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EXHIBIT 10.78
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EXHIBIT 10.78
November 14, 1995
Xxx Xxxxx
Offshore Broadcasting Corp.
000 Xxxxxx'x Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Dear Xx. Xxxxx:
Xxxxxx Communications Corporation ("Buyer"), or its assign whose performance
will be guaranteed by Xxxxxx, hereby proposes to purchase fifty (50%) per cent
of the common voting stock (the "Buyer's Stock") of ["NEWCO"] and to loan up to
$1.5 Million to Newco provided that Offshore Broadcasting Corporation
("Offshore") will contribute to Newco, in exchange for the remaining 50% of the
common voting stock of Newco, all of the assets, including real property,
accounts receivable, tangible and intangible personal or mixed properties (the
"Assets"), used or useful in the operation of Television Station WOST-TV, Block
Island, R.I. (the "Station") licensed to Offshore, 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 licenses for the
Station (and any auxiliary licenses) from Offshore to Newco 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), Newco will issue 50% of its common voting stock to Buyer and
the other 50% to Offshore in accordance with the provisions of a
definitive Stock 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:
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November 14, 1995
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(a) The purchase price for the Buyer's Stock shall be ONE MILLION DOLLARS
($1,000,000) payable in cash at Closing and Offshore shall contribute
the Assets in exchange for its 50% common voting stock interest.
(b) 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; including, but not limited to, all
governmental permits necessary for the relocation and construction of
the Station's transmission tower on the mainland at a mutually
acceptable site utilizing a mutually acceptable design structure. At
the Closing, Buyer and Newco shall enter into a Loan Agreement that
will make available to Newco up to $1.5 million for the limited
purpose of constructing and operating the Station from the new site.
The Loan shall carry an annual interest rate of 11 7/8% and such
interest shall not accrue until 120 days after the Station commences
its operations from the new site. Newco shall have the option to
secure the other sources of debt at more favorable rates if available.
Payments of interest only shall be made monthly thereafter for twelve
(12) months with principal and interest payment to be made for the
next sixty (60) months.
(c) Representations, warranties and covenants shall be set forth
relating to the Buyer's Stock that are usual and customary in
transactions of this nature and which shall survive the Closing for
eighteen (18) months.
(d) Buyer or Offshore 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
within eighteen (18) months from its execution.
(e) 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.
(f) Newco shall pay all federal, state and local sales or transfer taxes
arising from the conveyance of the Assets to Newco and the Buyer's
Stock to Buyer, as well as expenses associated with the
development of the antenna site.
(g) At the Closing, Buyer and Offshore shall execute a Shareholders
Agreement with/regarding to Newco which shall, among other
matters, require mutual agreement on all capital and operating
budgets, salaries and contracts over $500.00. In addition, all checks
over $200 will require two (2) signatures, one
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November 14, 1995
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(1) of which shall be a Xxxxxx representative and each party will have
a right of first refusal to the other's common voting stock.
3. Buyer shall deposit with First Union National Bank, the sum
of FIFTY THOUSAND AND NO/100 DOLLARS ($50,000.00) 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 Offshore has fully complied with the terms of the
Purchase Agreement, then only in that event Buyer shall forfeit the
Deposit to Offshore as liquidated damages and as the exclusive remedy
of Offshore against Buyer.
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 Offshore and Buyer no later than November 30, 1995. If
the Purchase Agreement is not executed by November 30, 1995, then the
terms of this letter shall expire without any liability to either
Offshore or Buyer.
5. Following the execution of the Purchase Agreement and prior to the
Closing, Buyer agrees to loan Offshore up to a maximum of Six Thousand
Dollars ($6,000) per month to cover the operating costs of the Station
and for no other purpose. In exchange for these funds, Offshore agrees
to broadcast some programming on the Station as mutually agreed upon
with Buyer.
6. 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, Offshore 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 or any common voting
stock in Newco.
7. Buyer shall be afforded, from and after the date hereof,
reasonable opportunity to inspect the Station and the books and
records of the Offshore. 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 Offshore, 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, Offshore shall supply to Buyer
the information called for on Attachment I hereto relating to the
Station.
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8. Buyer and Offshore 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.
9. Buyer and Offshore 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.
10. From the proceeds of the sale, Newco shall satisfy its obligations
for a brokerage commission due and payable to Media Venture Partners.
11. Offshore agrees that until December 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 or Buyer's Stock, nor shall
it permit its owners to offer, to seek to offer, or entertain or
discuss any offer to sell, any interest in the Station or Buyer's
Stock to third parties.
12. Except for paragraphs 4, 5, 6, 7, 8, 9, 10 and Paragraph 11 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.
13. Buyer may assign its rights and obligations under this letter to
another entity, whose performance will be guaranteed by Xxxxxx
Communications Corporation. Such affiliated entity shall be the
signatory to the Purchase Agreement.
14. This proposal shall expire at 5:00 P.M., Eastern Standard Time on
November 20, 1995, unless earlier accepted by Offshore. Acceptance by
Offshore shall be
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evidenced by the signatures of the president of Offshore on this Letter
of Intent provided to Buyer prior to 5:00 P.M., November 20, 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.
XXXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Secretary
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OFFSHORE BROADCASTING CORPORATION
By: /s/ Xxx Xxxxx
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Its: President
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ATTACHMENT I
INFORMATION RELATING TO STATION WOST-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
