own choice, who shall be,
however, reasonably acceptable to the Indemnified Party. The Indemnifying Party
may make any compromise or settlement (subject to the written consent of the
Indemnified Party, which will not be unreasonably withheld). The Indemnified
Party shall have the right but not the obligation to participate at its own
expense in the defense thereof by counsel of its own choice. In the event that
the Indemnifying Party fails timely to defend, contest or otherwise protect
itself against any such suit, action, investigation, claim or proceeding, the
Indemnified Party shall have the right to defend, contest or otherwise protect
the
Indemnified Party against the same and may make any compromise or settlement
thereof and recover the entire cost thereof from the Indemnifying Party
including without limitation, reasonable attorneys' fees, disbursements and all
amounts paid as a result of such suit, action, investigation, claim or
proceeding or compromise or settlement thereof.
() For purposes of this Article VIII, all Damages
shall be computed net of any insurance coverage (from the amount of which
coverage there shall be deducted all costs and expenses, including attorneys'
fees, of the Indemnified Party not reimbursed by such coverage) and tax benefits
with respect thereto which reduces the Damages that would otherwise be
sustained; PROVIDED, HOWEVER, that in all cases, the timing of the receipt or
realization of insurance proceeds or tax benefits shall be taken into account in
determining the amount of reduction of Damages.
/bullet/ PAYMENTS; NON-EXCLUSIVITY. Any amounts due an
Indemnified Party under the aforesaid indemnities shall be due and payable by
the Indemnifying Party within fifteen (15) days after written demand therefor.
The remedies conferred in this Article VIII are intended to be without prejudice
to any other rights or remedies available at law or equity to the Indemnified
Parties, now or hereafter.
/bullet/ SET-OFF. If from time to time and at any time the
Purchaser shall be entitled to be paid any amount under the provisions of this
Agreement, including this Article VIII, the Purchaser shall be entitled, if it
so elects, to set-off such amount against any other amounts due to the Seller
from the Purchaser or any of its affiliates. Such right of set-off shall be in
addition to and not in substitution of any other rights the Purchaser shall be
entitled to under the provisions of this Article VIII or otherwise.
ARTICLE
MISCELLANEOUS; GENERAL
/bullet/ FEES AND EXPENSES. Whether or not the transactions
contemplated hereby shall be consummated, each party hereto shall pay its own
expenses incident to preparing for, entering into or carrying out this Agreement
and the consummation of the transactions contemplated hereby.
/bullet/ MODIFICATION OR AMENDMENT. Subject to the applicable
provisions of the Delaware General Corporation Law, at any time prior to the
Closing Date (whether before or after receipt of the Stockholder Approval), this
Agreement may be supplemented, modified or amended, or the provisions hereof may
be waived, by the mutual agreement of the Purchaser and the Seller, by action of
their respective Boards of Directors followed by written agreement executed and
delivered by duly authorized officers of the respective parties; provided,
however, that no such supplement, modification, amendment or waiver which
materially and adversely affects the rights of the stockholders of the Seller,
shall be made without Stockholder Approval.
/bullet/ 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.
/bullet/ 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.
/bullet/ 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 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 the
federal or state courts located in the State of New York for any proceeding
arising in connection with this Agreement (and each such party agrees not to
commence any such proceeding, except in such courts), (ii) waives any objection
to the laying of venue of any such proceeding in the courts of the State of New
York, and (iii) waives, and agrees not to plead or to make, any claim that any
such proceeding brought in any federal or state court in the State of New York
has been brought
in an improper or otherwise inconvenient forum. Process in any such action may
be served by service upon the Secretary or State (or other appropriate public
official) of the jurisdiction of incorporation of the party to whom it is
directed.
/bullet/ NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party to the other shall be in writing and
shall be deemed to have been duly given on the day when 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.
If to Seller:
The Western Transmedia Company, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn.: Chief Executive Officer
With a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn.: Xxxxx X. Xxxxx, Esq.
If to Purchaser:
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.
/bullet/ DISCLOSURE LETTER AND EXHIBITS; ENTIRE AGREEMENT. The
Seller Disclosure Letter and all exhibits and schedules and attachments to
exhibits or schedules, or documents expressly incorporated into this Agreement,
and any other attachments to this Agreement are hereby incorporated into this
Agreement and are hereby made a part hereof as if set out in full in this
Agreement. This Agreement supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof.
/bullet/ ASSIGNMENT. Except as provided in the following
sentence, this Agreement and the rights and obligations of the parties hereto
shall not be assignable, by operation of law or otherwise, or delegable. The
Purchaser may assign any or all of its rights and interests and delegate any or
all of its obligations under this Agreement to any one or more affiliates of
Purchaser, but in such event the Purchaser shall remain, and the assignee shall
be, fully liable for the performance of all such obligations in the manner
prescribed in this Agreement. Subject to the two preceding sentences, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.
/bullet/ DEFINITION OF "AFFILIATE". When a reference is made
in this Agreement to an affiliate of a party, the word "affiliate" means any
corporation or other organization, whether incorporated or unincorporated, (x)
of which such party or any other affiliate of such party is a general partner or
limited partner or (y) beneficially owns at least a majority of the securities
or interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation or other organization, or (z) beneficially owns a
majority of the securities or other interests representing
the total equity in such organization, is directly or indirectly owned or
controlled by such party or by any one or more of its affiliates, or by such
party and one or more of its affiliates.
/bullet/ 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 way affect, limit, extend or describe
the scope of this Agreement or the intent of any provision hereof.
/bullet/ SEVERABILITY. Any provision hereof which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which may
render any provision hereof prohibited or unenforceable in any respect.
/bullet/ PUBLICITY. During the period through the Closing
Date, the Purchaser, the Seller and their respective affiliates shall consult
before making any public announcements or public comments regarding this
Agreement or the sale contemplated hereby, except as required by applicable law,
regulation or rule.
/bullet/ NO THIRD PARTY BENEFICIARIES. This Agreement has been
made for the sole benefit of the Purchaser and the Seller and shall not be
construed to confer any benefit or rights upon, nor may it be enforced by, any
other person, including any officer, director, employee, stockholder or creditor
of the Purchaser or the Seller.
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.
THE WESTERN TRANSMEDIA
COMPANY, INC.
By:/S/XXXXXX X. XXXXXXX
----------------------
Name:Xxxxxx X. Xxxxxxx
Title: President
TRANSMEDIA NETWORK INC.
By:/S/ XXXXXX XXXXXX
---------------------
Xxxxxx Xxxxxx
Chairman and President
TABLE OF CONTENTS
Page
ARTICLE I THE TRANSACTIONS 2
1.1 The Transactions 2
1.2 The Consideration. 3
1.3 Closing 5
1.4 Further Assurances 10
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER 12
2.1 Organization; Power; Capital Stock, Etc. 12
2.2 No Conflict; Required Filings and Consents 13
2.3 Permits; Compliance 14
2.4 Title to Assets; Absence of Liens and
Encumbrances; Defaults. 15
2.5 Absence of Litigation 16
2.6 Contracts; No Default; Etc. 17
2.7 Intellectual Property Rights 19
2.8 Brokers 19
2.9 No Material Misstatements or Misleading Statements 19
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 19
3.1 Organization; Power; Etc. 19
3.2 No Conflict; Required Filings and Consents 20
3.3 Absence of Litigation 21
3.4 Brokers. 21
3.5 No Material Misstatements or Misleading Statements 21
ARTICLE IV AGREEMENTS OF THE PARTIES 22
4.1 Ordinary Course of Business 22
4.2 Purchaser's Actions 23
ARTICLE V ADDITIONAL AGREEMENTS 24
5.1 Preparation of the Proxy Statement 24
5.2 Change of Seller's Name 24
5.3 Meeting 24
5.4 Legal Conditions to Transaction 24
5.5 Taxes. 25
5.6 Confidentiality 25
5.7 Access to Information 26
ARTICLE VI CONDITIONS TO CLOSING 27
6.1 Conditions to the Obligations of the Purchaser 27
6.2 Conditions to the Obligations of the Seller 29
ARTICLE VII TERMINATION 31
7.1 Termination 31
7.2 Effect of Termination 31
ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION 32
8.1 Survival of Representations and Warranties 32
8.2 Seller's Indemnification Obligations 32
8.3 Purchaser's Indemnification Obligations 34
8.4 Claims for Indemnification; Defense of 34
Indemnified Claims; Limitations on
Indemnification
8.5 Payments; Non-Exclusivity 36
8.6 Set-Off. 36
ARTICLE IX MISCELLANEOUS; GENERAL 36
9.1 Fees and Expenses 36
9.2 Modification or Amendment 36
9.3 Waiver of Conditions 37
9.4 Counterparts 37
9.5 Governing Law; Forum; Consent to Jurisdiction 37
9.6 Notices 38
9.7 Disclosure Letter and Exhibits; Entire Agreement 39
9.8 Assignment 39
9.9 Definition of "Affiliate" 40
9.10 Titles and Captions 40
9.11 Severability. 40
9.12 Publicity 41
9.13 No Third Party Beneficiaries 41
EXHIBIT A Assumed Leases
EXHIBIT B Prepaid Expenses
EXHIBIT C Assumed Liabilities re: Rights to Receive
EXHIBIT D Form of General Assignment and Xxxx of Sale and Agreement of
Assumption
EXHIBIT E Form of FIRPTA Affidavit
EXHIBIT F Form of Franchise Termination Agreement
EXHIBIT G Form of Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP Legal Opinion
