-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RE7mCD2xRKV8810NTiK0g+auXo3UafbkG04gN7iRvuWr3rGXD/WE5Q7RYwVKSj7d NRR9IGjKww34VAm33fmlNw== 0000950137-99-003435.txt : 19990920 0000950137-99-003435.hdr.sgml : 19990920 ACCESSION NUMBER: 0000950137-99-003435 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19990917 GROUP MEMBERS: EGI-TRANSMEDIA INVESTORS, L.L.C. GROUP MEMBERS: HALMOSTOCK LIMITED PARTNERSHIP GROUP MEMBERS: SAMSTOCK LLC GROUP MEMBERS: SAMSTOCK, L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSMEDIA NETWORK INC /DE/ CENTRAL INDEX KEY: 0000078536 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 846028875 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-35249 FILM NUMBER: 99713552 BUSINESS ADDRESS: STREET 1: 11900 BISCAYNE BLVD STREET 2: STE 460 CITY: MIAMI STATE: FL ZIP: 33181 BUSINESS PHONE: 3058923300 MAIL ADDRESS: STREET 1: 11900 BISCAYNE BLVD STREET 2: SUITE 460 CITY: MIAMI STATE: FL ZIP: 33181 FORMER COMPANY: FORMER CONFORMED NAME: PIKES PEAK AMERICAN CORP DATE OF NAME CHANGE: 19840912 FORMER COMPANY: FORMER CONFORMED NAME: PIKES PEAK TURF CLUB INC DATE OF NAME CHANGE: 19740728 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SAMSTOCK LLC CENTRAL INDEX KEY: 0001051877 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 364156890 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: TWO NORTH RIVERSIDE PLAZA CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124664010 MAIL ADDRESS: STREET 1: TWO NORTH RIVERSIDE PLAZA CITY: CHICAGO STATE: IL ZIP: 60606 SC 13D/A 1 SCHEDULE 13D AMENDMENT #2 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2) TRANSMEDIA NETWORK INC. (Name of Issuer) COMMON STOCK, PAR VALUE $0.02 PER SHARE (Title of Class of Securities) 893767103 (CUSIP Number) SUSAN OBUCHOWSKI EQUITY GROUP INVESTMENTS, L.L.C. TWO NORTH RIVERSIDE PLAZA, SUITE 600 CHICAGO, ILLINOIS 60606 (312) 454-0100 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) SEPTEMBER 7, 1999 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(b)(3) or (4), check the following box [__]. Page 1 2 SCHEDULE 13D CUSIP NO. 893767103 PAGE 2 OF 5 PAGES --------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON EGI-Transmedia Investors, L.L.C. FEIN#: 36-4192415 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 4,697,449* OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING 476,647 PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 1,444,541 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,697,449* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. * Represents the number of shares which are beneficially owned by all members of the group, in the aggregate, and which are subject to voting arrangements set forth more fully in Items 3 and 4 below. This filing shall not be construed as an admission that such reporting person is the beneficial owner of all of such shares. Page 2 3 SCHEDULE 13D CUSIP NO. 893767103 PAGE 2 OF 5 PAGES --------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Samstock, L.L.C. FEIN: 36-4156890 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 4,697,449* OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING 2,776,261 PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 1,444,541 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,697,449* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. * Represents the number of shares which are beneficially owned by all members of the group, in the aggregate, and which are subject to voting arrangements set forth more fully in Items 3 and 4 below. This filing shall not be construed as an admission that such reporting person is the beneficial owner of all such shares. Page 3 4 SCHEDULE 13D CUSIP NO. 893767103 --------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Halmostook Limited Partnership FEIN#: 830319692 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Wyoming - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES ----------------------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 4,697,449* OWNED BY EACH ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER REPORTING PERSON ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER WITH 604,532 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,697,449* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* 00 - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. * Represents the number of shares which are beneficially owned by all members of the group, in the aggregate, and which are subject to voting arrangements set forth more fully in Items 3 and 4 below. This filing shall not be construed as an admission that such reporting person is the beneficial owner of all of such shares. Page 4 5 This Amendment No. 2 to Schedule 13D relates to the common stock, par value $.02 per share ("Common Stock"), of Transmedia Network Inc. (the "Issuer"). Items 2, 3, 4, 5, 6 and 7 of the Schedule 13D are hereby amended to read in their entirety as follows: ITEM 2. IDENTITY AND BACKGROUND (a-c) This Statement is being filed by the following beneficial owners of Common Stock: EGI-Transmedia Investors, L.L.C., a Delaware limited liability company ("TMI"), Samstock, L.L.C., a Delaware limited liability company ("Samstock"), and Halmostock Limited Partnership, a Wyoming limited partnership ("Halmostock"). (TMI, Samstock and Halmostock are referred to herein, individually, as a "Stockholder" and, collectively, as the "Stockholders.") The sole managing member of TMI is Samstock. The sole member of Samstock is SZ Investments, L.L.C., a Delaware limited liability company ("SZI"). The managing member of SZI is Zell General Partnership, Inc., an Illinois corporation ("ZGP"). The general partner of Halmostock is Halmos Investments-Western, Inc., a Wyoming corporation ("HIW"). Additional information concerning SZI, ZGP and HIW is set forth in Appendix A hereto. The principal business of TMI is investment in the securities of the Issuer. The principal business of Samstock, SZI and ZGP is general investments. The business address of TMI, Samstock, SZI and ZGP is Two North Riverside Plaza, Chicago, Illinois, 60606. The principal business of Halmostock is investment in the securities of the Issuer and the principal business of HIW is general investments. The business address of Halmostock and HIW is 21 W. Las Olas Boulevard, Fort Lauderdale, Florida, 33301. (d) and (e) Neither the Stockholders nor, to the best knowledge of the Stockholders, any of SZI, ZGP or HIW, or any of the persons listed in Appendix A hereto, have during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was, or is, subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Pursuant to a Stock Purchase and Sale Agreement dated as of November 6, 1997 among TMI, Samstock and the Issuer (the "Stock Purchase Agreement"), TMI and Samstock agreed to acquire in the aggregate (i) 2,500,000 newly issued shares of Common Stock (the "Shares") and (ii) warrants to purchase an additional 1,200,000 shares of Common Stock (the "Warrant Shares"), subject to the satisfaction of certain conditions precedent. The Stock Purchase Agreement was attached as Exhibit 1 to the original Schedule 13D and is incorporated herein by reference. Pursuant to an Assignment Agreement dated as of March 3, 1998 (the "Initial Investment Closing Date") among the Stockholders and the Issuer (the "Assignment Agreement"), effective contemporaneously with the closing under the Stock Purchase Agreement, TMI and Samstock assigned to Halmostock the right to acquire 352,941 of the Shares and 169,412 of the Warrant Shares. The Assignment Agreement was attached as Exhibit 2 to Amendment Number 1 to Schedule 13D and is incorporated herein by reference. In addition, Halmostock is the beneficial owner of 92,000 shares of Common Stock, which 92,000 shares were contributed to Halmostock by Steven J. Halmos prior to the Initial Investment Closing Date. On the Initial Investment Closing Date, TMI acquired 322,059 of the Shares and 154,588 of the Warrant Shares and Samstock acquired 1,825,000 of the Shares and 876,000 of the Warrant Shares, for a total aggregate consideration of $9,125,000.75, the source of which was capital contributions to TMI and Samstock by the members of TMI and Samstock, respectively. In addition, on the Initial Investment Closing Date, Halmostock acquired 352,941 Shares and 169,412 Warrant Shares for a total aggregate consideration of $1,499,999.25 paid to the Issuer, the source of which was a loan of $1,534,999.25 from an affiliate of Halmostock, which affiliate is a Wyoming limited partnership the general partner of which is HIW. The loan was made pursuant to a note dated March 2, 1998, is payable on demand, and bears interest at a rate of 8% per annum. The acquisition of the Shares and Warrant Shares by TMI, Samstock and Halmostock described in this paragraph are referred to herein collectively as the "Initial Investment." Page 5 6 Effective as of the Initial Investment Closing Date, immediately after the closing of the Initial Investment, Samstock sold to Robert M. Steiner, as trustee under the declaration of trust dated March 9, 1983, as amended, establishing the Robert M. Steiner Revocable Trust ("Steiner Trust"), 40,364 of the Shares and 19,375 of the Warrant Shares for a purchase price in cash in the amount of $171,547.00, and Halmostock sold to the Steiner Trust 6,636 of the Shares and 3,185 of the Warrant Shares, for a purchase price in cash of $28,203.00. In connection with the Initial Investment, TMI, Samstock, the Issuer, Melvin Chasen and Iris Chasen (Melvin Chasen and Iris Chasen being referred to herein, together, as the "Chasens") have also entered into an Amended and Restated Agreement Among Stockholders dated as of March 3, 1998 (the "Amended Agreement Among Stockholders"), which amends, restates and supersedes an Agreement Among Stockholders dated as of November 6, 1997 among the same parties. Pursuant to the Amended Agreement Among Stockholders, TMI and Samstock acquired the sole power to vote or to direct the vote of all of the shares of Common Stock held by the Chasens (the "Chasen Shares"), whether now owned or hereafter acquired, subject to certain limitations in the Investment Agreement described below. There are currently 840,009 Chasen Shares issued and outstanding known to the Reporting Persons, representing 6.3% of the issued and outstanding Common Stock. The Amended Agreement Among Stockholders also provides that, subject to certain limitations, TMI and Samstock have a right of first refusal on all sales of the Chasen Shares, and the Chasen Shares are subject to "co-sale" and "drag along" provisions if TMI and Samstock sell any shares they may own. On September 7, 1999, Samstock exercised its right of first refusal on a portion of the Chasen Shares, thereby acquiring from the Chasens 135,000 of the Chasen Shares for an aggregate purchase price of $472,500 in cash, the source of which was Samstock's working capital. The Amended Agreement Among Stockholders will terminate if Stockholders and their affiliates (the "Stockholder Group") cease to own in the aggregate at least 5% of the Issuer's Common Stock (or other securities of the Issuer entitled to vote generally for the election of directors or securities convertible into or exchangeable for Common Stock or such voting securities or other options or rights to acquire Common Stock or such voting securities) (collectively, the "Voting Securities"). The Amended Agreement Among Stockholders was attached as Exhibit 3 to Amendment Number 1 to Schedule 13D and is incorporated herein by reference. Also in connection with the Initial Investment, the Stockholders and the Issuer have entered into a Stockholders' Agreement dated as of March 3, 1998 (the "Stockholders Agreement"), pursuant to which TMI and Samstock acquired the sole power to vote or to direct the vote of all of the shares of Common Stock held by Halmostock (the "Halmostock Shares"), whether now owned or hereafter acquired, subject to certain limitations in the Investment Agreement described below. There are currently 438,305 Halmostock Shares issued and outstanding, representing 3.3% of the issued and outstanding Common Stock. In addition, Halmostock owns warrants in respect of the 166,227 Warrant Shares which, together with the 438,305 issued and outstanding Halmostock Shares, represent 4.5% of the Common Stock, including the 166,227 Warrant Shares. Like the Amended Agreement Among Stockholders, the Stockholders Agreement also provides that, subject to certain limitations, TMI and Samstock have a right of first refusal on all sales of the Halmostock Shares, and the Halmostock Shares are subject to "co-sale" and "drag along" provisions if TMI and Samstock sell any shares they may own. The Stockholders Agreement will terminate if the Stockholder Group ceases to own in the aggregate at least 5% of the Issuer's Voting Securities. The Stockholders Agreement was attached as Exhibit 4 to Amendment Number 1 to Schedule 13D and is incorporated herein by reference. The summary contained in this Statement of certain provisions of each of the Stock Purchase Agreement, the Assignment Agreement, the Amended Agreement Among Stockholders and the Stockholders Agreement is not intended to be complete and is qualified in its entirety by reference to the Stock Purchase Agreement, the Assignment Agreement, the Amended Agreement Among Stockholders and the Stockholders Agreement, each of which was attached as an exhibit to the original Schedule 13D or Amendment Number 1 to Schedule 13D and is incorporated herein by reference. Page 6 7 ITEM 4. PURPOSE OF THE TRANSACTION The Stockholders' acquisition of the Shares and the Warrant Shares and Samstock's acquisition of 135,000 of the Chasen Shares, and TMI's and Samstock's acquisition of the sole power to vote or to direct the vote of the Chasen Shares and the Halmostock Shares, were effected for the purpose of investing in the Issuer. The purchase price upon exercise of the warrants in respect of the Warrant Shares is equal to a specified price (the "Exercise Price") multiplied by the number of shares of Common Stock that TMI, Samstock, or Halmostock, as the case may be, is then purchasing upon exercise of the warrants. The Exercise Price is $6.00 per share for one third of the Warrant Shares purchased, $7.00 per share for another third of the Warrant Shares, and $8.00 per share for the final third of the Warrant Shares. The warrants may be exercised at any time and will expire on the fifth anniversary of the date of the Initial Investment Closing Date. In June 1999, the Issuer entered into a $10 million loan agreement (the "GAMI Loan Agreement") with GAMI Investments, Inc. ("GAMI"), an affiliate of Samstock. The Issuer drew down the entire $10 million principal amount available under the GAMI Loan Agreement on June 30, 1999 (the "GAMI Loan"). The GAMI Loan Agreement obligates the Issuer to conduct a $10,000,000 rights offering (the "Rights Offering") for shares of a newly created series of convertible preferred stock (the "Series A Preferred Stock") described in the Issuer's preliminary proxy statement filed with the Securities Exchange Commission on August 10, 1999. The GAMI Loan Agreement is attached hereto as Exhibit 6 and is incorporated herein by reference. The summary contained in this Statement of certain provisions of the GAMI Loan Agreement is not intended to be complete and is qualified in its entirety by reference to the GAMI Loan Agreement attached as an exhibit hereto and incorporated herein by reference. In connection with the Rights Offering, Samstock and the Issuer have entered into a Standby Purchase Agreement dated as of June 30, 1999 (the "Standby Purchase Agreement"), whereby Samstock has agreed to act as a standby purchaser to ensure that $10 million in proceeds are raised in the Rights Offering. The Issuer is required to use all proceeds of the Rights Offering to repay the outstanding principal amount of the GAMI Loan. Under the Standby Purchase Agreement, Samstock is obligated to exercise its basic subscription privilege in full and to purchase, at the subscription price, all shares of Series A Preferred Stock offered pursuant to the Rights Offering which are not subscribed for by other stockholders (including pursuant to any overscription privilege). The obligation of Samstock under the Standby Purchase Agreement is subject to various conditions, including (1) approval by the Issuer's stockholders of Proposals 1 and 2 set forth in the Preliminary Proxy Statement, (2) the expiration or termination of any required waiting period applicable to the transactions contemplated by the Standby Purchase Agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and (3) the accuracy and completeness of the Issuer's representations and warranties contained in the Standby Purchase Agreement, among others. The Standby Purchase Agreement is attached hereto as Exhibit 7 and is incorporated herein by reference. In consideration of Samstock's commitment under the Standby Purchase Agreement and of the provision of the GAMI Loan by GAMI, the Issuer has agreed to issue to Samstock, at the closing of the transactions contemplated by the Standby Purchase Agreement, a non-transferable five-year warrant (the "Rights Offering Warrant") to purchase 1,000,000 shares of the Issuer's common stock (the "Rights Offering Warrant Shares"). A copy of the form of the Rights Offering Warrant is attached as an exhibit to the Standby Purchase Agreement, which is attached as an exhibit hereto. The exercise price per share of the Rights Offering Warrant will be equal to the average of the closing prices of the common stock for the 20 trading days preceding the closing of the Rights Offering. The summary contained in this Statement of certain provisions of the Standby Purchase Agreement is not intended to be complete and is qualified in its entirety by reference to the Standby Purchase Agreement attached as an exhibit hereto and incorporated herein by reference. In connection with the Initial Investment, the Stockholders and the Issuer entered into an Amended and Restated Investment Agreement dated as of March 3, 1998 (the "First Amended Investment Agreement"), which amended, restated and superseded an Investment Agreement dated as of November 6, 1997 among TMI, Samstock and the Issuer. The Steiner Trust joined the First Amended Investment Agreement only for purposes of Section 5 thereof in connection with its purchase of a portion of the Samstock Shares and Halmostock Shares described above. In connection with the GAMI Loan and the Standby Purchase Agreement, the Stockholders (other than Halmostock), the Issuer, and for purposes of Section 5 thereof only, the Steiner Trust, entered into a Second Amended and Restated Investment Agreement dated as of June 30, 1999 (the "Second Amended Investment Agreement"), which amends, restates and supersedes the First Amended Investment Agreement, only with respect to the rights and obligations of each of the parties to the First Amended Investment Agreement other than Halmostock. The First Amended and Restated Investment Agreement continues in full force and effect with respect to the rights and obligations of Halmostock thereunder vis a vis each of the other Stockholders and the Issuer. The Second Amended Page 7 8 Investment Agreement contains agreements as to certain aspects of the relationship among the Stockholders other than Halmostock and the Issuer. The Second Amended Investment Agreement is attached hereto as Exhibit 8 and is incorporated herein by reference. The First Amended Investment Agreement and the Second Amended Investment Agreement read together are collectively referred to herein as the "Investment Agreement." Pursuant to the Amended Investment Agreement, the Stockholders agreed that the members of the Stockholder Group will not take any of the following actions (collectively, the "Standstill Provisions") prior to the fifth anniversary of the Initial Investment Closing Date, without the approval of a majority of the Issuer's disinterested directors, subject to specified limited exceptions: (a) increase their ownership of Voting Securities beyond the combined voting power of all Voting Securities represented by the Shares, the Warrant Shares, the Series A Preferred Stock or the Rights Offering Warrant Shares or subject to the Amended Agreement Among Stockholders or Stockholders Agreement; provided, however, that the foregoing limitation shall not prohibit the purchase of Voting Securities directly from the Issuer pursuant to exercise of the warrants and any rights, oversubscription rights or standby purchase obligations in connection with rights offerings by the Issuer or exercise of any stock options granted by the Issuer; (b) solicit proxies, assist any other person in the solicitation of proxies, become a "participant" in a "solicitation" or assist any such "participant" (as such terms are defined in Rule 14a-1 of Regulation 14A under the Securities Exchange Act of 1934, as amended) in opposition to the recommendation of a majority of disinterested directors, or submit any proposal for the vote of Issuer's stockholders; (c) form, join or participate in any other way in a partnership, pooling agreement, syndicate, voting trust or other "group", or enter into any agreement or arrangement or otherwise act in concert with any other person, for the purpose of acquiring, holding, voting or disposing of Voting Securities of the Issuer; provided, however, that the members of the Stockholder Group may engage in any of such activities among themselves and with any stockholder of the Issuer who is a party to the Amended Agreement Among Stockholders or the Stockholders Agreement; (d) engage in certain specified takeover actions or take any other actions, alone or in concert with any other person, to seek control of the Issuer; or (e) take any action to seek to circumvent any of the foregoing limitations. Pursuant to the Investment Agreement, at all times prior to the fifth anniversary of the date of the Initial Investment Closing Date, Samstock is entitled to designate two representatives, reasonably acceptable to the independent directors of the Issuer, to serve on the Board of Directors of the Issuer (the "Board") as long as the Stockholders together beneficially own at least 15% of the combined voting power of the Issuer's Voting Securities (including, for these purposes, the Warrant Shares and the Rights Offering Warrant Shares issuable upon exercise of the warrants until such time as the warrants expire) and, in the event that the Stockholders together beneficially own less than 15%, but at least 5%, of the combined voting power of the Issuer's Voting Securities, Samstock shall be entitled to designate one representative, reasonably acceptable to the independent directors of the Issuer, to serve on the Issuer's Board. The Issuer agreed that it will not increase the size of the Board beyond seven members as long as Samstock is entitled to designate one or two Board representatives, except in furtherance of the exercise by Samstock of its rights under the Investment Agreement, and further agreed that, notwithstanding the agreements contained in the Amended Agreement Among Stockholders, the chief executive officer of the Issuer shall not count as a designee of Samstock. Pursuant to the Investment Agreement, in addition to any other rights to designate directors of the Issuer thereunder, in the event Samstock, pursuant to the Standby Purchase Agreement, purchases more than 25% of the total number of shares of Series A Preferred Stock issued by the Issuer in the Rights Offering (exclusive of those shares of Series A Preferred Stock purchased by Samstock pursuant to its basic subscription privilege or its obligation to purchase shares of Series A Preferred Stock not purchased by TMI or TMI's members pursuant to its or their basic subscription privileges), Samstock shall have the right to designate one additional director of the Issuer, which individual may be designated in Samstock's sole discretion without obtaining the acceptance or approval of the Issuer's disinterested directors or any other person or entity, to serve for a period of three years or, if earlier, until the time when the Stockholders together beneficially own less than 15% of the combined voting power of the Issuer's Voting Securities. Pursuant to the Investment Agreement, in addition to any other rights to designate directors of the Issuer thereunder, upon the occurrence of any Event of Default (as defined in the GAMI Loan Agreement), and at any time thereafter during the continuance thereof, Samstock shall have the right to designate such additional number of directors of the Issuer (which individuals may be designated in Samstock's sole discretion without obtaining the acceptance or approval of the Issuer's disinterested directors or any other person or entity), and the Issuer shall take all necessary or appropriate action to increase the number of directors constituting the Issuer's Board of Directors and/or use its reasonable best efforts to obtain resignations of individuals then serving as directors (other than directors designated by Samstock), and assist in the nomination and election as directors such additional designees of Samstock, such that, after taking such actions into account, the number of Page 8 9 individuals designated by Samstock under the Investment Agreement serving as directors of the Issuer shall constitute at least a majority of the total number of the Issuer's directors. Pursuant to the Investment Agreement, automatically upon the occurrence of an Event of Default (as defined in the GAMI Loan Agreement) and the expiration of any and all cure periods, if any, applicable thereto, without further action or notice by any party, the Standstill Provisions shall lapse in their entirety and no longer be of any force or effect with respect to Samstock and TMI, but shall continue in full force with respect to Halmostock. Pursuant to the Investment Agreement, the Stockholders agreed that, except to the extent otherwise provided in the Investment Agreement, the Stockholders would vote their Voting Securities with respect to the election or removal of directors of the Issuer either (a) in accordance with the recommendations of a majority of the disinterested directors of the Issuer or (b) in the same proportions (including abstentions) as the holders of record of the Issuer's Voting Securities, other than those beneficially owned by the Stockholders, vote their securities; provided that the Stockholders may vote in favor of the election or retention of the one or two directors designated by Samstock as described in the preceding paragraph. Pursuant to the Investment Agreement and subject to certain exceptions, the Issuer granted to the Stockholders and certain other parties certain shelf registration rights in connection with certain permitted sales of shares of Common Stock. In particular, pursuant to such registration rights, the Issuer has prepared and filed with the SEC a shelf registration statement (including pledgees of any selling stockholder) with respect to all Shares and Warrant Shares and caused such shelf registration statement to become effective and has agreed to use its reasonable efforts keep such registration statement effective until such time as all Shares and Warrant Shares have been sold or otherwise disposed of. The purpose of such shelf registration is to facilitate the ability of each of TMI, Samstock and their affiliates to margin its stock and does not represent any present intention on behalf of any Stockholder to dispose of any Shares or Warrant Shares covered thereby. Pursuant to the Investment Agreement and subject to certain exceptions, the Issuer granted to Samstock and certain other parties certain shelf registration rights in connection with certain permitted sales of shares of Series A Preferred Stock and Common Stock. In particular, the Issuer agreed to prepare and file with the SEC a shelf registration statement (which shall include pledgees of any selling stockholder) with respect to the Series A Preferred Stock, Common Stock issuable upon conversion of the Series A Preferred Stock and the Rights Offering Warrant Shares as soon as practicable after the closing of the Rights Offering, and to use its reasonable efforts to cause such shelf registration statement to become effective and keep such registration statement effective until such time as all Series A Preferred Stock, Common Stock issuable upon conversion of the Series A Preferred Stock or the Rights Offering Warrant Shares have been sold or otherwise disposed of. The purpose of any such shelf registration put in effect pursuant to the Investment Agreement is to facilitate the ability of Samstock and its affiliates to margin its stock and does not represent any present intention on behalf of any Stockholder to dispose of any Series A Preferred Stock, Common Stock issuable upon conversion of the Series A Preferred Stock or the Rights Offering Warrant Shares to be covered thereby. The summary contained in this Statement of certain provisions of the Investment Agreement is not intended to be complete and is qualified in its entirety by reference to the First Amended Investment Agreement and the Second Amended Investment Agreement attached as exhibits to Amendment Number 1 to Schedule 13D or hereto and incorporated herein by reference. Each Stockholder intends to continue to review its investment in Common Stock and, subject to the limitations of the Investment Agreement described above, from time to time depending upon certain factors, including without limitation the financial performance of the Issuer, the availability and price of shares of Common Stock and other general market and investment conditions, may determine to acquire through open market purchases or otherwise additional shares of Common Stock or Series A Preferred Stock, or may determine to sell through the open market or otherwise. Except as stated above, none of the Stockholders has any plans or proposals of the types referred to in clauses (a) through (j) of Item 4 of Schedule 13D, as promulgated by the Securities and Exchange Commission. Page 9 10 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) and (b) To the best knowledge of the Stockholders, there are 13,352,709 shares of Common Stock outstanding as of the date hereof. As of the date hereof, the aggregate 3,520,009 shares of Common Stock beneficially owned by the Stockholders represent approximately 26.4% of the Common Stock issued and outstanding and, together with the 1,177,440 Warrant Shares, represent 32.3% of the Common Stock, including the Warrant Shares. Such Common Stock and Warrants are held as follows:
ISSUED AND HOLDER OUTSTANDING SHARES WARRANT SHARES - ------ ------------------ -------------- Samstock 1,919,636 856,625 TMI 322,059 154,588 Halmostock 438,305 166,227 Chasens (1) 840,009 -------------- ------------- Total 3,520,009 1,177,440
- -------------- (1) As described in Item 3 above and as set forth more fully in this Item 5, TMI and Samstock have shared voting power and shared dispositive power in respect of the Chasen Shares. Pursuant to the Amended Agreement Among Stockholders, and subject to the limitations of the Investment Agreement, TMI and Samstock have the shared power to vote or to direct the vote of the 840,009 Chasen Shares beneficially owned by them. Pursuant to the Stockholders Agreement, and subject to the limitations of the Investment Agreement, TMI and Samstock have the shared power to vote or to direct the vote of the 604,532 Halmostock Shares beneficially owned by it. In addition, each of the Stockholders has agreed to vote its shares of Common Stock in accordance with certain provisions of the Investment Agreement. Each Stockholder has the power to dispose of or to direct the disposition of such Stockholder's shares of Common Stock, subject to the following limitations, which are described more fully in Item 3 above. Pursuant to the "drag along" provisions of the Amended Agreement Among Stockholders, TMI and Samstock have the shared power, together with the Chasens, to dispose of or to direct the disposition of the Chasen Shares. Similarly, pursuant to the "drag along" provisions of the Stockholders Agreement, TMI and Samstock have the shared power, together with Halmostock, to dispose of or to direct the disposition of the Halmostock Shares. For purposes of this Statement the Stockholders are being treated as a group which, in the aggregate, beneficially owns all of the shares of Common Stock listed above. This filing shall not be construed as an admission that any reporting person is the beneficial owner of all of such shares of Common Stock. At the date hereof, neither the Stockholders, nor to the best knowledge of the Stockholders, any of SZI, ZGP, HIW or any of the persons listed in Appendix A hereto owns any shares of Common Stock other than shares of Common Stock beneficially owned by the Stockholders, as described herein, of which one or more of such other persons may be deemed to have beneficial ownership pursuant to Rule 13d-3 of the Exchange Act. (c) During the last sixty days, the only transaction in the Common Stock effected by the Stockholders, or to the best knowledge of the Stockholders, by SZI, ZGP or HIW or any of the persons listed in Appendix A hereto, was the acquisition on September 7, 1999, by Samstock of 135,000 Chasen Shares, as described in Item 3 hereof. (d) No person other than a Stockholder has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of the Common Stock beneficially owned by such Stockholders, except for the Chasens, in the case of the Chasen Shares. (e) Not applicable. Page 10 11 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Except for the matters described herein, no Stockholder or, to the best knowledge of the Stockholders, any of SZI, ZGP or HIW or any of the persons listed in Appendix A hereto has any contract, arrangement, understanding or relationship with any person with respect to any securities of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1 - Stock Purchase Agreement* Exhibit 2 - Assignment Agreement* Exhibit 3 - Amended Agreement Among Stockholders* Exhibit 4 - Stockholders Agreement* Exhibit 5 - First Amended Investment Agreement* Exhibit 6 - GAMI Loan Agreement** Exhibit 7 - Standby Purchase Agreement** Exhibit 8 - Second Amended Investment Agreement** Exhibit 9 - Power of Attorney dated February 26, 1998**
* Previously filed. ** Filed herewith. Page 11 12 APPENDIX A SCHEDULE 13D/A CUSIP NUMBER 893767103 SZ Investments, L.L.C., A Delaware Limited Liability Company: SZI's managing member is Zell General Partnership, Inc., and its non-managing members are Alphabet Partners and ZFT Partnership. Zell General Partnership, Inc., An Illinois Corporation: ZGP's sole shareholder is the Samuel Zell Revocable Trust and its sole director is Samuel Zell. Samuel Zell: Mr. Zell is Chairman of the Board of Directors of Equity Group Investments, L.L.C. ("EGI"). EGI is a privately owned investment management firm. Mr. Zell is a citizen of the United States of America. Alphabet Partners, An Illinois General Partnership: Alphabet Partners is composed of three trusts created for the benefit of Mr. Zell and his family. Chai Trust Company, L.L.C., an Illinois limited liability company, is the sole trustee of the three trusts. ZFT Partnership, An Illinois General Partnership: ZFT Partnership is composed of four trusts created for the benefit of Mr. Zell and his family. Chai Trust Company, L.L.C., an Illinois limited liability company, is the sole trustee of the four trusts. Halmos Investments-Western, Inc.: HIW's sole shareholder and sole director is Steven J. Halmos. Mr. Halmos is a citizen of the United States of America. Page 12 13 SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. DATED: September 17, 1999 EGI-TRANSMEDIA INVESTORS, L.L.C. By: /s/ Donald J. Liebentritt ---------------------------- Name: Donald J. Liebentritt Title: Vice President SAMSTOCK, L.L.C. By: /s/ Donald J. Liebentritt ---------------------------- Name: Donald J. Liebentritt Title: Vice President HALMOSTOCK LIMITED PARTNERSHIP by Halmos Investments-Western, Inc., its general partner By: /s/ * ---------------------------- Name: Steven J. Halmos, President * By: /s/ Donald J. Liebentritt ---------------------------- Donald J. Liebentritt Attorney-in-fact Page 13 14 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 1 Stock Purchase and Sale Agreement dated as of November 6, 1997* 2 Assignment Agreement dated as of March 3, 1998* 3 Amended and Restated Agreement Among Stockholders dated as of March 3, 1998* 4 Stockholders' Agreement dated as of March 3, 1998* 5 First Amended Investment Agreement dated as of March 3, 1998* 6 GAMI Loan Agreement dated as of June 30, 1999** 7 Standby Purchase Agreement dated as of June 30, 1999** 8 Second Amended Investment Agreement dated as of June 30, 1999** 9 Power of Attorney dated February 26, 1998** * Previously filed. ** Filed herewith. Page 14 EX-99.6 2 GAMI LOAN AGREEMENT DATED 6/30/99 1 U.S. $10,000,000 CREDIT AGREEMENT BY AND BETWEEN GAMI INVESTMENTS, INC. Two North Riverside Plaza CHICAGO, ILLINOIS 60606 AND TRANSMEDIA NETWORK, INC., TRANSMEDIA RESTAURANT COMPANY, INC., TRANSMEDIA SERVICE COMPANY, INC., AND TMNI INTERNATIONAL INCORPORATED 11900 Biscayne Boulevard MIAMI, FLORIDA 33181 DATED AS OF June 30, 1999 2 INDEX
Page ARTICLE I DEFINITIONS AND INTERPRETATIONS..................................................................1 SECTION 1.01 DEFINED TERMS...............................................................................1 SECTION 1.02. ACCOUNTING TERMS............................................................................7 SECTION 1.03. INTERPRETATION..............................................................................7 SECTION 1.04. RECITALS, SCHEDULES AND EXHIBITS............................................................8 ARTICLE II THE LOAN.........................................................................................8 SECTION 2.01. THE LOAN....................................................................................8 SECTION 2.02. THE NOTE....................................................................................8 SECTION 2.03. INTEREST RATE...............................................................................8 SECTION 2.04. INTEREST ON OVERDUE AMOUNTS.................................................................9 SECTION 2.05. BORROWING PROCEDURES........................................................................9 SECTION 2.06. PAYMENTS OF PRINCIPAL AND INTEREST..........................................................9 SECTION 2.07. APPLICATION OF PAYMENTS; REINSTATEMENT......................................................9 SECTION 2.08. ADDITIONAL AMOUNTS..........................................................................9 SECTION 2.09. TAXES ON PAYMENTS..........................................................................10 SECTION 2.10. INITIAL FEE AND RIGHTS OFFERING WARRANT....................................................10 ARTICLE III REPRESENTATIONS AND WARRANTIES..................................................................11 SECTION 3.01. ORGANIZATION; CORPORATE POWERS.............................................................11 SECTION 3.02. AUTHORIZATION..............................................................................11 SECTION 3.03. GOVERNMENTAL APPROVAL......................................................................11 SECTION 3.04. ENFORCEABILITY.............................................................................11 SECTION 3.05. FINANCIAL MATTERS..........................................................................11 SECTION 3.06. NO MATERIAL ADVERSE CHANGE.................................................................12 SECTION 3.07. LITIGATION.................................................................................12 SECTION 3.08. COMPLIANCE WITH LAWS.......................................................................12 SECTION 3.09. ENVIRONMENTAL PROTECTION...................................................................12 SECTION 3.10. AGREEMENTS.................................................................................12 SECTION 3.11. FEDERAL RESERVE REGULATIONS................................................................13 SECTION 3.12. TAXES......................................................................................13 SECTION 3.13. EMPLOYEE BENEFIT PLANS.....................................................................13 SECTION 3.14. INVESTMENT COMPANY ACT.....................................................................13 SECTION 3.15. PATENTS, TRADEMARKS, ETC...................................................................13 SECTION 3.16. SUBSIDIARIES...............................................................................13 SECTION 3.17. SOLVENCY...................................................................................13 SECTION 3.18. LABOR DISPUTES.............................................................................14 SECTION 3.19. COMPLETE DISCLOSURE........................................................................14 SECTION 3.20. VOTE REQUIRED..............................................................................14 SECTION 3.21. TAKEOVER STATUS............................................................................14 SECTION 3.22. REPORTING COMPANY; FORM S-3................................................................14 SECTION 3.23. TRADING ON NYSE............................................................................14 ARTICLE IV CONDITIONS TO THE LOAN..........................................................................14 SECTION 4.01. CONDITIONS TO LOAN CLOSING.................................................................14 ARTICLE V AFFIRMATIVE COVENANTS...........................................................................16 SECTION 5.01. EXISTENCE..................................................................................16 SECTION 5.02. BUSINESSES AND PROPERTIES; COMPLIANCE WITH LAWS............................................16 SECTION 5.03. INSURANCE..................................................................................16
(i) 3 SECTION 5.04. OBLIGATIONS AND TAXES......................................................................16 SECTION 5.05. FINANCIAL STATEMENTS; REPORTS..............................................................17 SECTION 5.06. LITIGATION AND OTHER NOTICES...............................................................18 SECTION 5.07. ERISA......................................................................................18 SECTION 5.08. MAINTAINING RECORDS; ACCESS AND INSPECTIONS................................................18 SECTION 5.09. USE OF PROCEEDS............................................................................19 SECTION 5.10. RIGHTS OFFERING COVENANTS..................................................................19 SECTION 5.11. NET WORTH..................................................................................19 ARTICLE VI NEGATIVE COVENANTS............................................................................19 SECTION 6.01. INDEBTEDNESS...............................................................................20 SECTION 6.02. NEGATIVE PLEDGE............................................................................20 SECTION 6.03. SALE OF ASSETS.............................................................................21 SECTION 6.04. LIQUIDATIONS, CONSOLIDATIONS, MERGERS OR PURCHASES OF ASSETS...............................21 SECTION 6.05. INVESTMENTS, LOANS AND ADVANCES............................................................21 SECTION 6.06. RESTRICTED PAYMENTS........................................................................21 SECTION 6.07. TRANSACTIONS WITH AFFILIATES...............................................................22 SECTION 6.08. LINE OF BUSINESS...........................................................................22 SECTION 6.09 CERTAIN DOCUMENTS..........................................................................22 ARTICLE VII DEFAULTS......................................................................................22 SECTION 7.01. EVENTS OF DEFAULT..........................................................................22 SECTION 7.02. REMEDIES UPON DEFAULT......................................................................24 ARTICLE VIII MISCELLANEOUS.................................................................................25 SECTION 8.01. NOTICES....................................................................................25 SECTION 8.02. SURVIVAL OF AGREEMENT......................................................................26 SECTION 8.03. SUCCESSORS AND ASSIGNS.....................................................................26 SECTION 8.04. EXPENSES OF THE LENDER; INDEMNITY..........................................................26 SECTION 8.05. RIGHT OF SETOFF............................................................................27 SECTION 8.06. APPLICABLE LAW.............................................................................27 SECTION 8.07. WAIVERS....................................................................................28 SECTION 8.08. AMENDMENTS.................................................................................28 SECTION 8.09. SEVERABILITY...............................................................................28 SECTION 8.10. COUNTERPARTS...............................................................................28 SECTION 8.11. HEADINGS...................................................................................28 SECTION 8.12. CONSENT TO JURISDICTION....................................................................28 SECTION 8.13. WAIVER OF JURY TRIAL.......................................................................28 SECTION 8.14. INTEREST LIMITATION........................................................................29 SECTION 8.15. LOAN DOCUMENTS.............................................................................29 SECTION 8.16. JOINT AND SEVERAL LIABILITY................................................................29
(ii) 4 INDEX OF EXHIBITS AND SCHEDULES EXHIBITS EXHIBIT Form of Promissory Note EXHIBIT Form of Borrowing Request EXHIBIT Form of Opinion of Counsel EXHIBIT D Form of Rights Offering Warrant EXHIBIT E Second Amended and Restated Investment Agreement EXHIBIT F Form of Standby Purchase Agreement EXHIBIT G Preferred Stock Designation SCHEDULES SCHEDULE 1.01 Existing Investments SCHEDULE 3.06 Subsidiaries SCHEDULE 3.07 Litigation SCHEDULE 3.10 Burdensome Contracts; Defaults SCHEDULE 6.01 Existing Indebtedness SCHEDULE 6.02 Existing Liens (iii) 5 CREDIT AGREEMENT THIS CREDIT AGREEMENT (this "AGREEMENT") is entered into as of June 30, 1999, between GAMI INVESTMENTS, INC., its successors and assigns (the "LENDER"), and TRANSMEDIA NETWORK, INC., a Delaware corporation ("TMN"), TRANSMEDIA RESTAURANT COMPANY, INC., a Delaware corporation ("RESTAURANT"), TRANSMEDIA SERVICE COMPANY, INC., a Delaware corporation ("SERVICE") and TMNI INTERNATIONAL INCORPORATED, a Delaware corporation ("TMNI" -- TMN, Restaurant, Service and TMNI are each referred to herein individually as a "BORROWER" and collectively as "Borrowers"). RECITALS A. The Borrowers have requested that the Lender extend credit to the Borrowers in order to enable the Borrowers to borrow, on the date hereof, a maximum aggregate principal amount of $10,000,000 (the "LOAN") for the purpose of providing working capital and for other general corporate purposes from time to time on a nonrevolving credit basis. B. Each of Restaurant, Service and TMNI are wholly-owned Subsidiaries of TMN. C The Lender is willing to make the Loan to the Borrowers, and the Borrowers are willing to borrow from the Lender, subject to the terms and conditions herein set forth. AGREEMENT NOW, THEREFORE, for and in consideration of the Recitals and the mutual covenants and agreements herein set forth and other consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings specified below: "ACQUISITION" shall mean the acquisition by the Borrowers from SignatureCard, Inc. of certain assets related to the membership program operated under the Dining A La Card trade name and service mark in accordance with the terms of the Asset Purchase Agreement. "AFFILIATE" shall mean, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power (a) to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, membership interests, by contract, or otherwise, or (b) to vote ten percent (10%) or more of the securities (on a fully diluted basis) having ordinary voting power for election of directors, managing general partners or similar officials of the other Person. 6 "AGREEMENT" shall mean this Credit Agreement as from time to time amended, supplemented, restated or otherwise modified and in effect. "ASSET PURCHASE AGREEMENT" means that certain Asset Purchase Agreement dated as of March 17, 1999 executed by TMN and SignatureCard, Inc., as amended, supplemented or modified. "BACK-END FEE" shall mean $500,000, payable by Borrowers to Lender in accordance with the terms of SECTION 2.10 below. "BOARD" shall mean the Board of Governors of the Federal Reserve System of the United States. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or legal holiday in the States of Illinois and Florida on which banks are open for business in Chicago, Illinois and Miami, Florida. "CLOSING DATE" shall mean the date hereof. "CHASE BRIDGE LOAN FACILITY" shall mean that certain $35,000,000 senior secured revolving credit facility made available to TMN by The Chase Manhattan Bank of even date herewith to fund the Acquisition. "COMMON STOCK" shall mean TMN's common stock, par value $.02 per share. "DEFAULT" shall mean any event that with notice or lapse of time or both would constitute an Event of Default. "DOLLARS" and the symbol "$" shall mean the lawful currency of the United States of America. "EGI-TRANSMEDIA" shall mean EGI-Transmedia Investors, L.L.C., a Delaware limited liability company. "ENVIRONMENTAL LAWS" shall mean all laws relating to environmental, health or safety matters, including those relating to fines, orders, injunctions, penalties, damages, contribution, cost recovery, compensation, losses or injuries resulting from the release or threatened release of hazardous substances or materials and to the generation, use, storage, transportation, or disposal of hazardous substances or materials, in any manner applicable to the Borrowers or their respective Subsidiaries or their respective properties, each as heretofore and hereafter amended or supplemented, and any analogous future or present local, state or federal statutes, rules and regulations promulgated thereunder or pursuant thereto, and any other present or future law, ordinance, rule, regulation, permit or permit condition or order addressing environmental, health or safety issues of or by the federal government, any state or any political subdivision thereof, or any agency, court or body of the federal government, any state or any political subdivision thereof, exercising executive, legislative, judicial, regulatory or administrative functions which are applicable to the Borrowers or their respective Subsidiaries or their respective properties. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time. "ERISA AFFILIATE" shall mean any corporation, trade or business that is along with any Borrower a member of a controlled group of trades or businesses, or a member of any group of organizations within the meaning of Sections 414(b) or (c) of the Internal Revenue Code of 1986, as amended, 2 7 and any and all regulations thereunder, or is otherwise treated as a single employer with any Borrower pursuant to Section 4001(b)(1) of ERISA, and any and all regulations thereunder. "EVENT OF DEFAULT" shall mean the Events of Default specified in SECTION 7.01. "EXISTING WARRANT" shall mean collectively those certain warrants to purchase an aggregate of 1,200,000 shares of TMN's Common Stock, dated as of March 3, 1998 and expiring March 3, 2003, held by Samstock, EGI-Transmedia, Halmostock Limited Partnership and Robert M. Steiner, as Trustee. "FINANCIAL OFFICER" shall mean either the President or the Chief Financial Officer of a Borrower. "GUARANTY" shall mean any obligation, contingent or otherwise, of any Person guarantying or having the economic effect of guarantying any Indebtedness of any other Person in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness, or (c) to maintain working capital, equity capital or other financial condition of the primary obligor so as to enable the primary obligor to pay such Indebtedness (including any obligation to make capital contributions, loans or other payments pursuant to a keep well guaranty or similar instrument); provided, however, that the term "Guaranty" shall not include endorsements for collection or deposit, in either case in the ordinary course of business. "INDEBTEDNESS" shall mean, with respect to any Person, without duplication, all (a) obligations of such Person for borrowed money, (b) obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) obligations of such Person upon which interest charges are contractually specified, (d) obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person, (e) obligations of such Person issued or assumed as the deferred purchase price of property or services (other than trade payables and accrued expenses incurred in the ordinary course of business not yet due and payable), (f) Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) Guaranties of such Person, (h) capital lease obligations of such Person, (i) obligations of such Person under interest rate protection agreements, and (j) obligations of such Person under or with respect to letters of credit and bankers' acceptances. "INITIAL FEE" shall mean $500,000, payable by Borrowers to Lender on the Closing Date. "INTELLECTUAL PROPERTY" shall mean all copyrights, patents, trademarks, tradenames, and all applications and licenses therefor. "INTEREST PAYMENT DATE" shall mean the first Business Day of each calendar month. "INVESTMENT" shall mean, with respect to any Person, all advances, loans or extensions of credit to any other Person, all purchases or commitments to purchase any stock, bonds, notes, debentures or other securities of any other Person, and any investment in any other Persons, including partnerships or joint ventures. 3 8 "INVESTMENT AGREEMENT AMENDMENT" shall mean that certain Second Amended and Restated Investment Agreement of even date herewith executed by TMN, Samstock, EGI-Transmedia and Halmostock Limited Partnership, in the form of EXHIBIT E, as amended from time to time. "LIEN" shall mean, with respect to any asset, any lien, mortgage, security interest, charge or encumbrance of any kind, including the rights of a vendor, lessor, or similar party under any conditional sale agreement or other title retention agreement or lease substantially equivalent thereto. "LOAN" shall mean the Loan defined in RECITAL A. "LOAN DOCUMENTS" shall mean collectively this Agreement, the Note, and the reports, certificates, financial statements and other agreements and instruments executed and delivered by the Borrowers in connection herewith or therewith. "MANAGEMENT FEE" shall mean the quarterly fee for management services payable by TMN to Equity Group Investments, L.L.C. in the quarterly amount of $62,500.00. "MARGIN STOCK" shall have the meaning assigned to such term in Regulation U of the Board. "MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect upon the business, operations, properties, assets, liabilities, operating results, cash flows or condition (financial or otherwise) of the Borrowers and their respective Subsidiaries, taken as a whole or (b) a material impairment of the ability of the Borrowers to perform the obligations to, or the validity or enforceability of, or impairment of the rights or remedies of, or benefits to, the Lender under the Loan Documents. "MATURITY DATE" shall mean the earliest to occur of (a) December 30, 1999, (b) the date all Obligations shall be due and payable hereunder, whether by acceleration or otherwise, and (c) the Rights Offering Closing Date. "MULTIEMPLOYER PLAN" shall mean a plan described in Section 3(37) or 4001(a)(3) of ERISA that is maintained for employees of either a Borrower or any ERISA Affiliate or to which contributions are or have been made by a Borrower or any ERISA Affiliate. "NOTE" shall mean the Promissory Note to be executed and delivered by the Borrowers on the Closing Date, in substantially the form contained in EXHIBIT A. "OBLIGATIONS" shall mean (a) (i) the principal and interest (including interest accruing after the commencement of any proceeding against or with respect to a Borrower under the Bankruptcy Code, 11 U.S.C. ss. 101 et seq., or any other federal or state bankruptcy, insolvency, receivership or similar law, at the rate specified herein) on the Loan, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment, or otherwise, and (ii) all other monetary obligations of the Borrowers to the Lender under this Agreement and the other Loan Documents, whether now existing or hereafter arising, and (b) all other obligations of the Borrowers under this Agreement and the other Loan Documents, whether now existing or hereafter arising. "PENSION PLAN" shall mean any Plan and any Multiemployer Plan that is subject to the provisions of Section 302 of ERISA or Title IV of ERISA. "PERMITTED INVESTMENTS" shall mean (a) the purchase of direct obligations of the government of the United States of America, or any agency thereof, or obligations unconditionally 4 9 guaranteed by the United States of America; (b) certificates of deposit of any bank organized or licensed to conduct a banking business under the laws of the United States of America or any State thereof having capital, surplus and undivided profits of not less than $100,000,000; (c) Investments in commercial paper which, at the time of acquisition, is accorded the highest rating by Standard & Poor's Corporation, Moody's Investors Services, Inc. or any other nationally recognized credit rating agency of similar standing; (d) other Investments existing as of the date of execution hereof as shown on SCHEDULE 1.01 hereof, including Investments in the Subsidiaries listed thereon; (e) ordinary course advances made by a Borrower to another Borrower; (f) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers, customers or other debtors or in settlement of delinquent obligations arising in the ordinary course of business; (g) promissory notes or other debt obligations received in connection with asset dispositions permitted hereunder; and (h) loans and advances to any employee or officer of any Borrower in the ordinary course of business not to exceed $300,000 in the aggregate principal amount at any one time outstanding. "PERSON" shall mean and include natural persons, corporations (business, municipal or not-for-profit), limited partnerships, general partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof. "PLAN" shall mean any employee benefit plan (within the meaning of Section 3(3) of ERISA), that is maintained for employees of, or sponsored, participated in or contributed to by a Borrower or any ERISA Affiliate. "PREFERRED STOCK" shall mean the Series A senior convertible redeemable preferred stock of TMN issued and sold pursuant to the Rights Offering. "PREFERRED STOCK DESIGNATION" shall mean the Certificate of Designation of Preferred Stock covering the Preferred Stock to be filed by TMN with the Secretary of State of Delaware in substantially the form of EXHIBIT G. "PRIME RATE" shall mean on any date the rate of interest designated by The Chase Manhattan Bank or its successor from time to time as its prime rate, base rate or reference rate. The Prime Rate is not necessarily intended to be the lowest rate of interest charged by such Person in connection with extensions of credit. Changes in the rate of interest on the Loan shall take effect simultaneously with each change in the Prime Rate. If The Chase Manhattan Bank or its successor shall cease to report a Prime Rate, then Prime Rate shall be deemed to be the average prime rate, base rate or reference rate reported by the three (3) largest (measured by total assets) banking institutions in the continental United States then announcing such an interest rate. The applicable Prime Rate shall be determined by the Lender, and such determination shall be conclusive absent manifest error. "PROXY PROPOSALS" shall mean each of the following: (a) the issuance of the Rights Offering Warrant, (b) the proposed increase in the authorized shares of TMN's Common Stock and preferred stock, and (c) any other matter submitted for the approval by TMN's stockholders in connection with the Rights Offering, the Rights Offering Warrant, and related matters. "REGISTRATION STATEMENT" shall mean that certain registration statement of TMN on Form S-2 registering the Rights, the Preferred Stock and the Common Stock into which the Preferred Stock is convertible. 5 10 "REGULATION G, T, U OR X" shall mean Regulation G, T, U or X of the Board, as each of the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof. "REPORTABLE EVENT" shall mean any Reportable Event within the meaning of Section 4043(b) of Title IV of ERISA or the regulations issued thereunder. "RESTRICTED PAYMENTS" shall mean the Restricted Payments specified in SECTION 6.06. "RIGHTS" shall mean the nontransferable rights offered to stockholders of TMN pursuant to the Rights Offering. "RIGHTS OFFERING" shall mean that certain offering of nontransferable rights to stockholders of TMN to purchase an aggregate of up to $10,000,000 newly issued Series A senior convertible redeemable preferred stock of TMN, par value $.10 per share, on terms and conditions acceptable to Lender. "RIGHTS OFFERING CLOSING DATE: shall mean the date on which the Preferred Stock is issued and sold by TMN to Samstock and such other stockholders of TMN as have elected to purchase Preferred Stock pursuant to the Rights Offering. "RIGHTS OFFERING DEFAULT EVENT" shall mean the occurrence of any of the following: (a) failure by the required percentage of TMN's stockholders to approve each of the Proxy Proposals upon presentation thereof to a vote of TMN's stockholders, (b) failure by TMN or its Board of Directors to recommend that TMN's stockholders vote in favor of the Proxy Proposals or the withdrawal by TMN or its Board of Directors of such recommendation or any modification of such recommendation which could reasonably be expected to adversely affect such approval by TMN's stockholders, or (c) failure by any stockholder of TMN who is a member of either senior management or the Board of Directors of TMN to vote in favor of the Proxy Proposals. "RIGHTS OFFERING EVENT" shall mean each of the following: (a) the preparation for filing of an initial draft with the Securities and Exchange Commission of (i) a proxy statement containing the Proxy Proposals, and (ii) the Registration Statement , (b) the execution and delivery of the Standby Purchase Agreement (or, subject to Lender's approval, preparation of the final form of the Standby Purchase Agreement) and the Investment Agreement Amendment, (c) the preparation for filing with the Secretary of State of Delaware of the Preferred Stock Designation, and (d) the preparation of the final form of the Rights Offering Warrant, in each of the foregoing cases, in form and substance reasonably satisfactory to the Lender. "RIGHTS OFFERING PROCEEDS" shall mean all cash proceeds received by the Borrowers from the Rights Offering. "RIGHTS OFFERING WARRANT" shall mean the warrant issued by TMN to Samstock, upon receipt of the necessary stockholder approval, and the closing of the Rights Offering, to purchase an aggregate of 1,000,000 shares of TMN's Common Stock substantially in the form of EXHIBIT D (with such modifications as Lender and Borrowers shall approve). "SAMSTOCK" shall mean Samstock, L.L.C., a Delaware limited liability company. "STANDBY PURCHASE AGREEMENT" shall mean that certain Standby Purchase Agreement by and between TMN and Samstock in a form substantially similar to EXHIBIT F (with such modifications as Lender and Borrowers shall approve), as amended from time to time. 6 11 "SUBSIDIARY" shall mean, as to any Person (a) any corporation, more than fifty percent (50%) of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (b) any partnership, association, joint venture, limited liability company or other entity in which such Person and/or one or more Subsidiaries of such Person has greater than a fifty percent (50%) equity interest at the time. "TAXES" shall mean the Taxes defined in SECTION 2.09. "TRANSACTION FEE" shall mean the fee approved by the board of directors of TMN payable by TMN to Equity Group Investments, L.L.C. on the closing of the Acquisition in the amount of one percent (1%) of the value of the Acquisition. "TRANSACTIONS" shall mean, collectively, the execution, delivery and performance by the Borrowers of this Agreement and each of the other Loan Documents, the borrowing of the Loan by the Borrowers hereunder, the issuance of the Rights Offering Warrant, the Rights Offering (and completion of the transactions contemplated in the Standby Purchase Agreement), the Investment Agreement Amendment and all other transactions contemplated by this Agreement, the other Loan Documents and the Standby Purchase Agreement. SECTION 1.02 ACCOUNTING TERMS. Except as otherwise herein specifically provided: (a) each accounting term used herein shall have the meaning given it under generally accepted accounting principles in effect in the United States of America from time to time applied on a consistent basis; and (b) each reference to generally accepted accounting principles shall mean generally accepted accounting principles in effect in the United States of America from time to time applied on a consistent basis. SECTION 1.03 INTERPRETATION. In this Agreement and each other Loan Document, unless a clear contrary intention appears: (a) the singular number includes the plural number and vice versa; (b) reference to any Person includes such Person's successors and assigns but, if applicable, only if such successors and assigns are permitted by the Loan Documents, and reference to a Person in a particular capacity excludes such Person in any other capacity; (c) reference to either gender includes the other gender; (d) reference to any agreement (including this Agreement and the Schedules and Exhibits hereto, and the other Loan Documents), document or instrument means such agreement, document or instrument as amended, supplemented, restated or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof and the other Loan Documents, and reference to any promissory note includes any promissory note which is an extension or renewal thereof or a substitute or replacement therefor; (e) reference to any law, rule, regulation, order, decree, requirement, policy, guideline, directive or interpretation means as amended, modified, codified, replaced or 7 12 reenacted, in whole or in part, and in effect on the determination date, including rules and regulations promulgated thereunder; (f) reference to any Article, Section, Schedule, or Exhibit means such Article or Section of this Agreement, or Schedule or Exhibit to this Agreement; (g) "hereunder", "hereof", "hereto" and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section or other provision hereof; (h) "including" (and with correlative meaning "include") means including without limiting the generality of any description preceding such term; and (i) relative to the determination of any period of time, "from" means "from and including" and "to" means "to but excluding". SECTION 1.04 RECITALS, SCHEDULES AND EXHIBITS. The Recitals, Schedules and Exhibits in and to this Agreement are incorporated in and expressly made a part of this Agreement. ARTICLE II THE LOAN SECTION 2.01 THE LOAN. Subject to the terms and conditions of this Agreement, the Lender shall make available to the Borrowers on the Closing Date a term loan in an aggregate maximum principal amount of $10,000,000. Repayments and prepayments of the Loan shall not be subject to reborrowing. SECTION 2.02 THE NOTE. The Loan shall be evidenced by the Note. At the Lender's option, the Lender may, and is hereby authorized by the Borrowers to, endorse on the schedules attached to the Note, or otherwise record in the Lender's internal records, an appropriate notation evidencing the date and amount of the Loan, each payment of principal of any portion of the Loan, each payment of interest on the Loan and the other information provided for on such schedule; provided, however, that the failure of the Lender to make such a notation or any error in such a notation shall not affect the obligation of the Borrowers to repay the Loan in accordance with the terms of the Note and this Agreement. SECTION 2.03 INTEREST RATE. Except as set forth in SECTION 2.04 below, the Borrowers shall pay the Lender interest on the outstanding principal balance of the Loan from time to time at a rate equal to the Prime Rate plus 4.0% per annum. The records of the Lender as to the interest rate applicable to the Loan shall be binding and conclusive absent manifest error. Interest shall be payable from the Closing Date to the day of repayment of the Loan. Interest and all fees owing hereunder shall be computed on the basis of the actual number of days elapsed on the basis of a year consisting of 360 days, and shall be payable as provided in SECTIONS 2.04, 2.06 AND 2.11 below. SECTION 2.04 INTEREST ON OVERDUE AMOUNTS. If the Borrowers shall default in the payment when due of the principal of or interest on the Loan or any other amount becoming due hereunder, by scheduled maturity, acceleration or otherwise, or if there shall otherwise occur an Event of Default, the Borrowers shall on demand from time to time from the Lender pay interest, to the extent permitted by law, on such defaulted amount from the day after the due date thereof to the date of actual payment (after as well as before judgment) (or on the amount otherwise outstanding hereunder from the date of Default into which matured such Event of Default until the date such Event of Default is cured or otherwise no longer exists), 8 13 at a rate per annum computed on the basis of the actual number of days elapsed on the basis of a year consisting of 360 days, equal to the Prime Rate plus 8.0% per annum. SECTION 2.05 BORROWING PROCEDURES. On the Closing Date, Borrower shall deliver to Lender a request for borrowing in the form attached hereto as EXHIBIT B. The request for borrowing pursuant to this SECTION 2.05 shall be deemed to be a representation that all of the representations and warranties of the Borrowers contained in this Agreement and the other Loan Documents are true and correct in all material respects as if made on such date, except to the extent that such representations and warranties expressly related to an earlier date, and that no Default or Event of Default shall have occurred and be continuing. SECTION 2.06 PAYMENTS OF PRINCIPAL AND INTEREST. If not sooner paid, the outstanding principal amount of the Loan, together with all accrued and unpaid interest thereon and all other amounts owing hereunder, shall be due and payable on the Maturity Date. All principal payments of the Loan shall be accompanied by accrued interest on the principal amount being repaid to the date of payment. Interest on the Loan shall be due and payable monthly in arrears on each Interest Payment Date. The Borrowers shall pay to the Lender upon the Borrowers' receipt thereof all Rights Offering Proceeds, which amounts shall be applied by the Lender pursuant to SECTION 2.07 below. All payments by the Borrowers pursuant to this Agreement, the Note or any other Loan Document, whether in respect of principal, interest, or otherwise, shall be made without setoff or counterclaim (other than reimbursement or offset of the Initial Fee to the extent required pursuant to SECTION 2.10 below) in same day funds by the Borrowers to the Lender. The Borrowers shall have the right at any time and from time to time to prepay the advances under the Loan in whole or in part without premium or penalty upon at least one (1) Business Day's prior written notice to the Lender. All payments required to be made to the Lender shall be made not later than 11:00 a.m., Chicago time, on the date due by wire transfer to such account as the Lender shall specify from time to time by notice to the Borrowers. Funds received after that time shall be deemed to have been received by the Lender on the next following Business Day. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest, if any, in connection with such payment. SECTION 2.07 APPLICATION OF PAYMENTS; REINSTATEMENT. The Lender shall, at its option, apply all payments received hereunder first to all fees, expenses and other costs due hereunder and under the other Loan Documents, next to accrued but unpaid interest on the Loan, and next to the outstanding principal balance of the Loan. To the extent that the Borrowers make a payment or payments to the Lender, which payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy act, state or federal law, common law or equitable cause, then, to the extent of such payment received, the Obligations or part thereof intended to be satisfied shall be revived and shall continue in full force and effect, as if such payments had not been received by the Lender. SECTION 2.08 ADDITIONAL AMOUNTS. If the implementation of or any change in any law or regulation or in the interpretation by any court or administrative or governmental authority charged with their administration shall impose on the Lender any condition not existing on the date of this Agreement regarding this Agreement, the Loan or the Note, and the result shall be to: (i) increase the cost to the Lender of making or maintaining the Loan, or (ii) reduce any amounts payable by the Borrowers hereunder, then, within thirty (30) days after written demand by the Lender, the Borrowers shall pay to the Lender, from time to time as specified by the Lender, additional amounts which shall be sufficient to compensate the Lender for such increased cost or reduction in payment. If any such amount is not paid within thirty (30) days after written demand by the Lender, the Borrowers shall pay the Lender interest at the interest 9 F 14 rate specified in SECTION 2.04 above on each such amount from the date when payment was due until paid in full. SECTION 2.09 TAXES ON PAYMENTS. All payments made by the Borrowers under the Note or this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any future income, stamp or other taxes, levies, imposts, deductions, charges, or withholdings imposed, assessed, levied or collected by the United States of America or any political subdivision or taxing authority thereof or therein, but excluding taxes imposed on net income of the Lender by the United States of America or any state or any political subdivision or taxing authority thereof or therein (all such non-excluded taxes, levies, imposts, deduction, charges or withholdings being hereinafter called "TAXES"). If any Taxes are required to be withheld from any amounts so payable to the Lender hereunder or under the Note, the amounts so payable to the Lender shall be increased to the extent necessary to yield to the Lender (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in the Note or this Agreement. Whenever any Tax is paid by the Borrowers, as promptly as possible thereafter, the Borrowers shall send to the Lender a certified copy of any original official receipt received by the Borrowers showing payment thereof. If the Borrowers fail to pay any Taxes when due to the appropriate taxing authority, the Borrowers shall indemnify the Lender for any incremental taxes, interest or penalties that may become payable by the Lender as a result of any such failure. SECTION 2.10 INITIAL FEE AND RIGHTS OFFERING WARRANT. As consideration for execution of this Agreement and the Standby Purchase Agreement, and the Lender or its Affiliates entering into and consummating the Transactions, and the Lender's making the Loan available to the Borrowers, the Borrowers have agreed to pay to Lender the Initial Fee (subject to reimbursement or offset as set forth below) and to issue to Samstock the Rights Offering Warrant, each of which Initial Fee and Rights Offering Warrant shall be deemed fully earned on the Closing Date regardless of whether the Loan is disbursed in whole or in part. Upon receipt of the necessary approval of TMN's stockholders of the Proxy Proposals, the closing of the Rights Offering, the issuance of the Rights Offering Warrant and the payment in full of the Obligations, Lender shall reimburse (or offset against the Obligations) to Borrowers the Initial Fee. If the Proxy Proposals are not approved by the stockholders of TMN, or the Rights Offering Warrant is not issued for any reason, or the Rights Offering is withdrawn or canceled by TMN for any reason or there occurs an Event of Default, Borrowers shall immediately pay to Lender the Back-End Fee, which shall be deemed fully earned on the Closing Date (but only payable as aforesaid) regardless of whether the Loan is disbursed in whole or in part. ARTICLE III REPRESENTATIONS AND WARRANTIES To induce the Lender to execute this Agreement and perform its obligations hereunder, each Borrower represents and warrants to the Lender as follows: SECTION 3.01 ORGANIZATION; CORPORATE POWERS. Such Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or formed, has the requisite power and authority, including all material licenses, registrations, permits, franchises, consents and approvals, to own its property and assets and to carry on its business as now conducted and is qualified to do business and in good standing in every jurisdiction where such qualification is required, except where failure to so qualify would not reasonably be likely to have a Material Adverse Effect. Such Borrower has all requisite corporate power and authority to consummate the Transactions. 10 15 SECTION 3.02 AUTHORIZATION. The execution and delivery of this Agreement and the other Loan Documents, and the consummation of the Transactions: (a) have been duly authorized by all requisite corporate action of such Borrower (other than the approval of the Proxy Proposals by TMN's stockholders), including, without limitation, the approval by a majority of the Disinterested Directors of TMN (within the meaning of Section 3.1 of the Amended and Restated Investment Agreement dated March 3, 1998 by and among TMN, Samstock, EGI-Transmedia, and Halmostock Limited Partnership); and (b) will not (i) violate (A) any provision of law, statute, rule or regulation or the certificate or articles of incorporation or the by-laws of such Borrower, (B) any order of any court, or any rule, regulation or order of any other agency of government binding upon such Borrower or any of its Subsidiaries, or (C) any provisions of any material indenture, agreement or other instrument to which such Borrower or any of its Subsidiaries is a party or by which such Borrower or any of its Subsidiaries or any of their respective properties or assets are or may be bound; (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material indenture, agreement or other instrument referred to in (b)(i)(C) above; or (iii) result in the creation or imposition of any Lien upon any property or assets of such Borrower or any of its Subsidiaries. SECTION 3.03 GOVERNMENTAL APPROVAL. No registration or filing with or consent or approval of, or other action by, any federal, state or other governmental agency, authority or regulatory body or any other Person is or will be required in connection with the execution or delivery of this Agreement or the other Loan Documents, or the consummation of the Transactions other than (a) the filing with the Securities and Exchange Commission of (i) a proxy statement containing the Proxy Proposals, and (ii) the Registration Statement (and the declaration of its effectiveness by the Securities and Exchange Commission), (b) the filing of the Certificate of Amendment to TMN's Certificate of Incorporation and the Preferred Stock Designation with the Delaware Secretary of State and (c) those which such Borrower has obtained and/or made. SECTION 3.04 ENFORCEABILITY. This Agreement constitutes, and each of the other Loan Documents when duly executed and delivered by such Borrower will constitute, legal, valid and binding obligations of such Borrower, in each case enforceable in accordance with their respective terms. SECTION 3.05 FINANCIAL MATTERS. The audited consolidated financial statements of the Borrowers and their Subsidiaries dated September 30, 1998, and the unaudited consolidated financial statements of the Borrowers and their Subsidiaries dated March 31, 1999, and the related consolidated statements of income or operations, stockholders' equity and cash flows for the fiscal periods ended on such dates: (a) were prepared in accordance with generally accepted accounting principals consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein; (b) fairly present the financial condition of the Borrowers and their Subsidiaries as of the dates thereof and results of operations for the periods covered thereby (subject, in the case of such unaudited financial statements, to the absence of footnotes and to normal year-end adjustments); and (c) show all material indebtedness and other liabilities, direct or contingent, of the Borrowers and their Subsidiaries as of the dates thereof, including liabilities for taxes, material commitments and material contingent obligations. 16 SECTION 3.06 NO MATERIAL ADVERSE CHANGE. Since March 31, 1999, there has been no change that could reasonably be expected to have a Material Adverse Effect. SECTION 3.07 LITIGATION. Except as listed on SCHEDULE 3.07, there are no actions, suits or proceedings at law or in equity or by or before any arbitrator or any governmental instrumentality or other agency or regulatory authority now pending or, to the best of such Borrower's knowledge, threatened against or affecting such Borrower or its Subsidiaries, or the businesses, assets or rights of such Borrower or its Subsidiaries: (a) which involve this Agreement or any of the other Loan Documents or any of the transactions contemplated hereby or thereby; or (b) as to which, if adversely determined, could individually or in the aggregate have a Material Adverse Effect. SECTION 3.08 COMPLIANCE WITH LAWS. Such Borrower is not in violation of any law, including any Environmental Law, or in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court or governmental agency or instrumentality, where such violation or default could reasonably be expected to have a Material Adverse Effect. SECTION 3.09 ENVIRONMENTAL PROTECTION. Neither such Borrower nor any of its Subsidiaries has received: (a) any claim or notice of violation, lien, complaint, suit, order or other claim or notice to the effect that it is or may be liable to any Person as a result of the (i) environmental condition of such Borrower's or any Subsidiary's property or any other property or (ii) the release or threatened release of any hazardous substances or materials; or (b) any letter or request for information under any Environmental Law; and, to the best of such Borrower's knowledge, none of the operations of such Borrower nor any of its Subsidiaries are the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release or threatened release of any hazardous substance or material at such Borrower's property or at any other location, including any location to which such Borrower or any Subsidiaries has transported, or arranged for the transportation of, any hazardous substances or materials. SECTION 3.10 AGREEMENTS. Except as listed on SCHEDULE 3.10, neither such Borrower nor any of its Subsidiaries is a party to any agreement or instrument or subject to any restriction that has or could have a Material Adverse Effect. Except as listed on SCHEDULE 3.10, neither such Borrower nor any of its Subsidiaries is in default in any material manner in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any material agreement or instrument to which it is a party. SECTION 3.11 FEDERAL RESERVE REGULATIONS. Such Borrower is not engaged principally, or as of one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock. No part of the proceeds of the Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately: (a) to purchase or carry Margin Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or to refund indebtedness originally incurred for such purpose; or (b) for any purpose which entails a violation of, or which is inconsistent with, the provisions of Regulations of the Board, including Regulations G, T, U or X thereof. SECTION 3.12 TAXES. Such Borrower has filed or caused to be filed all federal, state and local tax returns which are required to be filed by it, and has paid or caused to be paid all taxes shown to be due and payable on such returns or on any assessments received by it, other than any taxes or assessments, the validity of which such Borrower is contesting in good faith by appropriate proceedings, and with respect to which such Borrower shall have set aside on its books adequate reserves. SECTION 3.13 EMPLOYEE BENEFIT PLANS. Such Borrower and each Plan is in compliance with those provisions of ERISA, the Internal Revenue Code of 1986, as amended, and the Age 12 17 Discrimination in Employment Act, as amended, and the regulations and published interpretations thereunder which are applicable to such Borrower or such Plan, except where failure to so comply is not reasonably likely to result in a Material Adverse Effect. As of the date hereof, no Reportable Event has occurred or is reasonably likely to occur with respect to any Pension Plan as to which such Borrower was required to file a report with the Pension Benefit Guaranty Corporation. No Pension Plan (other than a Multiemployer Plan) has any material amount of unfunded benefit liabilities (within the meaning of Section 4001(a)(18) of ERISA) or any accumulated funding deficiency (within the meaning of Section 302(a)(2) of ERISA), whether or not waived, and neither such Borrower nor any ERISA Affiliate has incurred or expects to incur any material withdrawal liability under Subtitle E of Title IV of ERISA to a Multiemployer Plan. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which could result in a Material Adverse Effect. SECTION 3.14 INVESTMENT COMPANY ACT . Such Borrower is not an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940 or a company controlled by such an "investment company". SECTION 3.15 PATENTS, TRADEMARKS, ETC. To the best of such Borrower's knowledge, such Borrower and its Subsidiaries have obtained and protected all Intellectual Property necessary to own their respective properties and assets and carry on and operate their respective businesses as heretofore and hereafter anticipated to be conducted. To the best of such Borrower's knowledge, (a) no event is threatened or has occurred which permits, or after notice or lapse of time, would permit, the revocation or termination of such properties, and (b) there is no past, present or threatened occurrence that is reasonably likely to preclude or materially impair such Borrower's and such Subsidiaries' ability to retain or obtain any authorization necessary for the operation of their respective businesses. SECTION 3.16 SUBSIDIARIES. Such Borrower does not have any Subsidiaries other than as listed on SCHEDULE 3.16, and is not a partner or joint venturer in any partnerships or joint ventures. SECTION 3.17 SOLVENCY Such Borrower has capital sufficient to carry on its business and all businesses and transactions in which it plans to engage and is now solvent and able to pay its debts as they mature. As of the date of this Agreement, such Borrower owns property having a value, both at fair valuation and at present fair salable value, greater than the amount required to pay such Borrower's debts. SECTION 3.18 LABOR DISPUTES. Such Borrower is not a party to any labor dispute which could have, individually or in the aggregate, a Material Adverse Effect. There are no strikes or walkouts relating to any labor contracts to which such Borrower is subject. Such Borrower is not party to any collective bargaining agreement to the benefit of which any of its employees is entitled. SECTION 3.19 COMPLETE DISCLOSURE All factual information furnished by or on behalf of such Borrower or its Subsidiaries to the Lender for purposes of or in connection with this Agreement or the Transactions is, and all other such factual information hereafter furnished by or on behalf of such Borrower or its Subsidiaries will be, true and accurate in all material respects on the date as of which such information is furnished and not incomplete by omitting to state any material fact necessary to make such information not materially misleading at such time in light of the circumstances under which such information was provided. SECTION 3.20 VOTE REQUIRED. (a) No vote of the holders of any class or series of capital stock or other securities of TMN or any other Borrower is required to approve or effect this Agreement, the other Loan Documents, any Rights Offering Event, any Transaction or any transactions contemplated hereby and thereby, including without limitation under applicable law, applicable stock 13 18 exchange rules or regulations, the certificate of incorporation (including without limitation Article Seventh of TMN's Certificate of Incorporation) or the by-laws of TMN or any other Borrower or any contract, agreement or permit of any kind whatsoever applicable to TMN, any other Borrower or their assets, except that the Proxy Proposals identified in clauses (a) and (b) of the definition of "Proxy Proposals" under Section 1.01 of this Agreement require the approval of TMN's stockholders as referenced in SECTION 3.20(B) below. (b) The affirmative vote of the holders of no more than a majority of the outstanding shares of TMN's Common Stock is the only vote of the holders of any class or series of capital stock or other securities of TMN or any other Borrower necessary to approve the Proxy Proposals. SECTION 3.21 TAKEOVER STATUS. The requirements of Section 203 of the Delaware General Corporation Law are not applicable to TMN or any other Borrower in connection with the transactions contemplated by this Agreement, the other Loan Documents, any Rights Offering Event, or any other Transactions. SECTION 3.22 REPORTING COMPANY; FORM S-3. TMN is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and its Common Stock is registered under Section 12 thereof. TMN is eligible to register for resale shares of its Common Stock to be sold by parties other than TMN on a registration statement on Form S-3 under the Securities Act of 1933, as amended. SECTION 3.23 TRADING ON NYSE. TMN's Common Stock is listed for trading on The New York Stock Exchange, and trading in TMN's Common Stock on The New York Stock Exchange has not been suspended as of the date hereof. ARTICLE IV CONDITIONS TO THE LOAN SECTION 4.01 CONDITIONS TO LOAN CLOSING. The obligation of the Lender to make the Loan hereunder is subject to the following conditions precedent, all of which shall be in form and substance satisfactory to the Lender in its sole and absolute discretion: (a) LEGAL OPINION. The Lender shall have received a written opinion of counsel for each Borrower, in substantially the form contained in EXHIBIT C. (b) AUTHORIZATION AND ORGANIZATIONAL DOCUMENTATION. The Lender shall have received: (i) a copy of the certificate of incorporation of each Borrower, certified by the Secretary of State of the state of its incorporation as of a recent date, and a certificate as to the good standing of each Borrower from such Secretary of State, dated as of a recent date; (ii) a certificate of the Secretary or an Assistant Secretary of each Borrower, dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of such Borrower, as in effect on the date of such certificate, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Borrower, authorizing the execution, delivery and performance of this Agreement and the other Loan Documents, the borrowing by such Borrower hereunder, and, subject to receipt of stockholder approval of the Proxy Proposals, the consummation of the Transactions, and that such resolutions have not been modified, rescinded or 14 19 amended and are in full force and effect, (C) that the certificate or articles of incorporation of such Borrower, have not been amended since the date of the certification thereto furnished pursuant to (i) above, and (D) as to the incumbency and specimen signature of each officer of such Borrower, executing this Agreement and the other Loan Documents; and (iii) such other documents as the Lender or its counsel may reasonably request. (c) NOTE. The Lender shall have received the Note, duly executed and delivered by the Borrowers, payable to the order of the Lender and otherwise complying with the provisions of SECTION 2.02 above. (d) INSURANCE. The Lender shall have received satisfactory evidence of the insurance required by SECTION 5.03 below. (e) CERTIFICATION. The Lender shall have received a certificate, dated as of the Closing Date, whereby the Borrowers certify that: (i) the representations and warranties set forth in ARTICLE III are true and correct in all material respects with the same effect as though made on and as of the date hereof, except to the extent they expressly relate to an earlier date (in which case they shall be true and correct in all material respects on and as of such date), and (ii) the Borrowers are in compliance in all material respects with all the terms and provisions contained herein and in the other Loan Documents on their part to be observed or performed, and at the time of and immediately after such borrowing of the Loan, no Default or Event of Default shall have occurred and be continuing. (f) SEARCHES. The Lender shall have received recently dated judgment and state and federal tax lien search reports for each Borrower. (g) ACQUISITION. The Lender shall have received satisfactory evidence of the consummation of the Acquisition and the closing of the Chase Bridge Loan Facility. (h) RIGHTS OFFERING EVENTS. The Lender shall have received satisfactory evidence of the completion and occurrence of each of the Rights Offering Events. (i) WAIVER. The Lender shall have received satisfactory evidence of the waiver of the "Early Amortization Event" specified in Section 14(x) of the Security Agreement dated as of December 1, 1996 among TNI Funding Company I, L.L.C., The Chase Manhattan Bank, TNI Funding I, Inc. and TMN. (j) FEES. The Lender shall have received the fees and reimbursement of expenses to be paid on the Closing Date pursuant to the terms of this Agreement and the Standby Purchase Agreement, including without limitation the Initial Fee and the Transaction Fee. (k) FURTHER ASSURANCES. The Lender shall have received all further documents, notifications and other assurances reasonably required by the Lender in connection with the Loan. 15 20 ARTICLE V AFFIRMATIVE COVENANTS Each Borrower covenants and agrees with the Lender that, so long as this Agreement shall remain in effect or the principal of or interest on the Note, or any other expense or amount payable hereunder shall be unpaid, unless the Lender shall otherwise consent in writing, it shall, and it shall cause each of its Subsidiaries to: SECTION 5.01 EXISTENCE. Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and qualify and remain qualified in each jurisdiction where qualification is necessary or desirable in view of its business operations or ownership of its properties, except where the failure to so qualify would not reasonably be likely to have a Material Adverse Effect. SECTION 5.02 BUSINESSES AND PROPERTIES; COMPLIANCE WITH LAWS. At all times, maintain and operate its business in substantially the manner in which it is presently conducted and operated; comply in all material respects with all laws and regulations applicable to the operation of such business, including all Environmental Laws, whether now in effect or hereafter enacted and with all other applicable laws and regulations; take all action which may be reasonably required to obtain, preserve, renew and extend all franchises, registrations, licenses, permits and other authorizations which may be material to the operation of such business; and at all times maintain, preserve and protect all property material to the conduct of such business and keep its property in good repair, working order and condition (ordinary wear and tear excepted) and from time to time make, or cause to be made, all reasonably needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times. SECTION 5.03 INSURANCE. Maintain insurance (with financially sound and responsible insurance carriers), to such extent and against such risks, loss or damage to, or liability in connection with, its property, business, persons and such other contingencies, as is customary with companies of established reputations similarly situated and in the same or similar business. SECTION 5.04 OBLIGATIONS AND TAXES. Pay and discharge promptly when due all Indebtedness, and taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise, which, if unpaid, might give rise to liens or charges upon such properties or any part thereof; provided, however, that such Borrower shall not be required to pay and discharge or to cause to be paid and discharged any such tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and such Borrower shall have set aside on its books adequate reserves with respect thereto. SECTION 5.05 FINANCIAL STATEMENTS; REPORTS. Furnish (or cause to be furnished) to the Lender: (a) within ninety (90) days after the end of each fiscal year of such Borrower, the audited, consolidated and consolidating balance sheets and statements of income, retained earnings, and cash flows, together with supporting schedules (which shall include, upon the reasonable request of the Lender with respect to matters which it desires to review, the working papers with respect to such Borrower's financial statements) of such Borrower, all in reasonable detail and accompanied by an unqualified opinion thereon by KPMG Peat Marwick or such other firm or 16 21 independent certified public accountants of recognized standing selected by such Borrower and reasonably acceptable to the Lender; (b) as soon as available, but in any event not later than forty-five (45) days after the end of each of the first three (3) quarterly periods of each fiscal year of such Borrower, the management prepared unaudited, consolidated and consolidating financial statements of such Borrower, including a balance sheet of such Borrower as at the end of such fiscal quarter and related unaudited statements of income, retained earnings, and cash flows, all for the period from the beginning of such fiscal year to the end of such fiscal quarter, setting forth in each case corresponding figures for the like period of the preceding fiscal year; all in reasonable detail, prepared in accordance with generally accepted accounting principles applied on a basis consistently maintained throughout the period involved and with prior periods, subject to normal year-end audit adjustments, and certified by a Financial Officer of such Borrower; (c) concurrently with the delivery of the items referred to in clauses (a) and (b) above, a certificate of the Financial Officer of such Borrower (i) stating that, to the best of his or her knowledge, no condition or event which would constitute a Default or Event of Default has occurred and is continuing, or if such a condition or event has occurred, the certificate shall specifically state such condition or event, and (ii) demonstrating compliance, as of the dates of the financial statements being furnished at such time, with the covenant set forth in SECTION 5.11 hereof; (d) promptly after the same are sent or otherwise publicly available, copies of all proxy statements, financial statements and reports which such Borrower sends to its stockholders, and promptly after the same are filed, copies of all regular, periodic and special reports (including reports on Forms 10-K, 10-Q and 8-K), and all registration statements which such Borrower files with the Securities and Exchange Commission or any governmental authority which may be substituted therefore, or with any national securities exchange; and (e) promptly, from time to time, such other information regarding the operations, business, affairs, and financial condition of such Borrower and any of its Subsidiaries as the Lender may reasonably request. All financial statements required to be furnished to the Lender under this SECTION 5.05 shall be prepared in accordance with generally accepted accounting principles applied on a basis consistent with the accounting practices of the Borrowers reflected in its financial statements referred to in SECTION 3.05 hereof, or to the extent such treatment has changed, with a reconciliation thereof. SECTION 5.06 LITIGATION AND OTHER NOTICES. Give the Lender prompt written notice of the following: (a) ORDERS; INJUNCTIONS. The issuance by any court or governmental agency or authority of any injunction, order, decision or other restraint prohibiting, or having the effect of prohibiting, the making of the Loan or the initiation of any litigation or similar proceeding seeking any such injunction, order or other restraint. 17 22 (b) LITIGATION. The filing or commencement of any action, suit or proceeding against such Borrower or its Subsidiaries whether at law or in equity or by or before any court or any federal, state, municipal or other governmental agency or authority and which, if adversely determined against such Borrower or its Subsidiaries, could have a Material Adverse Effect. (c) ENVIRONMENTAL MATTERS. Any violation by such Borrower or its Subsidiaries of any Environmental Law which could have a Material Adverse Effect or which, to such Borrower's knowledge, is the subject of an investigation or enforcement action by any governmental authority or other third party. (e) DEFAULT. Any Default or Event of Default, specifying the nature and extent thereof and the action (if any) which is proposed to be taken with respect thereto. (f) MATERIAL ADVERSE EFFECT. Any development in the business or affairs of such Borrower or its Subsidiaries which could have a Material Adverse Effect. SECTION 5.07 ERISA. Comply with the applicable provisions of ERISA and the provisions of the Internal Revenue Code of 1986 relating thereto, except where failure to so comply is not reasonably likely to result in a Material Adverse Effect, and: (a) furnish to the Lender as soon as possible, and in any event within 30 days after such Borrower knows or has reason to know thereof, notice of: (i) the establishment by such Borrower or any ERISA Affiliate of any Pension Plan; (ii) the commencement by such Borrower of contributions to a Multiemployer Plan; (iii) any failure by such Borrower or any ERISA Affiliate to make contributions required by Section 302 of ERISA (whether or not such requirement is waived pursuant to Section 303 of ERISA); and (iv) the occurrence of any Reportable Event with respect to any Pension Plan for which the reporting requirement is not waived, together with a statement of a Financial Officer of such Borrower setting forth details as to such Reportable Event and the action which such Borrower proposes to take with respect thereto, together with a copy of the notice of such Reportable Event given to the Pension Benefit Guaranty Corporation if any notice is required to be so given; (b) promptly after receipt thereof, a copy of any notice such Borrower or any Subsidiary may receive from the Pension Benefit Guaranty Corporation relating to its intention to terminate any Pension Plan, or to appoint a trustee to administer any Pension Plan; and (c) promptly after receipt thereof, a copy of any notice of withdrawal liability from any Multiemployer Plan. SECTION 5.08 MAINTAINING RECORDS; ACCESS AND INSPECTIONS. Maintain financial records in accordance with generally accepted practices and, upon reasonable notice, at all reasonable times and as often as the Lender may reasonably request, permit any authorized representative designated by the Lender to visit and inspect the properties and financial records of such Borrower and its Subsidiaries and make extracts from such financial records at such Borrower's expense, and permit any authorized representative designated by the Lender to discuss the affairs, finances and condition of such Borrower and its Subsidiaries with such Borrower's chief financial officer and such other officers as such Borrower shall deem appropriate and such Borrower's independent public accountants, and such Borrower will use its best efforts to make such officers and accountants promptly available for such discussions. SECTION 5.09 USE OF PROCEEDS. Use the proceeds of the Loan only for working capital and general corporate purposes. SECTION 5.10 RIGHTS OFFERING COVENANTS. As promptly as practicable after the Closing Date, the Borrowers and TMN shall commence and diligently pursue to completion each of the following: 18 23 (a) Prepare and file with the Securities and Exchange Commission (i) a proxy statement containing the Proxy Proposals, and (ii) the Registration Statement, and use their best efforts to cause the Registration Statement to be declared effective as soon after filing such statement as practicable and to remain effective through the Rights Offering Closing Date and to cover the issuance and sale of the Preferred Stock pursuant to the Rights Offering; (b) take all necessary action in accordance with applicable law and TMN's Certificate of Incorporation and By-laws to (i) amend TMN's Certificate of Incorporation and By-laws to the extent necessary to increase the number of authorized shares of preferred stock and Common Stock, and to make such other necessary amendments, in order to effectuate the Transactions, (ii) mail to TMN's stockholders the proxy statement referred to in the defined term "Rights Offering Event", (iii) recommend to TMN's stockholders a vote in favor of each Proxy Proposal, (iv) duly convene a meeting of TMN's stockholders for the purpose of voting on the Proxy Proposals, and (v) file with the Secretary of State of Delaware the Preferred Stock Designation; (c) use their best efforts to (i) ensure that the Preferred Stock (and the Common Stock into which it is convertible) and the Common Stock underlying the Rights Offering Warrant are listed on The New York Stock Exchange, and (ii) effectuate the Transactions; and (d) deliver to Lender, on or before the date on which the Registration Statement is declared effective by the Securities and Exchange Commission, a fully executed Standby Purchase Agreement. SECTION 5.11 NET WORTH. The Borrowers and their consolidated Subsidiaries shall at all times have and maintain an aggregate net worth of at least $20,000,000.00. ARTICLE VI NEGATIVE COVENANTS Each Borrower covenants and agrees with the Lender that, so long as this Agreement shall remain in effect or the principal of or interest on the Note, or any other expense or amount payable hereunder shall be unpaid, unless the Lender shall otherwise consent in writing, it will not, and it will not permit any of its Subsidiaries to, either directly or indirectly: SECTION 6.01 INDEBTEDNESS. Incur, create, assume or permit to exist any Indebtedness, except: (a) Indebtedness incurred pursuant to this Agreement and the other Loan Documents; (b) Indebtedness incurred in the ordinary course of business with respect to customer deposits, trade payables and other unsecured current liabilities not the result of borrowing and not represented by any note or other evidence of Indebtedness; (c) Indebtedness existing on the date hereof and listed on SCHEDULE 6.01 attached hereto; (d) Indebtedness secured by the Liens permitted under SECTION 6.02(E) below; (e) Indebtedness incurred pursuant to the Chase Bridge Loan Facility; (f) Indebtedness incurred pursuant to interest rate protection agreements entered into in the ordinary course of business and not for speculation; (g) a securitized receivables purchase transaction (referred to as the PARCO Facility under the Chase Bridge Loan Facility documents) entered into by the Borrowers and a special purpose subsidiary of TMN secured by rights to receive and related assets, which obligations related thereto are not recourse to any of the 19 24 Borrowers, (h) unsecured Indebtedness of the Borrowers incurred in connection with the acquisition of franchises of a Borrower in an aggregate principal amount not exceeding $8,000,000 at any time outstanding, provided, that the terms of such Indebtedness and the related acquisitions of such franchises must conform to the following conditions: (i) any such unsecured Indebtedness shall be expressly subordinate to all of the Borrowers' and their Subsidiaries' obligations under the Chase Bridge Loan Facility and the Obligations, (ii) such unsecured Indebtedness shall not require the payment of any interest or other similar charges to any creditor of the Borrowers or their Subsidiaries prior to the repayment in full of all of the Obligations hereunder, (iii) such unsecured Indebtedness shall have a maturity equal to or greater than four (4) years, (iv) the aggregate of the purchase prices for all such acquisitions of franchises shall not exceed $12,000,000, and (v) any such acquisition of a franchise by the Borrowers or their Subsidiaries and the related incurrence of Indebtedness will be subject to the prior written approval of Lender (which approval shall not be unreasonably withheld); and (i) additional unsecured Indebtedness in an aggregate principal amount not exceeding $500,000.00 at any time outstanding. SECTION 6.02 NEGATIVE PLEDGE. Incur, create, assume or permit to exist any Lien on any property or assets now owned or hereafter acquired by it, including inventory, fixed assets and intangible assets, or on any income or rights in respect of any thereof, except: (a) deposits or pledges to secure payment of workers' compensation, unemployment insurance, old age pensions, or other social security laws, or to secure statutory obligations; (b) Liens for property taxes, assessments or other governmental charges or taxes due and payable, the validity or amount of which in good faith is being contested or litigated; (c) mechanics', carriers', workmen's, repairmen's, or other like liens arising in the ordinary course of business securing obligations which are not overdue for a period of sixty (60) days or more or which are in good faith being contested or litigated; (d) existing Liens reflected in the financial statements referred to in SECTION 3.05 hereof, or additional existing Liens listed in SCHEDULE 6.02 attached hereto and made a part hereof; (e) Liens granted to the Person financing the acquisition of property, plant or equipment or other property acquired by such Borrower or its Subsidiaries, including Liens related to capitalized lease obligations if (i) limited to the particular assets acquired, (ii) the debt secured by the Lien does not exceed the acquisition cost of a particular asset for which the Lien is granted, (iii) such transaction does not otherwise violate this Agreement, and (iv) the aggregate amount of all Indebtedness secured by Liens permitted under this clause (e) does not exceed $250,000 at any one time outstanding; (f) Liens arising out of attachments, judgments or awards as to which an appeal or other appropriate proceedings for contest or review are timely commenced (and as to which foreclosure and other enforcement proceedings shall not have been commenced unless fully bonded or otherwise effectively stayed) and as to which appropriate reserves have been established in accordance with generally accepted accounting principles; (g) possessory Liens which (i) occur in the ordinary course of business, (ii) secure normal trade debt which is not yet due and payable, and (iii) do not secure Indebtedness for borrowed money; (h) Liens arising by virtue of any statutory or common law provision relating to banker's liens, rights of setoff or similar rights with respect to deposit accounts of such Borrower or any of its Subsidiaries; (i) easements, rights of way, restrictions, minor defects or irregularities in title and other similar encumbrances on real property which do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of business of such Borrower and its Subsidiaries; (j) licenses, leases and subleases granted by a Borrower in the ordinary course of its business; (k) any Lien existing on any asset prior to a Borrower's acquisition thereof; provided, that (i) such Lien is not created in contemplation of or in connection with such acquisition, (ii) such Lien shall not apply to any other assets of any Borrower and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition; (l) Liens securing the Chase Bridge Loan Facility; (m) Liens securing the Revolving Securitization receivables purchase transaction identified on SCHEDULE 6.01; and (n) Liens securing the securitized receivables purchase transaction permitted under SECTION 6.01(G) above. 20 25 SECTION 6.03 SALE OF ASSETS. Sell, lease, assign, transfer or otherwise dispose of all or substantially all of its assets or properties, including the equity interest in any Subsidiary, except: (a) sales of assets necessary to consummate the Revolving Securitization receivables purchase transaction identified on SCHEDULE 6.01 and the securities receivable purchase transaction permitted under SECTION 6.01(G) above and (b) sales, leases, assignments, transfers or other dispositions of assets by a Borrower to another Borrower or by a Subsidiary of a Borrower to a Borrower. SECTION 6.04 LIQUIDATIONS, CONSOLIDATIONS, MERGERS OR PURCHASES OF ASSETS. Liquidate, dissolve (whether voluntarily or involuntarily), merge into or consolidate or combine with any other Person, or purchase, lease or otherwise acquire (in one transaction or a series of related transactions) all or substantially all of the property or assets of any Person (other than purchases or other acquisitions of inventory, materials, leases, property and equipment in the ordinary course of business), except: (a) a Borrower may merge into another Borrower so long as TMN is the survivor if TMN is involved in the merger, (b) a Subsidiary of a Borrower may merge into that Borrower, so long as the Borrower is the surviving entity, (c) a Subsidiary of a Borrower may be dissolved if the Board of Directors of the applicable Borrower determines such dissolution is in the best efforts of the applicable Borrower and such dissolution is not reasonably likely to result in a Material Adverse Effect, and (d) for acquisitions of franchises of Borrowers pursuant to the terms and subject to the limitations set forth in SECTION 6.01(H) above. SECTION 6.05 INVESTMENTS, LOANS AND ADVANCES. Make or suffer to exist any Investments except for (a) Permitted Investments, and (b) Investments permitted under or made in compliance with the Revolving Securitization receivables purchase transactions identified on SCHEDULE 6.01 or permitted under SECTION 6.01(G) with excess funds received in connection therewith. SECTION 6.06 RESTRICTED PAYMENTS. Declare or pay, directly or indirectly, any dividends or make any other distribution, whether in cash, property, securities or a combination thereof, with respect to (whether by reduction of capital or otherwise) any partnership interests or capital accounts or any shares of capital stock, warrants, options or any of its other securities, or directly or indirectly redeem, purchase, retire or otherwise acquire for a consideration, any partnership interests or capital accounts or any shares of any class of capital stock, warrants, options or any of its other securities, or set apart any sum for the aforesaid purposes (collectively "RESTRICTED PAYMENTS"), except that (a) a Borrower's Subsidiaries may make Restricted Payments to such Borrower and to the Borrowers' other Subsidiaries, (b) a Borrower may make Restricted Payments to another Borrower, (c) a Borrower may declare and pay dividends with respect to its capital stock payable solely in shares of its common stock, (d) a Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of that Borrower consistent with past practice, and (e) TMN may make Restricted Payments required, contemplated, or permitted by the terms of the Preferred Stock Designation, the Rights Offering Warrant and the Existing Warrant. SECTION 6.07 TRANSACTIONS WITH AFFILIATES. Sell or transfer any assets to, or purchase or acquire any assets of, or otherwise engage in any material transaction with, or permit any Affiliate to sell or transfer assets to, or purchase or acquire any assets of, or otherwise engage in any other material transaction with any other Affiliate, except, in each case, in the ordinary course of such Borrower's or such Subsidiaries business and upon fair and reasonable terms no less favorable to such Borrower or Subsidiary than would be obtained in a comparable arm's-length transaction with a Person other than an Affiliate, provided that this SECTION 6.07 shall not apply to (a) the Transactions, (b) the Rights Offering (including the purchase, redemption or conversion of the Preferred Stock issued pursuant thereto, and the payment of distributions on such Preferred Stock), (c) the Revolving Securitization receivables purchase transactions identified on SCHEDULE 6.01 and permitted under SECTION 6.01(G) above, (d) payment of the Management Fee, (e) payment of the Transaction Fee, or (f) the exercise of rights under the Existing Warrant. 21 26 SECTION 6.08 LINE OF BUSINESS. Engage, directly or indirectly, in any business other than the businesses in which it is engaged on the Closing Date and businesses reasonably related thereto. SECTION 6.09 CERTAIN DOCUMENTS. Except as contemplated by the Proxy Proposals, amend, modify, terminate or waive: any material term or provision of its certificate or articles of incorporation or by-laws, or other organizational or investment documents or agreements, without in each case, the prior written consent of the Lender, which shall not be unreasonably withheld or delayed, provided that this SECTION 6.09 shall not apply to any such amendments, modification and waivers necessary to effectuate the Transactions. ARTICLE VII DEFAULTS SECTION 7.01 EVENTS OF DEFAULT. Each of the following events shall constitute events of default ("EVENTS OF DEFAULT") hereunder: (a) any representation or warranty made by or on behalf of any Borrower in connection with this Agreement or the other Loan Documents or any Transaction shall prove to have been false or misleading in any material respect when made, and to the extent capable of being remedied, the condition giving rise to such representation or warranty being incorrect or untrue shall continue unremedied for thirty (30) days after written notice thereof from the Lender to Borrowers; (b) default shall be made in the payment of any principal on the Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise; (c) default shall be made in the payment of any interest on the Loan or any other amount (other than an amount referred to in clause (b) above) due under this Agreement or the other Loan Documents, within five (5) Business Days after the same shall become due and payable; (d) default shall be made in the due observance of any covenant, condition or agreement on the part of the Borrower contained in SECTION 5.01, 5.05, 5.10 OR 5.11 or ARTICLE VI; (e) default shall be made in the due observance or performance of any other covenant, condition or agreement to be observed or performed by the Borrower pursuant to the terms of this Agreement or any other Loan Document (other than those covered in clauses (b) - (d) above) and such default shall continue unremedied for a period of thirty (30) days after the earlier of: (i) written notice from the Lender of such default; or (ii) actual knowledge by a Borrower of such default; (f) any Borrower or any of any Borrower's Subsidiaries shall: (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code or any other federal or state bankruptcy, insolvency or similar law; (ii) consent to the institution of, or fail to controvert in a timely and appropriate manner, any such proceeding or the filing of any such petition; (iii) apply for or consent to the appointment of a receiver, trustee, custodian, 22 27 sequestrator or similar official for such Borrower or such Subsidiary or for a substantial part of their respective properties or assets; (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding; (v) make a general assignment for the benefit of creditors; (vi) become unable generally, or admit in writing its inability, to pay its debts as they become due; (vii) suspend the transaction of all or a substantial portion of its usual business; or (viii) take corporate action for the purpose of effecting any of the foregoing; (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking: (i) relief in respect of any Borrower or any of any Borrower's Subsidiaries of a substantial part of any of their respective properties or assets, under Title 11 of the United States Code or any other federal or state bankruptcy, insolvency or similar law; (ii) the appointment of a receiver, trustee, custodian, sequestrator or similar official for any Borrower or any of any Borrower's Subsidiaries or for a substantial part of their respective properties; or (iii) the winding-up or liquidation of any Borrower or any of any Borrower's Subsidiaries; and such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall continue unstayed and in effect for sixty (60) days; (h) a default shall be made with respect to any Indebtedness of any Borrower or any of any Borrower's Subsidiaries, if the effect of any such default shall be to accelerate, or to permit the holder or obligee of any such Indebtedness (or any trustee or agent on behalf of such holder or obligee) to accelerate (with or without notice or lapse of time or both) the maturity of the Indebtedness in an aggregate amount of $1,000,000 or more; or any payment of principal or interest, regardless of amount, on any Indebtedness of any Borrower or any of any Borrower's Subsidiaries in an aggregate principal amount of $1,000,000 or more, shall not be paid when due, whether at maturity, by acceleration or otherwise (after giving effect to any applicable cure period specified in the instrument evidencing or governing such Indebtedness); (i) a Reportable Event shall have occurred with respect to any Pension Plan or a notice of intent to terminate a Pension Plan shall have been furnished to the affected parties (as provided in Section 4041(c)(1) of ERISA); or the Pension Benefit Guaranty Corporation shall have instituted proceedings to terminate any Pension Plan, or a trustee shall have been appointed by a United States District Court to administer any Pension Plan, if in any such case such Pension Plan then has an amount of unfunded benefit liabilities (within the meaning of Section 4001(a)(18) of ERISA) or any Borrower or any ERISA Affiliate incurs withdrawal liability which could reasonably be expected to result in a Material Adverse Effect; (j) a final judgment or judgments for the payment of money in excess of $2,000,000 in the aggregate shall be rendered by a court or other tribunal against any Borrower or Borrowers or any of their Subsidiaries and shall remain undischarged for a period of thirty (30) consecutive days during which execution of such judgment shall not have been stayed effectively; 23 28 (k) any Loan Document shall cease to be in full force and effect, enforceable in accordance with its terms, or any Borrower shall assert the invalidity of any such instrument; (l) there occurs a default or event of default by any Borrower under or in connection with the Chase Bridge Loan Facility, the Investment Agreement Amendment or the Standby Purchase Agreement (or any document executed by any Borrower pursuant to the Standby Purchase Agreement), which remains uncured after the expiration of any applicable cure period; (m) there shall occur a Rights Offering Default Event; and (n) there shall occur a Purchase Termination Event or Potential Purchase Termination Event under or in connection with the existing Revolving Securitization receivables purchase transaction identified on SCHEDULE 6.01, or a Termination Event or Potential Termination Event under or in connection with the securitized receivables purchase transaction permitted under SECTION 6.01(G) or the Chase Bridge Loan Facility. SECTION 7.02 REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default (other than an event described in SECTION 7.01 (F) or (G)), and at any time thereafter during the continuance of such event, the Lender may, by written or telegraphic notice to the Borrowers, declare the Note to be forthwith due and payable, whereupon the principal of the Note, together with accrued interest thereon and all other liabilities of the Borrowers accrued hereunder and under the other Loan Documents, shall become forthwith due and payable both as to principal and interest, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrowers, anything contained herein or in any Note to the contrary notwithstanding. Upon the occurrence of any event described in SECTION 7.01 (F) OR (G), the principal amount outstanding under the Note, together with all accrued interest thereon and all other liabilities of the Borrowers accrued hereunder and under the other Loan Documents, shall automatically become due and payable, both as to principal and interest, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers, anything contained herein or in the Note to the contrary notwithstanding. Without limitation to the foregoing, upon the occurrence of an Event of Default, Lender shall be entitled to all rights and remedies available to it hereunder, under the other Loan Documents, under the Standby Purchase Agreement, under the Investment Agreement Amendment, at law or in equity. Notwithstanding anything to the contrary contained above in this SECTION 7.02, and without limitation to the Lender's ability to take the actions set forth above in this SECTION 7.02, upon the occurrence of any Event of Default, at any time thereafter during the continuance of such event, in addition to any other rights to designate directors of Lender under Article IV of the Investment Agreement Amendment (other than Section 4.7 thereof), Samstock shall have the right to designate such additional number of directors (which individuals may be designated in Samstock's sole discretion without obtaining the acceptance of approval of the Disinterested Directors (as defined in the Investment Agreement Amendment) or any other person or entity), and TMN shall take all necessary or appropriate action to increase the number of directors constituting TMN's Board of Directors and/or obtain resignations of individuals then serving as directors (other than directors designated by Samstock), and assist in the nomination and election as directors of such additional designees of Samstock, such that, after taking all of the same into account, the number of individuals designated by Samstock under this SECTION 7.02 and Article IV of the Investment Amendment serving as directors of TMN shall constitute at least a majority of the total number of directors of TMN, effective as soon as practicable, but in any event no later than five (5) Business Days after Lender notifies TMN in writing of its intent to exercise the right provided herein and the identity of the individuals Samstock desires to so designate (and, if applicable, the 24 29 individuals Samstock desires to resign). With respect to the foregoing, the Borrowers and TMN acknowledge and agree that (I) the provisions of this SECTION 7.02 are reasonable and necessary to protect the proper and legitimate interests of the Lender, and (II) the Lender would be irreparably damaged in the event any of the provisions of this SECTION 7.02 were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Lender shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this SECTION 7.02 by the Borrowers or TMN without the necessity of proving actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof, which rights shall be cumulative and in addition to any other remedy to which the Lender may be entitled hereunder, under any other Loan Documents or at law or in equity. ARTICLE VIII MISCELLANEOUS SECTION 8.01NOTICES. (a) Notices and other communications provided for herein and in the other Loan Documents shall be in writing and shall be delivered personally or mailed, by certified or registered mail, postage prepaid (or in the case of facsimile communication, delivered by telex, graphic scanning or other facsimile communications equipment) or delivered by overnight courier addressed: IF TO THE LENDER: GAMI Investments, Inc. Two North Riverside Plaza, Suite 600 Chicago, Illinois 60606 Attention: Greg Robitaille Telephone: (312) 466-3215 Facsimile: (312) 454-9678 WITH A COPY TO: Rosenberg & Liebentritt, P.C. Two North Riverside Plaza, Suite 1600 Chicago, Illinois 60606 Attention: Marc S. Brenner Telephone: (312) 446-3933 Facsimile: (312) 454-0335 IF TO THE BORROWERS: Transmedia Network, Inc. Transmedia Restaurant Company, Inc. Transmedia Service Company, Inc. TMNI International Incorporated 11900 Biscayne Boulevard Miami, Florida 33181 Attention: Gene Henderson Telephone: (305) 892-3306 Facsimile: (305) 892-3342 25 30 WITH A COPY TO: Morgan, Lewis & Bockius, LLP 101 Park Avenue New York, New York 10178 Attention: Stephen Farrell Telephone: (212) 309-6050 Facsimile: (212) 309-6273 (b) All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt, in each case addressed to such party as provided in this SECTION 8.01 or in accordance with the latest unrevoked direction from such party. SECTION 8.02 SURVIVAL OF AGREEMENT. All covenants, agreements, representations and warranties made by the Borrowers herein and in the other Loan Documents shall be considered to have been relied upon by the Lender and shall survive the making by the Lender of the Loan and the execution and delivery to the Lender of the Note evidencing the Loan and shall continue in full force and effect until the Note and all accrued interest thereon and all other Obligations then due and payable have been fully paid and performed and the Lender has no further commitment to lend hereunder. SECTION 8.03 SUCCESSORS AND ASSIGNS. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrowers or the Lender that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. The Borrowers may not assign or transfer any of their rights or obligations hereunder without the prior written consent of the Lender. The Lender shall have the right to make assignments of the Loan to an Affiliate of the Lender. SECTION 8.04 EXPENSES OF THE LENDER; INDEMNITY. (a) Each Borrowers agrees to pay (on the Closing Date) all reasonable costs and expenses incurred by the Lender (including the reasonable fees and expenses of the Lender's counsel) in connection with the preparation and administration of this Agreement and the other Loan Documents, and with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby contemplated shall be consummated) or incurred by the Lender (including the reasonable fees and expenses of the Lender's counsel) in connection with the enforcement of its rights and remedies in connection with this Agreement or the other Loan Documents. Each Borrower further agrees that it shall indemnify the Lender from and hold it harmless against any documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of this Agreement or any of the other Loan Documents. (b) Each Borrower agrees to indemnify the Lender and its Affiliates, directors, officers, employees and agents against, and to hold the Lender and such Persons harmless from, any and all losses, claims, damages, liabilities, penalties, actions, judgments, investigations, proceedings, litigation, suits, costs, and related expenses (collectively, "INDEMNIFIED LIABILITIES"), including legal fees and expenses, incurred by or asserted against the Lender or any such Persons arising out of, in any way connected with, or as a result of: (i) this Agreement or the other Loan Documents; (ii) the performance by the parties hereto and thereto of their respective rights and obligations hereunder and thereunder; (iii) consummation of the Transactions; (iv) the environmental condition or operation of such Borrower's and its Subsidiaries' properties, including the release, presence, spillage, disposal, discharge, transporting, emission or leakage of hazardous materials, which is at, in, on, under, about, from or affecting such properties, including any damage or injury resulting from any such hazardous materials to or affecting such Borrower's or its Subsidiaries' properties or the soil, water, air, vegetation, buildings, personal property, persons or animals 26 31 located on such properties or on any other property or otherwise; or (v) any violation of any Environmental Laws. The foregoing indemnity includes the cost of remedial action to the extent required to cause such Borrower's or it's Subsidiaries' properties to be in compliance with all applicable Environmental Laws. Notwithstanding the foregoing, this indemnity shall not apply to any such Indemnified Liabilities arising solely and directly from the gross negligence or willful misconduct of the Lender. (c) The provisions of this SECTION 8.04 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement or the other Loan Documents, the consummation of the Transactions contemplated hereby, the repayment of any of the Loan, the invalidity or unenforceability of any term or provision of this Agreement or any of the other Loan Documents, or any investigation made by or on behalf of the Lender. All amounts due under this SECTION 8.04 shall be payable within thirty (30) days after written demand in reasonable detail therefor. SECTION 8.05 RIGHT OF SETOFF. The Lender is hereby authorized at any time and from time to time after the occurrence and during the continuance of an Event of Default to setoff and apply any and all indebtedness and other obligations at any time owing by the Lender or its Affiliates to or for the credit or the account of any Borrower or any Borrower's Affiliates to amounts then due and payable under this Agreement and the other Loan Documents, irrespective of whether or not the Lender shall have made any demand under this Agreement or any of the other Loan Documents. The rights of the Lender under this SECTION 8.05 are in addition to other rights and remedies (including other rights of setoff) which the Lender may have under applicable law. SECTION 8.06 APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. SECTION 8.07 WAIVERS. No failure or delay of the Lender in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Lender hereunder and under the other Loan Documents, and under or in connection with the Rights Offering Warrant, the Rights Offering, and the Transactions, are cumulative and not exclusive of any rights or remedies which it would otherwise have. No waiver of any provision of this Agreement, the Note or the other Loan Documents, or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be authorized as provided in SECTION 8.08, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Borrower in any case shall entitle such Borrower or any other Borrower to any other or further notice or demand in similar or other circumstances. SECTION 8.08 AMENDMENTS. Neither this Agreement nor any other Loan Document, nor any provision hereof or thereof, may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Lender. SECTION 8.09 SEVERABILITY. In the event any one or more of the provisions contained in this Agreement, the Note or the other Loan Documents should be held invalid, illegal or unenforceable 27 32 in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall not in any way be affected or impaired thereby. SECTION 8.10 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one contract. SECTION 8.11 HEADINGS. Article and Section headings and the Index used herein are for convenience of reference only and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 8.12 CONSENT TO JURISDICTION. Each Borrower hereby irrevocably agrees that any suit, action, proceeding or claim against it arising out of or in any way relating to this Agreement or any of the other Loan Documents, or any judgment entered by any court in respect thereof, may be brought or enforced in the state or federal courts located in Cook County, Illinois or New York County, New York, and each Borrower consents, for itself and in respect to its property, to the non-exclusive jurisdiction of these courts, and each Borrower hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the venue of any proceeding brought in Cook County, Illinois, or New York County, New York, and further irrevocably waives any claims that any such proceeding has been brought in an inconvenient forum. SECTION 8.13 WAIVER OF JURY TRIAL. EACH BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER, OR REMEDY UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR UNDER OR IN CONNECTION WITH ANY AMENDMENT, INSTRUMENT, DOCUMENT, OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, AND AGREES THAT ANY SUCH ACTION SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE TERMS AND PROVISIONS OF THIS SECTION 8.13 CONSTITUTE A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. SECTION 8.14 INTEREST LIMITATION. Anything in this Agreement, the Note or any other Loan Document to the contrary notwithstanding, the Borrowers shall never be required to pay interest at a rate in excess of the highest lawful rate, and if the effective rate of interest that would otherwise be payable under this Agreement, the Note or any other Loan Document would exceed the highest lawful rate, or if any holder of the Note shall receive monies that are deemed to constitute interest which would increase the effective rate of interest payable under this Agreement, the Note or any other Loan Document to a rate in excess of the highest lawful rate, then: (a) the amount of interest that would otherwise be payable under this Agreement, the Note and the other Loan Documents shall be reduced to the amount allowed under applicable law; and (b) any interest paid in excess of the highest lawful rate shall, at the option of the holders of the Note, be either refunded to the payor or credited on the principal of the Note. If at any time the effective rate of interest which would otherwise be payable under this Agreement, the Note, or any other Loan Document exceeds the highest lawful rate, the rate of interest to accrue under this Agreement, the Note and the other Loan Documents shall be limited to the highest lawful rate, but any subsequent reductions in such interest rate shall not become effective to reduce such interest rate below the highest lawful rate until the total amount of interest accrued hereunder and under the Note and the other Loan Documents equals the total amount of interest that would have accrued if interest had been computed without giving effect to this SECTION 8.14. 28 33 SECTION 8.15 LOAN DOCUMENTS. In the event of any conflict or inconsistency between the terms and provisions of this Agreement and those of any other Loan Document, the terms and provisions of this Agreement shall govern and control to the extent of such conflict or inconsistency. SECTION 8.16 JOINT AND SEVERAL LIABILITY. The obligations and liability of the Borrowers under this Agreement and the other Loan Documents shall be joint and several. 29 34 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, all as of the day and year first above written. TRANSMEDIA NETWORK, INC., a Delaware corporation Attest: . By: ----------------------------------- -------------------------------------------- Its: Its: ----------------------------------- -------------------------------------------- TRANSMEDIA RESTAURANT COMPANY, INC., a Delaware corporation Attest: By: ----------------------------------- -------------------------------------------- Its: Its: ----------------------------------- -------------------------------------------- TRANSMEDIA SERVICE COMPANY, INC., a Delaware corporation Attest: By: ----------------------------------- -------------------------------------------- Its: Its: ----------------------------------- -------------------------------------------- TMNI INTERNATIONAL INCORPORATED, a Delaware corporation Attest: By: ----------------------------------- -------------------------------------------- Its: Its: ----------------------------------- -------------------------------------------- GAMI INVESTMENTS, INC. By: -------------------------------------------- Its: --------------------------------------------
30 35 EXHIBIT A Form of Promissory Note A-1 36 EXHIBIT B Form of Borrowing Request B-1 37 EXHIBIT C Form of Opinion of Counsel C-1 38 EXHIBIT D Form of Rights Offering Warrant 39 EXHIBIT E Second Amended and Restated Investment Agreement 40 EXHIBIT F Form of Standby Purchase Agreement 41 EXHIBIT G Preferred Stock Designation 42 SCHEDULE 1.01 Existing Investments [TO BE ATTACHED] 43 SCHEDULE 3.07 Litigation [TO BE ATTACHED] 44 SCHEDULE 3.10 Burdensome Contracts; Defaults [TO BE ATTACHED] 45 SCHEDULE 3.06 Subsidiaries Borrower Subsidiaries TMN Restaurant Service TMNI TNI Funding Company I, L.L.C. Restaurant None Service None TMNI None 46 SCHEDULE 6.01 Existing Indebtedness [TO BE ATTACHED] 47 SCHEDULE 6.02 Existing Liens None. EX-99.7 3 STANDBY PURCHASE AGREEMENT DATED 6/30/99 1 EXHIBIT 7 STANDBY PURCHASE AGREEMENT This Standby Purchase Agreement (as the same may be amended or modified from time to time, the "Agreement"), made and entered into as of June 30, 1999 by and between Transmedia Network Inc., a Delaware corporation (the "Company"), and Samstock, L.L.C., a Delaware limited liability company ("Samstock"; and in its capacity as standby purchaser, the "Standby Purchaser"). WITNESSETH: WHEREAS, under the terms of that certain Credit Agreement dated as of June 30, 1999 by and between the Company and GAMI Investments, Inc., a Delaware corporation and an affiliate of the Standby Purchaser ("Lender") (the "Loan Agreement"), Lender has loaned to the Company the aggregate principal amount of $10 million (the "Loan"); WHEREAS, in accordance with the terms of the Loan Agreement, the Company is implementing a rights offering (the "Rights Offering") pursuant to which it is anticipated that the Company will distribute to stockholders of record of the Company ("Stockholders") on a record date to be determined, rights (each, a "Right" and collectively, the "Rights") to subscribe for shares of Series A senior convertible redeemable preferred stock of the Company (the "Series A Preferred Shares"), at a subscription price per share to be determined (which shall represent approximately 70% of the market price of the Common Stock as of the pricing date calculated as described in the registration statement covering the Rights Offering) (the "Subscription Price"), not to exceed $10 million in the aggregate; WHEREAS, in order to help assure the success of the Rights Offering, and the receipt by the Company of sufficient proceeds therefrom to repay all outstanding amounts under the Loan upon its maturity, Samstock is willing to, and hereby does, agree to serve as Standby Purchaser for a specified number of Series A Preferred Shares available for purchase upon the expiration of unexercised Rights, and the Company has agreed with Samstock to sell such securities to the Standby Purchaser, all as more particularly set forth herein. NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Standby Purchaser do hereby agree as follows: Section 1. Standby Purchase Commitment. 1.1 The Standby Purchaser agrees that it will exercise in full the basic subscription privileges offered to it in connection with the Rights Offering and, to the extent that EGI-Transmedia Investors, L.L.C., a Delaware limited liability company, or its successors or distributees ("TNI") elects or elect not to exercise its or their basic subscription privileges in full, to purchase such additional number of Series A Preferred Shares that TNI or its successors or distributees would have 2 been entitled to purchase if it or they had exercised its or their basic subscription privileges in full. Subject to the terms and conditions set forth in this Agreement, the Company agrees to issue and sell to the Standby Purchaser, and the Standby Purchaser agrees to purchase from the Company, such number of Series A Preferred Shares not (i) subscribed for by it or TNI (or its successors or distributees) pursuant to their basic subscription privileges or by it pursuant to the preceding sentence or (ii) subscribed for by other Stockholders of the Company (the "Other Stockholders") in the Rights Offering, including pursuant to any oversubscription privilege, as may be necessary so that all of the Series A Preferred Shares offered for sale in the Rights Offering will be sold in the Rights Offering (the "Standby Shares"). 1.2 The purchase price of the Standby Shares sold pursuant to this Agreement to the Standby Purchaser shall be at the price and terms offered to the Other Stockholders pursuant to the Rights Offering; provided that the aggregate gross purchase price for all Series A Preferred Shares offered and sold to all Stockholders, including all Standby Shares offered and sold to the Standby Purchaser, shall not exceed $10 million. 1.3 In consideration of the Standby Purchaser's obligations under this Agreement and Lender's obligations under the Loan Agreement, the Company agrees to issue to the Standby Purchaser (or as the Standby Purchaser shall direct) a warrant (the "Warrant"), substantially in the form of Exhibit A hereto, to purchase an aggregate of 1,000,000 shares (the "Warrant Shares") of the Company's common stock, $.02 par value per share (the "Common Stock"). The Warrant shall be issued and delivered to the Standby Purchaser at the Closing (as hereinafter defined), upon repayment to the Company of the cash fee (or at Lender's option, upon offset of the amount of said cash fee against obligations owing to Lender under the Loan Agreement) previously paid to Lender or a portion thereof, to the extent required by, and otherwise in accordance with, Section 2.10 of the Loan Agreement. Section 2. Determination of Standby Shares. 2.1 As soon as practicable following the expiration of the exercise period of the Rights (as the same may be extended) and promptly following its determination of the number of Series A Preferred Shares validly subscribed for through the exercise of the Rights in accordance with the terms of the Rights Offering (including the exercise of any oversubscription options or privileges), the Company shall notify the Standby Purchaser in writing of the number of Standby Shares, if any, to be purchased by it pursuant to Section 1. Section 3. Closing. 3.1 The delivery of and payment for the Standby Shares shall take place at the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178 at 10:00 a.m., New York City time, on the date of the sale of the Series A Preferred Shares to the subscribing Stockholders in the Rights Offering (such time and date being referred to as the "Closing Time," the date of the Closing Time being referred to as the "Closing Date" and the consummation of the transaction being referred to as the "Closing"). 3.2 At the Closing: -2- 3 (a) the Company shall deliver to the Standby Purchaser (i) stock certificates representing the Standby Shares to be purchased by the Standby Purchaser hereunder, registered in the name of the Standby Purchaser or such of its nominees as it may specify at least three business days prior to the Closing Date, for the Standby Purchaser's account, and (ii) the Warrant, in each case free and clear of all liens, claims or encumbrances of any kind, and (b) the Standby Purchaser shall deliver the Subscription Price for each Standby Share purchased by it in immediately available funds in the form of a wire transfer to an account designated by the Company at least one business day prior to the Closing Date. Section 4. Representations and Warranties. 4.1 The Company represents and warrants to, and covenants with, the Standby Purchaser, as of the date hereof and again as of the Closing Date, as follows: (a) As soon as practicable, the Company shall file with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-2 to register under the Securities Act of 1933 (the Securities Act") such number of Rights, Series A Preferred Shares and shares of Common Stock into which the Series A Preferred Shares may, from time to time, be convertible in relation to the Rights Offering such that the gross proceeds thereof, assuming full subscription, shall be $10 million. The Company will file such amendments to the registration statement as may be necessary to permit the registration statement, as so amended, to become effective. Such registration statement as amended at the time it becomes effective (the "Effective Date"), including all exhibits and all documents incorporated therein by reference, is herein called the "Registration Statement." The prospectus first filed with the Commission pursuant to Rule 424(b) under the Securities Act of 1933 (the "Securities Act") is herein called the "Prospectus." (b) On the Effective Date and at the time when the Prospectus is first filed with the Commission pursuant to Rule 424(b), the Registration Statement and the Prospectus will comply in all material respects with the provisions of the Securities Act and the rules and regulations promulgated thereunder, and on the Effective Date neither the Registration Statement nor the Prospectus will contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing does not apply to statements or omissions in the Registration Statement or the Prospectus made in reliance upon information furnished by the Standby Purchaser to the Company expressly for use therein. (c) The documents incorporated by reference in the Prospectus (the "Incorporated Documents"), at the time they were filed with the Commission, complied as to form in all material respects with the requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and the rules and regulations of the Commission promulgated thereunder, and, when read together with the other information in the Prospectus, will not contain an -3- 4 untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The consolidated financial statements of the Company included in the Incorporated Documents 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 its 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 Incorporated Documents, neither the Company nor any of its subsidiaries has any obligation or liability of any nature whatsoever (direct or indirect, matured or unmatured, absolute, accrued, contingent or otherwise) either (1) required by generally accepted accounting principles to be set forth on a consolidated balance sheet of the Company and its subsidiaries or in the notes thereto or (ii) which, individually or in the aggregate, could reasonably be expected to have 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 its subsidiaries, taken as a whole, whether or not required by generally accepted accounting principles to be provided or reserved against on a balance sheet prepared in accordance with generally accepted accounting principles, other than liabilities and obligations reflected or reserved against in the consolidated financial statements of the Company and its consolidated subsidiaries included in the Company's quarterly report on Form 10-Q for the quarter ended March 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 its subsidiaries taken as a whole. (d) As soon as practicable, the Company shall file with the Commission a Proxy Statement in preliminary form relating to a special meeting of stockholders (the "Stockholders Meeting") to be duly called and convened for the purpose of considering and taking action upon the Proxy Proposals (as defined in the Registration Statement). The Company will use its reasonable efforts to cause the Proxy Statement to be mailed to stockholders as promptly as practicable after the Registration Statement is declared effective under the Securities Act. At the time it is first mailed to stockholders, the Proxy Statement will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing does not apply to statements or omissions in the Proxy Statement made in reliance upon information furnished by the Standby Purchaser to the Company expressly for use therein. (e) The Company has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance by the Company of this Agreement (including the issuance of the Warrant) have -4- 5 been duly and validly authorized by the Board of Directors of the Company (the "Board") and have been approved by a majority of the Disinterested Directors of the Company (within the meaning of Section 3.1 of the Amended and Restated Investment Agreement dated March 3, 1998 by and among the Company, Samstock, TNI and Halmostock), and no other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery and performance by the Company of this Agreement, other than Stockholder Approval (as defined below). The Board has approved this Agreement and the consummation of the transactions contemplated hereby, including, without limitation, the issuance to the Standby Purchaser of the Standby Shares, the Warrant and the Warrant Shares, so as to render inapplicable thereto 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. (f) This Agreement has been duly authorized, executed and delivered by the Company and is the valid and binding obligation of the Company and is enforceable against the Company by the Standby Purchaser in accordance with its terms. (g) The Rights, the Series A Preferred Shares offered by the Company to the Stockholders upon exercise of Rights, and the Standby Shares to be sold by the Company under this Agreement have been duly authorized by the Company and will be included in the Registration Statement. Upon the approval of the Proxy Proposals by the requisite vote of the stockholders of the Company at the Stockholders Meeting in accordance with the Delaware General Corporation Law, the applicable rules of the New York Stock Exchange and the provisions of the Company's Certificate of Incorporation and By-laws (the "Stockholder Approval") and the filing by the Company of the Certificate of Amendment, in substantially the form attached hereto as Exhibit B, and the Certificate of Designations, in substantially the form attached hereto as Exhibit C, with the Secretary of State of the State of Delaware (together, the "Delaware Filings"), the Standby Shares and any shares of Common Stock into which the Standby Shares may be convertible shall have been reserved for issuance by the Company and the Standby Shares, when issued and delivered by the Company against payment therefor as provided in this Agreement, will be validly issued, fully paid and nonassessable, and the Standby Purchaser shall acquire good and valid title to the Standby Shares (and any shares of Common Stock into which they may be convertible) and the Warrant, free and clear of all Liens. Upon exercise of the Warrant, in whole or, from time to time, in part, and upon payment of the exercise price therefor, in accordance with the terms of the Warrant, the Standby Purchaser will acquire good and valid title to the Warrant Shares, free and clear of all Liens, and such Warrant Shares shall be validly issued, fully paid and nonassessable. For purposes of this paragraph (g), "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 Standby Purchaser or pursuant to this Agreement. No vote of the holders of any class or series of capital stock or other securities of the Company or any subsidiary of the Company is required to approve or effect this Agreement or any transaction contemplated -5- 6 hereby, including, without limitation, under applicable law, applicable stock exchange rules or regulations, the certificate or articles of incorporation (including, without limitation, Article Seventh of the Company's Certificate of Incorporation) or by-laws of the Company or any subsidiary of the Company or any agreement of any kind applicable to the Company, any subsidiary of the Company, or their assets, except that the Proxy Proposals require Stockholder Approval. The affirmative vote of the holders of no more than a majority of the outstanding shares of the Company's Common Stock is the only vote of the holders of any class or series of capital stock or other securities of the Company or any subsidiary of the Company necessary to obtain Stockholder Approval of the Proxy Proposals. (h) The execution, delivery and performance of this Agreement will not (i) conflict with, result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of its subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or (ii) upon receipt of the Stockholder Approval and making the Delaware Filings, result in a violation of the Certificate of Incorporation or By-laws of the Company or any of its subsidiaries or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company or any of its subsidiaries or any of their respective properties. Except for the Delaware Filings and as required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), the Securities Act, the Securities Exchange Act of 1934 (the "Exchange Act"), and applicable state securities law, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement. 4.2 The Standby Purchaser represents and warrants to, and covenants with, the Company as follows: (a) The Standby Purchaser shall receive from the Company and carefully review a copy of the registration statement, the Incorporated Documents, and the Proxy Statement, in the form in which they are filed with the Commission and the information relating to the Standby Purchaser contained therein furnished by the Standby Purchaser to the Company expressly for use therein shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (b) The Standby Purchaser understands and acknowledges that neither the Warrant nor the Warrant Shares have been registered under Section 5 of the Securities Act and may not be sold or otherwise transferred unless so registered or pursuant to a valid exemption therefrom. The Standby Purchaser further agrees that it will not sell, transfer, hypothecate or dispose of (i) any Series A Preferred Shares, (ii) any shares of Common Stock into which the Series A Preferred Shares are convertible, (iii) the Warrant, or (iv) any Warrant Shares except in compliance with the Securities Act and applicable state securities laws. (c) The Standby Purchaser has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance by the Standby Purchaser of this Agreement have been duly and -6- 7 validly authorized by the Managing Member of the Standby Purchaser, and no other proceedings on the part of the Standby Purchaser are necessary to authorize the execution, delivery and performance by the Standby Purchaser of this Agreement. The Managing Member has approved this Agreement and the consummation of the transactions contemplated hereby, including, without limitation, the purchase by the Standby Purchaser of the Standby Shares. (d) This Agreement has been duly authorized, executed and delivered by the Standby Purchaser and is the valid and binding obligation of the Standby Purchaser and is enforceable against the Standby Purchaser by the Company in accordance with its terms. (e) On the Closing Date, the Standby Purchaser will have sufficient cash funds on hand to purchase the Standby Shares on the terms and conditions contained in this Agreement. 4.3 The Standby Purchaser and the Company shall file or cause to be filed promptly following their mutual determination to do so with the Federal Trade Commission (the "FTC") and the Department of Justice (the "DOJ") all requisite notification and report forms and documentary materials which comply with the provisions of the HSR Act and the rules thereunder, and will cooperate and coordinate with each other to file promptly any additional information requested as soon as practicable after receipt of a request from the FTC or the DOJ. The Standby Purchaser and the Company shall use their respective best efforts to obtain early termination of the applicable waiting period under the HSR Act and to overcome any objection made by either the FTC or the DOJ in connection therewith. All of the fees and costs of filing any such notification and report forms by either the Standby Purchaser or the Company (including the expenses of legal, financial or other professionals engaged to provide services in respect of such filing) and related materials incurred by either the Standby Purchaser or the Company shall be borne or reimbursed by the Company. Section 5. Conditions to Closing. 5.1 The obligation of the Standby Purchaser to purchase the Standby Shares as set forth in this Agreement is subject to the following conditions: (a) The Registration Statement shall have been declared effective by the Commission. No order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission and any requests for additional information by the Commission (to be included in the Registration Statement, in the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Standby Purchaser. (b) The Standby Shares shall have been approved for listing on the New York Stock Exchange. (c) The Stockholder Approval shall have been obtained. (d) Any required waiting period applicable to the transactions contemplated by this Agreement under the HSR Act shall have terminated or expired. -7- 8 (e) The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the Closing Date, the Company shall have performed all covenants and agreements herein required to be performed on its part at or prior to the Closing Date and the Standby Purchaser shall receive a certificate to such effect dated the Closing Date and executed by either the President or a Vice President of the Company. (f) The Warrant shall have been issued and delivered to the Standby Purchaser (or its designees) concurrently with the Closing; (g) Purchaser shall have received an opinion of Morgan, Lewis & Bockius LLP, counsel to the Company, in substantially the form attached hereto as Exhibit D . (h) In the event that Samstock is entitled to designate an additional director to the Board pursuant to Section 4.6 of the Second Amended and Restated Investment Agreement, and shall have so designated an individual to serve as such additional director, such individual shall have been elected to the Board to serve commencing upon the Closing. (i) Concurrently with the Closing, the gross proceeds of the Rights Offering shall have been paid to Lender against the Company's obligations under the Loan Agreement (net of amounts owing to the Company in accordance with Section 2.10 of the Loan Agreement). 5.2 The obligation of the Company to issue and sell the Standby Shares as set forth in this Agreement is subject to the following conditions: (a) The Company shall not have withdrawn or canceled the Rights Offering prior to the Expiration Time (as defined in the Registration Statement). (b) The Standby Shares shall have been approved for listing on the New York Stock Exchange. (c) The Stockholder Approval shall have been obtained. (d) Any required waiting period applicable to the transactions contemplated by this Agreement under the HSR Act shall have terminated or expired. (e) The representations and warranties of the Standby Purchaser contained herein shall be true and correct in all material respects as of the Closing Date and the Standby Purchaser shall have performed all covenants and agreements herein required to be performed on its part at or prior to the Closing Date. Section 6. Indemnification. 6.1 The Company agrees to indemnify and hold the Standby Purchaser, its affiliates, and their respective officers, directors, employees, agents, representatives, and successors (each, a "Standby Purchaser Indemnitee") harmless from and against any and all losses, claims, damages and liabilities, joint or several (including any investigation, legal and other expenses -8- 9 reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) (collectively, "Losses"), to which any Standby Purchaser Indemnitee may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses arise out of or are based upon (i) any inaccuracy in, breach of or failure to comply with, any representation, warranty, or covenant made by the Company in this Agreement, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Proxy Statement, any preliminary prospectus, the Registration Statement or the Prospectus (as amended or supplemented, if the Company shall have filed with the Commission any amendment thereof or supplement thereto), or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such untrue statement or omission or alleged untrue statement or omission was made in such Proxy Statement, preliminary prospectus, the Registration Statement or the Prospectus, or such amendment or supplement in reliance upon, and in conformity with, information furnished to the Company by the Standby Purchaser expressly for use therein. 6.2 The Standby Purchaser agrees to indemnify and hold harmless the Company, each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, each director of the Company and each officer of the Company who signs the Registration Statement (each, a "Company Indemnitee"), from and against any and all Losses to which any Company Indemnitee may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such Losses are based upon (i) any inaccuracy in, breach of or failure to comply with, any representation, warranty, or covenant made by the Standby Purchaser in this Agreement or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Proxy Statement, any preliminary prospectus, the Registration Statement or the Prospectus (as amended or supplemented, if the Company shall have filed with the Commission any amendment thereof or supplement thereto), or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only insofar as any such untrue statement or omission or alleged untrue statement or omission was made in such Proxy Statement, preliminary prospectus, the Registration Statement or the Prospectus, or such amendment or supplement, in reliance upon, and in conformity with, information furnished to the Company by the Standby Purchaser expressly for use therein; provided, however, that the obligation of the Standby Purchaser to indemnify the Company Indemnitees hereunder shall be limited to the total price for the Series A Preferred Shares purchased by the Standby Purchaser pursuant to this Agreement. 6.3 Any party which proposes to assert the right to be indemnified under this Section 6 will promptly after receipt of notice of a claim or of commencement of any action, suit or proceeding against such party in respect of which a claim is to be made against any indemnifying party under this Section 6, notify each such indemnifying party of the nature of the claim or the commencement of such action, suit or proceeding, enclosing a copy of all correspondence received and papers served, but the omission so to notify such indemnifying party of any such claim, action, suit or proceeding shall not relieve it from any liability which it may have to any indemnified party otherwise than under this Section 6. In case any such claim shall be asserted or any such action, suit or proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the assertion or commencement thereof, the indemnifying party shall be entitled to participate in, and -9- 10 to assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its selection so to assume the defense thereof the indemnifying party shall not be liable to such indemnified party for any subsequent legal or other expenses. The indemnified party shall have the right to employ its counsel in any such action where the indemnifying party has assumed the defense as aforesaid, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of counsel by such indemnified party has been authorized by the indemnifying party, (ii) the indemnified party shall have reasonably concluded that there may be a conflict of interest between the indemnifying party and the indemnified party in the conduct of the defense of such action (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party) or (iii) the indemnifying party shall not in fact have employed counsel satisfactory to the indemnified party to assume the defense of such action, in any of which events such fees and expenses shall be borne by the indemnifying party. An indemnifying party shall not be liable for any settlement of any action or claim effected without its consent so long as it is performing its obligations under this Section 6. Section 7. Termination. This Agreement may be terminated by Samstock upon written notice to the Company and thereafter shall be of no further force and effect (without any liability by the Company to the Standby Purchaser, Lender or any other party) upon the occurrence of an event of default under the Loan Agreement. Section 8. Survival. The indemnification agreement contained in Section 6 hereof and the representations, warranties, covenants and agreements of the Company and the Standby Purchaser set forth in this Agreement shall remain operative and in full force and effect regardless of (a) any termination of this Agreement, (b) any investigation made on behalf of the Standby Purchaser, or (c) acceptance of Standby Shares under this Agreement. Section 9. Miscellaneous 9.1 This Agreement is made solely for the benefit of the Standby Purchaser and, to the extent provided herein, Lender, and the Company, and their respective successors, and no other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Agreement. 9.2 Neither the Company nor the Standby Purchaser may assign any of its rights under this Agreement without the prior written consent of the other party hereto. 9.3 This Agreement, together with the Loan Documents (as defined in the Loan Agreement), the Second Amended and Restated Investment Agreement and the Warrant, constitute the entire agreement between the Standby Purchaser and Lender, on the one hand, and the Company on the other, and supersedes all prior agreements and understandings relating to the subject matter hereof. In case any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect under the laws of any -10- 11 jurisdiction, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way affected or impaired thereby or under the laws of any other jurisdiction. 9.4 This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, and all such counterparts together constitute but one and the same instrument. 9.5 This Agreement may not be amended, modified or changed, in whole or in part, except by an instrument in writing signed by the Company and the Standby Purchaser. Section 10. Notices. Except as otherwise provided in this Agreement, and unless otherwise notified by the respective addressee, all notices and communications hereunder shall be in writing and shall be deemed to have been duly given when delivered personally to the recipient, one day after being sent by overnight courier (charged prepaid), five days after being mailed to the recipient (postage prepaid) or upon confirmation if transmitted via fax. Notices should be directed as follows: If to the Company: Transmedia Network Inc. 11900 Biscayne Boulevard Miami, Florida 33181 Fax: (305) 892-3342 With a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, New York 10178 Attention: Stephen P. Farrell, Esq. Fax: (212) 309-6273 If to the Standby Purchaser: Samstock, L.L.C. Two N. Riverside Plaza, Suite 600 Chicago, Illinois 60606 Attention: General Counsel Fax: (312) 454-0610 Section 11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws rules thereof. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. TRANSMEDIA NETWORK INC. -11- 12 /s/ Gene Henderson --------------------------------------------- By: Gene Henderson, President and Chief Executive Officer SAMSTOCK, L.L.C. /s/ Donald J. Liebentritt --------------------------------------------- By: Donald J. Liebentritt, Vice President 12 13 EXHIBIT A [FORM OF WARRANT] THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS COVERING SUCH SECURITIES OR (II) SUCH SALE, TRANSFER, ASSIGNMENT, OFFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE NON-TRANSFERABLE, EXCEPT AS PROVIDED HEREIN. TRANSMEDIA NETWORK INC. WARRANT TO PURCHASE 1,000,000 SHARES OF COMMON STOCK VOID AFTER , 2004 THIS CERTIFIES THAT, for value received, [ , a limited liability company] (the "HOLDER"), is entitled to subscribe for and purchase from Transmedia Network Inc., a Delaware corporation (the "COMPANY"), an aggregate of 1,000,000 shares (as adjusted pursuant to Section 3 hereof) of fully paid and nonassessable Common Stock (the "SHARES") of the Company, at the price of $ per share [insert the average of the closing prices of the Common Stock as reported by the New York Stock Exchange during the 20 consecutive trading days preceding the Closing] (the "EXERCISE PRICE") (as adjusted pursuant to Section 3 hereof), and subject to the provisions and upon the terms and conditions hereinafter set forth. 1. Exercise; Payment. (a) Time of Exercise; Expiration. This Warrant is immediately exercisable. This Warrant shall expire at, and shall no longer be exercisable after, 5:00 p.m., Chicago local time, on , 2004. (b) Method of Exercise. (i) Cash Exercise. The purchase rights represented by this Warrant may be exercised by the Holder, at any time, in whole, or from time to time, in part, by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit 1 duly executed) at the principal office of the Company, and by the payment to the Company, by certified, cashier's or other check A-1 14 acceptable to the Company, of an amount equal to the aggregate Exercise Price of the Shares being purchased. (ii) Net Issue Exercise. In lieu of exercising this Warrant, the Holder may elect to receive Shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder a number of shares of the Company's Common Stock computed using the following formula: X = Y(A-B) ------ A Where X = the number of Shares to be issued to the Holder. Y = the number of Shares purchasable under this Warrant. A = the fair market value of one share of the Company's Common Stock. B = the Exercise Price (as adjusted to the date of such calculation). (iii) Fair Market Value. For purposes of this Section 1, the fair market value of the Company's Common Stock shall mean: A. The average closing price of the Company's Common Stock on the New York Stock Exchange or in the event the Company's Common Stock is not then traded on the New York Stock Exchange the average closing price quoted on any exchange on which the Common Stock is listed, as published in the Mid-Western Edition of the Wall Street Journal for the ten consecutive trading days prior to the date of determination of fair market value. B. If the Company's Common Stock is not then traded on the New York Stock Exchange or on another exchange, the per share fair market value of the Common Stock shall be the fair market value price per share as determined in good faith by the Company's Board of Directors. (c) Stock Certificates. In the event of any exercise of the rights represented by this Warrant, certificates for the shares of Common Stock so purchased shall be delivered to the Holder within a reasonable time and, unless this Warrant has been fully exercised or has expired, a new Warrant of identical terms and provisions as those hereof, representing the shares with respect to which this Warrant shall not have been exercised shall also be issued to the Holder within such time. 2. Stock Fully Paid; Reservation of Shares. All of the Shares issuable upon the exercise of the rights represented by this Warrant will, upon issuance and receipt of the Exercise Price therefor, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the A-2 15 Company shall at all times have authorized and reserved for issuance sufficient shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 3. Adjustment of Exercise Price and Number of Shares. The number and kind of Shares purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the occurrence of certain events, as follows: (a) Reclassification. In case of any reclassification or change of outstanding securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), the Company shall, as condition precedent to such transaction, execute a new Warrant providing that the Holder shall have the right to exercise such new Warrant and upon such exercise to receive, in lieu of each share of stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification or change by a holder of one share of stock. Such new Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3. The provisions of this Section 3(a) shall similarly apply to successive reclassifications or changes. (b) Subdivision or Combination of Warrant Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its stock, the Exercise Price shall be proportionately decreased in the case of a subdivision or increased in the case of a combination. (c) Stock Dividends. If the Company at any time while this Warrant is outstanding and unexpired shall pay a dividend with respect to stock payable in, or make any other distribution with respect to stock (except any distribution specifically provided for in the foregoing Section 3(a) and 3(b)) of stock, then the Exercise Price shall be adjusted, from and after the date of determination of stockholders entitled to receive such dividend or distribution, to that price determined by multiplying the Exercise Price in effect immediately prior to such date of determination by a fraction (i) the numerator of which shall be the total number of shares of stock outstanding immediately prior to such dividend or distribution, and (ii) the denominator of which shall be the total number of shares of stock outstanding immediately after such dividend or distribution. (d) Adjustment of Number of Warrant Shares. Upon each adjustment in the Exercise Price, the number of shares of stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of Shares purchasable immediately prior to such adjustment in the Exercise Price by a fraction, the numerator of which shall be the Exercise Price immediately prior to such adjustment and the denominator of which shall be the Exercise Price immediately thereafter. 4. Notice of Adjustments. Whenever the number of Shares purchasable hereunder or the Exercise Price thereof shall be adjusted pursuant to Section 3 hereof, the Company shall provide notice by first class mail to the holder of this Warrant setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the number of Shares which may be purchased and the Exercise Price therefor after giving effect to such adjustment. A-3 16 5. Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder. In lieu of such fractional shares the Company shall make a cash payment therefor based upon the Exercise Price then in effect. 6. Warrant Exchangeable for Different Denominations. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for new Warrants of like tenor representing in the aggregate the purchase rights hereunder, and each of such new Warrants will represent such portion of such rights as is designated by the Holder at the time of such surrender. All Warrants representing portions of the rights hereunder are referred to herein as the "Warrant." 7. Replacement. Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Holder is deemed to be reasonably satisfactory) of the ownership and the loss, theft, destruction or mutilation of this Warrant, and in the case of any such loss, theft or destruction, upon the receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation upon surrender of such Warrant, the Company will (at its expense, except for the cost of any lost security indemnity bond required which shall be paid for by the Holder) execute and deliver in lieu of such Warrant a new Warrant of like kind representing the same rights represented by such lost, stolen, destroyed or mutilated Warrant and dated the date of such lost, stolen, destroyed or mutilated Warrant. 8. Restrictive Legend. The Shares issuable upon exercise of this Warrant (unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form: "The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws and may not be sold, transferred, assigned, offered, pledged or otherwise disposed of unless (i) there is an effective registration statement under such Act and such laws covering such securities or (ii) such sale, transfer, assignment, offer, pledge or other disposition is exempt from the registration and prospectus delivery requirements of such Act and such laws. 9. Restrictions on Transfer. Neither this Warrant, nor any interest herein, may be transferred to any party without the Company's prior written consent; provided, however, that this Warrant may be transferred to any member of the Zell Group (as defined in that certain Amended and Restated Investment Agreement, dated as of March 3, 1998, among the Company, Samstock, L.L.C., EGI-Transmedia Investors, L.L.C. and Halmostock Limited Partnership) at any time, in whole, or from time to time, in part, without the Company's consent, upon delivery to the Company of the Notice of Transfer in the form of Exhibit 2 hereto. 10. Rights of Stockholders. No holder of this Warrant shall be entitled, as a Warrant holder, to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for A-4 17 any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 11. Notices, Etc. All notices and other communications between the Company and the Holder shall be mailed by first class registered or certified mail, postage prepaid, (i) if to the Company, at the Company's executive offices, and (ii) if to the Holder, at such address as may have been furnished to the Company in writing by the Holder. 12. Governing Law, Headings. This Warrant is being delivered in the State of Delaware and shall be construed and enforced in accordance with and governed by the laws of such State. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. Issued this day of , 1999. --- ------- A-5 18 TRANSMEDIA NETWORK INC. By: --------------------------- Its: A-6 19 EXHIBIT 1 NOTICE OF EXERCISE TO: TRANSMEDIA NETWORK INC. 11900 Biscayne Boulevard Miami, Florida 33181 Attention: Chief Executive Officer 1. The undersigned hereby elects to purchase __________ shares of Common Stock of TRANSMEDIA NETWORK INC. pursuant to the terms of the attached Warrant. 2. Method of Exercise (Please mark the applicable blank): The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased. The undersigned elects to exercise the attached Warrant by means of the net exercise provisions of Section 1(b)(ii) of the Warrant. 3. Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below: Name: -------------------------- Address: ----------------------- ----------------------- Signature: ---------------------- Title: ------------------------- Date: -------------------------- A-7 20 EXHIBIT 2 NOTICE OF TRANSFER FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto the right represented by the attached Warrant to purchase * shares of Common Stock of TRANSMEDIA NETWORK INC., to which the attached Warrant relates, and appoints Attorney-in-Fact to transfer such right on the books of TRANSMEDIA NETWORK INC., with full power of substitution in the premises. Dated: By: ------------------------- ---------------------------------- Address: --------------------------- --------------------------- - ------------------- * Insert here the number of shares without making any adjustment for additional shares of Common Stock or any other stock or other securities or property or cash which, pursuant to the adjustment provisions of the Warrant, may be deliverable upon exercise. A-8 21 EXHIBIT B [FORM OF AMENDMENT TO CERTIFICATE OF INCORPORATION] B-1 22 EXHIBIT C [FORM OF SECOND AMENDED AND RESTATED INVESTMENT AGREEMENT] C-1 23 EXHIBIT D [FORM OF OPINION] D-1 EX-99.8 4 SECOND AMENDED INVESTMENT AGREEMENT DATED 6/30/99 1 EXHIBIT 8 SECOND AMENDED AND RESTATED INVESTMENT AGREEMENT Second Amended and Restated Investment Agreement dated as of June 30, 1999, (as amended, supplemented or otherwise modified from time to time, this "Agreement"), among Transmedia Network Inc., a Delaware corporation (the "Company"), Samstock, L.L.C., a Delaware limited liability company ("Samstock"), EGI-Transmedia Investors, L.L.C., a Delaware limited liability company (formerly known as Transmedia Investors, L.L.C., "TNI") (each of the foregoing parties, other than the Company, together with Halmostock Limited Partnership, a Wyoming limited partnership ("Halmostock"), individually an "Investor" and collectively the "Investors"), and solely with respect to Section 5 of this Agreement, Robert M. Steiner, as trustee under declaration of trust dated March 9, 1983, as amended, establishing the Robert M. Steiner Revocable Trust ("Steiner Trust"). W I T N E S S E T H: WHEREAS, pursuant to that certain Stock Purchase and Sale Agreement, dated as of November 6, 1997, among the Company, Samstock and TNI (the "Purchase Agreement"), and that certain Assignment Agreement, dated as of March 3, 1998, among the Company, Samstock, TNI, and Halmostock, on March 3, 1998, the Company issued and sold to the Investors an aggregate of 2,500,000 newly issued shares (collectively, the "Shares") of the Company's Common Stock, par value $.02 per share ("Common Stock"), and warrants (collectively, the "Warrant") to purchase an additional 1,200,000 shares (collectively, the "Warrant Shares") of Common Stock; WHEREAS, in connection with the Purchase Agreement and the transactions contemplated thereby, the Company, Samstock, TNI and Halmostock entered into that certain Amended and Restated Investment Agreement, dated as of March 3, 1998 (the "First Amended Investment Agreement"); WHEREAS, as of March 3, 1998, Samstock and Halmostock sold to the Steiner Trust an aggregate of 47,000 of the Shares and warrants to purchase an aggregate of 22,560 of the Warrant Shares, and the Steiner Trust executed a joinder to Section 5 of the First Amended Investment Agreement; WHEREAS, reference is made to that certain Credit Agreement dated as of the date hereof, 1999 (the "Loan Agreement"), by and among GAMI Investments, Inc., a Delaware corporation and an affiliate of Samstock and TNI ("GAMI") as lender, and each of the Company and its wholly-owned subsidiaries, Transmedia Restaurant Company, Inc., Transmedia Service Company, Inc., and TMNI International Incorporated, as borrowers, whereby GAMI loaned to the borrowers on the date hereof an aggregate principal amount of $10 million (the "Loan"); WHEREAS, in connection with the Loan and as more particularly described in the Loan Agreement, the Company intends to implement a rights offering (the "Rights Offering") pursuant to which it is anticipated that the Company will distribute to all of its stockholders of record as of record date to be determined, and on terms and conditions acceptable to GAMI, nontransferable rights to subscribe for and purchase an aggregate of up to $10,000,000 newly issued Series A senior convertible redeemable preferred stock of the Company, par value $.10 per share ("Preferred Stock"), to be established by the Company's Board of Directors in connection with the Rights Offering pursuant to a Certificate of Designation of Preferred Stock substantially in the form 2 of Exhibit G to the Loan Agreement; WHEREAS, the Loan Agreement requires that the Company pay to GAMI 100% of the gross cash proceeds received by the Company from the Rights Offering to be applied by GAMI against obligations owed by the borrowers to GAMI under the Loan Agreement all as more particularly described in the Loan Agreement; WHEREAS, in order to assure the success of the Rights Offering, and the receipt by the Company of sufficient gross cash proceeds therefrom to repay all outstanding amounts under the Loan, Samstock has entered into that certain Standby Purchase Agreement with the Company, dated as the date hereof (the "Standby Purchase Agreement"), whereby Samstock has agreed to act as "Standby Purchaser" for a specified amount of shares of Series A Preferred Stock available for purchase upon the expiration of unexercised rights, all as more particularly set forth in the Standby Purchase Agreement; WHEREAS, in consideration of GAMI's obligations under the Loan Agreement and Samstock's obligations to act as Standby Purchaser under the Standby Purchase Agreement, the Loan Agreement and the Standby Purchase Agreement require the Company to issue to Samstock a warrant (the "Rights Offering Warrant"), substantially in the form of Exhibit A to the Standby Purchase Agreement, to purchase an aggregate of 1,000,000 shares (the "Rights Offering Warrant Shares") of the Company's Common Stock, upon the terms and subject to the conditions set forth in the Loan Agreement and the Standby Purchase Agreement; WHEREAS, the Company, Samstock, TNI, and Melvin Chasen and Iris Chasen, individuals residing in the State of Florida (together "Chasen"), have entered into an Amended and Restated Agreement Among Stockholders, dated as of March 3, 1998 (the "Agreement Among Stockholders"); WHEREAS, the Company, Samstock, TNI and Halmostock, have entered into a Stockholders' Agreement, dated as of March 3, 1998 (the "Stockholders' Agreement"); WHEREAS, the Company and each of the Investors other than Halmostock are entering into this Agreement, with the approval of at least a majority of Disinterested Directors (as defined in the First Amended Investment Agreement), to establish certain arrangements with respect to the relationships between them, and intend for this Agreement to amend, restate and supersede the First Amended Investment Agreement in its entirety, only with respect to the rights and obligations of each of the parties to the First Amended Investment Agreement other than Halmostock; it being understood that the First Amended Investment Agreement will continue in full force and effect with respect to the rights and obligations of Halmostock thereunder vis a vis each of the other Investors and the Company, and this Agreement will be read together with the First Amended Investment Agreement to determine the rights and obligations of all the Investors including Halmostock and the Company vis a vis all of them in respect of the subject matter of this Agreement and the First Amended Investment Agreement. NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows: -2- 3 ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 The terms "beneficial ownership," "person" and "group" shall have the respective meanings ascribed to such terms pursuant to Regulation 13D-G adopted by the Securities and Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date hereof. The term "affiliate" shall have the meaning ascribed to such term pursuant to Rule 12b-2 under the Exchange Act, as in effect on the date hereof. 1.2 The "Combined Voting Power" at any measurement date shall mean the total number of votes which could have been cast in an election of directors of the Company had a meeting of the stockholders of the Company been duly held based upon a record date as of the measurement date if all Company Voting Securities then outstanding and entitled to vote at such meeting were present and voted to the fullest extent possible at such meeting. 1.3 "Company Voting Securities" shall mean, collectively, Common Stock, Preferred Stock, any other preferred stock of the Company that is entitled to vote generally for the election of directors, any other class or series of Company securities that is entitled to vote generally for the election of directors and any other securities, warrants, options or rights of any nature (whether or not issued by the Company) that are convertible into, exchangeable for, or exercisable for the purchase of, or otherwise give the holder thereof any rights in respect of, Common Stock, Preferred Stock, any other Company preferred stock that is entitled to vote generally for the election of directors, or any other class or series of Company securities that is entitled to vote generally for the election of directors. 1.4 "Disinterested Director" means Independent Directors who are "disinterested directors" as that term is used in Section 144 of the Delaware General Corporate Law. 1.5 "Effective Date" means March 3, 1998. 1.6 "Independent Director" means directors of the Company who (i) are not current or former employees or officers of the Company, (ii) are not serving as designees of Samstock pursuant to Article IV hereof, (iii) are not 5% or greater stockholders of the Company, and (iv) have no financial interest in and are not otherwise associated with any of the Investors, the Company, any subsidiary of the Company or any of their respective affiliates, excluding, however, any equity interest of not more than 2% of any publicly-held entity. 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 a member of the Zell Group might be interested. 1.7 The "Maximum Permitted Voting Power" at any measurement date shall mean the Voting Power as of such measurement date of all Company Voting Securities, regardless of the holder thereof, (i) represented by the Shares or the Warrant Shares, (ii) outstanding as of the date hereof and subject to the Agreement Among Stockholders or the Stockholders' Agreement, (iii) issued by the Company after the date hereof and subject to the Agreement Among Stockholders or the Stockholders' Agreement upon issuance, or (iii) represented by the Preferred Shares, the Rights Offering Warrant Shares or the Preferred Stock Conversion Shares; provided, however, that, in the event that the Company issues any Company Voting Securities after the date hereof, -3- 4 the Maximum Permitted Voting Power shall be adjusted so that the percentage of the Combined Voting Power represented by the Maximum Permitted Voting Power shall not be reduced. 1.8 "Zell Affiliate" means Samstock, TNI and any of their respective affiliates under control of or common control with Samstock or TNI (exclusive of Halmostock, Chasen and their respective affiliates). 1.9 "Zell Group" means (i) Samstock, (ii) TNI, (iii) any member of Samstock or TNI, (iv) any affiliate of any member of Samstock or TNI under control of, or common control with, such member, (v) Halmostock, (vi) any partner of Halmostock, (vii) any affiliate of any partner of Halmostock under control of, or common control with, Halmostock, and (viii) any corporations, partnerships, limited liability companies or other legal entities that are the affiliates of any of the foregoing, collectively; provided, however, that publicly held entities that might fall within this definition (a "Public Zell Affiliate") shall not be treated as affiliates of any member of the Zell Group hereunder unless any member of the Zell Group or any of its affiliates took any action, directly or indirectly, to suggest, encourage or assist such entity in taking the relevant action to be attributed to the Zell Group hereunder. For purposes of the preceding sentence and the similar clause appearing in the second sentence of Section 3.1, the failure of any member of the Zell Group or any of its affiliates, upon learning of a Public Zell Affiliate's action, to request that such Public Zell Affiliate refrain from taking such action because of the provisions of this Agreement will be deemed to constitute "encouraging or assisting" in such action. 1.10 "Zell Associates" means any member of the Zell Group other than those persons or entities described in clauses (v) through (vii) of Section 1.9 and clause (viii) of Section 1.9 as it pertains to said clauses (v) through (vii). 1.11 "Preferred Shares" means the shares of Preferred Stock acquired by Samstock, TNI or other members of the Zell Group in the Rights Offering, including without limitation, any shares of Preferred Stock acquired pursuant to the Standby Purchase Agreement. 1.12 "Preferred Stock Conversion Shares" means shares of Common Stock issuable upon conversion of Preferred Stock. 1.13 "Standstill Provisions" means collectively Article III hereof in its entirety and Section 4.5 in its entirety. ARTICLE II REPRESENTATIONS AND WARRANTIES 2.1 Samstock and TNI jointly and severally represent and warrant to the Company and Chasen as follows: (a) Each of Samstock and TNI is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware. Each of Samstock and TNI has the limited liability company power and authority to enter into this Agreement and perform its obligations hereunder. (b) This Agreement has been duly authorized, executed and delivered by each of Samstock and TNI and constitutes the legal, valid and binding agreement of each of Samstock and TNI, enforceable against each of them in accordance with the terms hereof. -4- 5 (c) Neither the execution and delivery of this Agreement nor the performance by Samstock or TNI of its obligations hereunder will conflict with, or result in a breach of, or constitute a default under, any law, rule, regulation, judgment, order or decree of any court, arbitrator or governmental agency or instrumentality, or any agreement or instrument to which Samstock, TNI or their respective properties are bound or by which they are affected or any organizational documents of Samstock or TNI. (d) As of the Effective Date, no shares of Common Stock (other than the Shares and the Warrant Shares) were beneficially owned by Samstock or TNI. 2.2 [Intentionally Omitted] 2.3 The Company represents and warrants to Investors as follows: (a) The Company is a validly existing corporation under the laws of the jurisdiction of its organization and has the corporate power and authority to enter into this Agreement and perform its obligations hereunder. (b) This Agreement has been duly authorized, executed and delivered by the Company and constitutes the legal, valid and binding agreement of the Company, enforceable against the Company in accordance with the terms hereof. (c) Neither the execution and delivery of this Agreement nor the performance of its obligations hereunder will conflict with, or result in a breach of, or constitute a default under, any law, rule, regulation, judgment, order or decree of any court, arbitrator or governmental agency or instrumentality, or any agreement or instrument to which the Company is bound or by which it is affected or any charter documents of the Company. (d) The execution, delivery and performance of this Agreement by the Company have been duly and validly authorized by the Board of Directors of the Company (the "Board") and have been approved by a majority of the Disinterested Directors of the Company (within the meaning of -5- 6 Section 3.1 of the First Amended Investment Agreement), and no other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery and performance of this Agreement by the Company. ARTICLE III STANDSTILL AGREEMENT 3.1 Acquisition of Company Voting Securities. Except as the same may be approved by a majority of the Disinterested Directors in a specific resolution to that effect adopted prior to the taking of such action, from and after the Effective Date and prior to the fifth anniversary of the Effective Date, no member of the Zell Group shall, directly or indirectly, acquire, offer to acquire, agree to acquire, become the beneficial owner of or obtain any rights in respect of any Company Voting Securities, by purchase or otherwise, or take any action in furtherance thereof, if the effect of such acquisition, agreement or other action would be (either immediately or upon consummation of any such acquisition, agreement or other action, or expiration of any period of time provided in any such acquisition, agreement or other action) to increase the aggregate beneficial ownership of Company Voting Securities by the Zell Group to such number of Company Voting Securities that represents or possesses greater than the Maximum Permitted Voting Power. Notwithstanding the foregoing maximum limitations, (A) no member of the Zell Group shall be obligated to dispose of any Company Voting Securities beneficially owned in violation of such maximum limitations if, and solely to the extent that, its beneficial ownership is or will be increased solely as a result of (1) a repurchase of any Company Voting Securities by the Company or any of its subsidiaries if such repurchase was approved by a majority of the Disinterested Directors or (2) the purchase by any Public Zell Affiliate not otherwise constituting a part of the Zell Group in accordance with Section 1.9 hereof unless any member of the Zell Group took any action, directly or indirectly, to suggest, encourage or assist in such purchase, and (B) the foregoing shall not prohibit any purchase of Company Voting Securities directly from the Company pursuant to any rights, oversubscription rights or standby purchase obligations in connection with rights offerings by the Company or exercise of any stock options granted by the Company. For purposes of calculating the maximum limitations, all Company Voting Securities that are the subject of an agreement, arrangement or understanding pursuant to which the Zell Group or any member thereof has the right to obtain beneficial ownership of such securities in the future (including the Warrant Shares and the Rights Offering Warrant Shares to the extent the Warrant and the Rights Offering Warrant have not been exercised or has not expired) shall also be deemed to be outstanding and beneficially owned by the Zell Group or the applicable member thereof. 3.2 Proxy Solicitations, etc. Prior to the fifth anniversary of the Effective Date, no member of the Zell Group shall solicit proxies, assist any other person in any way, directly or indirectly, in the solicitation of proxies, become a "participant" in a "solicitation" or assist any "participant" in a "solicitation" (as such terms are defined in Rule 14a-1 of Regulation 14A under the Exchange Act) in opposition to the recommendation of a majority of the Disinterested Directors, submit any proposal for the vote of stockholders of the Company, in each case (a) without the prior approval of the majority of the Disinterested Directors or (b) other than with respect to Company Voting Securities (i) held by any member of the Zell Group or (ii) subject to the Agreement Among Stockholders or the Stockholders' Agreement. 3.3 No Voting Trusts, Pooling Agreements, or Formation of "Groups". Except as the same may be approved by a majority of the Disinterested Directors in a specific resolution to that effect adopted prior to the taking of such action, prior to the fifth anniversary of the Effective Date, no member of the Zell Group shall (a) form, join or in any other way participate in a partnership, pooling agreement, syndicate, voting trust or other "group" with respect to Company Voting -6- 7 Securities other than (i) the Zell Group or (ii) with any Company stockholders who are parties to the Agreement Among Stockholders or the Stockholders' Agreement as of the date hereof or hereafter become parties to the Agreement Among Stockholders or the Stockholders' Agreement in each case in accordance with the terms thereof as a result of a sale, assignment or other transfer of Company Voting Securities that are subject to the Agreement Among Stockholders or the Stockholders' Agreement ("Other Covered Stockholders"); or (b) enter into any agreement or arrangement or otherwise act in concert with any other person other than a member of the Zell Group (provided such member of the Zell Group is itself bound by the terms of this Agreement), or a holder of any interest in any entity included within the Zell Group, for the purpose of acquiring, holding, voting or disposing of Company Voting Securities, other than with any Other Covered Stockholders. 3.4 No Solicitation of Bidders. Prior to the fifth anniversary of the Effective Date, no member of the Zell Group shall directly or indirectly assist, encourage or induce any person to bid for or acquire outstanding Company Voting Securities (other than any Company Voting Securities held by the Zell Group) in any transaction or series of related transactions, unless the consummation of such transaction or series of related transactions requires approval of a majority of the Board of Directors. Prior to disclosing any confidential non-public information concerning the Company to such person, such person shall have executed and delivered to the Zell Group a confidentiality and standstill agreement on substantially the same terms as those set forth in the letter agreement dated July 16, 1997, entered into between the Company and an affiliate of Samstock and TNI in connection with the transactions contemplated by the Purchase Agreement, with such duration as shall be appropriate under the circumstances in the reasonable judgment of the Zell Group. Promptly upon the Zell Group entering into any written agreement or arrangement with such person concerning a transaction covered by this Section 3.4 (including such aforementioned confidentiality and standstill agreement), the Zell Group shall notify the Company's Board of Directors and provide the Company's Board of Directors with copies of the same; provided, however, that the mere sale of Company Voting Securities by any member of the Zell Group shall not constitute assisting, encouraging or inducing within the meaning of this Section 3.4. 3.5 Non-Circumvention. Except as the same may be approved by a majority of the Disinterested Directors in a specific resolution to that effect adopted prior to the taking of such action, prior to the fifth anniversary of the Effective Date, no member of the Zell Group shall take any action, alone or in concert with any other person to circumvent the limitations of the provisions of Article III of this Agreement. Without limiting the generality of the foregoing, without such approval no member of the Zell Group shall (i) present to the Company or to any third party any proposal that can reasonably be expected to result in any increase beyond the Maximum Permitted Voting Power of Company Voting Securities beneficially owned in the aggregate by the Zell Group, (ii) publicly suggest or announce its willingness or desire to engage in a transaction or group of transactions that would result in any increase beyond the Maximum Permitted Voting Power of Company Voting Securities beneficially owned in the aggregate by the Zell Group, or (iii) initiate, request, induce or attempt to induce or give encouragement to any other person to initiate any proposal that can reasonably be expected to result in any increase beyond the Maximum Permitted Voting Power of Company Voting Securities beneficially owned in the aggregate by the Zell Group. ARTICLE IV VOTING OF COMPANY SECURITIES AND RELATED MATTERS 4.1 Each member of the Zell Group that is a holder of record of Company Voting -7- 8 Securities shall be present, and each member of the Zell Group that is a beneficial owner of Company Voting Securities shall cause the holder of record to be present, in person or by proxy, at all meetings of stockholders of the Company so that all Company Voting Securities owned of record or beneficially by the Zell Group may be counted for the purpose of determining the presence of a quorum at such meetings. 4.2 So long as Samstock is entitled to designate any directors in accordance with the provisions of this Article IV, except to the extent otherwise provided herein, the Company shall take all necessary or appropriate action to assist in the nomination and election as directors of (i) that number of individuals specified in this Article IV designated by Samstock to be elected as directors of the Company (provided, with respect to designees designated under Sections 4.4 and 4.6 only, such designees are reasonably acceptable to the Independent Directors at the time of their designation), and (ii) two Independent Directors. All persons to be so designated as Independent Directors shall be individuals selected by a majority of the Independent Directors then in office and shall be mutually acceptable to Samstock on the one hand and a majority of the Independent Directors on the other hand. The Company hereby agrees and acknowledges that Sam Zell, F. Philip Handy, Rod Dammeyer and Steven J. Halmos are reasonably acceptable to the Independent Directors as directors of the Company. The Company hereby agrees and acknowledges that Lester Wunderman is reasonably acceptable as an Independent Director. The Company further agrees that one position on the Board of Directors of the Company is intended to be filled by the chief executive officer to be selected by the Board of Directors of the Company, and that in no event shall the chief executive officer of the Company count as a designee of Samstock. Samstock shall cause its designees on the Board of Directors of the Company to take all necessary or appropriate action to assist in the nomination and election as directors of all such nominees as may be selected to serve as Independent Directors in the manner described above. Except in furtherance of the exercise of Samstock's rights pursuant to Section 4.7, the Zell Group and the directors designated by Samstock shall not vote (as stockholders or directors) in favor of, and shall not take any other action in furtherance of or seeking to cause, a reduction of the number of directors of the Company below seven directors or the removal of any Independent Directors. 4.3 For purposes of this Agreement, directors "designated by Samstock" shall include directors designated by Samstock as anticipated by this Article IV, and any other directors of the Company (other than the Company's chief executive officer) affiliated or associated with any member of the Zell Group. 4.4 In addition to any other rights to designate directors of the Company under this Article IV, Samstock shall be entitled to designate the following number of directors pursuant to Section 4.2 hereof: (a) so long as the members of the Zell Group that have executed this Agreement as parties (the "Zell Contracting Parties") beneficially own collectively at least 15% of the Combined Voting Power of all Company Voting Securities (including, for these purposes, the Warrant Shares and the Rights Offering Warrant Shares issuable upon exercise of the Warrant and the Rights Offering Warrant, respectively, until such time as the Warrant or the Rights Offering Warrant, as applicable, expires), Samstock shall have the right to designate two directors of the Company, provided such designees are reasonably acceptable to the Independent Directors at the time of their designation (it being hereby acknowledged and agreed by the Company that each of Sam Zell, F. Philip Handy, Rod Dammeyer and Steven J. Halmos will be acceptable to the Company at the time of designation); and (b) so long as the Zell Contracting Parties beneficially own less than 15%, but at least -8- 9 5% of the Combined Voting Power of all Company Voting Securities (as so calculated), Samstock shall have the right to designate one director of the Company, provided such designee is reasonably acceptable to the Independent Directors at the time of his or her designation (it being hereby acknowledged and agreed by the Company that each of Sam Zell, F. Philip Handy, Rod Dammeyer and Steven J. Halmos will be acceptable to the Company at the time of designation); provided, however, that at any time when the Zell Contracting Parties shall no longer beneficially own at least 15% of the Combined Voting Power of all Company Voting Securities (as so calculated), Samstock shall cause one of its two designees under this Section 4.4 (but not those, if any, designated under Section 4.7 hereof) to resign forthwith such that only one designee under this Section 4.4 remains on the Board of Directors of the Company; and provided, further, that at any time when the Zell Contracting Parties shall no longer beneficially own at least 5% of the Combined Voting Power of all Company Voting Securities (as so calculated), Samstock shall not have the right to designate any directors of the Company under this Section 4.4, Samstock's rights under this Section 4.4 shall terminate, Samstock shall cause its designees under this Section 4.4 (but not those, if any, designated under Section 4.7 hereof) to resign forthwith such that no designee of Samstock under this Section 4.4 remains on the Board of Directors of the Company and all of the covenants under Article IV of this Agreement pertaining to Samstock's designees under Section 4.4 shall lapse and no longer be of any force or effect. In addition, all of the covenants under Article III of this Agreement shall lapse and no longer be of any force or effect if for any reason any of the director designees who are designated by Samstock pursuant to the rights granted by this Article IV, and, with respect to any of the director designees who are designated by Samstock under Sections 4.4 or 4.6 only, are reasonably acceptable to the Independent Directors at the time of their designation in accordance with Sections 4.2, 4.4 and/or 4.6, shall not be nominated for election as a director of the Company with the unanimous recommendation of all of the directors of the Company (other than those directors designated by Samstock pursuant to this Article IV) at the next election of directors of the Company following Samstock's designation. At any time when Samstock shall have the right to designate any directors pursuant to this Article IV, the Company shall not increase the number of directors to more than seven directors without the prior written consent of Samstock, except in furtherance of the exercise by Samstock of its rights under Section 4.6 or Section 4.7. 4.5 Except as expressly set forth above, the Investors shall vote all Company Voting Securities owned of record by the Investors and shall cause all Company Voting Securities owned beneficially by the Investors to be voted with respect to the election or removal of directors of Company, (a) either (i) in accordance with the recommendations of a majority of the Disinterested Directors, or (ii) in the same proportions (including abstentions) as the holders of record of Company Voting Securities other than those beneficially owned by the Zell Group that are entitled to vote on the election of directors (or such other matter) vote their Company Voting Securities, provided, however, that notwithstanding the foregoing subparagraph (a), the Investors may at all times vote their Company Voting Securities for the election or retention of any directors designated by Samstock in accordance with this Article IV. 4.6. Notwithstanding anything to the contrary in this Agreement, in addition to any other rights to designate directors of the Company under this Article IV, in the event Samstock, pursuant to the Standby Purchase Agreement, purchases more than 25% of the total number of shares of Preferred Stock issued by the Company in the Rights Offering (exclusive of those shares of Preferred Stock purchased by Samstock pursuant to its basic subscription privilege or its obligation to purchase shares of Preferred Stock not purchased by TNI or TNI's members pursuant to its or their basic subscription privileges), Samstock shall have the right to designate one additional director to the Company, which individual may be designated in Samstock's sole -9- 10 discretion without obtaining the acceptance or approval of the Disinterested Directors or any other person or entity, to serve for a period of three years or, if earlier, until the time when the Zell Contracting Parties shall no longer beneficially own at least 15% of the Combined Voting Power of all Company Voting Securities (including, for these purposes, the Warrant Shares and the Rights Offering Warrant Shares issuable upon exercise of the Warrant and the Rights Offering Warrant, respectively, until such time as the Warrant or the Rights Offering Warrant, as applicable, expires), in which event, Samstock shall cause its designee under this Section 4.6 (but not those designees, if any, designated under Section 4.7 hereof) to resign forthwith. 4.7 Notwithstanding anything to the contrary in this Agreement, in addition to any other rights to designate directors of the Company under this Article IV, upon the occurrence of any Event of Default (as defined in the Loan Agreement), and at any time thereafter during the continuance thereof, Samstock shall have the right to designate such additional number of directors (which individuals may be designated in Samstock's sole discretion without obtaining the acceptance or approval of the Disinterested Directors or any other person or entity), and the Company shall take all necessary or appropriate action to increase the number of directors constituting the Company's Board of Directors and/or use its reasonable best efforts to obtain resignations of individuals then serving as directors (other than directors designated by Samstock), and assist in the nomination and election as directors such additional designees of Samstock, such that, after taking such actions into account, the number of individuals designated by Samstock under this Article IV serving as directors of the Company shall constitute at least a majority of the total number of directors, effective as soon as practicable, but in any event no later than two (2) business days after Samstock notifies the Company in writing of its intent to exercise the right provided herein and the identity of the individuals Samstock desires to designate (and, if applicable, the individuals Samstock desires to resign). 4.8 Notwithstanding anything to the contrary in this Agreement, automatically upon the occurrence of an Event of Default (as defined in the Loan Agreement) and the expiration of any and all cure periods, if any, applicable thereto, without further action or notice by any party, the Standstill Provisions shall lapse in their entirety and no longer be of any force or effect with respect to the Zell Associates, and none of the Standstill Provisions shall be enforceable against any Zell Associate, as if such Standstill Provisions had never existed; it being understood, that this provision shall not apply to any members of the Zell Group other than the Zell Associates, and notwithstanding the foregoing the Standstill Provisions shall continue in full force and effect with respect to any members of the Zell Group other than the Zell Associates. ARTICLE V REGISTRATION RIGHTS 5.1 Definitions. For purposes of this Article V: (a) The term "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act of 1933, as amended (the "Act"). (b) The term "Registrable Securities" means shares of Common Stock or Preferred Stock held, from time to time, by any member of the Zell Group or any Other Covered Stockholders. (c) The term "Holder" means any (i) Zell Contracting Party, (ii) Other Covered Stockholder who is a party hereto or who executes and delivers to the Company a joinder agreement, agreeing to be legally bound by this Article V, and (iii) the Steiner Trust, in each case -10- 11 who owns of record Registrable Securities. (d) The term "Rule 415 Offering" means an offering on a delayed or continuous basis pursuant to Rule 415 (or any successor rule to similar effect) promulgated under the Act. (e) The term "Shelf Registration Statement" means a registration statement intended to effect a shelf registration in connection with a Rule 415 Offering. 5.2 Shelf Registrations. (a) Shares and Warrant Shares. As soon as practicable after the Effective Date, but in any event no later than ninety (90) days after the Effective Date, the Company shall prepare and file with the SEC a Shelf Registration Statement (which shall include pledgees of any selling stockholder under the caption "plan of distribution" contained in such Shelf Registration Statement) with respect to all Shares and Warrant Shares and use its reasonable efforts to cause such Shelf Registration Statement to become effective and keep such registration statement effective until such time as all Shares and Warrant Shares have been sold or disposed of thereunder or sold, transferred or otherwise disposed of (other than pursuant to a pledge of such Registrable Securities) to a person that is not a Holder or, with respect to any Warrant Shares for which the Warrant has not been exercised prior to its expiration, until such time as the Warrant has expired. Notwithstanding the foregoing, if the Company shall furnish to Samstock a certificate signed by the Chief Executive, Chief Operating, or Chief Financial Officer of the Company stating that, in the good faith judgment of a majority of the Disinterested Directors, it would be materially detrimental to the Company for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the Samstock's request; provided, however, that the Company may not utilize this right more than once in any 12-month period. (b) Additional Shares. If the Company shall at any time receive a written request from Samstock (or its designee) on behalf of any Zell Affiliates who are the Holders of Registrable Securities that the Company file a Shelf Registration Statement with respect to any Registrable Securities, then, within sixty (60) days after the receipt of such request, the Company shall prepare and file with the SEC a Shelf Registration Statement (which shall include pledgees of any selling stockholder in the "plan of distribution") with respect to all Registrable Securities which the Holders request to be registered and use its reasonable efforts to cause such Shelf Registration Statement to become effective and keep such Shelf Registration Statement effective until such time as all Registrable Securities covered thereby have been sold or disposed of thereunder or sold, transferred or otherwise disposed of (other than pursuant to a pledge of such Registrable Securities) to a person that is not a Holder. The rights to cause the Company to file a Shelf Registration Statement under this Section 5.2(b) shall be in addition to the rights to cause the Company to file a Shelf Registration Statement under Section 5.2(a). Notwithstanding the foregoing, if the Company shall furnish to Samstock a certificate signed by the Chief Executive, Chief Operating, or Chief Financial Officer of the Company stating that, in the good faith judgment of a majority of the Disinterested Directors, it would be materially detrimental to the Company for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the Samstock's request; provided, however, that the Company may not utilize this right more than twice in any 12-month period. (c) Schedule 13D Statement. Samstock and TNI covenant and agree that they will, and that they shall cause each Zell Affiliate which shall at any time hold Shares and/or Warrant Shares subject to Section 5.2(a) hereof, or Preferred Shares, Preferred Stock Conversion Shares -11- 12 and/or Rights Offering Warrant Shares subject to Section 5.2(d) hereof, to include in any Schedule 13D filed by or on behalf of such Holder a statement to the effect that such Shelf Registration Statement was put in effect for the sole purpose of facilitating such Holder's ability to margin its stock and does not represent any present intention on behalf of the Holder to dispose of any Shares, Warrant Shares, Preferred Shares, Preferred Stock Conversion Shares or Rights Offering Warrant Shares covered thereby. (d) Preferred Shares, Preferred Stock Conversion Shares and Rights Offering Warrant Shares. As soon as practicable after the closing of the Rights Offering, but in any event no later than ninety (90) days thereafter, the Company shall prepare and file with the SEC a Shelf Registration Statement (which shall include pledgees of any selling stockholder under the caption "plan of distribution" contained in such Shelf Registration Statement) with respect to all Preferred Shares, Preferred Stock Conversion Shares and Rights Offering Warrant Shares and use its reasonable efforts to cause such Shelf Registration Statement to become effective and keep such registration statement effective until such time as all Preferred Shares, Preferred Stock Conversion Shares and Rights Offering Warrant Shares have been sold or disposed of thereunder or sold, transferred or otherwise disposed of (other than pursuant to a pledge of such Registrable Securities) to a person that is not a Holder or, with respect to any Rights Offering Warrant Shares for which the Rights Offering Warrant has not been exercised prior to its expiration, until such time as the Rights Offering Warrant has expired. Notwithstanding the foregoing, if the Company shall furnish to Samstock a certificate signed by the Chief Executive, Chief Operating, or Chief Financial Officer of the Company stating that, in the good faith judgment of a majority of the Disinterested Directors, it would be materially detrimental to the Company for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the Samstock's request; provided, however, that the Company may not utilize this right more than once in any 12-month period. 5.3 Additional Obligations of the Company. Whenever the Company has filed a Shelf Registration Statement under this Article V, the Company shall, as expeditiously as reasonably possible: (a) Prepare and file with the SEC such amendments and supplements to such Shelf Registration Statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered thereby. (b) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities covered by such Shelf Registration Statement owned by them. (c) Use its best efforts to register and qualify the securities covered by such Shelf Registration Statement under such other securities or Blue Sky laws of such states or other jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions where it is not so subject. -12- 13 (d) Notify each Holder of Registrable Securities covered by such Shelf Registration Statement at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and then use its best efforts to promptly correct such statement or omission. Notwithstanding the foregoing and anything to the contrary set forth in this Section 5.2, each Holder acknowledges that the Company shall have the right to suspend the use of the prospectus forming a part of a Shelf Registration Statement if such offering would interfere with a pending corporate transaction or for other reasons until such time as an amendment to the Shelf Registration Statement has been filed by the Company and declared effective by the SEC, or until such time as the Company has filed an appropriate report with the SEC pursuant to the Exchange Act. Each Holder hereby covenants that it will (a) keep any such notice strictly confidential, and (b) not sell any shares of Common Stock pursuant to such prospectus during the period commencing at the time at which the Company gives the Holder notice of the suspension of the use of such prospectus and ending at the time the Company gives the Holder notice that it may thereafter effect sales pursuant to such prospectus. The Company shall only be able to suspend the use of such prospectus for periods aggregating no more than 90 days in respect of any registration. 5.4 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Article V with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder's Registrable Securities and as may be required from time to time to keep such registration current. 5.5 Expenses of Shelf Registration. All expenses incurred by or on behalf of the Company in connection with registrations, filings or qualifications pursuant to Section 5.2 , including, without limitation, all registration, filing and qualification fees, printers' and accounting fees, and fees and disbursements of counsel for the Company, shall be borne by the Company. In no event shall the Company be obligated to bear any underwriting discounts or commissions or brokerage fees or commissions relating to Registrable Securities or the fees and expenses of counsel to the selling Holders. 5.6 Indemnification. In the event any Registrable Securities are included in a Shelf Registration Statement under this Article V: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder and the affiliates of such Holder, and their respective directors, officers, general and limited partners, agents and representatives (and the directors, officers, affiliates and controlling persons thereof), and each other person, if any, who controls such Holder within the meaning of the Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus (but only if such statement is not corrected in the final prospectus) contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to -13- 14 make the statements therein not misleading (but only if such omission is not corrected in the final prospectus), or (iii) any violation or alleged violation by the Company in connection with the registration of Registrable Securities under the Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Act, the Exchange Act or any state securities law; and the Company will pay to each such Holder, affiliate or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 5.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder or controlling person. Each indemnified party shall furnish such information regarding itself or the claim in question as an indemnifying party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom. (b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this Section 5.6(b) in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 5.6(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of such Holder, which consent shall not be unreasonably withheld; provided, that, in no event shall any indemnity under this Section 5.6(b) exceed the gross proceeds from the offering received by such Holder. (c) Promptly after receipt by an indemnified party under this Section 5.6 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 5.6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties. The failure to deliver written notice to the indemnifying party within a reasonable time after the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 5.6 to the extent of such prejudice, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 5.6. The indemnified party shall have the right, but not the obligation, to participate in the defense of any action referred to above through counsel of its own choosing and shall have the right, but not the obligation, to assert any and all separate defenses, cross claims or counterclaims which it may have, and the -14- 15 fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the employment of such counsel has been specifically authorized in advance by the indemnifying party, (ii) there is a conflict of interest that prevents counsel for the indemnifying party from adequately representing the interests of the indemnified party or there are defenses available to the indemnified party that are different from, or additional to, the defenses that are available to the indemnifying party, (iii) the indemnifying party does not employ counsel that is reasonably satisfactory to the indemnified party within a reasonable period of time, or (iv) the indemnifying party fails to assume the defense or does not reasonably contest such action in good faith, in which case, if the indemnified party notifies the indemnifying party that it elects to employ separate counsel, the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party and the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party; provided, however, that, the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm (in addition to one firm acting as local counsel) for all indemnified parties. (d) The obligations of the Company and the holders under this Section 5.6 shall survive the completion of any offering of Registrable Securities in a Shelf Registration Statement under this Article V. (e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement (if any) entered into in connection with any underwritten public offering of the Registrable Securities are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control. 5.7 Reports Under the Exchange Act. With a view to making available to the holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to: (a) use its best efforts to make and keep public information available, as those terms are understood and defined in Rule 144; (b) use its best efforts to file with the SEC in a timely manner all reports and other documents required under the Act and the Exchange Act; and (c) furnish to any Holder forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144, or as to whether it qualifies as a registrant whose securities may be resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information (and the Company shall take such action) as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form. 5.8 No Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Article V may only be assigned by a Holder to a transferee or assignee of any Registrable Securities if (i) such transferee or assignee is a Zell Contracting Party and (ii) immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act. 5.9 Waiver Procedures. The observance by the Company of any provision of this -15- 16 Article V may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Holders of a majority of the Registrable Securities, and any waiver effected in accordance with this paragraph shall be binding upon each Holder of Registrable Securities. 5.10 "Market Stand-off" Agreement. Any Holder of Registrable Securities, if requested by an underwriter of any registered public offering of Company securities being sold in a firm commitment underwriting, agrees not to sell or otherwise transfer or dispose of any Common Stock (or other Company Voting Securities) held by such Holder other than shares of Registrable Securities included in the registration during the seven days prior to, and during a period of up to 180 days following, the effective date of the registration statement. Such agreement shall be in writing in a form reasonably satisfactory to the Company and such underwriter. The Company may impose stop-transfer instructions with respect to the securities subject to the foregoing restriction until the end of the required stand-off period. 5.11 Listing of Shares. The Company shall use its commercially reasonable efforts to cause (i) the Shares, (ii) upon exercise of the Warrant, the Warrant Shares, (iii) the Preferred Shares, (iv) upon conversion of the Preferred Shares, the Preferred Stock Conversion Shares, and (v) upon exercise of the Rights Offering Warrant, the Rights Offering Warrant Shares, to be listed on the New York Stock Exchange as soon as practicable. ARTICLE VI CONFIDENTIALITY 6.1 Confidential Material. (a) Definitions. For purposes of this Section 6.1: (i) The term "Confidential Material" means all information, whether oral, written or otherwise (including any information furnished prior to the execution of this Agreement), furnished by the Company to any member of the Zell Group or any of the Representatives (as defined below), and all notes, reports, analyses, compilations, studies and other materials prepared by the Zell Group or any of the Representatives (in whatever form maintained, whether documentary, computer storage or otherwise) containing or based upon, in whole or in part, any such information, and the fact that such information has been delivered to the Zell Group or any of its Representatives. The term "Confidential Material" does not include information which is or becomes generally available to the public other than as a result of a disclosure by any member of the Zell Group or any of the Representatives or becomes available to any member of the Zell Group or any of the Representatives on a non-confidential basis from any source that is not known by such member of the Zell Group or such Representative to be bound by an obligation of confidentiality to the Company. (ii) The term "Representatives" shall mean any and all employees, agents, financial advisors, partners, affiliates or other representatives of any member of the Zell Group. (b) Each member of the Zell Group and each of the Representatives will preserve the confidentiality of the Confidential Material and will not disclose any of the Confidential Material in any manner whatsoever; provided, however, that (i) the Zell Group may make any disclosure of such information to which the Company gives its prior consent, (ii) any of such information may be disclosed to the Representatives who need to know such information, and who are informed of the confidential nature of the Confidential Material and of the terms of this Section 6.1 and who agree -16- 17 to keep such information confidential, (iii) any member of the Zell Group may make any disclosure of such information in connection with any activity which such member of the Zell Group reasonably believes to be in the best interests of the Company and not prohibited by this Agreement, provided the recipient of such information is informed of the confidential nature of the Confidential Material and of the terms of this Section 6.1 and agrees to keep such information confidential and (iv) any member of the Zell Group may make any disclosure of such information to any other member of the Zell Group. In any event, the Zell Group will be responsible for any actions by the Representatives which are not in accordance with the provisions hereof. (c) If any member of the Zell Group or any of the Representatives are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand, any informal or formal investigation by any government or governmental agency or authority or otherwise) to disclose any Confidential Material or such person's opinion, judgment, view or recommendation concerning the Company as developed from the Confidential Material, the Zell Group agrees (i) to promptly notify the Company of the existence, terms and circumstances surrounding such a request, (ii) to the extent possible, to consult with the Company on the advisability of taking legally available steps to resist or narrow such request and (iii) if disclosure of such information is required, to furnish only that portion of the Confidential Material which, in the opinion of counsel to the relevant member of the Zell Group, the Zell Group is legally compelled to disclose, and to cooperate with any action by the Company to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Material. (d) Each Investor hereby acknowledges that the United States securities laws prohibit, in certain circumstances, any person who has received from an issuer material, non-public information, including certain information that may be part of the Confidential Material, while such information is non-public, from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. (e) This Section 6.1 shall survive until the earlier of the fifth anniversary of this Agreement or two years following the date of termination of this Agreement. ARTICLE VII MISCELLANEOUS 7.1. [Intentionally deleted] 7.2. Term of Agreement; Certain Provisions Regarding Termination. Unless this Agreement specifically provides for earlier or later termination with respect to any particular right or obligation, this Agreement shall terminate if the Zell Group shall, at any time, sell or otherwise dispose of or otherwise cease to own Company Voting Securities such that the Zell Group beneficially owns in the aggregate Company Voting Securities representing less than 5% of the Combined Voting Power of all Company Voting Securities (calculated in accordance with Section 3.1 and including the Shares and, to the extent the Warrant has not been exercised or has not expired, the Warrant Shares). 7.3 Legend and Stop Transfer Order. To assist in effectuating the provisions of this Agreement, each of the Investors hereby consents to the placement, in connection with the transactions contemplated by the Purchase Agreement and the Standby Purchase Agreement or otherwise within 10 business days after any Company Voting Securities become subject to the -17- 18 provisions of this Agreement, of the applicable legend specified below on all certificates representing ownership of Company Voting Securities owned of record or beneficially by any member of the Zell Group, until such shares are sold, transferred or disposed in a manner permitted hereby to a person who is not then a member of the Zell Group. The Company agrees to remove promptly all legends and stop transfer orders with respect to the transfer of Company Voting Securities being made to a person who is not then a member of the Zell Group in compliance with the provisions of this Agreement. Certificates representing any Shares or Warrant Shares held by Samstock or TNI shall contain a legend, in substantially the following form: The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws and may not be sold, transferred, assigned, offered, pledged or otherwise disposed of unless (i) there is an effective registration statement under such Act and such laws covering such securities or (ii) such sale, transfer, assignment, offer, pledge or other disposition is exempt from the registration and prospectus delivery requirements of such Act and such laws. The securities evidenced by this certificate are subject to the restrictions on transfer contained in the Second Amended and Restated Investment Agreement dated as of June 30, 1999, the Amended and Restated Agreement Among Stockholders dated as of March 3, 1998, and the Stockholder's Agreement dated as of March 3, 1998, 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." Certificates representing any Preferred Shares, the Rights Offering Warrant Shares or the Preferred Stock Conversion Shares held by Samstock or TNI shall contain a legend, in substantially the following form: The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws and may not be sold, transferred, assigned, offered, pledged or otherwise disposed of unless (i) there is an effective registration statement under such Act and such laws covering such securities or (ii) such sale, transfer, assignment, offer, pledge or other disposition is exempt from the registration and prospectus delivery requirements of such Act and such laws. The securities evidenced by this certificate are subject to the restrictions on transfer contained in the Second Amended and Restated Investment Agreement dated as of June 30, 1999, 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." Certificates representing any Shares or Warrant Shares held by Halmostock shall contain a legend, in substantially the following form: "The securities evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state securities laws and may not be sold, transferred, assigned, offered, pledged or otherwise disposed of unless (i) there is an effective registration statement under such Act and such laws covering such securities or (ii) such sale, transfer, assignment, offer, pledge or other disposition is exempt from the registration and prospectus delivery -18- 19 requirements of such Act and such laws. The securities evidenced by this certificate are subject to the restrictions on transfer contained in the Second Amended and Restated Investment Agreement dated as of June 30, 1999, and the Stockholders' Agreement dated as of March 3, 1998, 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." 7.4 Remedies. (a) Each of the Investors and the Company acknowledge and agree that (i) the provisions of this Agreement are reasonable and necessary to protect the proper and legitimate interests of the parties hereto, and (ii) the parties would be irreparably damaged in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that each party shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Agreement by the other party (or its affiliates) without the necessity of proving actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof and thereof in any court of the United States or any state thereof having jurisdiction, which rights shall be cumulative and in addition to any other remedy to which the parties may be entitled hereunder or at law or equity. (b) In addition to any other remedy the Company may have under this Agreement or in law or equity, if any member of the Zell Group shall acquire or transfer any Company Voting Securities in violation of this Agreement, such Company Voting Securities which are in excess of the number permitted to be owned or controlled by the Zell Group or which have been transferred by a member of the Zell Group in violation of the provisions of this Agreement may not be voted by the owner thereof or any proxy therefor. 7.5 Additional Zell Group Parties; Several Obligations. All of the liabilities and obligations under this Agreement: (a) of members of the Zell Group who are Zell Affiliates shall be joint and several; (b) as between members of the Zell Group who are Zell Affiliates, on the one hand, and any other persons or groups who are not Zell Affiliates, on the other hand, shall be several and not joint. Notwithstanding anything to the contrary in this Agreement, in no event shall any member of the Zell Group who is a Zell Affiliate be responsible in any manner for any liability or obligation of any person or group who is not a Zell Affiliate. Notwithstanding anything to the contrary in this Agreement, in no event shall any member of the Zell Group who is not a Zell Affiliate be responsible in any manner for any liability or obligation of any person or group who is a Zell Affiliate. Notwithstanding anything to the contrary in this Agreement, no natural person or entity that is not a signatory party to this Agreement shall have any liability or obligation under this Agreement, except as otherwise provided in Section 7.12 of this Agreement. Each member of the Zell Group that shall become or have the right to become the beneficial owner, within the meaning and scope of Section 3.1 hereof, of Company Voting Securities shall, promptly upon becoming such owner or holder, execute and deliver to the Company a joinder agreement, agreeing to be legally bound by this Agreement to the same extent as if it had signed this Agreement as an original signatory as a member of the Zell Group (each such member of the Zell Group, a "Zell Contracting Party"); provided that failure to execute such an agreement shall not excuse such member's non-compliance with any provision of this Agreement. No member of the Zell Group shall transfer securities to another member of the Zell Group unless the transferee shall agree to be bound by this Agreement in the manner specified above in this Section 7.5. -19- 20 7.6 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 Samstock or TNI: Samstock, L.L.C. Two N. Riverside Plaza - Suite 600 Chicago, IL 60606 Attention: General Counsel Fax: (312) 454-0335 if to Halmostock: Halmostock Limited Partnership 21 W. Las Olas Boulevard Ft. Lauderdale, FL 33301 Attention: Steven J. Halmos Fax: (954) 760-4983 with an additional copy to: Kenny Nachwalter Seymour Arnold Critchlow & Spector, P.A. 1100 Miami Center 201 South Biscayne Boulevard Miami, Florida 33131-4327 Attention: Thomas H. Seymour, Esq. Fax: (305) 372-1861 if to the Company: Transmedia Network Inc. 11900 Biscayne Boulevard Miami, Florida 33181 Attention: Chief Executive Officer Fax: (305) 892-3342 with a copy to: Morgan, Lewis & Bockius LLP 101 Park Avenue New York, New York 10178 Attention: Stephen P. Farrell, Esq. Fax: (212) 309-6273 -20- 21 If to the Steiner Trust: Robert M. Steiner, as trustee 64 East Elm Street Chicago, Illinois 60611 Fax: (312) 983-8985 7.7 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The parties hereto agree that they will use their best efforts at all times to support and defend this Agreement. 7.8 Amendments. This Agreement may be amended only by an agreement in writing signed by each of the parties hereto; provided, however, that any amendment executed by the Company must prior thereto be approved by a majority of the Disinterested Directors then in office. 7.9 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. 7.10 Descriptive Headings. Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provision of this Agreement. 7.11 Counterparts; Facsimile Signatures. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, bears the signatures of each of the parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be an original as against the party whose signature appears thereon, or on whose behalf such counterpart is executed, but all of which taken together shall be one and the same agreement. A facsimile copy of a signature of a party to this Agreement or any such counterpart shall be fully effective as if an original signature. 7.12 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the successors and assigns of the parties hereto. 7.13 Assignments. This Agreement may not be assigned without the prior written consent of each party hereto, and any attempt to effect an assignment hereof without such consent shall be void. -21- 22 IN WITNESS WHEREOF, each of the Investors and the Company have executed this Second Amended and Restated Investment Agreement as of the date first above written. INVESTORS: EGI-TRANSMEDIA INVESTORS, L.L.C. /s/ Donald J. Liebentritt -------------------------------------- By: Donald J. Liebentritt Vice President SAMSTOCK, L.L.C. /s/ Donald J. Liebentritt -------------------------------------- By: Donald J. Liebentritt Vice President SOLELY FOR PURPOSES OF SECTION 5 HEREOF: STEINER TRUST: /s/ Robert M. Steiner, Trustee -------------------------------------- Robert M. Steiner, as trustee under declaration of trust dated March 9, 1983, as amended, establishing the Robert M. Steiner Revocable Trust COMPANY: TRANSMEDIA NETWORK INC. /s/ Gene Henderson -------------------------------------- By: Gene Henderson, President and Chief Executive Officer -22- EX-99.9 5 POWER OF ATTORNEY DATED 2/26/98 1 EXHIBIT 9 POWER OF ATTORNEY STATE OF FLORIDA ) COUNTY OF DADE ) KNOW ALL MEN BY THESE PRESENTS that Halmos-Investments-Western, Inc., as the general partner of Halmostock Limited Partnership, having an address at 21 W. Las Olas Boulevard, Ft. Lauderdale, Florida 33301, has made, constituted and appointed and BY THESE PRESENTS, does make, constitute and appoint either of SHELI Z. ROSENBERG or DONALD J. LIEBENTRITT, each having an address at Two North Riverside Plaza, Chicago, Illinois 60606, his true and lawful Attorney-In-Fact for it and in its name, place and stead to sign and execute all documents concerning a Schedule 13D with respect to the common stock of Transmedia Network Inc. and concerning any amendments thereto, giving and granting unto either of Sheli Z. Rosenberg or Donald J. Liebentritt, said Attorneys-In-Fact, full power and authority to do and perform all and everything whatsoever, requisite and necessary to be done with respect to the above referenced matter, as fully, to all intents and purposes as it might or could do if personally present to the doing thereof, with full power of substitution and revocation, hereby ratifying and confirming all that said Attorney-In-Fact or her or his substitutes shall lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect until terminated by the undersigned through the instrumentality of a signed writing. IN WITNESS WHEREOF, Halmos-Investments-Western, Inc. has hereunto set its hand and seal this 26th day of February, 1998. /S/ Steven J. Halmos ---------------------------- By: Steven J. Halmos Its: President I, Marieta Oria, A Notary Public in and for said County in the State aforesaid, do hereby certify that Steven J. Halmos, personally known to me to be the same person whose name is subscribed to the foregoing instrument appeared before me this day in person and acknowledged that he signed and delivered said instrument as his own free and voluntary act for the uses and purposes therein set forth. Given under my hand and notarial seal this 26 day of February, 1998. /S/ Marieta Oria ---------------------------- My Commission Expires: Marieta Oria My Commission # CC443715 Expires: May 7, 1999 Bonded Thru Notary Public Underwriters -----END PRIVACY-ENHANCED MESSAGE-----