Exhibit 10.1(u)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THIS NOTE HAS BEEN ACQUIRED, AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE MUST BE ACQUIRED, FOR INVESTMENT ONLY AND
MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE
RESALE THEREOF UNDER THE ACT OR AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS
NOT REQUIRED.
TRANSMEDIA ASIA PACIFIC, INC.
12% SECURED CONVERTIBLE NOTE
New York, New York $4,156,000.00
December 13, 2000
FOR VALUE RECEIVED, TRANSMEDIA ASIA PACIFIC, INC., a Delaware
corporation (hereinafter called the "Company"), hereby promises to pay to Koch
Invbestment Group Limited, a Delaware corporation, 20 East Greenway Plaza,
Houston, Texas 77046, or registered assigns (the "Holder") or order, the
aggregate principal amount of Four Million One Hundred Fifty Six Thousand
Dollars ($4,156,000.00), which principal shall be paid in seven quarterly
installments equal to the Principal Installment Amount due on each of June 13,
2001, September 13, 2001, December 13, 2001, March 13, 2002, June 13, 2002,
September 13, 2002 and December 13, 2002 (the "Final Maturity Date", and
together with such other six dates, the "Principal Payment Dates"), and to pay
interest on the unpaid principal balance hereof at the Applicable Rate from the
date hereof until the same becomes due and payable, whether on a Principal
Payment Date, at maturity or upon acceleration or by redemption or repurchase in
accordance with the terms hereof or otherwise. Any amount of principal of or
interest on this Note which is not paid when due shall bear interest at the
Default Rate from the due date thereof (except as otherwise provided in the
definition of Default Rate in Article VI) until the same is paid ("Default
Interest"). Interest shall be payable quarterly in arrears on each of March 13,
2001, June 13, 2001, September 13, 2001, December 13, 2001, March 13, 2002, June
13, 2002, September 13, 2002 and on the Final Maturity Date (the "Interest
Payment Dates"); provided, however, that the first quarterly interest payment
due on March 13, 2001 may be deferred by the Company until no later than June
13, 2001. Interest on this Note shall accrue daily and be computed on the basis
of a 360-day year of 12 30-day months and actual days elapsed. No interest shall
be payable on an Interest Payment Date on any portion of the principal amount of
this Note for any period after which such portion shall have been converted,
redeemed or repurchased prior to such Interest Payment Date so long as the
Company shall have complied in full with its obligations with respect to such
conversion, redemption or repurchase.
All payments of principal of and premium, if any, and interest on
this Note shall be made in the lawful money of the United States of America. All
payments shall be made by wire transfer of immediately available funds to such
account as the Holder may from time to time designate by written notice in
accordance with the provisions of this Note. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a Business Day, the
same shall instead be due on the next succeeding day which is a Business Day
and, in the case of any Interest Payment Date which is not the date on which
this Note is paid in full, the extension of the due date thereof shall not be
taken into account for purposes of determining the amount of interest due on
such date. Certain capitalized terms used in this Note are defined in Article
VI.
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The obligations of the Company under this Note shall rank in right
of payment (i) on a parity with all other unsubordinated obligations of the
Company for Indebtedness existing on the Issuance Date and (ii) senior to all
Indebtedness of the Company hereafter created or incurred. This Note is issued
pursuant to the Exchange Agreement and the Holder of this Note and the Other
Note are subject to the terms of the Exchange Agreement. The obligations of the
Company under this Note are secured pursuant to, and the Holder of this Note is
entitled to the benefits of, the Security Agreement.
The following terms shall apply to this Note:
ARTICLE I
OPTIONAL REDEMPTION
1.1 Optional Redemption by Company. (a) On any Optional Redemption
Date, so long as no Event of Default or Repurchase Event has occurred and is
continuing and so long as the Company is in compliance in all material respects
with its obligations to the Holder (including, without limitation, its
obligations under the Transaction Documents), the Company shall have the right
to redeem all or from time to time any portion of this Note at the Optional
Redemption Price pursuant to this Section 1.1. In order to exercise its right of
redemption under this Section 1.1, the Company shall give an Optional Redemption
Notice to the Holder not less than 20 Trading Days or more than 30 Trading Days
prior to the Optional Redemption Date stating that: (1) the Company is
exercising its right to redeem a specified portion of this Note in accordance
with this Section 1.1, (2) the principal amount of this Note to be redeemed, (3)
the Optional Redemption Price and (4) the Optional Redemption Date. On the
applicable Optional Redemption Date the Company shall pay to or upon the order
of the Holder by wire transfer of immediately available funds to such account as
shall be specified for such purpose by the Holder an amount equal to the
Optional Redemption Price of the portion of this Note to be redeemed.
(b) Notwithstanding the giving of an Optional Redemption Notice, the
Holder shall be entitled to convert in accordance with the terms of this Note
the portion of this Note which is to be redeemed in accordance with such
Optional Redemption Notice by giving a Conversion Notice at any time prior to
the later of (1) date which is one Business Day prior to the applicable Optional
Redemption Date and (2) the date on which the Company pays the Optional
Redemption Price of such portion of this Note to the Holder.
(c) Any redemption of this Note pursuant to this Section 1.1 shall
be made at the same time as a redemption by the Company of a pro rata portion
(based on the outstanding principal amounts) of the Other Note. The Company
shall not redeem the Other Note pursuant to the provisions thereof similar to
this Section 1.1 or repurchase or otherwise acquire the Other Note unless the
Company offers simultaneously to redeem, repurchase or otherwise acquire a pro
rata portion (based on outstanding principal amount) of this Note for cash at
the same price as the Other Note.
1.2 No Prepayment. Except as otherwise specifically provided in
Section 1.1 or with the consent of the holders of this Note and the Other Note,
this Note may not be prepaid, redeemed or repurchased at the option of the
Company prior to the Final Maturity Date.
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ARTICLE II
CONVERSION
2.1 Conversion Right. (a) The Holder shall have the right from and
after the Issuance Date and then at any time on or prior to the date this Note
is paid in full, to convert at any time all or from time to time any part of the
outstanding and unpaid principal amount of this Note of at least $10,000, or
such lesser amount as shall remain unpaid at the time of the conversion or may
be permitted from time to time by the Company in its discretion, and accrued and
unpaid interest on the principal amount to be converted and on any such
interest, into fully paid and nonassessable shares of Common Stock at the
Conversion Price in effect on the date the applicable Conversion Notice is given
in accordance with this Note. The number of shares of Common Stock to be issued
upon each conversion of this Note shall be determined by dividing the sum of (1)
that portion of the principal amount of this Note to be converted plus (2)
accrued and unpaid interest on such principal amount to the date the Conversion
Notice for such conversion is given plus (3) Default Interest, if any, on the
amounts referred to in clauses (1) and (2) of this sentence to the date such
Conversion Notice is given, by the Conversion Price in effect on the applicable
Conversion Date.
(b) Notwithstanding any other provision of this Note, in no event
shall the Holder be entitled at any time to convert any portion of the principal
amount of this Note (and accrued and unpaid interest thereon and on any such
interest) in excess of that portion of the principal amount of this Note (and
accrued and unpaid interest thereon and on any such interest) upon conversion of
which the sum of (1) the number of shares of Common Stock beneficially owned by
the Holder and all Aggregated Persons of the Holder (other than shares of Common
Stock deemed beneficially owned by the Holder or any Aggregated Person of the
Holder through the ownership of (x) the unconverted portion of the principal
amount of this Note and the Other Note and accrued and unpaid interest thereon
and on any such interest and (y) the unconverted or unexercised portion of any
instrument, including, without limitation, the Warrants, which contains
limitations similar to those set forth in this sentence) and (2) the number of
shares of Common Stock issuable upon conversion of the portion of the principal
amount of this Note and accrued and unpaid interest thereon and on any such
interest with respect to which the determination in this sentence is being made,
would result in beneficial ownership by the Holder and all Aggregated Persons of
the Holder of more than 4.9% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the 1934 Act, and Regulation
13D-G thereunder, except as otherwise provided in clause (1) of the immediately
preceding sentence.
2.2 Authorized Shares. The Company covenants that, during the period
the conversion rights exist, the Company will reserve from its authorized and
unissued Common Stock an aggregate of 6,800,000 shares (such amount to be
subject to equitable adjustment from time to time on terms reasonably acceptable
to the Majority Holders for stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock occurring on or
after the Issuance Date) to provide for the issuance of Common Stock upon the
full conversion of this Note and the Other Note, subject to reduction from time
to time by the number of shares of Common Stock issued on conversion of this
Note and the Other Note. The Company shall, from time to time, authorize and
reserve additional shares of Common Stock to be issuable pursuant to the terms
of this Note as shall be necessary to ensure that an adequate number of shares
of Common Stock are at all times authorized and reserved for issuance upon full
conversion of this Note and the Other Note in accordance with the terms hereof
and thereof. The Company represents and warrants that upon issuance, such shares
of Common Stock will be duly and validly issued, fully paid and non-assessable.
The Company agrees that its issuance of this Note shall constitute full
authority to its officers and agents who are charged with the duty of executing
stock
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certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.
2.3 Method of Conversion. (a) The right of the Holder to convert
this Note shall be exercised by delivering (which may be made by telephone line
facsimile transmission) to the Conversion Agent, with a copy to the Company, a
Conversion Notice stating the principal amount of this Note which, together with
interest and Default Interest, if any, as provided in this Note, is being
converted and the number of shares of Common Stock to be issued upon such
conversion. The number of shares of Common Stock to be issued upon each
conversion of this Note shall be the number set forth in the applicable
Conversion Notice, which number shall be conclusive absent manifest error. The
Company shall notify the Holder of any claim by the Company of manifest error in
a Conversion Notice within two Trading Days after the Holder gives such
Conversion Notice and no such claim of error shall limit or delay performance of
the Company's obligation to issue upon such conversion the number of shares of
Common Stock which are not in dispute. A Conversion Notice shall be deemed for
all purposes to be in proper form unless the Company notifies the Holder by
telephone line facsimile transmission within two Trading Days after a Conversion
Notice has been given (which notice from the Company shall specify all defects
in the Conversion Notice) and any Conversion Notice containing any such defect
shall nonetheless be effective on the date given if the Holder promptly
undertakes in writing to correct all such defects. The Company shall pay any
transfer taxes arising in connection with any conversion of this Note except
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of shares of
Common Stock or other securities or property on conversion of this Note in a
name other than that of the Holder, and the Company shall not be required to
issue or deliver any such shares or other securities or property unless and
until the Person or Persons requesting the issuance thereof shall have paid to
the Company the amount of any such tax or shall have established to the
satisfaction of the Company that such tax has been paid. The Holder shall be
responsible for the amount of any withholding tax payable in connection with
such conversion.
(b) If the Holder elects to convert this Note in accordance with
Section 2.1, the Holder shall not be required to physically surrender this Note
unless the entire unpaid principal amount of this Note is so converted. The
Company shall maintain records showing the principal amount and the amount of
interest so converted and the dates of such conversions or shall use such other
method, reasonably satisfactory to the Holder and the Company, so as not to
require physical surrender of this Note upon each such conversion. In the event
of any dispute or discrepancy, such records of the Company shall be controlling
and determinative in the absence of manifest error. Notwithstanding the
foregoing, if any portion of this Note is converted as aforesaid the Holder may
not transfer this Note unless (1) the Holder first physically surrenders this
Note to the Company, whereupon the Company will forthwith issue and deliver upon
the order of the Holder a new note of like tenor, registered as the Holder (upon
payment by the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal amount of this Note
and (2) such transfer is otherwise in compliance with Section 7.7 hereof. THE
HOLDER AND ANY ASSIGNEE HEREOF, BY ACCEPTANCE OF THIS NOTE, ACKNOWLEDGES AND
AGREES THAT, BY REASON OF THE PROVISIONS OF THIS PARAGRAPH, FOLLOWING CONVERSION
OF A PORTION OF THIS NOTE, THE UNPAID AND UNCONVERTED PRINCIPAL AMOUNT OF THIS
NOTE REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNT STATED ON THE FACE
HEREOF.
(c) In case of any consolidation or merger of the Company with any
other corporation (other than a wholly-owned subsidiary of the Company) in which
the Company is not the surviving corporation, or in case of any sale or transfer
of all or substantially all of the assets of the Company, or in the case of any
share exchange pursuant to which all of the outstanding shares of Common Stock
are converted into other securities or property, the Company shall make
appropriate provision or cause appropriate provision to be made so that the
Holder shall have the right thereafter to
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convert this Note into the kind of shares of stock and other securities and
property receivable upon such consolidation, merger, sale, transfer or share
exchange by the Persons who were holders of Common Stock immediately prior to
the effective date of such consolidation, merger, sale, transfer or share
exchange and on a basis which preserves the economic benefits of the conversion
rights of the Holder on a basis as nearly as practical as such rights existed
prior to such consolidation, merger, sale, transfer or share exchange. If, in
connection with any such consolidation, merger, sale, transfer or share exchange
each holder of shares of Common Stock is entitled to elect to receive either
securities, cash or other assets upon completion of such transaction, the
Company shall provide or cause to be provided to the Holder the right to elect
the securities, cash or other assets into which this Note shall be convertible
after completion of any such transaction on the same terms and subject to the
same conditions applicable to holders of the Common Stock (including, without
limitation, notice of the right to elect, limitations on the period in which
such election shall be made, and the effect of failing to exercise the
election). The Company shall not effect any such transaction unless the
provisions of this paragraph have been complied with. The above provisions shall
similarly apply to successive consolidations, mergers, sales, transfers or share
exchanges.
Whenever the Company shall propose to take any of the actions
specified in this Section 2.3(c), the Company shall cause a notice to be mailed
to the Holder at least 20 days prior to the date on which the books of the
Company will close or on which a record will be taken for such action. Such
notice shall specify the action proposed to be taken by the Company and the date
as of which holders of record of the Common Stock shall participate in any such
actions or be entitled to exchange their Common Stock for securities or other
property, as the case may be.
(d) Upon receipt by the Conversion Agent from the Holder of a
Conversion Notice, the Company shall issue and deliver or cause to be issued and
delivered to the Holder certificates for the Common Stock issuable upon such
conversion by the close of business on the third Business Day after the date of
such receipt, and as of the close of business on the date of receipt of such
Conversion Notice the Holder shall be deemed to be the holder of record of the
Common Stock issuable upon such conversion, the outstanding principal amount and
the amount of accrued and unpaid interest on this Note shall be reduced to
reflect such conversion, and all rights with respect to the portion of this Note
being so converted shall forthwith terminate except the right to receive the
Common Stock or other securities, cash or other assets, as herein provided, on
such conversion. If the Holder shall have given a Conversion Notice as provided
herein, the Company's obligation to issue and deliver the certificates for
Common Stock shall be absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision thereof, the recovery of any judgment against any Person or any
action to enforce the same, any failure or delay in the enforcement of any other
obligation of the Company to the Holder, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Company or any violation or
alleged violation of law by the Holder or any other Person, and irrespective of
any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with such conversion. If the Company fails
to issue and deliver the certificates for the Common Stock to the Holder
pursuant to the first sentence of this Section 2.3(d) as and when required to do
so, in addition to any other liabilities the Company may have hereunder and
under applicable law, (1) the Company shall pay or reimburse the Holder on
demand for all out-of-pocket expenses including, without limitation, fees and
expenses of legal counsel incurred by the Holder as a result of such failure,
(2) for each Trading Day thereafter on which the Company so fails to deliver
such certificates, the Conversion Price applicable to such conversion shall be
reduced by an amount equal to one percent (1%) of the amount that the Conversion
Price would otherwise be and (3) the Holder may by written notice (which may be
given by mail, courier, personal service or telephone line facsimile
transmission) or oral notice (promptly confirmed in writing) given at any time
prior to delivery to the Holder of the certificates
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for the shares of Common Stock issuable upon such conversion of this Note,
rescind such conversion, whereupon the Holder shall have the right to convert
this Note thereafter in accordance herewith.
(e) No fractional shares of Common Stock shall be issued upon
conversion of this Note but, in lieu of any fraction of a share of Common Stock
which would otherwise be issuable in respect of the aggregate number of such
shares converted at one time by the same holder, the Company may round the
number of shares of Common Stock issued on such conversion up to the next
highest whole share or may pay lawful money of the United States of America,
based on a value of one share of Common Stock being equal to the last sale price
of the Common Stock on the date the applicable Conversion Notice is given to the
Company, as reported by Bloomberg, L.P.
2.4 Limitation on Shares Issuable on Conversion. Notwithstanding any
other provision herein, unless (i) the Company elects otherwise and (ii) if
required, the Stockholder Approval shall have been obtained from the
stockholders of the Company or waived by the Nasdaq SmallCap or other securities
market on which the Common Stock is then listed which has a Stockholder Approval
Rule, the Company shall not be required to issue upon conversion of this Note a
number of shares of Common Stock in excess of the Maximum Share Amount. The
Company shall maintain records which show the number of shares of Common Stock
issued by the Company upon conversion from time to time of this Note, which
records shall be controlling in the absence of manifest error. Upon surrender of
this Note for transfer or re-registration hereof (or, at the option of the
Holder, for conversion pursuant to Section 2.1 of less than all of this Note),
the Company shall make a notation on the new Note issued upon such transfer or
re-registration or evidencing such unconverted portion of this Note, as the case
may be, as to the remaining number of shares of Common Stock from the Maximum
Share Amount remaining available for conversion of the Note evidenced by such
new certificate. If this Note is surrendered for split-up into two or more Notes
representing an aggregate principal amount equal to the principal amount of this
Note at the time so surrendered (as reduced by any contemporaneous conversion of
this Note), each Note issued on such split-up shall bear a notation of the
portion of the Maximum Share Amount allocated thereto determined by pro rata
allocation from among the remaining portion of the Maximum Share Amount
allocated to this Note at the time so surrendered. If any Other Note is
converted in full, repaid, repurchased or redeemed, all of the portion of the
Maximum Share Amount (as defined in such Other Note) allocated to such Other
Note which remains unissued after such conversion, repayment, repurchase or
redemption shall be re-allocated to this Note and the Other Note outstanding at
the close of business on the date of such conversion, repayment, repurchase or
redemption of the Other Note so converted, repaid, repurchased or redeemed pro
rata based on the principal amounts outstanding at the close of business on such
date.
ARTICLE III
CERTAIN COVENANTS
3.1 Limitations on Certain Indebtedness. The Company will not
itself, and will not permit any subsidiary of the Company to, create, assume,
incur or in any manner become liable in respect of, any Indebtedness other than
Permitted Indebtedness.
3.2 Payment of Obligations. The Company will pay and discharge, and
will cause each subsidiary to pay and discharge, all their respective material
obligations and liabilities, including, without limitation, tax liabilities,
except where the same may be contested in good faith by appropriate proceedings.
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ARTICLE IV
EVENTS OF DEFAULT
If any of the following events of default (each, an "Event of
Default") shall occur:
4.1 Failure to Pay Principal or Interest. The Company fails (a) to
pay any installment of principal, the Optional Redemption Price or the
Repurchase Price hereof when due, whether on a Principal Payment Date, at
maturity, upon redemption or repurchase, upon acceleration or otherwise, as
applicable, or (b) to pay any installment of interest hereon when due and, in
the case of clauses (a) or (b) of this Section 4.1, such failure continues for a
period of five (5) Business Days after the due date thereof, and provided,
however, that if the first quarterly interest payment due March 13, 2001 is not
timely made, such failure to pay will not become an Event of Default unless such
failure continues until the 180th day after the Issuance Date;
4.2 Conversion and the Shares. The Company fails to timely issue or
cause to be issued shares of Common Stock to the Holder upon exercise by the
Holder of the conversion rights of the Holder in accordance with the terms of
this Note or fails to transfer any certificate for shares of Common Stock issued
to the Holder upon conversion of this Note as and when required by this Note and
the other Transaction Documents;
4.3 Breach of Covenant. The Company or any Guarantor (a) fails to
comply with any provision of Article III of this Note or (b) breaches any other
material covenant or other material term or condition of this Note (other than
as specifically provided in Sections 4.1, 4.2 and 4.3(a) hereof) or the other
Transaction Documents, and in the case of this clause (b) of this Section 4.3
only, such breach continues for a period of ten (10) Business Days after written
notice thereof to the Company from the Holder;
4.4 Breach of Representations and Warranties. Any representation or
warranty of the Company or the Guarantors made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection
herewith (including, without limitation, the Transaction Documents) shall be
false or misleading in any material respect when made;
4.5 Certain Voluntary Proceedings. The Company, any material
subsidiary of the Company, or any Guarantor shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due or shall admit in writing its inability generally to pay its debts as
they become due;
4.6 Certain Involuntary Proceedings. An involuntary case or other
proceeding shall be commenced against the Company, any material subsidiary of
the Company, or any Guarantor seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) consecutive
days;
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4.7 Judgments. Any court of competent jurisdiction shall enter one
or more final judgments against the Company, any subsidiary of the Company, or
any Guarantor or any of their respective properties or other assets in an
aggregate amount in excess of $100,000, which is not vacated, bonded, stayed,
discharged, satisfied or waived for a period of sixty (60) consecutive days;
4.8 Default Under Other Agreements. (a) the Company, any subsidiary
of the Company, or any Guarantor shall (i) default in any payment with respect
to any Indebtedness for borrowed money (other than this Note) which Indebtedness
has an outstanding principal amount in excess of $100,000 individually or
$200,000 in the aggregate for the Company, its subsidiaries and the Guarantors,
taken as a whole, beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement, covenant or condition relating to
any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, any such Indebtedness to become due
prior to its stated maturity and such default or event shall continue beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created (after giving effect to any consent or waiver
obtained and then in effect thereunder); or (b) any Indebtedness of the Company,
any of its subsidiaries or the Guarantors which has an outstanding principal
amount in excess of $100,000 individually or $200,000 in the aggregate shall, in
accordance with its terms, be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled or required payment prior to the
stated maturity thereof;
4.9 Security Agreement. The occurrence of any Event of Default as
such term is defined in the Security Agreement; or
4.10 Assertion of Invalidity. There shall have been asserted, in
writing, by or on behalf of the Company that any provision of the Transaction
Documents is not valid and binding on the Company, any of its subsidiaries or
the Guarantors, as the case may be, or declaration shall have been sought by or
on behalf of the Company, any of its subsidiaries or the Guarantors, as the case
may be, that any such provision is null and void, or there shall have been
commenced by or on behalf of the Company, any of its subsidiaries or the
Guarantors, as the case may be, a proceeding to contest the validity or
enforceability thereof, or there shall have been a denial by or on behalf of the
Company, any of its subsidiaries or the Guarantors, as the case may be, that any
of them has any or further liability or obligation under the Transaction
Documents; then upon the occurrence and during the continuation of any Event of
Default specified in Section 4.1, 4.2, 4.3, 4.4, 4.7, 4.8, 4.9 or 4.10, at the
option of the Holder, the Company shall, and upon the occurrence of any Event of
Default specified in Section 4.5 or 4.6, the Company shall, pay to the Holder an
amount equal to the sum of (1) the product obtained by multiplying (a) the sum
of (A) the outstanding principal amount of this Note plus (B) accrued and unpaid
interest on such principal amount to the date of payment times (b) 120% plus (2)
accrued and unpaid Default Interest, if any, on the amounts referred to in the
immediately preceding clauses (A) and (B) at the rate provided in this Note to
the date of payment, and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including, without
limitation, legal fees and expenses, of collection, and the Holder shall be
entitled to exercise all other rights and remedies available at law or in
equity, including all rights and remedies under or in connection with the
Security Agreement.
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ARTICLE V
REPURCHASE UPON A REPURCHASE EVENT
5.1 Repurchase Right Upon Repurchase Event. If there shall occur a
Repurchase Event, then, in addition to any other right or remedy of the Holder,
the Holder shall have the right, at the Holder's option, to require the Company
to repurchase all of this Note, or any portion hereof (in a minimum principal
amount of $100,000 or integral multiples thereof (or such lesser remaining
principal amount of this Note)), on the repurchase date that is three Business
Days after the date of the Holder Notice delivered with respect to such
Repurchase Event. The Holder shall have the right to require the Company to
repurchase all or any such portion of this Note if a Repurchase Event occurs at
any time while any portion of the principal amount of this Note is outstanding
at a price equal to the Repurchase Price.
5.2 Notices; Method of Exercising Repurchase Rights, Etc.
(a) On or before the fifth Business Day after the occurrence of a
Repurchase Event, the Company shall give to the Holder a Company Notice of the
occurrence of the Repurchase Event and of the repurchase right set forth herein
arising as a result thereof. Such Company Notice shall set forth:
(i) the date by which the repurchase right must be exercised, and
(ii) a description of the procedure (set forth below) which the Holder
must follow to exercise the repurchase right.
No failure of the Company to give a Company Notice or defect therein shall limit
the Holder's right to exercise the repurchase right or affect the validity of
the proceedings for the repurchase of this Note or portion hereof.
(b) To exercise the repurchase right, the Holder shall deliver to
the Company on or before the 30th day after the Company Notice is given (or if
no such Company Notice has been given, within 50 days after the Holder first
learns of the Repurchase Event) (i) a Holder Notice setting forth the name of
the Holder, the principal amount of this Note to be repurchased, and, in general
terms, the Repurchase Event giving rise to such repurchase and (ii) this Note,
duly endorsed for transfer to the Company of the portion of the principal amount
of this Note to be repurchased. A Holder Notice may be revoked by the Holder by
given notice of such revocation prior to the time the Company pays the
Repurchase Price.
5.3 Other. (a) If the Holder shall have given a Holder Notice, on
the date which is three Business Days after the date such Notice is given (or
such later date as the Holder surrenders this Note for full or partial
repurchase) the Company shall make payment in immediately available funds of the
applicable Repurchase Price to such account as specified by the Holder in
writing to the Company at least one Business Day prior to the applicable
repurchase date. If the Company fails to repurchase on the applicable repurchase
date this Note (or portion hereof) as to which the repurchase right has been
properly exercised pursuant to this Article V, then the Repurchase Price for the
portion (which, if applicable, may be all) of this Note shall bear interest to
the extent not prohibited by applicable law from the applicable repurchase date
until paid at the Default Rate.
(b) If a portion of this Note is to be repurchased, upon surrender
of this Note to the Company in accordance with the terms of this Article V, the
Company shall execute and deliver to the Holder without service charge, a new
Note or Notes, having the same date hereof and containing identical
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terms and conditions, in such denomination or denominations as requested by the
Holder in an aggregate principal amount equal to, and in exchange for, the
unrepurchased portion of the principal amount of the Note so surrendered.
(c) The Company shall notify the Holder of any claim by the Company
of manifest error in a Holder Notice within one Business Day after the Holder
gives such notice and no such claim of error shall limit or delay performance of
the Company's obligation to repurchase such portion of the Note which is not in
dispute and (ii) such notice shall be deemed for all purposes to be in proper
form unless the Company notifies the Holder within one Business Day after such
notice has been given (which notice from the Company shall specify all defects
in such notice) and any Holder Notice containing any such defect shall
nonetheless be effective on the date given if the Holder promptly undertakes in
writing to correct all such defects.
ARTICLE VI
DEFINITIONS
6.1 Certain Defined Terms. (a) All the agreements or instruments
herein defined shall mean such agreements or instruments as the same may from
time to time be supplemented or amended or the terms thereof waived or modified
to the extent permitted by, and in accordance with, the terms thereof and of
this Note.
(b) The following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or under common control with the subject Person; for purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Aggregated Person" means, with respect to any Person, any Person
whose beneficial ownership of shares of Common Stock would be aggregated with
the beneficial ownership of shares of Common Stock by such Person for purposes
of Section 13(d) of the 1934 Act and Regulation 13D-G thereunder.
"AMEX" means the American Stock Exchange, Inc.
"Applicable Rate" means twelve percent (12.0%) per annum; provided,
however, that if the first quarterly interest payment due March 13, 2001 is made
after such Interest Payment Date, the Applicable Rate for such payment shall be
fifteen percent (15.0%) per annum commencing on the Issuance Date.
"Average Market Price" for any date means the arithmetic average of
the Market Price for each of the five Trading Days, whether or not consecutive,
during the applicable Measurement Period on which the lowest Market Prices
occurred.
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"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which commercial banks in The City of New York are authorized or required
by law or executive order to remain closed.
"Collateral Agent" means Advantage Fund II Ltd., as Collateral Agent
under the Security Agreement.
"Common Stock" shall mean the Common Stock, $.00001 par value, of
the Company or any shares of capital stock of the Company into which such stock
shall be changed or reclassified after the Issuance Date.
"Company" shall have the meaning provided in the first paragraph of
this Note.
"Company Notice" means a notice from the Company to the Holder of
the occurrence of a Repurchase Event given in accordance with Section 5.2(a).
"Conversion Agent" means American Stock Transfer & Trust Company, or
its duly appointed successor, as conversion agent for this Note pursuant to the
Transfer Agent Instructions.
"Conversion Date" means, with respect to each conversion of this
Note pursuant to Article II, the date on which the Conversion Notice relating to
such conversion is actually received by the Conversion Agent, whether by mail,
courier, personal service, telephone line facsimile transmission or other means.
"Conversion Notice" means a Notice of Conversion of 12% Secured
Convertible Note substantially in the form attached hereto as Exhibit A,
properly completed and duly executed by the Holder or the Holder's
attorney-in-fact.
"Conversion Price" means for any Conversion Date, 95% of the Average
Market Price during the Measurement Period for such Conversion Date.
"Default Interest" shall have the meaning provided in the first
paragraph of this Note.
"Default Rate" means sixteen and one half percent (16.5%) per annum
(or such lesser rate equal to the highest rate permitted by applicable law);
provided, however, that if the first quarterly interest payment is made (i)
after the first Interest Payment Date but on or prior to June 13, 2001, such
payment shall not bear Default Interest or (ii) after June 13, 2001, the 16.5%
Default Rate shall apply commencing on June 14, 2001 to such payment computed at
an Applicable Rate of 15% from the Issuance Date.
"Event of Default" shall have the meaning provided in Article IV.
"Exchange Agreement" means the Exchange Agreement, dated as of
December 12, 2000, by and among the Company, Advantage Fund II Ltd. and Koch
Investment Group Limited.
"Final Maturity Date" shall have the meaning provided in the first
paragraph of this Note.
"Generally Accepted Accounting Principles" for any Person means the
generally accepted accounting principles and practices applied by such Person
from time to time in the preparation of its audited financial statements.
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"Guarantors" means TME, MonsterBook.com, Inc., a Delaware
corporation, and DSS Direct Connect, L.L.C., a Washington limited liability
company, and their respective successors and assigns.
"Guaranty Agreement" means the Guaranty Agreement, dated as of the
Issuance Date, by and among the Guarantors, the Company, the Holder and the
original holder of the Other Note.
"Holder" shall have the meaning provided in the first paragraph of
this Note.
"Holder Notice" means a notice from the Holder to the Company
requiring the repurchase of all or a portion of this Note given in accordance
with Section 5.2(b).
"Indebtedness" as used in reference to any Person means all
indebtedness of such Person for borrowed money, the deferred purchase price of
property, goods and services and obligations under leases which are required to
be capitalized in accordance with Generally Accepted Accounting Principles and
shall include all such indebtedness guaranteed in any manner by such Person or
in effect guaranteed by such Person through a contingent agreement to purchase
and all indebtedness for the payment or purchase of which such Person has
contingently agreed to advance or supply funds and all indebtedness secured by
mortgage or other lien upon property owned by such Person, although such Person
has not assumed or become liable for the payment of such indebtedness, and, for
all purposes hereof, such indebtedness shall be treated as though it has been
assumed by such Person.
"Interest Payment Dates" shall have the meaning provided in the
first paragraph of this Note.
"Issuance Date" means the date this Note was first issued to the
original Holder of this Note.
"Majority Holders" means at any time such of the holders of this
Note and the Other Note which hold this Note and the Other Note which, based on
the outstanding principal amount thereof, represent a majority of the aggregate
outstanding principal amount of this Note and the Other Note.
"Market Price" of the Common Stock on any date means the closing bid
price for one share of Common Stock on such date on the first applicable among
the following: (a) the national securities exchange on which the shares of
Common Stock are listed which constitutes the principal securities market for
the Common Stock, (b) the Nasdaq, if the Nasdaq constitutes the principal
securities market for the Common Stock on such date, (c) the Nasdaq SmallCap, if
the Nasdaq SmallCap constitutes the principal securities market for the Common
Stock on such date (in the case of clauses (a), (b) and (c), as reported by
Bloomberg, L.P.) or (d) the OTC Bulletin Board or such other market or service
where the Common Stock is listed or quoted (subject to equitable adjustments
from time to time on terms reasonably acceptable to the Majority Holders for
stock splits, stock dividends, combinations, recapitalizations,
reclassifications, distributions, Tender Offers and similar events relating to
the Common Stock occurring after the Issuance Date).
"Maximum Share Amount" means [INSERT PRO RATA PORTION OF 6,800,000]
shares of Common Stock (such amount to be subject to (i) adjustment pursuant to
the provisions of Section 2.4 and (ii) equitable adjustment from time to time on
terms reasonably acceptable to the Majority Holders for stock splits, stock
dividends, combinations, recapitalizations, reclassifications, distributions,
Tender Offers and similar events relating to the Common Stock occurring after
the Issuance Date).
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"Measurement Period" means, with respect to any date, the period of
20 consecutive Trading Days ending on the Trading Day prior to such date.
"Merger" means the proposed merger of TME with and into a subsidiary
of the Company pursuant to the Agreement and Plan of Merger, dated as of
December 28, 1999, as amended, among such parties.
"Nasdaq" means the Nasdaq National Market.
"Nasdaq SmallCap" means the Nasdaq SmallCap Market.
"1933 Act" means the Securities Act of 1933, as amended.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
"Note" shall have the meaning provided in Section 7.3.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Optional Redemption Date" means the date on which the Company
elects to redeem this Note in accordance with Section 1.1.
"Optional Redemption Notice" means a notice from the Company to the
Holder electing to redeem this Note given in accordance with Section 1.1(a).
"Optional Redemption Price" means an amount equal to the sum of (1)
the product obtained by multiplying (A) the sum of (i) the outstanding principal
amount of the Note to be redeemed on a particular Optional Redemption Date plus
(ii) accrued and unpaid interest on such principal amount to the Optional
Redemption Date times (B) 115% plus (2) accrued and unpaid Default Interest, if
any, on the amounts referred to in the immediately preceding clauses (1)(A)(i)
and (1)(A)(ii) at the rate provided in this Note to the Optional Redemption
Date.
"Other Note" means the 12% Secured Convertible Note of the Company
issued to the other holder pursuant to the Exchange Agreement and any
replacement note or notes.
"Permitted Indebtedness" means (i) Indebtedness of the Company
outstanding on the Issuance Date, (ii) Indebtedness of the Company incurred
after the Issuance Date which is unsecured and expressly subordinated to this
Note and the Other Note on terms reasonably acceptable to the Majority Holders,
and (iii) Indebtedness of the Company's subsidiary, DSS Direct Connect, L.L.C.,
a Washington limited liability company, incurred after the Issuance Date for a
working capital line of credit provided by a bank or other financial institution
which is secured by the assets and limited liability company interests of such
subsidiary.
"Person" means any natural person, corporation, partnership, trust,
incorporated organization, unincorporated association or similar entity or any
government, governmental agency or political subdivision.
"Principal Installment Amount" on any Principal Payment Date means
an amount equal to (x) the principal amount of this Note outstanding on such
Principal Payment Date divided by (y) the number of remaining Principal Payment
Dates hereunder (including such Principal Payment Date for
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which the Principal Installment Amount is being determined) which have not
occurred on prior dates, such amount to be rounded to the nearest cent.
"Principal Payment Dates" shall have the meaning provided in the
first paragraph of this Note.
"Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement, dated as of the Issuance Date, entered into
between the Company and the original holders of this Note and the Other Note.
"Registration Statement" means the Registration Statement required
to be filed by the Company with the SEC pursuant to Section 2(a) of the
Registration Rights Agreement.
"Repurchase Event" means the occurrence of any one or more of the
following events:
(1) The inability for 30 or more days (whether or not consecutive)
commencing on or after the SEC Effective Date of the Holder to sell any shares
of Common Stock issued or issuable on conversion of this Note or exercise of the
Warrants pursuant to the Registration Statement for any reason on each of such
30 days;
(2) Any consolidation or merger of the Company with or into another
entity (other than the Merger or a merger or consolidation of a subsidiary of
the Company into the Company or a wholly-owned subsidiary of the Company) where
the stockholders of the Company immediately prior to such transaction do not
collectively own at least 51% of the outstanding voting securities of the
surviving corporation of such consolidation or merger immediately following such
transaction or the common stock of such surviving corporation is not listed for
trading on the NYSE, the AMEX, the Nasdaq or the Nasdaq SmallCap; or any sale or
other transfer of all or substantially all of the assets of the Company or any
Guarantor;
(3) The taking of any action, including any amendment to the
Company's Certificate of Incorporation, without the consent of the Majority
Holders which materially and adversely affects the rights of the Holder;
provided, however, that no Repurchase Event shall be deemed to occur by reason
of an amendment to the Corporation's Certificate of Incorporation which
increases the number of authorized shares of Common Stock in connection with the
Merger; or
(4) The occurrence of any Event of Default specified in Article IV
of this Note.
"Repurchase Price" means an amount equal to the sum of (1) the
product obtained by multiplying the sum of (A) the outstanding principal amount
of this Note plus (B) accrued and unpaid interest on such principal amount to
the date of repurchase times 120% plus (2) accrued and unpaid Default Interest,
if any, on the amounts referred to in the immediately preceding clauses (1)(A)
and (1)(B) at the rate provided in this Note to the date of repurchase.
"SEC" means the Securities and Exchange Commission.
"SEC Effective Date" means the date on which the Registration
Statement is first declared effective by the SEC.
"Security Agreement" means the Pledge and Security Agreement, dated
as of the Issuance Date, by and among the Company, the Guarantors and the
Collateral Agent.
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"Stockholder Approval" shall mean the approval by a majority of the
votes cast by the holders of shares of Common Stock (in person or by proxy) at a
meeting of the stockholders of the Corporation (duly convened at which a quorum
was present), or a written consent of holders of shares of Common Stock entitled
to such number of votes given without a meeting, of the issuance by the
Corporation of 20% or more of the Common Stock of the Corporation outstanding on
the Issuance Date for less than the greater of the book or market value of such
Common Stock on conversion of the Note and the Other Note, as and to the extent
required under the Stockholder Approval Rule.
"Stockholder Approval Rule" means Rule 4310(c)(25)(H) of the Nasdaq
SmallCap as in effect from time to time or any successor, replacement or similar
rule or regulation of the Nasdaq SmallCap or any other principal securities
market on which the Common Stock is listed for trading.
"Tender Offer" means a tender offer or exchange offer.
"TME" means Transmedia Europe, Inc., a Delaware corporation.
"Trading Day" means a day on whichever of (x) the national
securities exchange, (y) the Nasdaq or (z) the Nasdaq SmallCap which at the time
constitutes the principal securities market for the Common Stock is open for
general trading.
"Transaction Documents" means this Note, the Exchange Agreement, the
Registration Rights Agreement, the Warrants, the Security Agreement, the
Guaranty Agreement and the Transfer Agent Instructions.
"Transfer Agent Instructions" means the Transfer Agent Instructions
from the Company to the Conversion Agent issued pursuant to the Exchange
Agreement for the benefit of the holders of this Note and the Other Note.
"Warrants" shall have the meaning provided in the Exchange
Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 Failure or Indulgency Not Waiver. No failure or delay on the
part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privileges. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
7.2 Notices. Except as otherwise specifically provided herein, any
notice herein required or permitted to be given shall be in writing and may be
personally served, sent by telephone line facsimile transmission or delivered by
courier or sent by United States mail and shall be deemed to have been given
upon receipt if personally served, sent by telephone line facsimile transmission
or sent by courier or three days after being deposited in the United States
mail, certified, with postage pre-paid and properly addressed, if sent by mail.
For the purposes hereof, the address of the Holder shall be as shown on the
records of the Company (telephone line facsimile transmission number (__) ____ -
____); and the address of the Company shall be 11 St. James's Square, London
SW1Y 4LB, England, Attention: Chief Executive Officer (telephone line facsimile
transmission number 011-44-207-839-5727. Both the Holder
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and the Company may change the address for service by service of written notice
to the other as herein provided.
7.3 Amendment Provision. The term "Note" and all reference thereto,
as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any replacement note or notes. Neither this Note, any Other
Note, the Security Agreement, nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the Majority Holders, provided that no such
change, waiver, discharge or termination shall, without the consent of the
Holder and the holder of the Other Note if affected thereby, (i) extend the
scheduled final maturity of this Note or the Other Note, or reduce the rate or
extend the time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) hereon or thereon
or reduce the principal amount hereof or thereof or the Optional Redemption
Price or Repurchase Price, (ii) release the collateral or reduce the amount of
collateral required to be deposited or maintained by the Company pursuant to the
Security Agreement except as expressly provided in the Security Agreement, (iii)
amend, modify or waive any provision of this Section 7.3, (iv) reduce any
percentage specified in, or otherwise modify, the definition of Majority Holders
or (v) except as provided in this Note, change the method of calculating the
Conversion Price. Notwithstanding any other provision of this Note, in addition
to the requirements of the immediately preceding sentence, any amendment of (x)
Section 2.1(b), (y) the definition of the term Aggregated Person or (z) this
sentence shall require approval by the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock, present in person or
represented by proxy at a duly convened meeting of stockholders of the Company,
and entitled to vote, or the consent thereto in writing by holders of a majority
of the outstanding shares of Common Stock, and the stockholders of the Company
are hereby expressly made third party beneficiaries of this sentence.
7.4 Assignability. This Note shall be binding upon the Company and
its successors and permitted assigns, and shall inure to the benefit of and be
binding upon the Holder and its successors and permitted assigns.
7.5 Certain Expenses. The Company shall pay on demand all expenses
incurred by the Holder, including reasonable attorneys' fees and expenses, as a
consequence of, or in connection with, (x) the negotiation, preparation or
execution of any amendment or modification of the Transaction Documents, (y) any
default or breach of any of the Company's obligations set forth in the
Transaction Documents and (z) the enforcement or restructuring of any right of,
including the collection of any payments due, the Holder under the Transaction
Documents, including any action or proceeding relating to such enforcement or
any order, injunction or other process seeking to restrain the Company from
paying any amount due the Holder in which the Holder prevails.
7.6 Governing Law. This Note shall be governed by and interpreted in
accordance with the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule that would
cause the laws of any jurisdiction other than the State of New York to be
applied.
7.7 Transfer of Note. This Note has not been and is not being
registered under the provisions of the 1933 Act or any state securities laws and
this Note may not be transferred unless (1) the transferee is an "accredited
investor" as defined in Regulation D under the 1933 Act and (2) the Holder shall
have delivered to the Company an opinion of counsel to the effect that this Note
may be sold or transferred pursuant to an exemption from such registration.
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7.8 Enforceable Obligation. The Company represents and warrants that
at the time of the original issuance of this Note it received consideration
pursuant to the Exchange Agreement of a type and in an amount with a value to
the Company at least equal to the original principal amount of this Note, and
that this Note is an enforceable obligation of the Company which is not subject
to any offset, reduction, counterclaim or disallowance of any sort.
7.9 Certain Amounts. Whenever pursuant to this Note the Company is
required to pay an amount in excess of the outstanding principal amount (or the
portion thereof required to be paid at that time) plus accrued and unpaid
interest plus Default Interest on such principal and interest, the Company and
the Holder agree that the actual damages to the Holder from the receipt of cash
payment on this Note may be difficult to determine and the amount to be so paid
by the Company represents stipulated damages and not a penalty and is intended
to compensate the Holder in part for loss of the opportunity to convert this
Note and to earn a return from the sale of shares of Common Stock acquired upon
conversion of this Note at a price in excess of the price paid for such shares
pursuant to this Note. The Company and the Holder hereby agree that such amount
of stipulated damages is not plainly disproportionate to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.
7.10 Replacement of Notes. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note and (a) in the case of loss, theft or
destruction, of an affidavit from the Holder reasonably satisfactory to the
Company or (b) in the case of mutilation, upon surrender and cancellation of
this Note, the Company at its expense will execute and deliver to the Holder a
new Note of like tenor.
* * * * * *
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IN WITNESS WHEREOF, the Company has caused this Note to be signed in
its name by its duly authorized officer on the day and in the year first above
written.
TRANSMEDIA ASIA PACIFIC, INC.
By:_______________________________
Name:
Title:
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Exhibit A
NOTICE OF CONVERSION
OF
12% SECURED CONVERTIBLE NOTE
OF
TRANSMEDIA ASIA PACIFIC, INC.
TO: American Stock Transfer CC: Transmedia Asia Pacific, Inc.
& Trust Company, 11 St. James's Square
as Conversion Agent London SW1Y 4LB
6201 Fifteenth Avenue England
Brooklyn, New York 11219
Attention: Chief Executive Officer
Facsimile No.: (718) 921-8355 Facsimile No.: 011-44-207-839-5727
(1) Pursuant to the terms of the 12% Secured Convertible Note due
2002 (the "Note") of Transmedia Asia Pacific, Inc., a Delaware corporation (the
"Company"), the undersigned hereby elects to convert $__________________ of the
Note, equal to the sum of $__________________ principal amount of the Note,
$_________________ of accrued and unpaid interest on such principal amount and
$_______________ of Default Interest on such principal and interest, into shares
of Common Stock, $.00001 par value (the "Common Stock"), of the Company.
Capitalized terms used in this Conversion Notice and not otherwise defined
herein have the respective meanings provided in the Note.
(2) Please issue a certificate or certificates for shares (the
"Conversion Shares") of Common Stock in the name(s) specified immediately below
or, if additional space is necessary, on an attachment hereto:
_______________________________ _______________________________
Name Name
_______________________________ _______________________________
Address Address
_______________________________ _______________________________
SS or Tax ID Number SS or Tax ID Number
(3) The Conversion Date is __________________.
(4) The closing bid price of the Common Stock on each of the five
Trading Days during the Measurement Period preceding the Conversion Date on
which the lowest closing bid prices occurred and the arithmetic average thereof
are as follows:
Date Closing Bid Price
---- -----------------
1.________________ ________________
2.________________ ________________
3.________________ ________________
4.________________ ________________
5.________________ ________________
Arithmetic Average: $ __________________ = Average Market Price
95% of Average Market Price = $_____________ = Conversion Price
A-2
(5) Calculation of number of Conversion Shares to be issued:
Amount to be converted of $__________________ divided by Conversion Price of
$_________________ = ___________________ shares of Common Stock.
(6) Principal amount of the Note held by the undersigned after
giving effect to this Conversion Notice: $__________________.
(7) Remaining number of shares of Common Stock from the Maximum
Share Amount available for conversion of the Note: ______________________.
(8) If the shares of Common Stock issuable upon conversion of the
Note have not been registered for resale under the Securities Act of 1933, as
amended (the "Act"), and the provisions of Rule 144(k) under the Act are
inapplicable to the undersigned with respect to the Conversion Shares relating
to this Notice, the undersigned represents and warrants that (i) the Conversion
Shares not so registered are being acquired for the account of the undersigned
for investment, and not with a view to, or for resale in connection with, the
public distribution thereof other than pursuant to registration under the Act,
and that the undersigned has no present intention of distributing or reselling
the shares of Common Stock not so registered other than pursuant to registration
under the Act and (ii) the undersigned is an "accredited investor" as defined in
Regulation D under the Act. If the provisions of Rule 144(k) under the Act are
inapplicable to the undersigned with respect to the Conversion Shares relating
to this Notice the undersigned further agrees that (A) the shares of Common
Stock not so registered shall not be sold or transferred unless either (i) they
first shall have been registered under the Act and applicable state securities
laws or (ii) the Company first shall have been furnished with an opinion of
legal counsel reasonably satisfactory to the Company to the effect that such
sale or transfer is exempt from the registration requirements of the Act and (B)
the Company may place a legend on the certificate(s) for the shares of Common
Stock not so registered to that effect and place a stop-transfer restriction in
its records relating to the shares of Common Stock not so registered, all in
accordance with the Exchange Agreement.
Date _________________________
______________________________________________
Signature of Holder
(Must be signed exactly as name appears on the
Note)