<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 30, 1999
------------------------------
TRANSMEDIA NETWORK INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-13806 84-6028875
---------------- ----------------- -------------------
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
11900 Biscayne Boulevard, Suite 460, Miami, Florida 33181
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (305) 892-3300
--------------------------
- --------------------------------------------------------------------------------
(Former Name or Address, if Changed Since Last Report)
<PAGE>
ITEM 2. Acquisition or Disposition of Assets.
On June 30, 1999, we concluded the acquisition from SignatureCard, Inc.
("SignatureCard"), a subsidiary of Montgomery Ward & Co., Incorporated, of
assets related to a membership discount dining program SignatureCard operated
under the Dining A La Card trade name and service mark. The assets acquired
included various intellectual property rights and computer software, membership
and merchant data, rights-to-receive, and, most significantly, a registered card
platform, among other things. As consideration for the assets, we (1) paid
SignatureCard $35 million in cash at closing (representing the estimated amount
of the cash funded by SignatureCard for certain "qualified" rights-to-receive),
(2) issued to SignatureCard 400,000 shares of our common stock and (3) issued to
SignatureCard a three-year option to purchase an additional 400,000 shares of
our common stock at a price of $4.00 per share. In addition, during the two-year
period following the closing, we have agreed to share with SignatureCard certain
amounts received in excess of the amount funded at closing in respect of
"non-qualified" rights-to-receive. Commencing December 31, 1999, SignatureCard
may, at any time prior to June 30, 2002, require us to repurchase all or part of
the 400,000 shares we issued at the closing at a price of $8.00 per share.
In connection with the acquisition of Dining A La Card, we entered into
a Services Collaboration Agreement with SignatureCard. Under this agreement,
SignatureCard will continue to provide dining members from its airline frequent
flyer partner programs and other marketing programs. It will also share, for
12.5 years, certain profits we derive from SignatureCard-generated members as
well as a portion of the membership fee revenues generated from fee paying
members acquired in this transaction or subsequently through SignatureCard's
efforts.
In connection with this acquisition, we paid a fee for transaction
advisory services to Equity Group Investments LLC, an affiliate of our largest
stockholder ("EGI"), of $386,000.
To finance the acquisition, we obtained a $35 million senior secured
revolving bridge loan facility from The Chase Manhattan Bank (from which $29
million was drawn down) and a $10 million term loan from GAMI Investments, Inc.,
an affiliate of EGI.
The Chase Facility
The Chase facility permits us to borrow up to an aggregate principal
amount equal to the lesser of (i) $35 million and (ii) the amount available
under a borrowing base formula based on the amount of Dining A La Card
receivables which meet certain eligibility criteria (which was $35 million at
the closing). The facility is secured by liens on substantially all of our
assets (including those purchased pursuant to the acquisition), other than those
subject to an existing securitization facility, as well as the stock of our
three principal subsidiaries: Transmedia Restaurant Company Inc., Transmedia
Service Company Inc., and TMNI International Incorporated. It is our intention
to use remaining proceeds of the facility in connection with the ongoing Dining
A La Card business.
Amounts drawn down under the facility accrue interest, at our election,
at either (i) 0.25% plus the greater of (a) the prime rate publicly announced by
Chase in effect in New York, New York and (b) the federal funds effective rate
from time to time plus 1.5% or (ii) one month LIBOR plus
(Page 2 of 26 Pages)
<PAGE>
1.25%, and mature on December 30, 1999 or upon the earlier effectiveness of a
securitization facility of the Dining A La Card rights-to-receive. Interest is
payable monthly in arrears. Any amounts overdue under the facility accrue
interest at the applicable rate plus 2%. The agreement contains customary events
of default, as well a cross default to all other material indebtedness,
including our existing securitization facility and the GAMI loan. We intend to
replace this bridge loan with a securitization facility of the Dining A La Card
rights-to-receive arranged through Chase.
In connection with the facility, we paid a $500,000 fee to Chase upon
the closing and are required to pay a monthly unused line fee equal to 0.375% of
the average unused amount.
The GAMI loan
The GAMI loan in the amount of $10 million is unsecured and
subordinated to the Chase facility. It binds Transmedia as well as its three
principal subsidiaries as borrowers. Interest accrues on the principal amount
outstanding at the prime rate (as announced from time to time by Chase) plus 4%,
and is payable monthly in arrears. Overdue amounts bear interest at such prime
rate plus 8%.
The terms of this agreement require us to conduct a rights offering of
rights to purchase a new series of convertible preferred stock to be offered to
each existing stockholder of record on a pro rata basis. The proceeds of the
rights offering will be used to repay all outstanding amounts under this loan.
In connection with the rights offering, EGI, through its affiliate and our
largest stockholder, Samstock L.L.C., has agreed to act as a standby purchaser
whereby, after exercising its initial rights and any additional subscription
privileges, it will purchase any shares not otherwise subscribed for by our
other stockholders. The GAMI loan matures on December 30, 1999 or the earlier
closing of such rights offering. The failure to meet certain requirements
relating to the rights offering and the occurrence of an event of default under
various agreements relating to the rights offering or under the Chase facility
would constitute defaults under this facility, among other customary events.
Upon the occurrence of an event of default, various standstill covenants binding
Samstock and its affiliates (which currently preclude Samstock and its
affiliates, subject to certain limitations, from acquiring additional securities
of Transmedia, soliciting proxies in opposition to the recommendation of a
majority of our disinterested directors, forming "groups" for the purpose of
acquiring, voting or disposing of our voting securities, or soliciting bidders
for Transmedia, among other things, until March 3, 2003) would automatically
terminate, and Samstock would have the right to designate an additional number
of directors to our Board of Directors such that the total number of Samstock
designees on our Board would constitute a majority, among other remedies.
The terms of this loan required us to pay to GAMI at closing a cash fee
of $500,000, which is reimbursable to us upon the consummation of the rights
offering and the issuance to Samstock L.L.C. of warrants to purchase 1,000,000
shares of our common stock in consideration of providing the loan and its
obligation to act as a standby purchaser in connection with the rights offering.
If the rights offering is not consummated or the warrants are not issued, we are
required to pay GAMI an additional $500,000 fee.
(Page 3 of 26 Pages)
<PAGE>
The Asset Purchase Agreement, the Option Agreement, the Services
Collaboration Agreement, the Chase Manhattan Bank Credit Agreement, the Security
Agreement, the Pledge Agreement and the GAMI Credit Agreement have been filed as
exhibits to the Current Report on Form 8-K to which this Form 8-K/A amends. The
foregoing summary of material terms of these documents is qualified in its
entirety by reference to these exhibits.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
The registrant is filing herewith (i) audited financial statements of
Dining A La Card as of December 31, 1998, 1997 and 1996 and for each of the
years in the three year period ended December 31, 1998, (ii) an unaudited
consolidated balance sheet as of June 30, 1999 reflecting the financial position
of the registrant after the acquisition and (iii) unaudited pro forma
consolidated statements of operations for the year ended September 30, 1998 and
the six months ended June 30, 1999 reflecting the results of operations of the
registrant as if this acquisition had occurred at the beginning of the periods
presented.
<TABLE>
<CAPTION>
(a) Financial Statements of Dining A La Card.
<S> <C>
Report of Independent Public Accountants........................................................5
Balance Sheets at December 31, 1998, 1997 and 1996..............................................6
Statements of Operations for each of the three years in the period
ended December 31, 1998................................................................7
Statements of Changes in Parent's Equity in Division for each of
the three years in the period ended December 31, 1998..................................8
Statements of Cash Flows for each of the three years in the period
ended December 31, 1998................................................................9
Notes to the Financial Statements..............................................................10
</TABLE>
(Page 4 of 26 Pages)
<PAGE>
[Letterhead of Arthur Andersen LLP]
Report of Independent Public Accountants
To the Management of
Dining A La Card:
We have audited the accompanying balance sheets of Dining A La Card (a division
of Signature Financial/ Marketing, Inc., which is wholly owned by Montgomery
Ward & Co. Incorporated) as of December 31, 1998, 1997 and 1996 and the related
statements of operations, changes in parent's equity in division and cash flows
for the years then ended. These financial statements are the responsibility of
the Division's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dining A La Card as of December
31, 1998, 1997 and 1996 and the results of its operations and its cash flows for
the years then ended, in conformity with generally accepted accounting
principles.
As explained in Note 6 to the financial statements, effective January 1, 1998,
the Division changed its method of accounting for printing and membership
materials.
Chicago, Illinois
April 19,1999
(Page 5 of 26 Pages)
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DINING A LA CARD
BALANCE SHEETS
As of December 31, 1998, 1997, 1996
(In Thousands of Dollars)
<TABLE>
<CAPTION>
ASSETS 1998 1997 1996
- ----------------------------------------------------------------------------- ---------------- ----------------- -----------------
<S> <C> <C> <C>
CASH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 73 $ - $ -
RIGHTS TO RECEIVE (Net of allowance of
$0, $5,940, $5,558 in 1998, 1997, and 1996, respectively (Note 8) . . 35,682 36,351 36,992
DEFERRED ACQUISITION COSTS (Notes 1 and 2) . . . . . . . . . . . . . . 8,881 24,077 23,688
ACCOUNTS RECEIVABLE (Net of allowance of
$183, $0, $0 in 1998, 1997, and 1996, respectively) . . . . . . . . . 6,221 7,432 5,969
INVESTMENT IN CARDPLUS JAPAN (Notes 1 and 5) . . . . . . . . . . . . 2,396 174 52
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,627 3,558 3,693
--------------- ---------------- ----------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,880 $ 71,592 $ 70,394
=============== ================ ================
LIABILITIES AND PARENT'S EQUITY IN DIVISION
- -----------------------------------------------------------------------------
CASH DEFICIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 78 $ 48
DEFERRED MEMBERSHIP DUES . . . . . . . . . . . . . . . . . . . . . . . . . 4,582 5,772 3,349
COMMISSIONS PAYABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,811 202 73
ACCRUED EXPENSES AND
OTHER CURRENT LIABILITIES (Note 1). . . . . . . . . . . . . . . . . . 4,165 3,802 2,150
--------------- ---------------- ----------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,558 $ 9,854 $ 5,620
PARENT'S EQUITY IN DIVISION . . . . . . . . . . . . . . . . . . . . . . . $ 43,322 $ 61,738 $ 64,774
--------------- ---------------- ----------------
TOTAL LIABILITIES &
PARENT'S EQUITY IN DIVISION . . . . . . . . . . . . . . . . . . . $ 55,880 $ 71,592 $ 70,394
=============== ================ ================
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
(Page 6 of 26 Pages)
<PAGE>
DINING A LA CARD
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1998, 1997, 1996
(In Thousands of Dollars)
<TABLE>
<CAPTION>
1998 1997 1996
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<S> <C> <C> <C>
REVENUES:
Restaurant Sales.................................................... $ 120,512 $ 96,411 $ 46,405
Membership Dues..................................................... 10,612 9,865 4,473
Other Income........................................................ 17 363 250
---------------- -------------- --------------
TOTAL REVENUE................................................... $ 131,141 $ 106,639 $ 51,128
EXPENSES (Note 4):
Cost of Sales....................................................... $ 73,002 $ 59,721 $ 29,303
Member Rebates...................................................... 24,262 21,953 10,713
Member Acquisition.................................................. 32,927 22,374 7,270
General and Administrative.......................................... 22,281 20,706 16,926
Bad Debt............................................................ 25,962 4,188 7,144
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TOTAL EXPENSES.................................................. $ 178,434 $ 128,942 $ 71,356
---------------- -------------- --------------
LOSS BEFORE INCOME TAXES, EQUITY IN LOSS OF CARDPLUS JAPAN, AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE.......................... (47,293) (22,303) (20,228)
INCOME TAXES (Note 6).................................................... 7,806 7,080 4,144
---------------- -------------- --------------
LOSS BEFORE EQUITY IN LOSS OF CARDPLUS JAPAN AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE............................................ (39,487) (15,223) (16,084)
EQUITY IN LOSS OF CARDPLUS JAPAN,
NET OF TAX OF $0 (Note 5)........................................... (220) - -
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE, NET OF TAX OF $0 (Note 7)................................... (2,105) - -
---------------- -------------- --------------
NET LOSS................................................................. $ (41,812) $ (15,223) $ (16,084)
================ ============== ==============
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
(Page 7 of 26 Pages)
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DINING A LA CARD
STATEMENTS OF CHANGES IN PARENT'S EQUITY IN DIVISION
For the Years Ended December 31, 1998, 1997, 1996
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Parent's Equity Accumulated
In Division Deficit Total
----------------- ------------------ ----------------
<S> <C> <C> <C>
BALANCE, December 31, 1995 . . . . . . . . . . . . . . . . . . $ 46,253 $ (11,839) $ 34,414
Net Loss . . . . . . . . . . . . . . . . . . . . .. . . . . (16,084) (16,084)
Parent's Equity in Division . . . . . . . . . . . . . . . 46,444 46,444
----------------- ------------------ ----------------
BALANCE, December 31, 1996 . . . . . . . . . . . . . . . . . . $ 92,697 $ (27,923) $ 64,774
Net Loss . . . . . . . . . . . . . . . . . . . . .. . . . . (15,223) (15,223)
Parent's Equity in Division . . . . . . . . . . . . . . . 12,187 12,187
----------------- ------------------ ----------------
BALANCE, December 31, 1997 . . . . . . . . . . . . . . . . . . $ 104,884 $ (43,146) $ 61,738
Net Loss . . . . . . . . . . . . . . . . . . . . .. . . . . (41,812) (41,812)
Parent's Equity in Division . . . . . . . . . . . . . . . 23,396 23,396
----------------- ------------------ ----------------
BALANCE, December 31, 1998 . . . . . . . . . . . . . . . . . . $ 128,280 $ (84,958) $ 43,322
================= ================== ================
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
(Page 8 of 26 Pages)
<PAGE>
DINING A LA CARD
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1998, 1997, 1996
(In Thousands of Dollars)
<TABLE>
<CAPTION>
1998 1997 1996
--------------- --------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss............................................................ $ (41,812) $ (15,223) $ (16,084)
Cumulative effect of accounting change, net of tax.................. 2,105 - -
Equity in loss of CardPlus Japan, net of tax........................ 220 - -
Adjustments to reconcile net loss to net cash provided by (used for)
operating activities:
Amortization of Deferred Membership Acquisition Costs 20,967 16,584 3,846
(Increase) decrease in assets:
Rights to Receive......................................... 669 641 (6,475)
Deferred Membership Acquisition Costs..................... (7,876) (16,973) (25,811)
Accounts Receivable....................................... 1,211 (1,463) (4,676)
Other Assets.............................................. 931 135 (1,580)
Increase (decrease) in liabilities:
Deferred Membership Dues.................................. (1,190) 2,423 2,772
Commission Payable........................................ 3,609 129 44
Accrued Expenses and Other Current Liabilities............ 363 1,652 1,205
--------------- --------------- --------------
Net cash used for operating activities................. (20,803) (12,095) (46,759)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in CardPlus Japan......................................... (2,442) (122) (52)
CASH FLOWS FROM FINANCING ACTIVITIES:
Parent's Equity in Division.......................................... 23,396 12,187 46,444
--------------- --------------- --------------
NET INCREASE (DECREASE) IN CASH.......................................... 151 (30) (367)
CASH AT BEGINNING OF YEAR................................................ (78) (48) 319
--------------- --------------- --------------
CASH AT END OF YEAR...................................................... $ 73 $ (78) $ (48)
=============== =============== ==============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash refunded during the year for income taxes....................... $ 7,806 $ 7,080 $ 4,144
=============== =============== ==============
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
(Page 9 of 26 Pages)
<PAGE>
DINING A LA CARD
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998, 1997 and 1996
(In Thousands of Dollars)
1. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
Dining A La Card (the "Business") is a business segment of
SignatureCard, Inc. of Delaware ("SCD"), which is a wholly owned
subsidiary of Signature Financial/ Marketing, Inc. ("SFM"). SFM is
wholly owned by Montgomery Ward & Co., Incorporated ("Montgomery
Ward"), which is a wholly owned subsidiary of Montgomery Ward Holding
Corp. ("MW Holding"). See Note 2 for information regarding the sale of
the business.
The Business markets and operates a dining plan, which offers savings
on the purchase price of meals to its members who dine at plan
restaurants. These savings are passed along to the member either
through direct cash rebates or airline mile rewards. At December 31,
1998, the Business had a membership base of approximately 1.9 million
members and a restaurant network of approximately 3,300 restaurants.
The Business is primarily marketed to its airline reward programs.
Approximately 51% of restaurant revenue in 1998 was attributable to
members in these programs. The Business also utilizes broad market
advertising to acquire new members. These marketing efforts include
direct-response television, radio and newspaper advertisements.
Approximately 24% of restaurant revenue in 1998 was attributable to
broad market memberships.
The financial statements are being prepared to comply with SEC filing
requirements due to the sale of certain assets related to the business.
See Note 2.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reported period. Actual
results could differ from these estimates.
Accounts Receivable
Accounts Receivable primarily represent valid member dining events that
have not yet been submitted for collection from the respective bank
accounts of the plan restaurants. These amounts are recorded as
restaurant sales revenue for the respective fiscal year in which the
dining event occurred. Amounts recorded as accounts receivable will not
be sold to Transmedia Network, Inc. (see Note 2).
Rights to Receive
Rights to receive represent payments for future meal credits to
restaurants that participate in the dining plan. Rights to receive are
stated at cost less allowances for future credits that may not be
realized of $0, $5,940, and $5,558 in 1998, 1997, and 1996,
respectively. As of December 31, 1998, rights to receive has been
recorded at an amount based on SFM's agreement to sell certain assets
of the business. See Note 2.
(Page 10 of 26 Pages)
<PAGE>
Deferred Acquisition Costs
Costs (primarily direct-response marketing expenses) of acquiring new
memberships are deferred when considered recoverable. Costs deferred
are amortized over a period of four years in proportion to the
estimated members' dues (initial and renewal) to be collected. The time
period over which deferred acquisition costs are being amortized and
the recoverability of such costs could differ from estimates due to
changing market conditions. Amortization periods and recoverability of
deferred membership acquisition costs are continually reviewed for
potential impairment and, as adjustments become necessary, they are
reflected in current operations.
Effective January 1, 1995, the Business adopted Statement of Position
No. 93-7, "Reporting on Advertising Costs." The adoption of this
statement allowed for the capitalization of direct response advertising
costs that are incurred to acquire new memberships. The amount of
direct response advertising costs capitalized was $7,866, $17,434, and
$25,426 in 1998, 1997, and 1996, respectively.
Effective January 1, 1996, the Business adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
In 1998, as a result of SFM's agreement to sell certain assets of the
Business (see Note 2), deferred acquisition costs were recorded at an
amount equal to the present value of the estimated amount of renewal
membership dues for members existing at December 31, 1998.
Investment in CardPlus Japan
SFM has made a cash investment in CardPlus Japan Co., Ltd. ("CardPlus
Japan"). (See Note 5). As of October 15, 1998, the amount invested
provided SFM with a greater than 20% interest in CardPlus Japan
operations. As such, beginning October 15, 1998, SFM accounts for its
investment under the equity method of accounting. Total cash invested
was $2,616, $174, and $52 as of December 31, 1998, 1997, and 1996,
respectively.
Membership Dues
Membership Dues are deferred and earned on a pro rata basis over the
terms of the memberships, which is one year. Amounts recorded as
deferred membership dues will not be sold to Transmedia Network, Inc.
(see Note 2).
Commissions Payable
Commissions Payable represent amounts owed to external marketing firms
that provide direct mail marketing services for the Business, as well
as commissions due to the internal sales force of the Business. Amounts
recorded as commissions payable will not be sold to Transmedia Network,
Inc. (see Note 2).
Income Taxes
As a member of a group that files a consolidated tax return and in
accordance with the Tax Sharing Agreement between MW Holding and its
subsidiaries, the Business computes its income tax provision on a
separate return basis. For federal income tax purposes, the Business'
tax benefit is included with the taxable income of SFM, which is
included in the consolidated federal income tax return of MW Holding.
Current federal tax balances are settled with SFM at least annually.
The Business uses the liability method of accounting for income taxes.
Under this method, deferred income taxes are provided for the tax
consequences of temporary differences by applying enacted statutory
rates applicable to future years to differences between the tax and
financial statement bases of assets and liabilities.
(Page 11 of 26 Pages)
<PAGE>
The effect on deferred taxes of a change in tax rates is recognized in
income in the period that includes the enactment date.
Accrued Expenses and Other Liabilities
Included in Accrued Expenses and Other Liabilities are amounts for
member rebate checks that are outstanding for over one year. These
outstanding checks are held by the Business as escheat funds for a
period of three to seven years as determined by the applicable state
regulation. The amount held as escheat funds was $806, $456, and $240
in 1998, 1997, and 1996, respectively. Amounts recorded as accrued
expenses and other current liabilities will not be sold to Transmedia
Network, Inc. (see Note 2).
Statement of Cash Flows
For purposes of the statements of cash flows, cash consists of amounts
on deposit with banks.
2. SALE OF BUSINESS
On October 30, 1998, a Letter of Understanding was executed by
Transmedia Network, Inc. ("Transmedia") to purchase certain assets of
the Business. On March 17, 1999 the Asset Purchase Agreement was
executed between Transmedia Network Inc. and SignatureCard, Inc. SCD
anticipates that the sale will be finalized by May 31, 1999. In
exchange for cash and Transmedia stock and stock options, Transmedia
will purchase virtually all performing Rights to Receive, the DALC
proprietary information software and all registered and licensed
trademarks and trade names.
As part of the Asset Purchase Agreement, SFM has entered in to a
Transition Services Agreement whereby it will provide, for a fee,
interim services and assistance (primarily customer service) during the
transition period through March 31, 2000, if needed.
Pursuant to a Service Collaboration Agreement that was executed in
conjunction with the Asset Purchase Agreement, SFM will be entitled to
67% of the renewal fee income for existing fee members as well as all
membership fee income from any new fee paying members obtained by SFM
for a period of five years from the date of closing. As a result of
this arrangement, an asset of $8,881 has been established for the
estimated present value of future renewal membership fees.
Additionally, Transmedia and SFM will share profits (defined as
revenues from qualified sales less direct costs and interest) derived
from the Business' members existing at the date of sale and any new
members obtained primarily from airline relationships maintained by SFM
for a period of twelve and one-half years on the basis of 60% to
Transmedia and 40% to SFM. SFM will not be required to fund losses, if
any, however, distributions of profit will not be made to SFM until
Transmedia fully recoups the losses incurred.
3. PARENT COMPANY
The Business's ultimate parent, Montgomery Ward, filed for protection
under Chapter 11 of the Bankruptcy Code on July 7, 1997. Subsequent to
its filing, Montgomery Ward secured a $1,000,000 debtor-in-financing
("DIP") facility to meet its liquidity needs. At year-end 1998,
Montgomery Ward had outstanding borrowings of $303,600 under the DIP
facility. The DIP facility imposes various restrictions on Montgomery
Ward, including limitations on capital expenditures. The DIP facility
also requires the satisfaction of certain financial tests, including
achievement of specified earning levels of Montgomery Ward as defined
in the DIP agreement. As of January 2, 1999, Montgomery Ward had met
all such financial tests and the availability under the DIP facility
was $363,200. The financial statements do not include any adjustments
that might result from the outcome of these bankruptcy proceedings.
(Page 12 of 26 Pages)
<PAGE>
On February 1, 1999, Montgomery Ward announced it will emerge from
Chapter 11 bankruptcy protection in mid 1999 as a result of a proposed
agreement reached with Montgomery Wards' Creditors' Committee.
As part of the proposed agreement, General Electric Capital Corporation
("GE Capital") is to acquire SFM. Montgomery Ward will place an
undisclosed sum in a fund to settle court approved pre-bankruptcy
unsecured claims of creditors other than GE Capital. In exchange for
its claims against Montgomery Ward, GE Capital and Montgomery Ward
management will receive equity in the reorganized retailer. This
proposed agreement will be submitted to a vote of the creditors.
4. TRANSACTIONS WITH AFFILIATES
The Business is charged for expenses incurred on its behalf by
affiliates, generally based upon either actual expense incurred or an
allocation of expense for centralized groups that serve a number of
affiliates. Expenses that are charged directly include payroll and
related items for groups working only with the Business, materials
printed for the Business, and any other purchases made specifically on
behalf of the Business. Expenses that are incurred by SFM are allocated
to the Business using a number of different allocation methods, which
include the following:
o Outbound telemarketing, which is charged out at a standard
rate per hour for all affiliates using a specific type of
telemarketing in a given month.
o Operations (primarily customer service expenses), which is
charged predominantly using a standard cost per minute for all
affiliates. The rates are calculated on a monthly basis. Some
units within operations use a different unit of measure than
time spent on program operations, such as the number of
letters or rebates processed for a given program.
o Member retention expense, which is charged using a standard
rate per retention attempt for all affiliates each month.
o Facility related expenses, which are allocated using the
square feet of office space utilized for program operations.
o Shared service expenses (i.e., systems, sales and pension
costs), which are allocated using program membership when time
spent on program operations cannot be easily measured.
o Payroll expense, which is allocated using time spent on
program operations. This allocation is performed for those
departments working with multiple affiliates.
Each department determines the most equitable method for allocating its
expenses to the various affiliates. Amounts allocated to the Business
were $9,701, $8,743, and $6,437 for 1998, 1997, and 1996, respectively,
and are included in the General and Administrative expenses on the
Statements of Operations.
5. INVESTMENT IN CARDPLUS JAPAN
During 1996, SFM entered into an agreement with CardPlus Japan (a
Japanese Corporation) for the purpose of conducting a dining plan
program in Japan. This agreement provided CardPlus Japan with the
exclusive right to the name "Dining A La Card" and the right to sell
and price memberships in the Asian market. SFM has periodically
invested in CardPlus Japan operations by purchasing ordinary common
voting stock for cash. As of December 31, 1998, SFM owned 4,356 (or
25.7%) of the total amount of CardPlus Japan common stock issued and
outstanding. This investment will not be sold to Transmedia Network,
Inc. (see Note 2).
(Page 13 of 26 Pages)
<PAGE>
6. INCOME TAXES
Under the Tax Sharing Agreement ("TSA") between MW Holding and its
subsidiaries, the income tax provision is calculated on a separate
return basis. The intent of the TSA is to assure that each subsidiary
for each taxable year will pay its share of the consolidated federal
tax liability or receive credit for its tax benefits.
The Business has generated losses on a separate entity basis. These
losses have been utilized to offset taxable income of SFM on a
consolidated basis. For 1997 and 1996, the Business has received a
benefit for the amount of these federal losses through the federal tax
settlement with MW Holding. The computed federal income tax benefit for
1997 and 1996 has been reflected in the Statement of Operations in the
following year, respectively.
During 1998, 1997, and 1996, the Business incurred no income tax
expense as a result of its having net operating losses and net
operating loss carryforwards. The Business recorded a benefit equal to
payments received from SFM on account of the Business's net operating
losses utilized in the consolidated federal income tax return. The
benefit for income taxes was $7,806, $7,080, and $4,144 for 1998, 1997,
and 1996, respectively.
The Business's effective income tax rate varies from the statutory tax
rate as a result of the following factors:
<TABLE>
<CAPTION>
1998 1997 1996
-------------- --------------- ---------------
<S> <C> <C> <C>
Statutory tax rate 40% 40% 40%
Change in valuation allowance (24) (8) (20)
Effective Tax Rate 16% 32% 20%
============== =============== ===============
</TABLE>
Deferred income tax assets and liabilities reflect the net tax effects
of temporary differences between the carrying amounts of assets and
liabilities for financial statement purposes and the amounts used for
income tax purposes. Significant components of the Business's deferred
tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
-------------- --------------- ---------------
<S> <C> <C> <C>
Deferred tax assets
Net operating loss carryforwards $26,045 $17,779 $15,935
Allowance for bad debts 73 2,376 2,223
-------------- --------------- ---------------
Total gross deferred tax assets 26,118 20,155 18,158
Valuation allowance (22,566) (10,524) (8,683)
-------------- --------------- ---------------
Net deferred tax asset 3,552 9,631 9,475
Deferred tax liabilities-
Deferred acquisition costs (3,552) (9,631) (9,475)
-------------- --------------- ---------------
Net deferred tax $ 0 $ 0 $ 0
============== =============== ===============
</TABLE>
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases.
(Page 14 of 26 Pages)
<PAGE>
Future tax benefits are recognized to the extent that realization of
such benefits is more likely than not. A valuation allowance is
provided to reduce the deferred tax assets to a level which, more
likely than not, will be realized.
At December 31, 1998, the Business has $26,045 of net operating loss
carryforwards available to reduce future taxable income. These loss
carryforwards expire in the years 2010 through 2018. A valuation
allowance has been provided for a portion of the deferred tax assets
related to those loss carryforwards that may expire unutilized.
7. CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Effective January 1, 1998, the Business changed its method of
accounting for printing and mailing membership materials. Historically,
the Business has accounted for the costs of printing and mailing of
membership materials by amortizing these costs for a period of four
years in proportion to the estimated members' dues (initial and
renewal) to be collected. Effective January 1, 1998, the Business
started expensing these costs upon the mailing of membership materials.
The Business changed its method of accounting in order to conform to
changing industry practice. The cumulative effect of this change in
accounting principle as of January 1, 1998 of $2,105 was recorded as a
reduction of membership acquisition costs and income.
8. CONTINGENT LIABILITIES
The Business is a defendant in legal actions arising from normal
business activities. Management, after consultation with legal counsel,
is of the opinion that any liability, to the extent not provided for,
will not have a material impact on the financial position and operating
results of the Business.
(Page 15 of 26 Pages)
<PAGE>
(b) Unaudited Pro Forma Consolidated Financial Information.
<TABLE>
<S> <C>
Summary Pro Forma Financial Information........................................................17
Pro Forma Consolidated Statement of Operations for the year
ended September 30, 1998..............................................................18
Pro Forma Consolidated Statement of Operations for the six
months ended June 30, 1999............................................................19
Consolidated Balance Sheet at June 30, 1999....................................................20
Notes to Unaudited Pro Forma Consolidated Financial Information................................21
</TABLE>
(Page 16 of 26 Pages)
<PAGE>
SUMMARY PRO FORMA INFORMATION
On June 30, 1999, Transmedia acquired from SignatureCard, Inc.
("SignatureCard"), most of the assets related to a membership discount dining
program SignatureCard operated under the Dining A La Card trade name and service
mark. The assets acquired included various intellectual property rights and
computer software, membership and merchant data, and their rights-to-receive
restaurant portfolio. As consideration for the assets, we (1) paid SignatureCard
$35 million in cash at closing, (2) issued to SignatureCard 400,000 shares of
our common stock and (3) issued to SignatureCard a three-year option to purchase
an additional 400,000 shares of our common stock at a price of $4.00 per share.
Commencing December 31, 1999, SignatureCard may, at any time prior to June 30,
2002, require us to repurchase all or part of the 400,000 shares we issued at
the closing at a price of $8.00 per share. In connection with the acquisition of
Dining A La Card, we entered into a services collaboration agreement with
SignatureCard. Under this agreement, SignatureCard will continue to provide
dining members from its airline frequent flyer partner programs and other
marketing programs, thus eliminating our cost of member acquisition. It will
also share, for 12.5 years, certain profits we derive from
SignatureCard-generated members as well as a portion of the membership fee
revenues generated from fee paying members acquired in this transaction or
subsequently through SignatureCard's efforts. In connection with this
acquisition, we paid a fee for transaction advisory services to Equity Group
Investments LLC, an affiliate of our largest stockholder ("EGI"), of $386,000.
To finance the acquisition, we obtained a $35 million senior secured revolving
bridge loan facility from The Chase Manhattan Bank (from which $29 million was
drawn down at closing) and a $10 million term loan from GAMI Investments, Inc.,
an affiliate of EGI. We intend to replace the bridge loan with a permanent
facility that securitizes the Dining A La Card rights-to-receive portfolio,
arranged through Chase. In connection with the bridge loan, we paid a $500,000
fee to Chase upon the closing. The GAMI loan in the amount of $10 million is
unsecured and subordinated to the Chase facility. The proceeds from the rights
offering will be used to repay all outstanding amounts under the GAMI loan. The
terms of this loan required us to pay to GAMI at closing a cash fee of $500,000,
which is reimbursable to us upon the completion of a future rights offering.
The unaudited pro forma financial information and notes below give effect to the
acquisition of Dining A La Card and the transactions described above utilizing
the Dining A La Card audited historical financial statements as of and for the
year ended December 31, 1998 and the interim financial statements as of and for
the six months ended June 30, 1999. The unaudited consolidated balance sheets as
of June 30, 1999 reflect the financial position of Transmedia after the
acquisition. The pro forma consolidated statements of operations for the year
ended September 30, 1998 and the six months ended June 30, 1999 reflect the
results of operations of Transmedia as if this acquisition had occurred at the
beginning of the periods presented.
(Page 17 of 26 Pages)
<PAGE>
Transmedia Network Inc. and Subsidiaries
Pro Forma Consolidated Statement of Operations
for the Year Ended September 30, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Transmedia Dining Pro Forma Pro Forma
Network Inc. A La Card (A) Adjustments Combined
------------ -------------- -------------- -----------
<S> <C> <C> <C> <C>
Operating revenue:
Gross dining sales 95,549 120,512 -- 216,061
Cost of sales 54,446 98,964 (B) (8,000) (I) 145,410
Cardmember discounts 21,444 24,262 45,706
------------ -------------- -------------- -----------
Net revenues from rights-to-receive 19,659 (2,714) 8,000 24,945
Other income 10,482 10,629 (7,110) (C) 14,001
------------ -------------- -------------- -----------
Total operating revenues 30,141 7,915 890 38,946
------------ -------------- -------------- -----------
Operating expenses:
Selling, general & administrative expenses 26,796 22,281 (10,873) (H) 38,204
Cardmember acquisition and promotion 5,097 32,927 (21,069) (D) 16,955
Amended compensation agreements 3,544 -- 3,544
Assets impairment loss 2,169 -- 2,169
------------ -------------- -------------- -----------
Total operating expenses 37,606 55,208 (31,942) 60,872
Operating income (loss) (7,465) (47,293) 32,832 (21,926)
Other income (expenses): (2,971) -- (3,617) (E) (6,588)
------------ -------------- -------------- -----------
Income (loss) before taxes (10,436) (47,293) 29,215 (28,514)
Income tax provision (benefit) (2,600) (7,806) (F) (10,835)
Income tax valuation allowance (F) 10,835
Loss before equity loss and (7,836) (39,487) 29,215 (28,514)
accounting change
Equity in loss of Cardplus Japan -- (220) 220 (G) --
Cumulative effect of accounting change (2,105) 2,105 (J) --
------------ -------------- -------------- -----------
Net income (loss) (7,836) (41,812) 31,540 (28,514)
============ ============== ============== ===========
Operating income (loss) per common and common
equivalent share:
Basic and Diluted (0.63) -- (1.80)
============ ============== ============== ===========
Net income (loss) per common and common
equivalent share:
Basic and Diluted (0.67) -- (2.33)
============ ============== ============== ===========
Weighted average number of common and common
equivalent shares outstanding:
Basic 11,773 400 12,173
============ ============== ============== ===========
Diluted 11,825 400 12,225
============ ============== ============== ===========
</TABLE>
See notes to unaudited pro forma consolidated financial information
(Page 18 of 26 Pages)
<PAGE>
Transmedia Network Inc. and Subsidiaries
Pro Forma Consolidated Statement of Operations
for the Six Month Period ending June 30, 1999
(Amounts in thousands)
<TABLE>
<CAPTION>
Historicals
-------------------------------
Transmedia Dining Pro Forma Pro Forma
Network Inc.(K) A La Card (K) Adjustments Combined
--------------- --------------- ---------------- -------------
<S> <C> <C> <C> <C>
Operating revenue:
Gross dining sales 48,098 61,384 -- 109,482
Cost of sales 27,215 39,099(L) 66,314
Cardmember discounts 11,081 13,195 24,276
--------------- --------------- ---------------- -------------
Net revenues from rights-to-receive 9,802 9,090 -- 18,892
Other income 5,476 4,378 (2,933)(M) 6,921
--------------- --------------- ---------------- -------------
Total operating revenues 15,278 13,468 (2,933) 25,813
--------------- --------------- ---------------- -------------
Operating expenses:
Selling, general & administrative expenses 14,774 10,008 (5,437)(R) 19,435
Cardmember acquisition and promotion 3,221 8,890 (2,690)(N) 9,421
--------------- --------------- ---------------- -------------
Total operating expenses 17,995 18,898 (8,127) 28,766
Operating income (loss) (2,717) (5,430) 5,193 (2,954)
Other income (expenses): (1,219) -- (1,888)(O) (3,107)
--------------- --------------- ---------------- -------------
Income (loss) before taxes (3,936) (5,430) 3,305 (6,061)
Income tax provision (benefit) (P) (2,303)
Income tax valuation allowance (P) 2,303
Loss before equity loss and (3,936) (5,430) 3,305 (6,061)
accounting change
Gain on sale of dining assets 2,089 (2,089)(S) --
Equity in loss of Cardplus Japan (212) 212 (Q) --
--------------- --------------- ---------------- -------------
Net income (loss) (3,936) (3,553) 1,428 (6,061)
=============== =============== ================ =============
Operating income (loss) per common and common
equivalent share:
Basic and Diluted (0.21) -- (0.23)
=============== =============== ================ =============
Net income (loss) per common and common
equivalent share:
Basic and Diluted (0.30) -- (0.47)
=============== =============== ================ =============
Weighted average number of common and common
equivalent shares outstanding:
Basic 12,938 12,938
=============== =============== ================ =============
Diluted 13,027 13,027
=============== =============== ================ =============
</TABLE>
See notes to unaudited pro forma financial information
(Page 19 of 26 Pages)
<PAGE>
Transmedia Network Inc. and Subsidiaries
Unaudited Consolidated Balance Sheet at June 30, 1999
(Amounts in thousands)
Historicals
------------------
Transmedia Network
Inc. as of
June 30, 1999 (1)
------------------
Current assets:
Cash and cash equivalents 3,226
Restricted cash 2,811
Accounts receivable, net 2,554
Rights to receive, net
Unrestricted 46,880
Securitized and owned by Trust 35,508
Prepaid expenses and other current assets 6,424
------------------
Total current assets 97,403
Securities available for sale 896
Equipment held for sale or lease, net 804
Property & equipment 6,384
Other assets 1,636
Restricted deposits and investments 2,070
Excess of cost over net assets acquired 4,901
------------------
Total assets 114,094
==================
Current liabilities:
Short term borrowing - bank 29,000
Short term borrowing - affiliate 10,000
A/P - rights to receive 3,956
A/P - other 4,258
Accrued expenses 2,973
Deferred membership fee income 3,146
------------------
Total current liabilities 11,630
Secured non-recourse notes payable 33,000
Other long-term liabilities 2,041
------------------
Total liabilities 88,374
Guaranteed Value of Puts 1,471
Common stock 268
PIC 23,521
Accumulated other comprehensive income 382
Retained earnings 78
==================
Total stockholders' equity 24,249
------------------
Total liabilities & stockholders' equity 114,094
==================
See notes to unaudited pro forma consolidated financial information
(Page 20 of 26 Pages)
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
1. SIGNIFICANT ACCOUNTING POLICIES
There are currently no material differences in the significant accounting
policies of Transmedia Network Inc. and Dining A La Card ("the Companies")
therefore, no consideration has been given to conforming the Companies'
significant accounting policies in this pro forma presentation. The Companies do
not expect to have material changes to current accounting policies in connection
with the transaction. For further information on the Companies' significant
accounting policies, see notes to the consolidated financial statement of the
Companies, either included elsewhere in this filing or incorporated by
reference.
2. RECLASSIFICATIONS
Certain reclassifications have been made to the historical statement of
operations of Dining A La Card to conform to the presentation used by Transmedia
Network Inc. These reclassifications relate to the presentation of rights to
receive losses and cost of sales.
3. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS
FOR THE TWELVE MONTHS ENDING SEPTEMBER 30, 1998
(A) Dining A La Card income statement is for the twelve month period
ending December 31, 1998 while Transmedia's income statement is for the twelve
month period ending September 30, 1998.
(B) Dining A La Card rights-to-receive losses of $25,962 have been
reclassified to cost of sales to conform with Transmedia's presentation.
(C) In accordance with the Marketing Collaboration Agreement between
Transmedia and SignatureCard, SignatureCard will receive 67% of all membership
dues collected from Dining A La Card members.
(D) To remove marketing amortization, since under the Marketing
Collaboration Agreement, SignatureCard will provide Dining A La Card members to
Transmedia at no cost.
(E) To record the amortization of deferred financing cost of $567 over
the estimated six month life of the GAMI loan, plus record interest expense on
the outstanding debt.
(F) To adjust the income tax benefit using Transmedia's statutory rate
for 1998 of 38%, and record an income tax valuation allowance required by SFAS
No. 109.
(G) To eliminate Dining A La Card's equity loss in Cardplus Japan since
Transmedia did not purchase those assets.
(Page 21 of 26 Pages)
<PAGE>
NOTES TO PRO FORMA FINANCIAL INFORMATION
(H) To remove Dining A La Card's internal interest expense included in
general and administrative and a portion of the general and administrative
expenses allocated from SignatureCard, which was eliminated as part of the
acquisition.
(I) To remove one time write-down of Dining A La Card's RTR portfolio
of approximately $8,000 and bring to fair value.
(J) Remove cumulative effect of accounting change.
4. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS
FOR THE SIX MONTHS ENDING JUNE 30, 1999
(K) Dining A La Card interim statement of operations is for the
six-month period ending June 30, 1999. A statement of operations for the
nine-month period ending June 30, 1999 for Dining A La Card is not available and
therefore not presented. For comparability purposes, Transmedia derived its
income statement for the six-month period ending June 30, 1999 by removing the
operations for the three-months ending December 31, 1998 from the operation for
the nine-months ending June 30, 1999. For the period excluded, Transmedia
reported gross dining sales of $22,756 and a net loss of $1,353, which were
reported in the 10-Q for that period and are incorporated herein by reference.
(L) Dining A La Card rights-to-receive losses of $2,749 have been
reclassified to cost of sales to conform with Transmedia's presentation.
(M) In accordance with the Marketing Collaboration Agreement between
Transmedia and SignatureCard, SignatureCard will receive 67% of all membership
dues collected from Dining A La Card members.
(N) To remove marketing amortization, since under the Marketing
Collaboration Agreement, SignatureCard will provide Dining A La Card members to
Transmedia at no cost.
(O) To record the amortization of deferred financing cost of $567 over
the estimated six month life of the GAMI loan, plus record interest expense on
the outstanding debt.
(P) To adjust the income tax benefit using Transmedia's statutory rate
for 1999 of 38%, and record an income tax valuation allowance required by SFAS
No. 109.
(Q) To eliminate Dining A La Card's equity loss in Cardplus Japan since
Transmedia did not purchase those assets.
(R) To remove Dining A La Card's internal interest expense included in
general and administrative and a portion of the general and administrative
expenses allocated from SignatureCard, which were eliminated as part of the
acquisition.
(Page 22 of 26 Pages)
<PAGE>
(S) To remove gain on sale of dining assets which resulted from
Transmedia's purchase of Dining A La Card.
5. UNAUDITED BALANCE SHEET ADJUSTMENTS AT JUNE 30, 1999
(1) Transmedia's historical balance at June 30, 1999 reflects the
acquisition of Dining A La Card which occurred on June 30, 1999. The assets,
liabilities and equity which remained on Dining A La Card's balance sheet at
June 30, 1999 represents items not purchased by Transmedia and therefore are
excluded from the unaudited consolidated balance sheet at June 30, 1999.
(Page 23 of 26 Pages)
<PAGE>
(c) Exhibits. The following exhibits are filed with this Report:
Exhibit Number Description
-------------- -----------
10.1* Asset Purchase Agreement, dated as of March 17, 1999,
between Transmedia Network Inc. and SignatureCard,
Inc., as amended by Amendment No. 1 thereto dated as
of April 15, 1999 and Amendment No. 2 thereto dated
as of May 31, 1999.
10.2* Option Agreement, dated as of June 30, 1999, between
Transmedia Network Inc. and SignatureCard, Inc.
10.3* Services Collaboration Agreement, dated as of June 30,
1999, between Transmedia Network Inc. and SignatureCard,
Inc.
10.4* Credit Agreement, dated as of June 30, 1999, between
Transmedia Network Inc. and The Chase Manhattan Bank.
10.5* Security Agreement, dated as of June 30, 1999, between
Transmedia Network Inc. and The Chase Manhattan Bank.
10.6* Pledge Agreement, dated as of June 30, 1999, between
Transmedia Network Inc. and The Chase Manhattan Bank.
10.7* Credit Agreement, dated as of June 30, 1999, between
GAMI Investments, Inc., Transmedia Network Inc.,
Transmedia Restaurant Company Inc., Transmedia Service
Company Inc. and TMNI International Incorporated.
23.1** Consent of Arthur Andersen LLP.
- -------------------
* Previously filed as an exhibit to the Current Report on Form 8-K on
July 14, 1999 which this Form 8-K/A amends.
** To be filed by amendment.
(Page 24 of 26 Pages)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSMEDIA NETWORK INC.
Date: September 10, 1999 By: /s/ Stephen E. Lerch
------------------------------
Name: Stephen E. Lerch
Title: Executive Vice President and
Chief Financial Officer
(Page 25 of 26 Pages)
<PAGE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description Page/
-------------- ----------- Reference
---------
<S> <C> <C>
10.1 Asset Purchase Agreement, dated as of March 17, 1999, between Transmedia *
Network Inc. and SignatureCard, Inc., as amended by Amendment No. 1 thereto
dated as of April 15, 1999 and Amendment No. 2 thereto dated as of May 31,
1999.
10.2 Option Agreement, dated as of June 30, 1999, between Transmedia Network Inc. *
and SignatureCard, Inc.
10.3 Services Collaboration Agreement, dated as of June 30, 1999, between *
Transmedia Network Inc. and SignatureCard, Inc.
10.4 Credit Agreement, dated as of June 30, 1999, between Transmedia Network Inc. *
and The Chase Manhattan Bank.
10.5 Security Agreement, dated as of June 30, 1999, between Transmedia Network Inc. *
and The Chase Manhattan Bank.
10.6 Pledge Agreement, dated as of June 30, 1999, between Transmedia Network Inc. *
and The Chase Manhattan Bank.
10.7 Credit Agreement, dated as of June 30, 1999, between GAMI Investments, Inc., *
Transmedia Network Inc., Transmedia Restaurant Company Inc., Transmedia
Service Company Inc. and TMNI International Incorporated.
23.1 Consent of Arthur Andersen LLP. **
</TABLE>
- ------------------
* Previously filed as an exhibit to the Current Report on Form 8-K on
July 14, 1999 which this Form 8-K/A amends.
** To be filed by amendment
(Page 26 of 26 Pages)
