EXHIBIT 4.14
STOCK PURCHASE AND SALE AGREEMENT
STOCK PURCHASE AND SALE AGREEMENT, dated as of April 28, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), among Minotaur Partners II, L.P., an Illinois limited partnership
("XX XX"), ValueVision International Inc., a Minnesota corporation
("ValueVision"), Xxxxxxx Xxxxxxx ("Xxxxxxx"), Xxxxxxx Bank ("Bank" and, together
with XX XX, ValueVision and Xxxxxxx, the "Purchasers"), and Transmedia Network
Inc., a Delaware corporation (the "Company"). All capitalized terms used and not
otherwise defined herein have the meanings ascribed to them in Article IX
hereof.
WHEREAS, the Company desires to issue and sell to the Purchasers, and
the Purchasers desire to purchase from the Company, (i) 1,534,247 newly issued
shares of Common Stock in the aggregate (such 1,534,247 newly issued shares,
collectively the "Shares") at a price of $4.5625 per share (the "Share Purchase
Price") and (ii) warrants (the "Warrants") in the form of Exhibit A hereto to
purchase an additional 3,068,494 shares of Common Stock in the aggregate (such
additional 3,068,494 shares of Common Stock in the aggregate issuable from time
to time upon the exercise of the Warrants, collectively the "Warrant Shares").
NOW, THEREFORE, in consideration of the premises, representations and
warranties and the mutual covenants and agreements set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES AND WARRANTS
1.1 Purchase and Sale of the Shares and Warrants. Upon the terms
and subject to the satisfaction of the conditions contained in this Agreement,
at the Closings, the Company shall issue and sell to the Purchasers (in such
proportions as between the Purchasers as set forth on Schedule 1 hereto), and
the Purchasers shall so purchase from the Company, the Shares and Warrants in
two separate tranches, as follows:
(a) In the first tranche (the "First Tranche"), the Company shall
issue and sell to the Purchasers, and the Purchasers shall so
purchase from the Company, free and clear of all Liens, (i)
904,303 Shares (the "First Tranche Shares") and (ii) Warrants
to purchase 1,808,606 Warrant Shares (the "First Tranche
Warrants"); and
(b) In the second tranche (the "Second Tranche"), the Company
shall issue and sell to the Purchasers, and the Purchasers
shall so purchase from the Company, (i) 629,944 Shares (the
"Second Tranche Shares") and (ii) Warrants to purchase
1,259,888 Warrant Shares (the "Second Tranche Warrants").
1.2 Consideration. Upon the terms and subject to the satisfaction
of the conditions contained in this Agreement, the Purchasers shall pay to the
Company (in such proportions as between the Purchasers as set forth on Schedule
1 hereto) (i) $4,125,882 in the aggregate for the First Tranche (the "First
Purchase Price") and (ii) $2,874,120 in the aggregate for the Second Tranche
(the "Second Purchase Price" and, together with the First Purchase Price, the
"Purchase Price").
ARTICLE II
THE CLOSINGS
2.1 Time and Place. (a) Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, the closing of the
First Tranche (the "First Closing") shall take place at the offices of
Transmedia Network Inc., 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx, at 10:00 a.m.
(local time) on the third business day following the date on which all of the
conditions hereunder have been satisfied or waived, or at such other place or
time as the Purchasers and the Company may agree. The date and time at which the
First Closing actually occurs is hereinafter referred to as the "First Closing
Date."
(b) Upon the terms and subject to the satisfaction of the
conditions contained in this Agreement, including but not limited to the
Stockholder Approval, the closing of the Second Tranche (the "Second Closing"
and, together with the First Closing, the "Closings") shall take place at the
offices of Transmedia Network Inc., 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx, at
10:00 a.m. (local time) within ten business days of the Company receiving the
Stockholder Approval, or at such other place or time as the Purchasers and the
Company may agree, but in no event at any time prior to the receipt of the
Stockholder Approval. The date and time at which the Second Closing actually
occurs is hereinafter referred to as the "Second Closing Date" and, together
with the First Closing Date, the "Closing Dates."
2.2 Deliveries by the Company. (a) At the First Closing,
the Company shall deliver the following to the Purchasers:
(i) stock certificates representing the First Tranche
Shares, in the names of XX XX, ValueVision, Xxxxxxx
and Bank, dated as of the First Closing Date, in the
respective denominations set forth on Schedule 1
hereto;
(ii) the First Tranche Warrants, in the names of XX XX,
ValueVision, Xxxxxxx and Bank, dated as of the First
Closing Date, in the respective denominations set
forth on Schedule 1 hereto; and
(iii) all other documents, instruments and writings
required to be delivered by the Company at or prior
to the First Closing Date pursuant to this Agreement.
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(b) At the Second Closing, the Company shall deliver the following
to the Purchasers:
(i) a certificate of the Secretary or any Assistant
Secretary of the Company certifying as to the receipt
by the Company of the Stockholder Approval;
(ii) stock certificates representing the Second Tranche
Shares, in the names of XX XX, ValueVision, Xxxxxxx
and Bank, dated as of the Second Closing Date, in the
respective denominations set forth on Schedule 1
hereto;
(iii) the Second Tranche Warrants, in the names of XX XX,
ValueVision, Xxxxxxx and Bank, dated as of the Second
Closing Date, in the respective denominations set
forth on Schedule 1 hereto; and
(iv) all other documents, instruments and writings
required to be delivered by the Company at or prior
to the Second Closing Date pursuant to this
Agreement.
2.3 Deliveries by the Purchasers. (a) At the First Closing, the
Purchasers shall deliver the following to the Company:
(i) the First Purchase Price by wire transfer of
immediately available funds to such accounts
designated in a writing delivered by the Company to
the Purchasers no less than two (2) business days
prior to the First Closing Date or by such other
means as may be agreed upon in writing by the Company
and the Purchasers; and
(ii) all other documents, instruments and writings
required to be delivered by the Purchasers at or
prior to the First Closing Date pursuant to this
Agreement.
(b) At the Second Closing, the Purchasers shall deliver the
following to the Company:
(i) the Second Purchase Price by wire transfer of
immediately available funds to such accounts
designated in a writing delivered by the Company to
the Purchasers no less than two (2) business days
prior to the Second Closing Date or by such other
means as may be agreed upon in writing by the Company
and the Purchasers; and
(ii) all other documents, instruments and writings
required to be delivered by the Purchasers at or
prior to the Second Closing Date pursuant to this
Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents, warrants and covenants to the Purchasers on the
date of this Agreement and again on the First Closing Date, which
representations, warranties and covenants shall survive the Closings to the
extent hereinafter provided, that (except as set forth in the Company's
schedules delivered herewith):
3.1 Organization and Qualification. Each of the Company and each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
requisite corporate power and authority to carry on its business as it is now
being conducted. Each of the Company and each Subsidiary is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction (including any foreign country) where the character of its
properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such failures to be so
qualified or licensed or in good standing which would not, individually or in
the aggregate, have a Material Adverse Effect.
3.2 Certificate of Incorporation and Bylaws. The Company has
heretofore made available to the Purchasers a complete and correct copy of the
certificates of incorporation of the Company and iDine and the bylaws of the
Company and iDine as currently in effect (collectively, the "Organizational
Documents"). Such Organizational Documents are in full force and effect, and no
other organizational documents are applicable to or binding upon the Company or
any Subsidiary (including, without limitation, any joint venture, investment or
other agreement). Neither the Company nor iDine is in violation of any of the
provisions of its Organizational Documents.
3.3 Capitalization; Subsidiaries.
(a) The authorized capital stock of the Company consists of
70,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock. As
of March 31, 2000, (i) 13,632,709 shares of Common Stock were issued and
outstanding, (ii) 4,149,378 shares of Series A Preferred Stock were issued and
outstanding and (iii) no shares of Common Stock or Preferred Stock were held in
the treasury of the Company.
(b) The First Tranche Shares and the First Tranche Warrants shall
represent approximately 13.23% of the Fully Diluted Common Stock and 19.90% of
the outstanding shares of Common Stock as of the First Closing Date. The Second
Tranche Shares and the Second Tranche Warrants shall represent approximately
8.44% of the Fully Diluted Common Stock and 13.86% of the outstanding shares of
Common Stock as of the Second Closing Date.
(c) Except as set forth above in Section 3.3(a) and as set forth
in Schedule 3.3(c) hereto, and except with respect to options granted to
employees of the Company in the ordinary course of business, there were as of
March 31, 2000 no outstanding Equity Securities of the Company. Schedule 3.3(c)
includes a true and correct table summarizing all outstanding stock options,
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warrants and other rights to acquire Equity Securities of the Company or any
Subsidiary, including the identity and title of the holder (other than the
holders of the Series A Preferred Stock), the number of shares covered, the
vesting schedule therefor, the exercise price therefor, and the termination date
therefor.
(d) Each of the outstanding shares of capital stock of each
Subsidiary is duly authorized, validly issued, fully paid and nonassessable, and
all such shares are owned by the Company free and clear of all Liens, and there
are no outstanding Equity Securities of any Subsidiary other than such shares.
Except as set forth on Schedule 3.3(d) hereto, the Company does not own,
directly or indirectly, any capital stock or other equity interest in any Person
other than the Subsidiaries.
3.4 The Shares and the Warrants.
(a) Upon payment of the First Purchase Price, the Purchasers will
acquire good and marketable title to the First Tranche Shares and the First
Tranche Warrants, free and clear of all Liens, and such First Tranche Shares
shall be validly issued, fully paid and nonassessable. Upon exercise of the
First Tranche Warrants, in whole or, from time to time, in part, and upon
payment of the exercise price therefor, in accordance with the terms of the
First Tranche Warrants, the Purchasers will acquire good and marketable title to
the First Warrant Shares, free and clear of all Liens, and such First Warrant
Shares shall be validly issued, fully paid and nonassessable.
(b) Upon payment of the Second Purchase Price, the Purchasers will
acquire good and marketable title to the Second Tranche Shares and the Second
Tranche Warrants, free and clear of all Liens, and such Second Tranche Shares
shall be validly issued, fully paid and nonassessable. Upon exercise of the
Second Tranche Warrants, in whole or, from time to time, in part, and upon
payment of the exercise price therefor, in accordance with the terms of the
Second Tranche Warrants, the Purchasers will acquire good and marketable title
to the Second Warrant Shares, free and clear of all Liens, and such Second
Warrant Shares shall be validly issued, fully paid and nonassessable.
3.5 Power and Authority. The Company has all necessary corporate
power and authority to execute and deliver this Agreement, the Co-Sale and
Voting Agreement, the Investment Agreement, the Warrants and all other
documents, instruments and other writings to be executed and/or delivered by or
on behalf of the Company to the Purchasers or any of their representatives in
connection with the transactions contemplated hereby or thereby (collectively,
the "Company Transaction Documents"), to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of each of the Company Transaction
Documents by the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by the Board of Directors of the Company (the "Board"), and no other
corporate proceedings on the part of the Company are necessary to authorize the
execution, delivery and performance of the Company Transaction Documents or the
consummation of the transactions contemplated hereby and thereby, other than
Stockholder Approval. The Board has approved each of the Company Transaction
Documents and the transactions contemplated hereby
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and thereby so as to render inapplicable to such transactions, including,
without limitation, the issuance to the Purchasers of the Shares, the Warrants
and Warrant Shares, the restrictions contained in Article Seventh of the
Certificate of Incorporation of the Company and the restrictions contained in
Section 203 of the Delaware General Corporation Law. Each of the Company
Transaction Documents has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery hereof and
thereof by the Purchasers, each constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
3.6 No Conflict; Required Filings and Consents. The execution,
delivery and performance of the Company Transaction Documents by the Company do
not and will not: (a) conflict with or violate the Organizational Documents of
the Company or any Subsidiary; (b) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any
Subsidiary or by which its or any of their respective properties are bound or
affected; (c) require any consent, approval, authorization or permit of, action
by, filing with or notification to, any Governmental Entity (other than any
filing required under Section 13(a) or (d), 14, 15(d) or 16(a) of the Exchange
Act); or (d) result in any breach or violation of or constitute a default (or an
event which with notice or lapse of time or both could become a default) or
result in the loss by the Company or any Subsidiary of a material benefit under,
or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the properties or
assets of the Company or any Subsidiary pursuant to, any Contract, Permit or
other instrument or obligation to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of their respective properties
are bound or affected; other than (i) in the case of clauses (b) and (d) for
such conflicts, violations, breaches, defaults, rights, losses and Liens as, and
(ii) in the case of clause (c), such consents, approvals, authorizations,
permits, actions, filings and notifications, the absence of which, would not
have a Material Adverse Effect.
3.7 Employment, Consulting and Severance Agreements and Related
Matters. Except as set forth in Schedule 3.7 hereto:
(a) There are no Employment, Consulting or Severance Agreements
with respect to iDine to which the Company or iDine is a party or by which the
Company or iDine or any of their respective assets may be bound, and no present
or former employee, officer, director, consultant, independent contractor or
other agent of the Company or iDine is a party to or the beneficiary of any such
Employment, Consulting or Severance Agreements; and
(b) The execution and delivery of this Agreement or the other
Company Transaction Documents and the consummation of the transactions
contemplated hereby and thereby: (i) do not and will not result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both could become a default) or result in the loss by the Company or any
Subsidiary of a material benefit under, or give rise to any right of
termination, amendment, acceleration or cancellation of any Employment,
Consulting or Severance Agreement; or (ii) do not and will not give rise to any
obligation on the part of the Company or any Subsidiary to pay or provide any
Severance Payment.
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3.8 Compliance; No Violation. Each of the Company and each
Subsidiary is in compliance with, and is not in default or violation of, (i) its
respective Organizational Documents and (ii) all Contracts, Permits and other
instruments or obligations to which any of them are a party or by which any of
them or any of their respective properties may be bound or affected, except, in
the case of clause (ii), for any such failures of compliance, defaults and
violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Since January 1, 2000, neither the
Company nor any Subsidiary has received notice of any revocation or modification
of any federal, state, local or foreign Permit material to the Company and its
subsidiaries taken as a whole.
3.9 SEC Documents; Undisclosed Liabilities.
(a) Since September 30, 1998, the Company has filed all required
reports, schedules, forms, proxy, registration and other statements and other
documents with the SEC (collectively, the "SEC Documents"). As of the date of
this Agreement, the last SEC Document filed by the Company was its Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999. As of their
respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents. As of their respective filing dates, none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent such statements have been modified or
superseded by a later SEC Document filed and publicly available prior to the
Closing Dates, the circumstances or bases for which modifications or
supersessions have not and will not individually or in the aggregate result in
any material liability or obligation on behalf of the Company under the
Securities Act, the Exchange Act, the rules promulgated under the Securities Act
or the Exchange Act, or any federal, state or local anti-fraud, blue-sky,
securities or similar laws. The consolidated financial statements of the Company
included in the SEC Documents (as amended or supplemented by any later filed SEC
Document filed and publicly available prior to January 1, 2000), comply as to
form in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in
notes thereto) and fairly present the consolidated financial position of the
Company and the Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments).
Except as set forth in the SEC Documents, neither the Company nor any Subsidiary
has any obligation or liability of any nature whatsoever (direct or indirect,
matured or unmatured, absolute, accrued, contingent or otherwise) either (i)
required by generally accepted accounting principles to be set forth on a
consolidated balance sheet of the Company and the Subsidiaries or in the notes
thereto or (ii) which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect whether or not required by generally
accepted accounting principles to be provided or reserved against on a balance
sheet prepared in accordance with generally accepted accounting principles;
other than liabilities and obligations
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reflected or reserved against in the consolidated financial statements of the
Company and its consolidated subsidiaries included in the Company's quarterly
report on Form 10-Q for the quarter ended December 31, 1999, or incurred since
the date of the balance sheet included in such financial statements in the
ordinary course of business which are not individually or collectively material
to the Company and the Subsidiaries taken as a whole.
(b) At the date the Proxy Statement is first mailed to the
Company's stockholders or at the time of the Stockholders' Meeting, the Proxy
Statement will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement shall comply in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder except that the Company makes no representation, warranty
or covenant with respect to any written information supplied by the Purchasers
specifically for inclusion in the Proxy Statement.
3.10 Absence of Certain Changes or Events. Except as disclosed in the
SEC Documents, since January 1, 2000, the Company and the Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice, and there has not occurred any event, condition,
circumstance, change or development (whether or not in the ordinary course of
business) that, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect. Without limiting the generality of
the foregoing, except as set forth on Schedule 3.10 hereto or as disclosed in
any SEC Documents filed with the SEC and publicly available prior to January 1,
2000, since January 1, 2000, there has not been (i) any change by the Company in
its accounting methods, principles or practices, (ii) any revaluation by the
Company of any of its or any Subsidiary's material assets, including but not
limited to, writing down the value of any Rights to Receive other than in the
ordinary course of business consistent with past practice, (iii) any entry
outside the ordinary course of business by the Company or any Subsidiary into
any commitments or transactions material, individually or in the aggregate, to
the Company and the Subsidiaries taken as a whole, (iv) any declaration, setting
aside or payment of any dividends or distributions in respect of the shares of
Common Stock or, any redemption, purchase or other acquisition of any of its
securities, other than semi-annual cash dividends of $.02 per share on
outstanding Common Stock consistent with past practices, (v) any grant or
issuance of any Equity Securities of the Company or any Subsidiary; or (vi) any
increase in, establishment of or amendment of any Employment, Consulting or
Severance Agreement, bonus, insurance, deferred compensation, pension,
retirement, profit sharing, stock option (including without limitation the
granting of stock options, stock appreciation rights, performance awards, or
restricted stock awards), stock purchase or other employee benefit plan or
agreement or arrangement, or any other increase in the compensation payable or
to become payable to any present or former directors, officers or employees of
the Company or any Subsidiary, except for increases in compensation in the
ordinary course of business consistent with past practice.
3.11 Absence of Litigation; Compliance. Except as set forth on
Schedule 3.11 hereto or as disclosed in any SEC Documents filed with the SEC and
publicly available prior to January 1, 2000, there are no suits, claims,
actions, proceedings or investigations pending or, to the
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Company's knowledge, overtly threatened against the Company or any Subsidiary,
or any properties or rights of the Company or any Subsidiary, before any
arbitrator or Governmental Entity, that (i) if determined adversely to the
Company or any Subsidiary could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or (ii) seek to delay or prevent the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document. Neither the Company nor any Subsidiary nor any of their
respective properties is or are subject to any order, writ, judgment,
injunction, decree, determination or award having, or which in the future could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or could prevent or delay the consummation of the transactions
contemplated by this Agreement or any other Transaction Document. Neither the
Company nor any Subsidiary is in violation of, nor has the Company or any
Subsidiary violated, any applicable provisions of any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, or other
instrument or obligations to which the Company or any Subsidiary is a party or
by which the Company, any Subsidiary or any of their respective properties are
bound or affected except for any such violations which could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Except as disclosed in the SEC Documents filed with the SEC and publicly
available prior to January 1, 2000, the Company and its Subsidiaries are in
compliance with all applicable statutes, laws, ordinances, rules, orders and
regulations of any Governmental Entity (including, without limitation, with
respect to employment and employment practices, immigration laws relevant to
employment, and terms and conditions of employment and wages and hours) except
for any failures to comply which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as disclosed in
the SEC Documents filed with the SEC and publicly available prior to January 1,
2000, no investigation by any Governmental Entity with respect to the Company or
any Subsidiary is pending or threatened.
3.12 Material Contracts; Defaults. All material Contracts (other
than Employment, Consulting or Severance Agreements) to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any of their
respective assets may be bound (the "Material Contracts") have been filed with
or described in the Company's SEC Documents. Neither the Company nor any
Subsidiary is, or has received any notice or has any knowledge that any other
party is, in default in any respect under any Material Contract, except for
those defaults which would not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default by the Company or any Subsidiary or, to the
Company's knowledge, by any other party. To the Company's knowledge, no party to
any Material Contract has threatened to terminate such Material Contract (or
modify such Material Contract in a manner detrimental to the Company or any
Subsidiary).
3.13 Intellectual Property. The Company and each of its Subsidiaries
owns, or is licensed to use (in each case, free and clear of any Liens) all
patents, trademarks, trade names, copyrights, technology, know-how, trade
secrets, processes and computer software (including, without limitation, all
documentation and source and object codes with respect to such software) used in
or necessary for the conduct of its business as currently conducted which are
material to the business, operations, assets, prospects, financial condition or
results of operations of the
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Company and its Subsidiaries taken as a whole. To the Company's knowledge, the
use of such patents, trademarks, trade names, copyrights, technology, know-how,
trade secrets, processes and computer software (including, without limitation,
all documentation and source and object codes with respect to such software) by
the Company and its Subsidiaries does not infringe or otherwise violate the
rights of any person. To the Company's knowledge, no person is infringing any
right of the Company or any Subsidiary with respect to any such patents,
trademarks, trade names, copyrights, technology, know-how, processes or computer
software (including, without limitation, all documentation and source and object
codes with respect to such software).
3.14 Vote Required. The affirmative vote of the holders of no more
than a majority of the outstanding shares of Common Stock and the Series A
Preferred Stock, voting together as a class, is the only vote of the holders of
any class or series of capital stock or other Equity Securities of the Company
necessary to approve the issuance and sale of the Second Tranche Shares and the
Second Tranche Warrants.
3.15 Takeover Status. No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
state or federal laws or applicable stock exchange rules or regulations,
including, without limitation, Section 203 of the Delaware General Corporation
Law, applicable to the Company or any Subsidiary is applicable to the
transactions contemplated hereby or by any other Transaction Document, taken
individually or in the aggregate.
3.16 Compliance with Securities Laws. The Company has not taken,
and will not take, any action which would subject the issuance and sale of the
Shares, the Warrants and/or the Warrant Shares pursuant to this Agreement to the
provisions of Section 5 of the Securities Act, or violate the registration or
qualification provisions of any securities or blue sky laws of any applicable
jurisdiction, and, based in part on the representations of the Purchasers in
Section 4.5, the sale of the Shares and the Warrants pursuant to this Agreement
and the issuance of the Warrant Shares from time to time upon exercise of the
Warrants complies with all applicable requirements of applicable federal and
state securities and blue sky laws.
3.17 Brokers. No broker, finder, investment banker or other person
is entitled to receive from the Purchasers any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by the Company
Transaction Documents based upon arrangements made by or on behalf of the
Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of XX XX, ValueVision, Xxxxxxx and Bank hereby severally, but not
jointly, represents, warrants and covenants to the Company, with respect to
itself or himself, on the date of this Agreement and again on each of the
Closing Dates, which representations and warranties shall survive the Closings,
as follows:
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4.1 Organization. XX XX is a limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized. ValueVision is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized.
4.2 Authority Relative to This Agreement, etc. Each of XX XX,
ValueVision, Xxxxxxx and Bank, as applicable, has the requisite power and
authority to execute and deliver this Agreement, the Investment Agreement, the
Co-Sale and Voting Agreement and all other documents, instruments and other
writings to be executed and/or delivered by or on behalf of XX XX, ValueVision,
Xxxxxxx and/or Bank to the Company or any of its representatives in connection
with the transactions contemplated hereby or thereby (collectively, "Purchaser
Transaction Documents"), to perform its or his obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of each of the Purchaser Transaction
Documents by XX XX and ValueVision and the consummation by XX XX and ValueVision
of the transactions contemplated hereby and thereby have been duly authorized by
the general partner of XX XX and an authorized officer of ValueVision, and no
other proceedings on the part of XX XX or ValueVision, are necessary to
authorize the execution, delivery and performance of the Purchaser Transaction
Documents or the transactions contemplated hereby or thereby. Each of the
Purchaser Transaction Documents has been duly executed and delivered by XX XX,
ValueVision, Xxxxxxx and/or Bank, as the case may be, and, assuming due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of XX XX, ValueVision, Xxxxxxx and/or Bank, as the case
may be, enforceable against XX XX, ValueVision, Xxxxxxx and/or Bank, as the case
may be, in accordance with its terms.
4.3 No Conflict; Required Filings and Consents. The execution, delivery
and performance of the Purchaser Transaction Documents by XX XX, ValueVision,
Xxxxxxx or Bank, as the case may be, does not and will not: (i) conflict with or
violate the organizational documents of XX XX or ValueVision, as the case may
be; (ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to XX XX, ValueVision, Xxxxxxx or Bank, as the case may be, or
by which any of their properties are bound or affected; (iii) require any
consent, approval, authorization or permit of, action by, filing with or
notification to, any Governmental Entity (other than any filing required under
Section 13(a) or (d), 14, 15(d) or 16(a) of the Exchange Act); or (iv) result in
any breach or violation of or constitute a default (or an event which with
notice or lapse of time or both could become a default) or result in the loss of
a material benefit under, or give rise to any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the property or assets of XX XX, ValueVision, Xxxxxxx or Bank, as the case may
be, pursuant to, any Contract, Permit or other instrument or obligation to which
XX XX, ValueVision, Xxxxxxx or Bank, as the case may be, is a party or by which
XX XX, ValueVision, Xxxxxxx or Bank, as the case may be, or any of its
properties are bound or affected, except, in the case of clauses (ii), (iii) and
(iv), for any such conflicts, violations, breaches, defaults or other
occurrences which could not, individually or in the aggregate, reasonably be
expected to impair or delay the ability of XX XX, ValueVision, Xxxxxxx or Bank,
as the case may be, to perform its obligations under this Agreement.
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4.4 Brokers. No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by the Purchaser Transaction Documents based
upon arrangements made by or on behalf of XX XX, ValueVision, Xxxxxxx or Bank.
4.5 Investment Intent. Each of XX XX, ValueVision, Xxxxxxx and Bank (i)
agrees that the Shares, the Warrants and the Warrant Shares have not been
registered under the Securities Act or any state securities laws and may not be
sold or transferred except pursuant to a registration statement or pursuant to
an exemption from the Securities Act, (ii) is purchasing the Shares and the
Warrants and will purchase the Warrant Shares for its own account for
investment, and not with a view to, or for resale in connection with, any public
distribution of the Shares, the Warrants or any Warrant Shares and (iii) agrees
to include in any Schedule 13D filed with the SEC covering the Shares and the
Warrant Shares a statement asserting their investment intent, such statement to
be in a form that is reasonably satisfactory to the Company.
4.6 Share Ownership. Except as set forth on the Purchasers' Schedule
4.6, the Purchasers do not beneficially own any Equity Securities.
4.7 Proxy Statement. The information supplied or to be supplied by XX
XX, ValueVision, Xxxxxxx and Bank in writing specifically for inclusion in the
Proxy Statement will not, at the date the Proxy Statement is first mailed to the
Company's stockholders or at the time of the Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading.
4.8 Availability of Funds. XX XX, ValueVision, Xxxxxxx and/or Bank has
on hand and will have on each Closing Date sufficient funds to pay the Purchase
Price then payable in accordance with the terms of this Agreement and all fees
and expenses incurred in connection with the transactions contemplated hereby
for which XX XX, ValueVision, Xxxxxxx and/or Bank is responsible.
4.9 XX XX, ValueVision, Xxxxxxx and Bank not "Interested Stockholders".
Except to the extent that they may be deemed such by virtue of this Agreement
and the Co-Sale and Voting Agreement, neither of XX XX, ValueVision, Xxxxxxx and
Bank, nor any of their affiliates, is an "interested stockholder" of the Company
within the meaning of Section 203 of the Delaware General Corporation Law or
Article 7 of the Company's Certificate of Incorporation.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Access to Information. The Purchasers are entitled to continue
their due diligence investigation of the Company and the Subsidiaries, including
without limitation, any business, legal, financial or environmental due
diligence as the Purchasers deem appropriate. The Company will permit the
Purchasers and their authorized representatives, accountants, attorneys,
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advisors and consultants full access to the Company's and the Subsidiaries'
property and all records and other data with respect to the Company, the
Subsidiaries, and their respective properties, assets, operations, sales and
marketing activities, and products and services, as is reasonably requested, and
will provide such assistance as is reasonably requested. Upon prior notification
to the Company, the Purchasers are entitled to contact and communicate with
employees, participating merchants (i.e., restaurants, other vendors and credit
card companies), legal advisors and accountants of the Company and the
Subsidiaries.
5.2 Filings. As promptly as practicable after the date of this
Agreement, the Company and the Purchasers shall make or cause to be made all
filings and submissions under laws and regulations applicable to the Company and
the Purchasers, if any, as may be required for the consummation of the
transactions contemplated by this Agreement. The Purchasers and the Company
shall coordinate and cooperate in exchanging such information and providing such
reasonable assistance as may be requested by any of them in connection with the
filings and submissions contemplated by this Section 5.2.
5.3 Stockholders' Meeting. The Company acting through the Board shall,
in accordance with applicable law, as soon as practicable:
(a) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Stockholders' Meeting") for the purpose of considering
and taking action upon the Proxy Proposal;
(b) include in the proxy statement (the "Proxy Statement") to be
distributed to the Company's stockholders in connection with the Proxy Proposal,
including any amendments or supplements thereto (which Proxy Statement shall be
in form and content reasonably satisfactory to the Purchasers), the
recommendation of the Board that the stockholders of the Company vote in favor
of the approval of the Proxy Proposal;
(c) provide a reasonable opportunity for the Purchasers and their
counsel to review and provide comment on the Proxy Statement prior to its
filing;
(d) use its best efforts (i) to obtain and furnish the information
required to be included by it in the Proxy Statement and respond promptly to any
comments made by the SEC with respect to the Proxy Statement and any preliminary
version thereof and cause the Proxy Statement to be mailed to its stockholders
at the earliest practicable time and (ii) to obtain the necessary approvals by
its stockholders of the Proxy Proposal; and
(e) cause the Proxy Statement (i) not to contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (ii) to comply as
to form in all material respects with the applicable provisions of the Exchange
Act and the rules and regulations thereunder, provided that the Company makes no
covenant with respect to any written information supplied by the Purchasers
specifically for inclusion in the Proxy Statement.
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5.4 Board of Directors. At all times prior to the fifth anniversary of
the First Closing Date, the Company hereby agrees to take all action within its
power to cause one person designated by XX XX who is reasonably acceptable to
the Independent Directors ("XX XX Designee") to be appointed to the Board of
Directors of the Company (the "Board"). The XX XX Designee shall serve on the
Board for as long as the Shares and Warrant Shares held by the Purchasers
constitute at least 5% of the combined voting power of the Company's voting
securities.
5.5 Agreement to Cooperate; Further Assurances. Subject to the terms
and conditions of this Agreement, each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and the other Transaction Documents, including providing
information and using reasonable efforts to obtain all necessary or appropriate
waivers, consents and approvals, and effecting all necessary registrations and
filings. In case at any time after the Closing Dates any further action is
necessary or desirable to transfer any Shares, the Warrants or the Warrant
Shares to the Purchasers or otherwise to carry out the purposes of this
Agreement and the other Transaction Documents, the Company and the Purchasers
shall execute such further documents and shall take such further action as shall
be necessary or desirable to effect such transfer and to otherwise carry out the
purposes of this Agreement and the other Transaction Documents, in each case to
the extent not inconsistent with applicable law.
5.6 Public Announcements. Any public announcement made by or on behalf
of any Purchaser or the Company prior to the termination of this Agreement
pursuant to Article VII hereof concerning this Agreement, the transactions
described herein or in any other Transaction Document or any other aspect of the
dealings heretofore had or hereafter to be had between the Company and the
Purchasers and their respective Affiliates must first be approved in writing by
the other (any such approval not to be unreasonably withheld), subject to the
Company's obligations under applicable law or New York Stock Exchange rules and
listing requirements as a public company (but the Company shall use its best
efforts to consult with the Purchasers as to all such public announcements).
5.7 Notification of Certain Matters. The Company shall promptly provide
the Purchasers (or their counsel) with copies of all filings made by the Company
with the SEC or any other Governmental Entity in connection with this Agreement,
the other Transaction Documents and the transactions contemplated hereby and
thereby.
5.8 Representations and Warranties. The Company shall give prompt
notice to the Purchasers, and the Purchasers shall give prompt notice to the
Company, of (a) any representation or warranty made by such party contained in
this Agreement that is qualified as to materiality becoming untrue or inaccurate
in any respect or any such representation or warranty that is not so qualified
becoming untrue or inaccurate in any material respect prior to the Closings or
(b) the failure by such party prior to the Closings to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by such party under this Agreement; provided, however, that no such
notification shall affect the
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representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.9 Use of Proceeds. Unless otherwise approved by the Board, the
proceeds raised by the Company pursuant to this Agreement shall be used solely
for the development of iDine.
5.10 Indemnification and Insurance.
(a) The Certificate of Incorporation and By-Laws of the Company shall
contain the provisions with respect to indemnification set forth in the
Certificate of Incorporation and By-Laws of the Company on the date hereof,
which provisions shall not be amended, repealed or otherwise modified in any
manner that would adversely affect the rights to indemnification thereunder of
any current or future directors, officers, employees or agents of the Company,
unless such modification is required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Certificate of Incorporation or By-Laws as in effect
on the First Closing Date and regardless of whether the First Closing occurs,
indemnify and hold harmless each present and former director, officer or
employee of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties") against any out of pocket costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative incurred by such person by reason of the fact that such person is
or was an Indemnified Party, (x) arising out of or pertaining to the
transactions contemplated by this Agreement and the other Transaction Documents
or (y) otherwise with respect to any acts or omissions occurring on or prior to
the First Closing Date, to the same extent as provided in the Company's
Certificate of Incorporation or By-Laws as in effect on the First Closing Date
or any Material Contract containing an agreement concerning indemnification of
any Indemnified Parties. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the First Closing
Date), (i) any counsel retained by the Indemnified Parties for any period after
the First Closing Date shall be reasonably satisfactory to the Company, (ii)
after the First Closing Date, the Company shall pay the reasonable fees and
expenses of such counsel, promptly after statements therefor are received,
provided the Indemnified Parties first deliver to the Company a written
undertaking to repay such amounts if it is ultimately determined that such
person is not entitled to be indemnified by the Company under this Section 5.10,
and (iii) the Company will cooperate in the defense of any such matter;
provided, however, that the Company shall not be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld). The Indemnified Parties as a group may retain (in addition to local
counsel) only one law firm to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Parties.
(c) For as long as the XX XX Designee serves on the Board, the Company
shall maintain in effect directors' and officers' liability insurance covering
those persons who are
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currently covered by the Company's directors' and officers' liability insurance
policy on terms comparable to those now applicable to directors and officers of
the Company.
(d) The obligations of the Company under this Section 5.10 shall
survive the First Closing, are intended to benefit the Company and the
Indemnified Parties, shall be binding on all successors and assigns of the
Company and shall be enforceable by the Indemnified Parties.
ARTICLE VI
CONDITIONS AND SCHEDULE UPDATES
6.1 Conditions to Obligation of Each Party. The respective obligations
of each party to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction at or prior to each of the Closing Dates of the
following conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or decree by any court of competent
jurisdiction which prevents the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents or
imposes material conditions with respect thereto shall have been issued
and remain in effect (each party agreeing to use its reasonable efforts
to have any such injunction, order or decree lifted);
(b) No action shall have been taken, and no statute, rule or
regulation shall have been enacted, by any Governmental Entity which
would prevent the consummation of the transactions contemplated by this
Agreement or the other Transaction Documents or impose material
conditions with respect thereto;
(c) All orders, consents and approvals of Governmental
Entities legally required for the consummation of the transactions
contemplated by this Agreement or the other Transaction Documents shall
have been obtained and be in effect at each of the Closing Dates;
(d) The Shares and the Warrant Shares to be issued at each of
the Closings shall have been approved for listing by the New York Stock
Exchange upon official notice of issuance; and
(e) Only with respect to the Second Closing, the Proxy
Proposal shall have received Stockholder Approval.
6.2 Condition to Obligations of the Company. The obligation of the
Company to effect the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to each of the Closing Dates (except as
noted below) of the following additional conditions:
(a) The Purchasers shall have performed in all material
respects all obligations by the Purchasers required to be performed at
or prior to the Closing Dates, and the
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representations and warranties of the Purchasers contained in this
Agreement shall be true and correct in all material respects (if not
qualified by materiality) and true and correct (if so qualified) on and
as of the date of this Agreement and at and as of the Closing Dates as
if made at and as of each Closing Date, except to the extent that any
such representation or warranty expressly relates to another date (in
which case, as of such date) and the Company shall have received a
certificate signed on behalf of each of XX XX, ValueVision, Xxxxxxx
and/or Bank, to such effect;
(b) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction to
prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents;
(c) All consents, approvals, authorizations and permits of,
actions by, filing with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made;
(d) The Purchasers shall have executed and delivered to the
Company the Investment Agreement, and such Investment Agreement shall
be in full force and effect; and
(e) The Purchasers shall have executed and delivered to the
Company the Co-Sale and Voting Agreement, and such Co-Sale and Voting
Agreement shall be in full force and effect.
6.3 Conditions to Obligations of the Purchasers. (a) The obligations of
the Purchasers to effect the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to the First Closing Date of the
following additional conditions:
(i) The Company shall have performed in all material respects
all obligations required to be performed by it under this Agreement at
or prior to the Closing Dates, and the representations and warranties
of the Company contained in this Agreement shall be true and correct in
all material respects (if not qualified by materiality) and true and
correct (if so qualified) on and as of the date of this Agreement and
at and as of the Closing Dates (as modified by the matters or
circumstances reflected in the Updated Schedules, if any, provided by
the Company to the Purchasers in accordance with Section 6.4 hereof) as
if made at and as of each Closing Date, except to the extent that any
such representation or warranty expressly relates to another date (in
which case, as of such date) and the Purchasers shall have received a
certificate from the Company signed by an executive officer, to such
effect;
(ii) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction
which action or proceeding has been brought by a Governmental Entity
and which is reasonably likely to have a Material
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Adverse Effect or to prohibit, restrain, enjoin or restrict the
consummation of the transactions contemplated by this Agreement or the
other Transaction Documents;
(iii) All consents, approvals, authorizations and permits of,
actions by, filings with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made;
(iv) The Purchasers shall have received an opinion of Xxxxxx,
Xxxxx & Xxxxxxx LLP, counsel to the Company, containing the opinions in
the form attached hereto as Exhibit B with such provisions concerning
scope of firm's inquiry, law covered by opinion, reliance by the firm,
assumptions, definition of firm's "knowledge", qualifications,
limitations and similar matters as shall be reasonably acceptable to
the Company;
(v) The Company shall have executed and delivered to the
Purchasers the Investment Agreement, and such Investment Agreement
shall be in full force and effect;
(vi) The Company shall have executed and delivered to the
Purchasers the Co-Sale and Voting Agreement, and such Co-Sale and
Voting Agreement shall be in full force and effect; and
(vii) The Company shall have reached agreement with other
investors, including Xxxx Xxxxxxxxx and Xxxx Xxxxxxxxxx, reasonably
acceptable to the Purchasers to invest at least $3,000,000 in the
securities of the Company on terms no more favorable than those of the
Purchasers.
(b) The obligations of the Purchasers to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Second Closing Date of the following additional conditions:
(i) No action or proceeding shall be pending against the
Company or the Purchasers before any court of competent jurisdiction
which action or proceeding has been brought by a Governmental Entity
and which is reasonably likely to have a Material Adverse Effect or to
prohibit, restrain, enjoin or restrict the consummation of the
transactions contemplated by this Agreement or the other Transaction
Documents; and
(ii) All consents, approvals, authorizations and permits of,
actions by, filings with or notifications to, Governmental Entities and
third parties required in connection with the transactions contemplated
by this Agreement and the other Transaction Documents shall have been
obtained, taken or made.
6.4 Schedule Updates. At any time prior to two (2) business days prior
to the First Closing, the Company shall be entitled to update any schedule
referred to in Article III of this Agreement or add new schedules not referred
to in or contemplated by Article III by written notice to the Purchasers if
necessary in order to make the corresponding representations and
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warranties true and correct as of the First Closing Date; provided that such
updated or new Schedules may only reflect changes in circumstances or matters
arising subsequent to the date of the execution of this Agreement that are not
the result of any action undertaken, or failure to act, by the Company or the
Subsidiaries in breach of any provision of this Agreement (any such updated or
new schedules, "Updated Schedules"); it being understood that the Company shall
not be entitled to reflect in any Updated Schedules any circumstances, matters
or facts which were in existence as of or prior to the date of this Agreement,
whether or not the Company knew or should have known of such circumstances,
matters or facts as of the date of this Agreement). If, in accordance with the
immediately preceding sentence, new schedules are added, the applicable section
or subsection of Article III corresponding to such new schedule shall be read to
include the words "except as set forth in Schedule [insert applicable section or
subsection number]" or words of similar meaning to appropriately connote the
modifications created by such new schedule. The delivery of any Updated
Schedules pursuant to this Section 6.4 shall not cure any breach of any
representation, warranty or covenant made in this Agreement as of the date of
this Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to either
Closing Date:
(a) By mutual written consent of the Purchasers and
the Company;
(b) By the Purchasers if there has been a material breach by
the Company of any representation, warranty, covenant or agreement set
forth in this Agreement, which breach has not been cured within ten
(10) business days following receipt by the breaching party of notice
of such breach; or
(c) By the Company, if there has been a material breach by the
Purchasers of any representation, warranty, covenant or agreement set
forth in this Agreement which breach has not been cured within ten (10)
business days following receipt by the breaching party of notice of
such breach.
7.2 Termination Prior to the Second Closing. This Agreement may be
terminated with respect to the Second Closing, and the transactions contemplated
by this Agreement in connection with the Second Closing may be abandoned at any
time prior to the Second Closing Date:
(a) By the Purchasers, upon notice to the Company, if the
Second Closing shall not have occurred on or before the one hundred
twentieth (120th) day following the First Closing, unless the absence
of such occurrence shall be due to the failure of the Purchasers to
perform in all material respects each of its obligations under this
Agreement required to be performed by it at or prior to the Second
Closing;
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(b) By the Purchasers or the Company, upon notice to the
other, if the Company's stockholders fail to adopt the Proxy Proposal
at the Stockholders' Meeting; or
(c) By the Purchasers, if the Board of Directors of the
Company shall withdraw, modify or change its approval or recommendation
of the Proxy Proposal in a manner adverse to the Purchasers or shall
have resolved to do so.
ARTICLE VIII
INDEMNIFICATION
8.1 General. From and after the First Closing, the parties shall
indemnify each other as provided in this Article VIII. No specifically
enumerated indemnification obligation with respect to a particular subject
matter as set forth below shall limit or affect the applicability of a more
general indemnification obligation as set forth below with respect to the same
subject matter. For the purposes of this Article VIII, each party shall be
deemed to have remade all of its representations, warranties and covenants
contained in this Agreement at the First Closing with the same effect as if
originally made at such Closing, except that the Purchasers shall be deemed to
have remade the representations and warranties contained in Section 4.5 and
Section 4.9 at the Second Closing with the same effect as if originally made at
such Closing. No Person which may be subject to an indemnification obligation
under this Article VIII shall be entitled to require that any action be brought
against any other Person before action is brought against it hereunder by a
Person seeking indemnification by such Person.
8.2 The Company's Indemnification Obligations. The Company shall
indemnify, save and keep harmless each of XX XX, ValueVision, Xxxxxxx and Bank
and each of their respective officers, directors, employees, agents,
representatives, Affiliates, successors and permitted assigns against and from
all Damages sustained or incurred by any of them resulting from or arising out
of or by virtue of any inaccuracy in, breach of or other failure to comply with
any representation, warranty or covenant made by the Company in this Agreement
or any other Company Transaction Document. A claim for indemnification under
this Section 8.2 must be asserted by notice delivered to the Company within
ninety (90) days after the Company files with the SEC its Annual Report on Form
10-K for the year ended September 30, 2001 (such ninetieth (90th) day,
hereinafter the "Survival Date"); provided, however, that any claims for any
inaccuracy in, breach of or other failure to comply with any representation,
warranty or covenant made by the Company under Section 3.1, Section 3.5 or
Section 3.15 may be made at any time prior to the expiration of any statute of
limitations, if any, applicable to such claims. Notwithstanding anything to the
contrary in this Agreement, no investigation or lack of investigation by any
Purchaser, nor any disclosure in any Schedule hereto or knowledge of any
Purchaser as to any indemnifiable matters referred to in this Section 8.2, shall
in any way limit the Company's indemnification obligations hereunder.
8.3 The Purchasers' Indemnification Obligations. Each of XX XX,
ValueVision, Xxxxxxx and Bank, severally and not jointly, shall indemnify, save
and keep harmless the
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Company and its officers, directors, employees, agents, representatives,
Affiliates, successors and permitted assigns against and from all Damages
sustained or incurred by any of them resulting from or arising out of or by
virtue of any inaccuracy in, breach of or failure to comply with any
representation and warranty made by such Purchaser to the Company in this
Agreement or in any other Purchaser Transaction Document. A claim for
indemnification under this Section 8.3 must be asserted by notice delivered to
the party from whom indemnification is sought no later than the Survival Date.
Notwithstanding anything to the contrary in this Agreement, no investigation or
lack of investigation by the Company, nor the knowledge of the Company as to any
indemnifiable matters referred to in this Section 8.3, shall in any way limit
any Purchaser's indemnification obligations hereunder.
8.4 Disputes; Mediation.
(a) If the recipient of a notice of a claim for indemnification under
either Section 8.2 or 8.3 desires to dispute such claim, it shall, within
fourteen (14) days after notice of the claim of loss against it or a notice of
dispute is given, give a counter notice, setting forth the basis for disputing
such claim, to the Purchasers or the Company, as the case may be. If no such
counter notice is given within such fourteen (14) day period, or if the
Purchasers or the Company, as the case may be, acknowledge liability for
indemnification, then such loss shall be promptly satisfied.
(b) If the dispute is not promptly resolved, then, within fourteen (14)
days after delivery of the counter notice, or at such later time as may be
mutually agreed upon by the parties, the parties shall meet in person to discuss
and negotiate in good faith a resolution to the dispute. The meeting shall be
conducted in Chicago, Illinois or such other place as may be mutually agreed
upon by the parties.
(c) If the dispute is not resolved within thirty (30) days after the
first meeting of the parties referred to in Section 8.4(b), the parties shall
initiate a voluntary, nonbinding mediation conducted by a mutually agreed upon
mediator. If the parties are unable to agree upon a mediator, they shall request
the clerk of the Circuit Court of Xxxx County, Illinois to appoint a mediator
for them. Each of the parties shall bear their own costs and expenses (including
attorneys' fees) and their proportionate share of any other costs, fees or
expenses associated with this mediation and endeavor in good faith to resolve
their differences. The mediation shall be conducted in Chicago, Illinois or such
other place as may be mutually agreed upon by the parties.
ARTICLE IX
DEFINITIONS
"Affiliate" shall mean, with respect to any person, any other person
that directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such first person. As used in this
definition, "control" (including, with correlative meanings, "controlled by" and
"under common control with") shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management or policies, whether
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through the ownership of securities or partnership or other ownership interests,
by contract or otherwise.
"Common Stock" means the common stock, $.02 par value per share, of the
Company.
"Contract" means any contract, agreement, commitment, indenture, lease,
note, bond, mortgage, license, plan, arrangement or understanding, whether
written or oral.
"Co-Sale and Voting Agreement" means that certain Co-Sale and Voting
Agreement, dated as of even date herewith, among Samstock, L.L.C., the
Purchasers and the Company.
"Damages" means all liabilities, demands, claims, actions or causes of
action, regulatory, legislative or judicial proceedings or investigations,
assessments, levies, losses, fines, penalties, damages, costs and expenses,
including, without limitation, reasonable attorneys', accountants',
investigators', and experts' fees and expenses, sustained or incurred in
connection with the defense or investigation of any of the foregoing.
"Employment, Consulting or Severance Agreements" means all oral and
written (i) agreements for the employment for any period of time whatsoever, or
in regard to the employment, or restricting the employment, of any employee of
the Company or any Subsidiary, (ii) consulting, independent contractor or
similar agreements, and (iii) policies, agreements, arrangements or
understandings relating to the payment or provision of severance, termination or
similar pay or benefits to any present or former employees, officers, directors,
consultants, independent contractors or other agents of the Company or any
Subsidiary (including, without limitation, the Company's Senior Executive
Severance Policy, any successor thereto or any similar plan).
"Equity Securities" means, with respect to the Company or any
Subsidiary, as the case may be, (i) any class or series of common stock,
preferred stock or other capital stock, whether voting or non-voting, including,
without limitation, with respect to the Company, Common Stock and Preferred
Stock, (ii) any other equity securities issued by the Company or such
Subsidiary, as the case may be, whether now or hereafter authorized for issuance
by the Company's or such Subsidiary's, as the case may be, Certificate of
Incorporation, (iii) any debt, hybrid or other securities issued by the Company
or such Subsidiary, as the case may be, which are convertible into, exercisable
for or exchangeable for any other Equity Securities, whether now or hereafter
authorized for issuance by the Company's or such Subsidiary's, as the case may
be, Certificate of Incorporation, (iv) any equity equivalents (including,
without limitation, stock appreciation rights, phantom stock or similar rights),
interests in the ownership or earnings of the Company or such Subsidiary, as the
case may be, or other similar rights, (v) any written or oral rights, options,
warrants, subscriptions, calls, preemptive rights, rescission rights or other
rights to subscribe for, purchase or otherwise acquire any of the foregoing,
(vi) any written or oral obligation of the Company or such Subsidiary, as the
case may be, to issue, deliver or sell, any of the foregoing, (vii) any written
or oral obligations of the Company or such Subsidiary, as the case may be, to
repurchase, redeem or otherwise acquire any Equity Securities, and (viii) any
bonds, debentures, notes or other indebtedness of the Company or such
Subsidiary, as the case may be, having the right to vote (or convertible into,
or exchangeable for securities having the
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right to vote) on any matters on which the stockholders of the Company or such
Subsidiary, as the case may be, may vote.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fully Diluted Common Stock" means the total number of shares of Common
Stock outstanding after taking into account the following: (i) all shares of
Common Stock outstanding (exclusive of the Shares); (ii) all Shares and Warrant
Shares (assuming full exercise of the Warrants and issuance of all Warrant
Shares); (iii) all shares of Common Stock issuable upon conversion, exchange or
other exercise of the Company's Equity Securities outstanding; and (iv)
adjustments needed to account or adjust for stock splits, stock dividends,
recapitalizations, recombinations and similar events.
"Governmental Entity" means any court, administrative agency or
commission or other governmental authority or instrumentality, whether domestic
(federal, state or local) or foreign.
"iDine" means xXxxx.xxx, Inc., a Delaware corporation and a wholly
owned subsidiary of the Company established to develop an internet based dining
business.
"Independent Directors" means directors of the Company who (i) are not
current or former employees or officers of the Company, (ii) are not holders of
more than 5% of the outstanding Common Stock, and (iii) have no financial
interest in and are not otherwise associated with the Purchasers, the Company,
any Subsidiary or any holder of more than 5% of the outstanding Common Stock or
any of their respective Affiliates, excluding however any equity interest of not
more than 2% of any publicly-held entity other than the Company. The term
"associated" means having a business, financial or familial relationship that
might reasonably be expected to affect the individual's judgment with respect to
matters in which the associated person might be interested.
"Investment Agreement" means that certain Investment Agreement, dated
as of even date herewith, among the Company and the Purchasers.
"Lien" means any preemptive or similar rights of any third party,
purchase options, calls, proxies, voting trusts, voting agreements, judgments,
pledges, charges, assessments, levies, escrows, rights of first refusal or first
offer, transfer restrictions, mortgages, indentures, claims, liens, equities,
mortgages, deeds of trust, deeds to secure debt, security interests and other
encumbrances of every kind and nature whatsoever, whether arising by agreement,
operation of law or otherwise, other than any created by the Purchasers or the
Purchaser Transaction Documents.
"Material Adverse Effect" means a material adverse effect (or any
development which could reasonably be expected to have a material adverse
effect) on the business, operations, assets, financial or other condition,
results of operations or prospects of the Company and the Subsidiaries, taken as
a whole, or that could reasonably be expected to impair or delay the ability of
the Company to perform its obligations under this Agreement.
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"Permit" means any permit, certificate, consent, approval,
authorization, order, license, variance, franchise or other similar indicia of
authority issued or granted by any Governmental Entity.
"Person" or "person" means any individual, corporation, partnership,
limited liability partnership, limited liability company, joint venture,
association, joint stock company, trust, unincorporated organization or
Governmental Entity, or any agency or political subdivision thereof, or any
other entity.
"Preferred Stock" means the preferred stock, $.10 par value per share,
of the Company.
"Proxy Proposal" means the following proposal to be included in the
Proxy Statement for Stockholder Approval: the issuance and sale of the Second
Tranche Shares and Second Tranche Warrants.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
"Series A Preferred Stock" means the Series A Senior Convertible
Redeemable Preferred Stock, par value $.10 per share, of the Company.
"Stockholder Approval" means the requisite approval of the Company's
stockholders under the Company's Organizational Documents and the Delaware
General Corporation Law for the Proxy Proposal.
"Subsidiary" means each of (i) Transmedia Restaurant Company Inc., a
Delaware corporation, (ii) TMN International Incorporated, a Delaware
corporation, (iii) Transmedia Service Company Inc., a Delaware corporation, and
(iv) iDine.
"Transaction Document" means any Company Transaction Document and any
Purchaser Transaction Document.
ARTICLE X
MISCELLANEOUS
10.1 Restrictive Legend. The Purchasers agree to the placing on the
certificates representing the Shares or the Warrant Shares of a legend, in
substantially the following form:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or applicable state securities laws and may not be
sold, transferred, assigned, offered, pledged or otherwise
disposed of unless (i) there is an effective registration
statement under such Act and such laws covering such
securities or (ii)
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such sale, transfer, assignment, offer, pledge or other
disposition is exempt from the registration and prospectus
delivery requirements of such Act and such laws. The
securities evidenced by this certificate are subject to the
restrictions on transfer contained in the Investment Agreement
dated as of April 28, 2000, and the Co-Sale and Voting
Agreement dated as of April 28, 2000, in each case, to which
the Company is a party, as amended, supplemented or otherwise
modified from time to time, and may not be transferred except
in compliance therewith."
10.2 Notices. All notices, and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile, to
the appropriate address or facsimile number set forth below (or at such other
address or facsimile number for a party as shall be specified by like notice):
if to any Purchaser, at their respective addresses
set forth on the signature pages hereto.
with an additional copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
if to the Company:
Transmedia Network Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
10.3 Expenses. Except as otherwise provided in this Agreement, the
Company shall bear all fees and expenses incurred by the Company or any
Subsidiary in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the other Company
-25-
Transaction Documents and the consummation of the transaction contemplated
hereby and thereby, including attorneys', accountants' and other professional
fees and expenses. The Purchasers shall bear all fees and expenses incurred by
the Purchasers in connection with, relating to or arising out of the execution,
delivery and performance of this Agreement and the other Purchaser Transaction
Documents and the consummation of the transaction contemplated hereby and
thereby, including attorneys', accountants' and other professional fees and
expenses.
10.4 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible
10.5 Entire Agreement; Amendment; Waiver; Assignment; Nature of
Obligations. This Agreement, together with the other Transaction Documents,
constitutes the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof and thereof. No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision of this
Agreement, whether or not similar, nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided. This Agreement shall not be assigned
by operation of law or otherwise; provided, however, that, notwithstanding the
foregoing, XX XX, ValueVision, Xxxxxxx or Bank may assign its or their rights
and obligations hereunder to (i) any controlled Affiliate of XX XX, ValueVision,
Xxxxxxx or Bank, (ii) any partner of XX XX, (iii) any Affiliate of any partner
of XX XX, (iv) any family member of Xxxxxxx or Bank or (v) any trust established
for the benefit of any family member of Xxxxxxx or Bank (each of (i), (ii),
(iii), (iv) and (v), a "Permitted Assignee"), upon the receipt by the Company of
the written agreement of any such Permitted Assignee to be bound by the terms of
each of the Purchaser Transaction Documents; provided further, however, that no
such assignment shall relieve the assigning party of any of its liabilities or
obligations under this Agreement. Any attempted assignment which does not comply
with the provisions of this Section 10.5 shall be null and void ab initio.
10.6 Parties in Interest. Subject to the provisions regarding
assignment in Section 10.5 above, this Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
-26-
10.7 Publicity. Neither the Company nor the Purchasers will make or
issue, or cause to be made or issued, any announcement or written statements
concerning the Transaction Documents or the transactions contemplated thereby
for dissemination to the general public without the prior written consent of the
Company or the Purchasers, as appropriate, which consent shall not be
unreasonably withheld. This provision will not apply to any announcement or
written statement required to be made by law or the regulations of the SEC, the
New York Stock Exchange or the NASDAQ Stock Exchange, except that the party
required to make such announcement will, whenever practicable, consult with the
other parties hereto concerning the timing and content of such announcement
before such announcement is made.
10.8 Governing Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware applicable to contracts
made in that State.
10.9 Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.10 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender (including neutral gender) shall extend to and
include all genders.
10.11 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
10.12 Jurisdiction and Service of Process. THE COMPANY AND THE
PURCHASERS HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREE THAT, SUBJECT TO THE
OTHER PROVISIONS OF THIS AGREEMENT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT WHICH MAY BE LITIGATED SHALL BE LITIGATED IN SUCH
COURTS. EACH OF THE COMPANY AND THE PURCHASERS ACCEPTS FOR SUCH PARTY AND IN
CONNECTION WITH SUCH PARTY'S PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE COMPANY AND THE
PURCHASERS AGREES TO ACCEPT SERVICE OF ALL PROCESS BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED BY EACH SUCH PARTY TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. IF ANY AGENT APPOINTED BY THE COMPANY OR THE
PURCHASERS REFUSES TO ACCEPT SERVICE, SUCH
-27-
PARTY HEREBY AGREES THAT SERVICE UPON SUCH PARTY BY MAIL SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COMPANY OR THE
PURCHASERS TO BRING PROCEEDINGS AGAINST THE COMPANY OR THE PURCHASERS IN THE
COURTS OF ANY OTHER JURISDICTION.
10.13 Trial. EACH OF THE COMPANY AND THE PURCHASERS HEREBY WAIVES SUCH
PARTY'S RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO
RELATING TO THE SUBJECT MATTER HEREOF. EACH OF THE COMPANY AND THE PURCHASERS
ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF ANY PARTY TO THIS AGREEMENT WITH RESPECT TO ANY
ACTION COMMENCED BY ONE OF THEM AGAINST THE OTHER OF THEM. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE COMPANY AND
THE PURCHASERS ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. EACH OF THE COMPANY AND THE PURCHASERS FURTHER
WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH SUCH
PARTY'S LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES SUCH
PARTY'S JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER
IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
-28-
IN WITNESS WHEREOF, the Purchasers and the Company have executed this
Stock Purchase and Sale Agreement as of the date first above written.
THE PURCHASERS:
MINOTAUR PARTNERS II, L.P.
By: Minotaur Partners II, L.L.C.
Its: General Partner
By: Minotaur Partners II, Inc.
Its: Manager
/s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
By: Xxxxxx X. Xxxxxxxx, Xx.
Its: Principal
Address: 000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
VALUEVISION INTERNATIONAL INC.
/s/ Xxxxxxx Xxxxxx
-----------------------------------------
By: Xxxxxxx Xxxxxx
Its: Senior Vice President and
Chief Financial Officer
Address: 0000 Xxxxx Xxx Xxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
/s/ Xxxxxxx Xxxxxxx
-----------------------------------------
XXXXXXX XXXXXXX
Address: 6N 000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
/s/ Xxxxxxx Bank
-----------------------------------------
XXXXXXX BANK
Address: X.X. Xxx 000
Xxxxxx, Xxxxxxxx 00000
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COMPANY:
TRANSMEDIA NETWORK INC.
/s/ Xxxx X. Xxxxxxxxx
--------------------------------------
By: Xxxx X. Xxxxxxxxx, President and
Chief Executive Officer
