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EXHIBIT 10.86
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EXHIBIT 10.86
THE CHRISTIAN NETWORK, INC.
00000 00xx Xxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
October 4, 1995
Xxxxx Eagle, President
Cornerstone Television, Inc.
Xxxxx #00, Xxxxxx Xxxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000-0000
Dear Ms. Eagle:
The Christian Network, Inc. ("Buyer"), through an affiliated entity to be
formed, hereby proposes to purchase all of the assets, including real property,
tangible and intangible personal or mixed properties (the "Assets"), used or
useful in the operation of Television Station WOCD-TV, Amsterdam, New York (the
"Station") licensed to Cornerstone TV, Inc. ("Seller"), free and clear of all
debts, liens, encumbrances or other liabilities, subject to the following terms
and conditions:
1. At the closing (the "Closing") to be held on a date set by Buyer
within ten (10) business days after the consent of the Federal
Communications Commission ("FCC") to the transfer of the broadcast
license for the Stations (and any auxiliary licenses) has become a
final order no longer subject to judicial or administrative review
(subject to waiver of such final order requirement in the sole
discretion of Buyer), Seller will sell the Assets to Buyer in
accordance with the provisions of a definitive Asset Purchase
Agreement as described in Paragraph 2 below (the "Purchase
Agreement").
2. The Purchase Agreement shall, among other terms customary in
transactions of this nature, include the following terms:
(a) The purchase price for the Assets shall be TWO MILLION FIVE
HUNDRED THOUSAND DOLLARS ($2,500,000.00) payable Eight Hundred
Fifty Thousand Dollars ($850,000) in cash at Closing with the
balance evidenced by Buyer's Promissory Note in the principal
sum of One Million Six Hundred Fifty Thousand Dollars
($1,650,000) payable over a seven (7) year term with interest
at the prime commercial rate of the Bank of New York.
Additionally, Buyer and Seller shall enter into a Time
Brokerage Agreement at Closing whereby Seller shall provide
programming for the Station between the hours of 9pm and
midnight, Sunday through Friday, and such Time Brokerage
Agreement shall continue until the Buyer's $1,650,000
Promissory Note has been paid in full.
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(b) The Assets shall not include Seller's cash or cash
equivalents, books and records pertaining to corporate
organization, employee pension and other benefit plans or
collective bargaining agreements.
(c) Buyer will review and agree to consider assuming certain
existing contracts of Seller relating to the Station and the
assumed contracts shall be set forth in the Purchase
Agreement.
(d) The Purchase Price shall be subject to normal closing
prorations.
(e) The obligations of the parties to consummate the proposed
transaction shall be subject to receipt of any required
consents or authorizations and other conditions usual and
customary in transactions of this nature.
(f) Representations, warranties and covenants shall be set forth
relating to the Assets that are usual and customary in
transactions of this nature and which shall survive the
Closing for eighteen (18) months.
(g) Non-competition agreements shall be provided for, containing
terms and conditions mutually agreed upon by the parties,
including a restrictive covenant prohibiting Sellers from
competing against Buyer in the business of radio or television
broadcasting in any area served by the Station for a term of
three (3) years, and 2% of the total consideration shall be
attributable to the non-competition agreement.
(h) Buyer or Seller may terminate the Purchase Agreement without
penalty or liability (except in the event of a default of a
party) if for any reason the Closing thereunder has not taken
place by October 1, 1996.
(i) Buyer shall not be obligated to consummate the Purchase
Agreement if there is a material adverse change in the
Station's tangible properties during the period from the date
of the Purchase Agreement until Closing.
(j) Seller shall pay all federal, state and local sales or
transfer taxes arising from the conveyance of the Assets to
Buyer.
3. Buyer shall deposit with First Union National Bank, the sum of ONE
HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) upon execution of
the Purchase Agreement, (the "Deposit") pursuant to an Escrow Deposit
Agreement, among the parties. In the event that the Buyer wrongfully
fails to close and Seller has fully complied with the terms of the
Purchase Agreement, then only in that event Buyer shall forfeit the
Deposit to Seller as liquidated damages and as the exclusive remedy of
Seller against Buyer.
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4. The parties shall in good faith endeavor to prepare and negotiate a
Purchase Agreement acceptable to each party in its discretion, to be
executed by Seller and a subsidiary of Buyer no later than October 31,
1995. If the Purchase Agreement is not executed by October 31, 1995,
then the terms of this letter shall expire without any liability to
either Seller or Buyer.
5. From the date of its execution of this letter until the sooner of (i)
the execution of a Purchase Agreement or (ii) the termination of the
obligations of the parties hereunder, Seller shall not seek, transfer,
convey or otherwise dispose of, with or without consideration, any
assets used or useful in or relating to the Station other than in the
ordinary course of business.
6. Buyer shall be afforded, from and after the date hereof, reasonable
opportunity to inspect the Stations and the books and records of the
Seller. Until such a time as a Purchase Agreement may be executed
which shall supersede this letter, this proposal is contingent upon
and subject to proper confirmation and verification by Buyer of the
financial and other information made available to Buyer by the Seller,
review of further financial or other information relating to the
purchase of the Assets and operation of the Station as may be
requested by Buyer, and inspection of the assets and technical
facilities of the Station, all to the satisfaction of Buyer in its
sole discretion. Finally, by the date set forth in Paragraph 4 above
for the execution of the Purchase Agreement, Seller shall supply to
Buyer the information called for on Attachment I hereto relating to
the Station.
7. Buyer and Seller each agree that it will use its best efforts to keep
confidential (except for disclosure requirements of federal or state
securities laws and securities markets along with such disclosure to
attorneys, bankers, underwriters investors, etc. as may be appropriate
in the furtherance of this transaction) all information of a
confidential nature obtained by it from the other (including the terms
of this proposal and the identity of Buyer) in connection with the
transactions contemplated by this letter, and in the event that such
transactions are not consummated, will return to the other all
documents and other materials obtained from the other in connection
therewith.
8. Buyer and Seller shall jointly prepare and determine the timing of,
any press release, or other announcement to the public or the news
media relating to the execution of this letter. No party hereto will
issue any press release or make any other public announcement relating
to the transactions contemplated by this letter without the prior
consent of each other party hereto, except that any party may make any
disclosure required to be made by it under applicable law (including
federal or state securities laws and the regulations of securities
markets) if it determines in good faith that it is appropriate to do
so and gives prior notice to each other party hereto.
9. Seller agrees that until October 31, 1995 or earlier if the parties
mutually determine that they are unable to enter into the Purchase
Agreement, it shall not offer or seek to offer, or entertain or
discuss any offer, to sell the Station, nor shall it permit its owners
to offer, to
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seek to offer, or entertain or discuss any offer to sell, any
interest in the Station to third parties.
10. Except for paragraphs 4, 5, 6, 7, 8, 9 and Paragraph 10 which shall be
legally binding in accordance with their respective terms, neither
this letter nor the acceptance hereof is intended to, and nor shall it
create a binding legal obligation, and the understanding set forth
herein is subject to the execution of the Purchase Agreement.
11. Buyer may assign its rights and obligations under this letter to an
affiliated entity, upon which assignment Buyer's rights and
obligations hereunder shall terminate. Such affiliated entity shall
be the signatory to the Purchase Agreement.
12. This proposal shall expire at 5:00 P.M., Eastern Standard Time on
October 6, 1995, unless earlier accepted by Seller. Acceptance by
Seller shall be evidenced by the signatures of a duly authorized
officer of Seller on this Letter of Intent provided to Buyer prior to
5:00 P.M., October 6, 1995.
This letter may be signed in counterparts, all of which taken together shall
constitute one instrument, and any of the parties hereto may execute this
letter by signing any such counterpart. This letter shall become effective
upon execution by all parties hereto.
Please indicate your acceptance of the terms and conditions of this proposal by
signing in the space provided below.
The Christian Network, Inc.
By: /s/ Xxxxx X. Xxxx
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Its: Chairman
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Cornerstone Television, Inc.
By: /s/ Xxxxx Eagles
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Its: President
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ATTACHMENT I
INFORMATION RELATING TO STATION WOCD-TV
1. Inventory of Station's personal property
2. Real property description and leasehold interests of the
Station along with copies of all leases and existing title
policies
3. Licenses and governmental authorizations
4. Copies of contracts to which the Station is a party and that
are to be assumed by Buyer following Closing
5. Intangible assets of the Station
6. Insurance policies on Station property and operations
7. List of employees indicating: name; title; salary; date of
hire; and date and amount of last salary increase. Copies of
all employee benefit plans
8. Station financial statements for 1993, 1994 and 1995 year to
date
9. Station property excluded from sale
10. Cable systems currently carrying the Station
11. Litigation and other administrative proceedings to which the
Station is a party