Exhibit 4.10
PURCHASE AGREEMENT
THIS AGREEMENT is made as of the __ day of May, 2002, by and between
iDine Rewards Network Inc. (the "Company"), a corporation organized under the
laws of the State of Delaware, with its principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and the purchaser whose name and
address is set forth on the signature page hereof (the "Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the Company and the Purchaser agree as follows:
SECTION 1. Authorization of Sale of the Shares. Subject to the terms
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and conditions of this Agreement, the Company has authorized the sale of up to
4,414,000 shares (the "Shares") of common stock, par value $0.02 per share (the
"Common Stock"), of the Company.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing
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(as defined in Section 3), the Company will sell to the Purchaser, and the
Purchaser will buy from the Company, upon the terms and conditions hereinafter
set forth, the number of Shares (at the purchase price) shown below:
Price Per
Number to Be Share In Aggregate
Purchased Dollars Price
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The Company proposes to enter into substantially the same form of
purchase agreement with certain other investors (the "Other Purchasers") and
expects to complete sales of the Shares to them. The Purchaser and the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Purchasers," and this Agreement and the agreements executed by the Other
Purchasers are hereinafter sometimes collectively referred to as the
"Agreements." The term "Placement Agent" shall mean Fulcrum Global Partners
LLC.
SECTION 3. Delivery of the Shares at the Closing. The completion of
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the purchase and sale of the Shares (the "Closing") shall occur as soon as
practicable and as agreed to by the parties hereto, following notification by
the Securities and Exchange Commission (the "Commission") to the Company of the
Commission's willingness to declare effective the registration statement to be
filed by the Company pursuant to Section 7.1 hereof (the "Registration
Statement") at a place and time (the "Closing Date") to be agreed upon by the
Company and the Placement Agent. The Company will promptly notify the
Purchasers by facsimile transmission or otherwise of the date, place and time of
the Closing; provided, however, that the Company will use its best efforts to
ensure that the Registration Statement shall be declared effective no later than
5:00 p.m. on the Closing Date.
At the Closing, the Company shall deliver to the Purchaser one or more
stock certificates registered in the name of the Purchaser, or , if so indicated
on the Stock Certificate Questionnaire attached hereto as Appendix I, in such
nominee name(s) as designated by the Purchaser, representing the number of
Shares set forth in Section 2 above and bearing an appropriate legend referring
to the fact that the Shares were sold in reliance upon the exemption from
registration under the Securities Act of 1933, as amended (the "Securities Act")
provided by Section 4(2) thereof and Rule 506 thereunder. The Company, at the
request of the Purchaser, will promptly substitute one or more replacement
certificates without the legend at such time as the Registration Statement is
declared effective. The name(s) in which the stock certificates are to be
registered are set forth in the Stock Certificate Questionnaire attached hereto
as Appendix I. The Company's obligation to complete the purchase and sale of
the Shares and deliver such stock certificate(s) to the Purchaser at the Closing
shall be subject to the following conditions, any one or more of which may be
waived by the Company: (a) receipt by the Company of same-day funds in the full
amount of the purchase price for the Shares being purchased hereunder; (b)
completion of the purchases and sales under the Agreements with all of the Other
Purchasers; and (c) the accuracy in all material respects of the representations
and warranties made by the Purchasers and the fulfillment of those undertakings
of the Purchasers to be fulfilled prior to the Closing. The Purchaser's
obligation to accept delivery of such stock certificate(s) and to pay for the
Shares evidenced thereby shall be subject to the following conditions, any one
or more of which may be waived by the Purchaser: (a) the Commission has notified
the Company of the Commission's willingness to declare the Registration
Statement effective on or prior to the 60/th/ day after the date such
Registration Statement was filed by the Company; (b) each of the representations
and warranties of the Company made herein shall be accurate in all material
respects at the Closing Date with the same effect as though made at and as of
such date; and (c) the fulfillment in all material respects of those
undertakings of the Company to be fulfilled prior to Closing. The Purchaser's
obligations hereunder are expressly not conditioned on the purchase by any or
all of the Other Purchasers of the Shares that they have agreed to purchase from
the Company.
SECTION 4. Representations, Warranties and Covenants of the Company.
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The Company hereby represents and warrants to, and covenants with, the Purchaser
as follows:
4.1. Organization and Qualification. The Company is a corporation
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duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and the Company is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is required, except
where failure to so qualify would not reasonably be expected to have a material
adverse effect upon the business, financial condition, properties or operations
of the Company and all of its material subsidiaries, which are listed on Exhibit
A (each a "Subsidiary" and collectively the "Subsidiaries"), taken as a whole (a
"Material Adverse Effect"). Each Subsidiary is a direct or indirect wholly-
owned subsidiary of the Company. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and is qualified to do business as a foreign entity in each jurisdiction in
which qualification is required, except where failure to so qualify would not
have a Material Adverse Effect.
4.2. Authorized Capital Stock. Except as disclosed in or
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contemplated by the Confidential Private Placement Memorandum, dated May 20,
2002, prepared by the Company,
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including all Exhibits, supplements and amendments thereto (the "Private
Placement Memorandum") or the Company's publicly available filings with the
Commission (the "Public Filings"), the Company had outstanding capital stock of
approximately 15,902,000 shares of Common Stock and approximately 4,124,000
shares of Series A preferred stock, $0.10 par value per share (the "Preferred
Stock"), as set forth under the heading "Capitalization" in the Private
Placement Memorandum as of the date set forth therein; the issued and
outstanding shares of the Company's Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and conform in all material respects to the description thereof
contained in the Private Placement Memorandum or the Public Filings. Except as
disclosed in the Private Placement Memorandum or the Public Filings, the Company
does not have outstanding any options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock, stock bonus and other stock
plans or arrangements and the options or other rights granted and exercised
thereunder, set forth in the Private Placement Memorandum or the Public Filings
accurately and fairly presents in all material respects the information required
to be shown with respect to such plans, arrangements, options and rights. With
respect to each Subsidiary, (i) all the issued and outstanding shares of each
Subsidiary's capital stock have been duly authorized and validly issued, are
fully paid and nonassessable, have been issued in compliance with applicable
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and (ii) there are no outstanding options to purchase, or any preemptive rights
or other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
the Subsidiary's capital stock or any such options, rights, convertible
securities or obligations.
4.3. Issuance, Sale and Delivery of the Shares. The Shares have been
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duly authorized and, when issued, delivered and paid for in the manner set forth
in this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform in all material respects to the description
thereof set forth in the Private Placement Memorandum or the Public Filings. No
preemptive rights or other rights to subscribe for or purchase exist with
respect to the issuance and sale of the Shares by the Company pursuant to this
Agreement. No stockholder of the Company has any right (which has not been
waived or has not expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement) to require the Company
to register the sale of any shares owned by such stockholder under the
Securities Act in the Registration Statement. No further approval or authority
of the stockholders or the Board of Directors of the Company will be required
for the issuance and sale of the Shares to be sold by the Company as
contemplated herein.
4.4. Due Execution, Delivery and Performance of this Agreement. The
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Company has full legal right, corporate power and authority to enter into this
Agreement and perform the transactions contemplated hereby. This Agreement has
been duly authorized, executed and delivered by the Company. The execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions herein contemplated will not violate any provision of the
organizational documents of the Company or any of its
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Subsidiaries and will not result in the creation of any lien, charge, security
interest or encumbrance upon any assets of the Company or any of its
Subsidiaries pursuant to the terms or provisions of, and will not (i) conflict
with, result in the breach or violation of, or constitute, either by itself or
upon notice or the passage of time or both, a default under (A) any agreement,
lease, franchise, license, permit or other instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective properties may be bound or affected and
in each case which would have a Material Adverse Effect, or (B) to the Company's
knowledge, any statute or any judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other governmental body
applicable to the Company or any of its Subsidiaries or any of their respective
properties where such conflict, breach, violation or default is likely to result
in a Material Adverse Effect. No consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other governmental body
is required for the execution and delivery of this Agreement or the consummation
of the transactions contemplated by this Agreement, except for compliance with
the blue sky laws and federal securities laws applicable to the offering of the
Shares. Upon the execution and delivery of this Agreement, and assuming the
valid execution thereof by the Purchaser, this Agreement will constitute valid
and binding obligations of the Company, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
the indemnification agreements of the Company in Section 7.3 hereof may be
legally unenforceable.
4.5. Accountants. The firm of KPMG LLP which has expressed its
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opinion with respect to the consolidated financial statements to be included or
incorporated by reference, in the Registration Statement and the Prospectus
which forms a part thereof is an independent accountant as required by the
Securities Act and the rules and regulations promulgated thereunder (the "Rules
and Regulations").
4.6. No Defaults. Except as disclosed in the Private Placement
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Memorandum or the Public Filings, and except as to defaults, violations and
breaches which individually or in the aggregate would not have a Material
Adverse Effect on the Company or any of its Subsidiaries taken as a whole,
neither the Company nor any of its Subsidiaries is in violation or default of
any provision of its certificate of incorporation or bylaws, or in breach of or
default with respect to any provision of any agreement, judgment, decree, order,
lease, franchise, license, permit or other instrument to which it is a party or
by which it or any of its properties are bound; and, to the Company's knowledge,
there does not exist any state of fact which, with notice or lapse of time or
both, would constitute an event of default on the part of the Company or any of
its Subsidiaries as defined in such documents, except such defaults which
individually or in the aggregate would not have a Material Adverse Effect.
4.7. Contracts. The contracts described in the Private Placement
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Memorandum or the Public Filings that are material to the Company or its
Subsidiaries are in full force and effect on the date hereof; and neither the
Company nor any of its Subsidiaries is, nor, to the Company's knowledge, is any
other party in breach of or default under any of such contracts which would have
a Material Adverse Effect.
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4.8. No Actions. Except as disclosed in the Private Placement
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Memorandum or the Public Filings, there are no legal or governmental actions,
suits or proceedings pending or, to the Company's knowledge, threatened in
writing to which the Company or any of its Subsidiaries is or may be a party or
of which property owned or leased by the Company or any of its Subsidiaries is
or may be the subject, or related to environmental or discrimination matters,
which actions, suits or proceedings, individually or in the aggregate, might
prevent or might reasonably be expected to materially and adversely affect the
transactions contemplated by this Agreement or result in a Material Adverse
Effect; and no labor disturbance by the employees of the Company exists, to the
Company's knowledge, or is imminent which might reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is
party to or subject to the provisions of any material injunction, judgment,
decree or order of any court, regulatory body administrative agency or other
governmental body.
4.9. Properties. Each of the Company and its Subsidiaries holds its
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leased properties under valid and binding leases, with such exceptions as are
not materially significant in relation to its business taken as a whole.
4.10. No Material Change. Since December 31, 2001 and except as
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described in the Private Placement Memorandum; (i) the Company and its
Subsidiaries have not incurred any material liabilities or obligations,
indirect, or contingent, or entered into any material verbal or written
agreement or other transaction which is not in the ordinary course of business
or which could reasonably be expected to result in a material reduction in the
future earnings or prospects of the Company and its Subsidiaries; (ii) the
Company and its Subsidiaries have not sustained any material loss or
interference with its businesses or properties from fire, flood, windstorm,
accident or other calamity not covered by insurance; (iii) except as described
in the Private Placement Memorandum or Public Filings, the Company and its
Subsidiaries have not paid or declared any dividends or other distributions with
respect to its capital stock and neither the Company nor any of its Subsidiaries
is in default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company or any of its Subsidiaries other than the sale of the Shares hereunder,
shares or options issued pursuant to employee equity incentive plans or purchase
plans approved by the Company's Board of Directors and repurchases of shares or
options pursuant to repurchase plans already approved by the Company's Board of
Directors, or indebtedness material to the Company or any of its Subsidiaries
(other than in the ordinary course of business); and (v) there has not been any
other event or change that would have a Material Adverse Effect.
4.11. Intellectual Property.
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(a) The Company has ownership or license or legal right to use all
material patent, copyright, trade secret and trademark rights known by it to be
necessary to the conduct of the business of the Company as now conducted
(collectively, "Intellectual Property").
(b) All material licenses or other material agreements under which (i)
the Company is granted rights in Intellectual Property, other than Intellectual
Property generally available on commercial terms from other sources, and (ii)
the Company has granted rights to others in Intellectual Property owned or
licensed by the Company, are in full force and effect
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and, to the knowledge of the Company, there is no material default by the
Company or any other party thereto that would result in a Material Adverse
Effect.
(c) To the knowledge of the Company, the present business, activities
and products of the Company do not infringe any intellectual property of any
other person, except where such infringement would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. No proceeding charging
the Company with infringement of any adversely held Intellectual Property has
been filed. To the knowledge of the Company, the Company is not making
unauthorized use of any confidential information or trade secrets of any person.
To the Company's knowledge, the activities of the Company or any of its
employees on behalf of the Company do not violate any agreements or arrangements
known to the Company which any such employees have with other persons, if any.
4.12. Compliance. Neither the Company nor any of its Subsidiaries
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has been advised, nor has reason to believe, that it is not conducting its
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting its business, including, without
limitation, all applicable local, state and federal environmental laws and
regulations; except where failure to be so in compliance would not have a
Material Adverse Effect.
4.13. Taxes. Each of the Company and its Subsidiaries has filed all
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necessary federal, state and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and neither the Company nor any
of its Subsidiaries has knowledge of a tax deficiency which has been or might be
asserted or threatened against it which could have a Material Adverse Effect.
4.14. Transfer Taxes. On the Closing Date, all stock transfer or
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other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares to be sold to the Purchaser
hereunder will be, or will have been, fully paid or provided for by the Company
and all laws imposing such taxes will be or will have been complied with.
4.15. Investment Company. The Company is not an "investment company"
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or an "affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
4.16. Offering Materials. The Company has not distributed and will
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not distribute prior to the Closing Date any offering material in connection
with the offering and sale of the Shares other than the Private Placement
Memorandum or any amendment or supplement thereto. The Company has not in the
past nor will it hereafter take any action independent of the Placement Agent to
sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Shares, as contemplated by
this Agreement, within the provisions of Section 5 of the Securities Act, unless
such offer, issuance or sale was or shall be within the exemptions of Section 4
of the Securities Act.
4.17. Insurance. The Company maintains insurance of the types and in
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the amounts that the Company reasonably believes is adequate for its business,
including, but not
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limited to, insurance covering all real and personal property owned or leased by
the Company against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which
insurance is in full force and effect.
4.18. Additional Information. The information contained in the
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following documents, which the Placement Agent has furnished to the Purchaser,
or will furnish prior to the Closing, does not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
in which they were made, not misleading, as of their respective final dates:
(a) the Company's Transition Report on Form 10-K for the period from
October 1, 2001 to December 31, 2001;
(b) the Company's Annual Report on Form 10-K for the year ended
September 30, 2001;
(c) the Company's Proxy Statement on Form 14A filed with the
Commission on January 29, 2002;
(d) the draft Registration Statement;
(e) the Private Placement Memorandum, including all addenda and
exhibits thereto (other than the Appendices); and
(f) all other documents, if any, filed by the Company with the
Commission since December 31, 2001 pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
4.19. Price of Common Stock. Although the Company intends to use
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proceeds from this placement to purchase its shares of outstanding Preferred
Stock, the Company has not taken, and will not take, directly or indirectly, any
action designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of the shares of the Common Stock to facilitate the sale or resale of the
Common Stock.
4.20. Legal Opinion. Prior to the Closing, legal counsel to the
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Company will deliver one or more legal opinions to the Placement Agent in a form
reasonably satisfactory to the Placement Agent and counsel to the Placement
Agent. Such opinions also shall state that each of the Purchasers may rely
thereon as though it were addressed directly to such Purchaser.
4.21. Certificate. At the Closing, the Company will deliver to
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Purchaser a certificate executed by the Chairman of the Board or President and
the chief financial or accounting officer of the Company, dated the Closing
Date, in form and substance reasonably satisfactory to the Purchasers, to the
effect that the representations and warranties of the Company set forth in this
Section 4 are true and correct as of the date of this Agreement for those
representations and warranties that already are qualified by a materiality
standard and true and correct in all material respects as of the date of this
Agreement for those representations and warranties that are not so qualified and
as of the Closing Date, and the Company has complied
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with all the agreements and satisfied all the conditions herein on its part to
be performed or satisfied on or prior to such Closing Date.
4.22. Reporting Company; Form S-3. The Company is subject to the
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reporting requirements of the Exchange Act, has two classes of securities
registered under Section 12 of the Exchange Act, and has filed all reports
required thereby. The Company is eligible to register the Shares for resale by
the Purchaser on a registration statement on Form S-3 under the Securities Act.
To the Company's knowledge, there exist no facts or circumstances (including
without limitation any required approvals or waivers or any circumstances that
may delay or prevent the obtaining of accountant's consents) that reasonably
could be expected to prohibit or delay the preparation and filing of a
registration statement on Form S-3 that will be available for the resale of the
Shares by the Purchaser.
4.23. Use of Purchaser Name. Except as may be required by applicable
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law or regulation, the Company shall not use, directly or indirectly, the
Purchaser's name or the name of any of its affiliates in any advertisement,
announcement, press release or other similar communication unless it has
received the prior written consent of the Purchaser for the specific use
contemplated or as otherwise required by applicable law or regulation.
4.24. Non-Public Information. Except for the proposed repurchase
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price of the Preferred Stock, the Company has not disclosed to the Purchaser,
whether in the Private Placement Memorandum or otherwise, information that would
constitute material non-public information as of the Closing Date.
4.25. Related Party Transactions. No transaction has occurred
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between or among the Company, any of the Subsidiaries and their affiliates,
officers or directors or any affiliate or affiliates of any such officer or
director that is required to have been described under applicable securities
laws in the Public Filings.
4.26. Off-Balance Sheet Arrangements. There is no transaction,
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arrangement or other relationship between the Company and an unconsolidated or
other off-balance sheet entity that is required to be disclosed by the Company
in its Exchange Act filings or that otherwise would be reasonably likely to have
a Material Adverse Effect. There are no such transactions, arrangements or
other relationships with the Company that may create contingencies or
liabilities that are not otherwise disclosed by the Company in its Exchange Act
filings.
SECTION 5. Representations, Warranties and Covenants of the Purchaser.
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(a) The Purchaser represents and warrants to, and covenants with, the Company
that: (i) the Purchaser is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares representing an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company and
comparable entities, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Shares; (ii) the Purchaser is acquiring the number of Shares set forth in
Section 2 above in the ordinary course of its business and for its own account
for investment only and with no present intention of distributing any of such
Shares or any arrangement or understanding with any other persons regarding the
distribution of such Shares (this representation and warranty not limiting the
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Purchaser's right to sell pursuant to the Registration Statement or in
compliance with the Securities Act and the Rules and Regulations, or, other than
with respect to any claims arising out of a breach of this representation and
warranty, the Purchaser's right to indemnification under Section 7.3); (iii) the
Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance with the
Securities Act and the Rules and Regulations; (iv) the Purchaser has completed
or caused to be completed the Registration Statement Questionnaire attached
hereto as part of Appendix I, for use in preparation of the Registration
Statement, and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the Registration
Statement and the Purchaser will notify the Company immediately of any material
change in any such information provided in the Registration Statement
Questionnaire; (v) the Purchaser has, in connection with its decision to
purchase the number of Shares set forth in Section 2 above, relied solely upon
the Private Placement Memorandum or the Public Filings and the documents
included therein or incorporated by reference and the representations and
warranties of the Company contained herein; and (vi) the Purchaser is an
"accredited investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.
(b) The Purchaser understands that the Shares are being offered and
sold to it in reliance upon specific exemptions from the registration
requirements of the Securities Act, the Rules and Regulations and state
securities laws and that the Company is relying upon the truth and accuracy of,
and the Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of the Purchaser set forth herein
in order to determine the availability of such exemptions and the eligibility of
the Purchaser to acquire the Shares.
(c) For the benefit of the Company, the Purchaser agreed orally with
the Placement Agent to keep confidential all information concerning this private
placement. The Purchaser understands that the information contained in the
Private Placement Memorandum is strictly confidential and proprietary to the
Company and has been prepared from the Company's publicly available documents
and other information and is being submitted to the Purchaser solely for such
Purchaser's confidential use. The Purchaser agrees to use the information
contained in the Private Placement Memorandum for the sole purpose of evaluating
a possible investment in the Shares and the Purchaser hereby acknowledges that
it is prohibited from reproducing or distributing the Private Placement
Memorandum, this Purchase Agreement, or any other offering materials or other
information provided by the Company in connection with the Purchaser's
consideration of its investment in the Company, in whole or in part, or
divulging or discussing any of their contents. Further, the Purchaser
understands that the existence and nature of all conversations and
presentations, if any, regarding the Company and this offering must be kept
strictly confidential. The Purchaser understands that the federal securities
laws impose restrictions on trading based on information regarding this
offering. In addition, the Purchaser hereby acknowledges that unauthorized
disclosure of information regarding this offering may cause the Company to
violate Regulation FD. This obligation will terminate upon the filing by the
Company of a press release or press releases describing this offering; provided,
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however, the Purchaser will not disclose the proposed repurchase price of the
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Preferred Stock and the use of proceeds from the transactions contemplated by
the Private Placement Memorandum until the Company publicly announces such
repurchase price and use of proceeds.
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(d) The Purchaser understands that its investment in the Shares
involves a significant degree of risk and that the market price of the Common
Stock has been volatile and that no representation is being made as to the
future value of the Common Stock. The Purchaser has the knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Shares and has the ability to bear the economic
risks of an investment in the Shares.
(e) The Purchaser understands that no United States federal or state
agency or any other government or governmental agency has passed upon or made
any recommendation or endorsement of the Shares.
(f) The Purchaser understands that, until such time as the
Registration Statement has been declared effective or the Shares may be sold
pursuant to Rule 144 under the Securities Act without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
the Shares may bear a restrictive legend in substantially the following form.
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities may not be sold, transferred or assigned in the absence
of an effective registration statement for the securities under said
Act, or an opinion of counsel, in form, substance and scope
reasonably acceptable to the Company, that registration is not
required under said Act or unless sold pursuant to Rule 144 under
said Act."
(g) The Purchaser's principal executive offices are in the
jurisdiction set forth immediately below the Purchaser's name on the signature
pages hereto.
(h) The Purchaser hereby covenants with the Company not to make any
sale of the Shares without complying in all material respects with the
provisions of this Agreement, and if applicable, without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied, and
the Purchaser acknowledges and agrees that such Shares are not transferable on
the books of the Company unless the certificate submitted to the transfer agent
evidencing the Shares is accompanied by a separate Purchaser's Certificate of
Subsequent Sale: (i) in the form of Appendix II hereto, (ii) executed by an
officer of, or other authorized person designated by, the Purchaser, and (iii)
to the effect that (A) the Shares have been sold in accordance with the
Registration Statement, the Securities Act and any applicable state securities
or blue sky laws and (B), if applicable, the requirement of delivering a current
prospectus has been satisfied. The Purchaser acknowledges that there may
occasionally be times when the Company must suspend the use of the prospectus
forming a part of the Registration Statement (a "Suspension") until such time as
an amendment to the Registration Statement has been filed by the Company and
declared effective by the Commission, or until such time as the Company has
filed an appropriate report with the Commission pursuant to the Exchange Act.
The Purchaser hereby covenants that it will not sell any Shares pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchaser written notice of the Suspension of the use of said prospectus and
ending at the time the Company gives the Purchaser written notice that the
Purchaser may thereafter effect sales pursuant to said prospectus.
Notwithstanding the foregoing, the Company agrees that no Suspension shall be
for a period of
-10-
longer than 30 consecutive days, and no Suspensions shall be for a period of an
aggregate in any 365 day period of longer than 65 days, unless in the good faith
judgment of the Company's board of directors, upon advice and an opinion in
writing of a firm reasonably satisfactory to the Purchaser, the sale of Shares
under the Registration Statement in reliance on the foregoing would be
reasonably likely to cause a violation of the Securities Act or the Exchange Act
or the Rules or Regulations promulgated under either act, and result in a
potential liability to the Company.
(i) The Purchaser further represents and warrants to, and covenants
with, the Company (i) the Purchaser has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
legal, valid and binding obligation of the Purchaser, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Purchaser in Section 7.3
hereof may be legally unenforceable.
SECTION 6. Survival of Representations, Warranties and Agreements.
------------------------------------------------------
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agent, all covenants, agreements, representations and warranties made
by the Company and the Purchaser herein and in the certificates for the Shares
delivered pursuant hereto shall survive the execution of this Agreement, the
delivery to the Purchaser of the Shares being purchased and the payment
therefor.
SECTION 7. Registration of the Shares; Compliance with the Securities
----------------------------------------------------------
Act.
---
7.1. Registration Procedures and Expenses. The Company shall:
------------------------------------
(a) as soon as practicable, prepare and file with the Commission the
Registration Statement on Form S-3 relating to the sale of the
Shares by the Purchaser from time to time through the automated
quotation system of the Nasdaq National Market or the facilities
of any national securities exchange on which the Common Stock is
then traded or in privately-negotiated transactions;
(b) use its reasonable efforts, subject to the receipt of necessary
information from the Purchasers, to cause the Commission to
notify the Company of the Commission's willingness to declare the
Registration Statement effective within 60 days after the date
the Registration Statement is filed by the Company;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used
in connection therewith as may be necessary to keep the
Registration Statement effective until the earliest of (i) two
years after the effective date of the ▇▇▇▇▇▇▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇, (▇▇) the date on which the Shares may be resold by
the Purchasers without registration by reason of Rule 144(k)
under the Securities Act or any other rule of similar effect,
or (iii) such time as all Shares purchased by the Purchaser
under this Agreement have been sold;
(d) furnish to the Purchaser with respect to the Shares registered
under the Registration Statement (and to each underwriter, if
any, of such Shares) such reasonable number of copies of
prospectuses in order to facilitate the public sale or other
disposition of all or any of the Shares by the Purchaser;
provided, however, that the obligation of the Company to deliver
-------- -------
copies of prospectuses to the Purchaser shall be subject to the
receipt by the Company of reasonable assurances from the
Purchaser that the Purchaser will comply with the applicable
provisions of the Securities Act and of such other securities or
blue sky laws as may be applicable in connection with any use of
such prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Purchaser;
provided, however, that the Company shall not be required to
-------- -------
qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so
consented; and
(f) bear all expenses in connection with the procedures in paragraphs
(a) through (f) of this Section 7.1 and the registration of the
Shares pursuant to the Registration Statement, other than fees
and expenses, if any, of counsel or other advisers to the
Purchaser or the Other Purchasers or underwriting discounts,
brokerage fees and commissions incurred by the Purchaser or the
Other Purchasers, if any.
7.2. Transfer of Shares After Registration. The Purchaser agrees that
-------------------------------------
it will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act,
except as contemplated in the Registration Statement referred to in Section 7.1
or as otherwise permitted by law, and that it will promptly notify the Company
of any changes in the information set forth in the Registration Statement
regarding the Purchaser or its plan of distribution.
7.3. Indemnification. For the purpose of this Section 7.3:
---------------
(i) the term "Purchaser/Affiliate" shall mean any affiliate of the
Purchaser, including a transferee who is an affiliate of the
Purchaser, and any person who controls the Purchaser or any
affiliate of the Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act; and
(ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or
relating to, and any
-12-
document incorporated by reference in, the Registration Statement
referred to in Section 7.1.
(a) The Company agrees to indemnify and hold harmless each Purchaser
and each Purchaser/Affiliate against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Purchaser or Purchaser/Affiliate may
become subject, under the Securities Act, the Exchange Act, or any other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the prior
written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, including the
prospectus, financial statements and schedules, and all other documents filed as
a part thereof, as amended at the time of effectiveness of the Registration
Statement, including any information deemed to be a part thereof as of the time
of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rule
434, of the Rules and Regulations, or the prospectus, in the form first filed
with the Commission pursuant to Rule 424(b) of the Regulations, or filed as part
of the Registration Statement at the time of effectiveness if no Rule 424(b)
filing is required (the "Prospectus"), or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
any of them a material fact required to be stated therein or necessary to make
the statements in any of them, in light of the circumstances under which they
were made, not misleading, or arise out of or are based in whole or in part on
any inaccuracy in the representations and warranties of the Company contained in
this Agreement, or any failure of the Company to perform its obligations
hereunder or under law, and will reimburse each such Purchaser and each such
Purchaser/Affiliate for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such Purchaser/Affiliate in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
-------- -------
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Purchaser expressly for use therein, or (ii)
the failure of such Purchaser to comply with the covenants and agreements
contained in Sections 5 or 7.2, or (iii) the inaccuracy of any representations
made by such Purchaser herein or (iv) any statement or omission in any
Prospectus that is corrected in any subsequent Prospectus that was delivered to
the Purchaser prior to the pertinent sale or sales by the Purchaser.
(b) Each Purchaser will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, against
any losses, claims, damages, liabilities or expenses to which the Company, each
of its directors, each of its officers who signed the Registration Statement or
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Purchaser) insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any failure to comply
-13-
with the covenants and agreements contained in Sections 5 or 7.2 hereof, or (ii)
the inaccuracy of any representation made by such Purchaser herein, or (iii) any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon 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, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Purchaser expressly
for use therein, and will reimburse the Company, each of its directors, each of
its officers who signed the Registration Statement or controlling person for any
legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.
(c) Promptly after receipt by an indemnified party under this Section
7.3 of notice of the threat or commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7.3 promptly notify the indemnifying party in writing
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 7.3 or to the extent it is not prejudiced as a result of such failure.
In case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying party,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded, based on an opinion of
counsel reasonably satisfactory to the indemnifying party, that there may be a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7.3 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by such
indemnifying party, representing all of the indemnified parties who are parties
to such action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of action, in each
of which cases the reasonable fees and expenses of counsel shall be at the
expense
-14-
of the indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; provided that such
consent shall not be unreasonably withheld. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnification could have been sought hereunder by
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of Common Stock or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Agreement which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by the Company on the one hand and each Purchaser on the other shall be
deemed to be in the same proportion as the amount paid by such Purchaser to the
Company pursuant to this Agreement for the Shares purchased by such Purchaser
that were sold pursuant to the Registration Statement bears to the difference
(the "Difference") between the amount such Purchaser paid for the Shares that
were sold pursuant to the Registration Statement and the amount received by such
Purchaser from such sale. The relative fault of the Company, one the one hand,
and each Purchaser on the other shall be determined by reference to, among other
things, whether the untrue or alleged statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or by such Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 7.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 7.3 with respect to the
notice of the threat or commencement of any threat or action shall apply if a
claim for contribution is to be made under this paragraph (d); provided,
--------
however, that no additional notice shall be required with respect to
-------
any threat or action for which notice has been given under paragraph (c) for
purposes of indemnification. The Company and each Purchaser agree that it would
not be just and equitable if contribution pursuant to this Section 7.3 were
determined solely by pro rata allocation (even if the Purchaser were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 7.3, no Purchaser shall be
required to contribute any amount in excess of the amount by which the
Difference exceeds the amount of any damages that such Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
-15-
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Purchasers' obligations to contribute pursuant to this
Section 7.3 are several and not joint. Notwithstanding the foregoing, each
Purchaser's contribution shall be capped at an amount equal to the respective
amounts paid by such Purchaser to the Company to purchase the Shares.
7.4. Termination of Conditions and Obligations. The restrictions
-----------------------------------------
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares upon the
passage of two years from the effective date of the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory in
form and substance to the Company shall have been rendered to the effect that
such conditions are not necessary in order to comply with the Securities Act.
7.5. Information Available. So long as the Registration Statement is
---------------------
effective covering the resale of Shares owned by the Purchaser, the Company will
furnish to the Purchaser:
(a) as soon as practicable after available (but in the case of the
Annual Report to the Stockholders, within 150 days after the end
of each fiscal year of the Company), one copy of (i) its Annual
Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified
public accountants), (ii) if not included in substance in the
Annual Report to Stockholders, upon the request of Purchaser, its
Annual Report on Form 10-K, (iii) upon request of Purchaser, its
quarterly reports on Form 10- Q, and (iv) a full copy of the
particular Registration Statement covering the Shares (the
foregoing, in each case, excluding exhibits);
(d) upon the reasonable request of the Purchaser, a reasonable number
of copies of the prospectuses, and any supplements thereto, to
supply to any other party requiring such prospectuses;
and the Company, upon the reasonable request of the Purchaser and with prior
notice, will be available to the Purchaser or a representative thereof at the
Company's headquarters to discuss information relevant for disclosure in the
Registration Statement covering the Shares and will otherwise cooperate with any
Purchaser conducting an investigation for the purpose of reducing or eliminating
such Purchaser's exposure to liability under the Securities Act, including the
reasonable production of information at the Company's headquarters, subject to
appropriate confidentiality limitations.
SECTION 8. Broker's Fee. The Purchaser acknowledges that the Company
------------
intends to pay to the Placement Agent a fee in respect of the sale of the Shares
to the Purchaser. Each of the parties hereto hereby represents that, on the
basis of any actions and agreements by it, there are no other brokers or finders
entitled to compensation in connection with the sale of the Shares to the
Purchaser.
-16-
SECTION 9. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
dispatched and shall be delivered as addressed as follows:
(a) if to the Company, to:
iDine Rewards Network Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: General Counsel
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the end of
this Agreement, or at such other address or addresses as may have
been furnished to the Company in writing.
SECTION 10. Changes. This Agreement may not be modified or amended
-------
except pursuant to an instrument in writing signed by the Company and the
Purchaser. No provision hereunder may be waived other than in a written
instrument executed by the waiving party.
SECTION 11. Headings. The headings of the various sections of this
--------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 12. Severability. In case any provision contained in this
------------
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 13. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York and the federal
law of the United States of America.
-17-
SECTION 14. 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 instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered (including by facsimile) to the other parties.
SECTION 15. Entire Agreement. This Agreement and the instruments
----------------
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Purchaser makes any
representation, warranty, covenant or undertaking with respect to such matters.
-18-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
iDINE REWARDS NETWORK INC.
By _________________________________
Print or Type:
Name of Purchaser
(Individual or Institution):
_____________________________________
Name of Individual representing
Purchaser (if an Institution):
_____________________________________
Title of Individual representing
Purchaser (if an Institution):
_____________________________________
Signature by:
Individual Purchaser or Individual
representing Purchaser:
_____________________________________
Address: ___________________________
Telephone: _________________________
Telecopier: ________________________
-19-
SUMMARY INSTRUCTION SHEET FOR PURCHASER
---------------------------------------
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements:
1. Page 18 - Signature:
(i) Name of Purchaser (Individual or Institution)
(ii) Name of Individual representing Purchaser (if an Institution)
(iii) Title of Individual representing Purchaser (if an Institution)
(iv) Signature of Individual Purchaser or Individual representing
Purchaser
2. Appendix I - Stock Certificate Questionnaire/Registration Statement
Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire and the Registration Statement Questionnaire.
3. Return BOTH properly completed and signed Purchase Agreements
including the properly completed Appendix I to:
Fulcrum Global Partners LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
B. Instructions regarding the transfer of funds for the purchase of
Shares will be sent by facsimile to the Purchaser by the Placement
Agent at a later date.
C. Upon the resale of the Shares by the Purchasers after the
Registration Statement covering the Shares is effective, as described
in the Purchase Agreement, the Purchaser:
(i) must deliver a current prospectus of the Company to the buyer
(prospectuses must be obtained from the Company at the
Purchaser's request); and
(ii) must send a letter in the form of Appendix II to the Company so
that the Shares may be properly transferred.
Appendix I
(one of two)
iDINE REWARDS NETWORK INC.
STOCK CERTIFICATE QUESTIONNAIRE
-------------------------------
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be
registered in (this is the name that will appear
on your stock certificate(s)). You may use a
nominee name if appropriate: ___________________
2. The relationship between the Purchaser of the
Shares and the Registered Holder listed in
response to item 1 above: ___________________
3. The mailing address of the Registered Holder
listed in response to item 1 above: ___________________
___________________
___________________
___________________
4. The Social Security Number or Tax Identification
Number of the Registered Holder listed in
response to item 1 above: ___________________
Appendix I
(two of two)
iDINE REWARDS NETWORK INC.
REGISTRATION STATEMENT QUESTIONNAIRE
------------------------------------
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Stockholder" section of the Registration
Statement, please state your or your organization's name exactly as it
should appear in the Registration Statement:
2. Please provide the number of shares that you or your organization will own
immediately after Closing, including those Shares purchased by you or your
organization pursuant to this Purchase Agreement and those shares
purchased by you or your organization through other transactions:
3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its
affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
________________________________________________________________
________________________________________________________________
________________________________________________________________
4. Are you (i) an NASD Member (see definition), (ii) a Controlling (see
definition) shareholder of an NASD Member, (iii) a Person Associated with
a Member of the NASD (see definition), or (iv) an Underwriter or a Related
Person (see definition) with respect to the proposed offering; or (b) do
you own any shares or other securities of any NASD Member not purchased in
the open market; or (c) have you made any outstanding subordinated loans
to any NASD Member?
Answer: [_] Yes [_] No If "yes," please describe below
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
NASD Member. The term "NASD member" means either any broker or dealer
-----------
admitted to membership in the National Association of Securities Dealers, Inc.
("NASD"). (NASD Manual, By-laws Article I, Definitions)
Control. The term "control" (including the terms "controlling,"
-------
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power, either individually or with others, to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise. (Rule 405 under the
Securities Act of 1933, as amended)
Person Associated with a member of the NASD. The term "person
-------------------------------------------
associated with a member of the NASD" means every sole proprietor, partner,
officer, director, branch manager or executive representative of any NASD
Member, or any natural person occupying a similar status or performing similar
functions, or any natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by a NASD
Member, whether or not such person is registered or exempt from registration
with the NASD pursuant to its bylaws. (NASD Manual, By-laws Article I,
Definitions)
Underwriter or a Related Person. The term "underwriter or a related
-------------------------------
person" means, with respect to a proposed offering, underwriters, underwriters'
counsel, financial consultants and advisors, finders, members of the selling or
distribution group, and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)
APPENDIX II
[Transfer Agent]
[Address]
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
_____________________________________________________________ hereby certifies
[fill in official name of individual or institution]
that he/she [said institution] is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold such shares on _______________ in
[date]
accordance with the terms of the Purchase Agreement and the Company, and in
accordance with Registration Statement number
____________________________________________________________________
[fill in the number of or otherwise identify Registration Statement]
or otherwise in accordance with the Securities Act of 1933, as amended, and, in
the case of a transfer pursuant to the Registration Statement, the requirement
of delivering a current prospectus by the Company has been complied with in
connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution): ______________________
Name of Individual
representing
Purchaser (if an
Institution) ______________________
Title of Individual
representing
Purchaser (if an
Institution): ______________________
Signature by:
Individual Purchaser
or Individual repre-
senting Purchaser: ______________________
EXHIBIT A
Name of Subsidiary Jurisdiction of Formation
iDine Restaurant Group, Inc. Delaware
Transmedia Services Company, Inc. Delaware
RTR Funding LLC Delaware