NOSTALGIA NETWORK INC, SC 13E3, 2000-11-29

NOSTALGIA NETWORK INC
SC 13E3, 2000-11-29
TELEVISION BROADCASTING STATIONS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

SCHEDULE 13E-3
(RULE 13e-100)
TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 13 e-3 THEREUNDER

TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934

THE NOSTALGIA NETWORK, INC.
(NAME OF THE ISSUER)

THE NOSTALGIA NETWORK, INC.
AND
NNI ACQUISITION CORPORATION ("NNI")
CROWN COMMUNICATIONS CORPORATION ("CROWN")
CONCEPT COMMUNICATIONS, INC. ("CONCEPT")
CROWN CAPITAL CORPORATION ("CAPITAL")
(NNI, CROWN, CONCEPT AND CAPITAL ARE COLLECTIVELY REFERRED TO HEREIN AS THE
"CONCEPT GROUP")

ATLANTIC VIDEO, INC. ("ATLANTIC")
ONE UP ENTERPRISES, INC. ("ONE UP")
UNIFICATION CHURCH INTERNATIONAL ("UCI")
ATLANTIC, ONE UP AND UCI ARE COLLECTIVELY REFERRED TO HEREIN AS THE "ATLANTIC
VIDEO GROUP")
(NAME OF THE PERSON(S) FILING STATEMENT)

<TABLE>
<S> <C>
COMMON STOCK 669 752107
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS OF SECURITIES)
</TABLE>

------------------------

<TABLE>
<S> <C>
SQUIRE RUSHNELL, PRESIDENT DONG MOON JOO, PRESIDENT
THE NOSTALGIA NETWORK, INC. CROWN COMMUNICATIONS CORPORATION
650 MASSACHUSETTS AVENUE, N.W. 650 MASSACHUSETTS AVENUE, N.W.
WASHINGTON, D.C. 20001 WASHINGTON, D.C. 20001
(202) 789-2124
</TABLE>

(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Person(s) Filing Statement)
------------------------
COPIES TO:

<TABLE>
<S> <C>
ARTHUR E. CIRULNICK, ESQUIRE MICHAEL D. GOLDEN, ESQUIRE
VENABLE, BAETJER, HOWARD & CIVILETTI, LLP GOLDEN & NELSON, PLLC
1201 NEW YORK AVENUE, N.W., SUITE 1000 1120 FRANCIS HAMMOND PARKWAY
WASHINGTON, D.C. 20005 ALEXANDRIA, VA 22302
(202) 962-4800 (703) 751-4445
</TABLE>

This statement is filed in connection with (check the appropriate box):

a. [X] The filing of solicitation materials or an information statement subject
to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities
Exchange Act of 1934.

b. [ ] The filing of a registration statement under the Securities Act of 1933.

c. [ ] A tender offer.

d. [ ] None of the above.

Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. [X]

CALCULATION OF FILING FEE

<TABLE>
<CAPTION>
TRANSACTION VALUATION AMOUNT OF FILING FEE
--------------------- --------------------
<S> <C>
1,441,958.77 $288.40
</TABLE>

[X] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.

<TABLE>
<S> <C>
Amount Previously Paid: $288.40
Form or Registration No.: Preliminary Proxy Statement on Schedule 14A
Filing Party: The Nostalgia Network, Inc.
Date Filed: February 2, 2000
</TABLE>

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<PAGE> 2

INTRODUCTION

This Rule 13e-3 Transaction Statement on Schedule 13E-3 (this "Schedule
13E-3") is being filed jointly by The Nostalgia Network, Inc., a Delaware
corporation ("Nostalgia" or the "Company"), the Concept Group and the Atlantic
Video Group, pursuant to Section 13(e) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and Rule 13e-3 thereunder, in connection with
the proposed merger (the "Merger") of NNI with and into the Company pursuant to
an Agreement and Plan of Merger, dated as of January 11, 2000, as amended (as so
amended the "Merger Agreement"), by and between the Company and NNI. This
Schedule 13E-3 amends and restates the Rule 13e-3 Transaction Statement dated
February 2, 2000 filed in connection with the Merger as amended by Amendment No.
1 thereto dated July 27, 2000, Amendment No. 2 thereto dated October 25, 2000
and Amendment No. 3 thereto dated November 16, 2000.

In the Merger and pursuant to the terms and conditions set forth in the
Merger Agreement, NNI will merge with and into the Company, with the Company as
the surviving corporation. At the effective time of the Merger as defined in the
Merger Agreement (the "Effective Time"):

1. Each issued and outstanding share of common stock, par value $.04
per share, of the Company (the "Common Stock"), other than Common Stock
held by NNI or stockholders exercising their appraisal rights, will be
converted into and become the right to receive $0.07 per share of Common
Stock in cash, without interest.

2. Each issued and outstanding share of preferred stock, par value
$2.00, of the Company (the "Preferred Stock"), other than Preferred Stock
held by NNI or stockholders exercising their appraisal rights, will be
converted into and become the right to receive $7.00 per share of Preferred
Stock in cash, without interest.

3. Each share of Common Stock and Preferred Stock owned by NNI, or
held in the treasury of the Company immediately prior to the Effective
Time, will be cancelled and cease to exist, and no consideration will be
paid with respect thereto.

4. Finally, each share of common stock of NNI that is issued and
outstanding immediately prior to the filing of the Certificate of Merger
will be converted into and represent the right to receive one fully paid
and nonassessable share of newly issued common stock of the Company, par
value $0.01 per share, and such shares of the Company shall constitute the
only issued shares of the Company.

Concurrently with the filing of this Schedule 13E-3, the Company is filing
a definitive proxy statement on Schedule 14A (as amended, the "Proxy Statement")
pursuant to which the stockholders of the Company will be given notice of the
Merger. The Proxy Statement is incorporated herein by reference. The information
set forth in the Proxy Statement, including all schedules, exhibits and
appendices thereto, is hereby expressly incorporated herein by reference and the
response to each item in this Schedule 13E-3 is qualified in its entirety by the
information contained in the Proxy Statement and the schedules, exhibits and
appendices thereto. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Proxy Statement.

ITEM 1. SUMMARY TERM SHEET

Item 1001 (Reg. M-A)

The information set forth in the section entitled "SUMMARY TERM SHEET" of
the Proxy Statement is incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION

Item 1002 (Reg. M-A)

(a) The information set forth in the section entitled "SUMMARY TERM
SHEET -- The Companies -- Nostalgia" of the Proxy Statement is incorporated
herein by reference.

(b) The information set forth in the section entitled "SUMMARY TERM
SHEET -- Vote Required" of the Proxy Statement is incorporated herein by
reference.

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<PAGE> 3

(c), (d) The information set forth in the section entitled "COMPARATIVE PER
SHARE MARKET INFORMATION" of the Proxy Statement is incorporated herein by
reference.

(e) No filing person has made an offering of the type described in Item
1002(e) of Regulation M-A.

(f) None of Nostalgia, Capital, Crown, Concept or any of the companies
comprising the Atlantic Video Group has purchased any securities of Nostalgia in
the past two years. NNI did not purchase any Nostalgia securities prior to
becoming an affiliate of Nostalgia.

ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON

Item 1003 (a)-(c) (Reg. M-A)

(a)-(c) The information set forth in the section entitled "SUMMARY TERM
SHEET -- The Companies" of the Proxy Statement is incorporated herein by
reference. The filing persons consist of Nostalgia, which is the subject
company, the Concept Group, which consists of affiliates of Nostalgia and the
Atlantic Video Group, the companies comprising which, solely for the purposes of
this Schedule 13E-3 and the Proxy Statement have elected to be deemed
affiliates. The information set forth on the cover page and in the sections
entitled "THE CONCEPT GROUP", "THE ATLANTIC VIDEO GROUP" and "BUSINESS OF
NOSTALGIA -- Directors and Executive Officers" of the Proxy Statement is
incorporated herein by reference.

ITEM 4. TERMS OF THE TRANSACTION

Item 1004 (a), (c)-(f) (Reg. M-A)

(a) The information set forth in the sections entitled "SUMMARY TERM
SHEET -- The Merger," "SUMMARY TERM SHEET -- Vote Required," "SUMMARY TERM
SHEET -- Reasons for the Merger; Fairness Considerations," "SUMMARY TERM
SHEET -- Federal Income Tax Consequences," "SUMMARY TERM SHEET -- Accounting
Treatment," "SPECIAL FACTORS -- Reasons for the Merger; Fairness
Considerations," "SPECIAL FACTORS -- Effect of the Merger on the Rights of
Existing Stockholders," "SPECIAL FACTORS -- Federal Income Tax Considerations,"
"THE MERGER -- Accounting Treatment," and the "THE MERGER AGREEMENT" of the
Proxy Statement is incorporated herein by reference.

(c) The information set forth in the section entitled "SPECIAL
FACTORS -- Effect of the Merger on the Rights of Existing Stockholders" of the
Proxy Statement is incorporated herein by reference.

(d) The information set forth in the sections entitled "SUMMARY TERM
SHEET -- Appraisal Rights" and "THE MERGER -- Appraisal Rights" of the Proxy
Statement and Appendix C to the Proxy Statement is incorporated herein by
reference.

(e) No provision of the type described in Item 1004(e) of Regulation M-A
has been made.

(f) Not applicable.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

Item 1005 (a)-(c) and (e) (Reg. M-A)

(a) The information set forth in the sections entitled "THE
MERGER -- Security Ownership of Management and Certain Beneficial Owners" and
"CERTAIN TRANSACTIONS AND RELATIONSHIPS" of the Proxy Statement is incorporated
herein by reference.

(b) Except as described in the section entitled "SPECIAL
FACTORS -- Background" of the Proxy Statement, no significant corporate events
of the type described in Item 1005(b) of Regulation M-A have occurred during the
past two years.

(c) The information set forth in the section entitled "SPECIAL
FACTORS -- Background" of the Proxy Statement is incorporated herein by
reference.

(e) The information set forth in the sections entitled "THE
MERGER -- Security Ownership of Management and Certain Beneficial Owners" and
"CERTAIN TRANSACTIONS AND RELATIONSHIPS" of the Proxy Statement is incorporated
herein by reference.

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<PAGE> 4

ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS

Item 1006(b), (c)(1)-(8) (Reg. M-A)

(b) The information in the section entitled "SPECIAL FACTORS -- Effect of
the Merger on the Rights of Existing Stockholders" of the Proxy Statement is
incorporated herein by reference.

(c) The information in the sections entitled "SUMMARY TERM SHEET -- The
Merger," SUMMARY TERM SHEET -- Consequences of the Merger," "SPECIAL
FACTORS -- Effect of the Merger on the Rights of Existing Stockholders," and
"SPECIAL FACTORS -- Effect of the Merger on Nostalgia, the Concept Group and the
Atlantic Video Group" of the Proxy Statement is incorporated herein by
reference.

ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS

Item 1013 (Reg. M-A)

(a)-(c) The information set forth in the sections entitled "SUMMARY TERM
SHEET -- Reasons for the Merger; Fairness Considerations," and "SPECIAL
FACTORS -- Reasons for the Merger; Fairness Considerations" of the Proxy
Statement is incorporated by reference.

(d) The information set forth in the sections entitled SUMMARY TERM
SHEET -- Consequences of the Merger," "SUMMARY TERM SHEET -- Federal Income Tax
Consequences," SPECIAL FACTORS -- Effect of the Merger on the Rights of Existing
Stockholders" "SPECIAL FACTORS -- Effect of the Merger on Nostalgia, the Concept
Group and the Atlantic Video Group," and "SPECIAL FACTORS -- Federal Income Tax
Considerations" of the Proxy Statement is incorporated herein by reference.

ITEM 8. FAIRNESS OF THE TRANSACTION

Item 1014 (Reg. M-A)

(a), (b) The information set forth in the sections entitled "SUMMARY TERM
SHEET -- Recommendations of the Special Committee and Nostalgia's Board of
Directors," "SUMMARY TERM SHEET -- Reasons for the Merger; Fairness
Considerations," "SUMMARY TERM SHEET -- Fairness Opinion of Chatsworth
Securities, LLC," "SUMMARY TERM SHEET -- Valuation Analysis of Daniels and
Associates, L.P.," and "SPECIAL FACTORS -- Reasons for the Merger; Fairness
Considerations" of the Proxy Statement is incorporated herein by reference.

(c), (d) The Merger is not structured so that the approval of at least a
majority of unaffiliated stockholders is required. The nonemployee directors
have not retained an unaffiliated representative to act solely on behalf of
Nostalgia's unaffiliated stockholders. The information set forth in the section
entitled "SUMMARY TERM SHEET -- Reasons for the Merger; Fairness Considerations"
of the Proxy Statement is incorporated herein by reference.

(e) The information set forth on the cover page and in the sections
entitled "SUMMARY TERM SHEET -- Recommendations of the Special Committee and
Nostalgia's Board of Directors" of the Proxy Statement is incorporated herein by
reference.

(f) During the past two years, Nostalgia has not received any firm offers
of the type described in paragraph (viii) of Instruction 2 to Item 1014.

ITEM 9. REPORTS, OPINION, APPRAISALS AND NEGOTIATIONS

Item 1015 (Reg. M-A)

(a), (b) The information set forth in the sections entitled "SUMMARY TERM
SHEET -- Recommendations of the Special Committee and Nostalgia's Board of
Directors," "SUMMARY TERM SHEET -- Fairness Opinion of Chatsworth Securities,
LLC," "SUMMARY TERM SHEET -- Valuation Analysis of Daniels and Associates,
L.P.," "SPECIAL FACTORS -- Report of the Financial Advisor to Crown," and
"SPECIAL FACTORS -- Opinion of the Financial Advisor to the Special Committee"
of the Proxy Statement and in Appendices B, D(1) and D(2) to the Proxy Statement
is incorporated herein by reference.

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<PAGE> 5

(c) The opinion of Chatsworth Securities, LLC has been provided as Appendix
B to the Proxy Statement. The valuation analyses of Daniels and Associates, L.P.
have been provided as Appendices D(1) and D(2) to the Proxy Statement.

ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

Item 1007 (Reg. M-A)

(a)-(d) The information set forth in the section entitled "THE
MERGER -- Financing, Expenses and Fees" of the Proxy Statement is incorporated
herein by reference.

ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY

Item 1008 (Reg. M-A)

(a) The information set forth in the section entitled "THE
MERGER -- Security Ownership of Management and Certain Beneficial Owners" of the
Proxy Statement is incorporated herein by reference.

(b) The information set forth in the section entitled "CERTAIN TRANSACTIONS
AND RELATIONSHIPS" of the Proxy Statement is incorporated herein by reference.

ITEM 12. THE SOLICITATION OR RECOMMENDATION

Item 1012(d), (e) (Reg. M-A)

(d), (e) The information set forth in the sections entitled "SUMMARY TERM
SHEET -- Vote Required," "SUMMARY TERM SHEET -- Recommendations of the Special
Committee and Nostalgia's Board of Directors," "SPECIAL
FACTORS -- Recommendations of the Board of Directors," and "SPECIAL
FACTORS -- Vote Required" of the Proxy Statement is incorporated herein by
reference.

ITEM 13. FINANCIAL STATEMENTS

Item 1010(a), (c) (Reg. M-A)

(a) The information set forth in the section entitled "SELECTED FINANCIAL
DATA" of the Proxy Statement and the financial information provided in Appendix
F to the Proxy Statement is incorporated herein by reference.

(b) The filing persons do not believe that the pro forma information
described by Item 1010(b) of Regulation M-A is material because the unaffiliated
stockholders of Nostalgia are receiving only cash consideration in the Merger.

ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED

Item 1009 (Reg. M-A)

(a) Not applicable.

(b) The information set forth in the section entitled "SPECIAL
FACTORS -- Background" of the Proxy Statement is incorporated herein by
reference.

ITEM 15. ADDITIONAL INFORMATION

Item 1011(b) (Reg. M-A)

Not applicable.

ITEM 16. EXHIBITS

Item 1016(a)-(d), (f), (g) (Reg. M-A)

(a) The Proxy Statement is incorporated herein by reference.

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(b) The information set forth in the following exhibits to amendments to
the Schedule 13D of Nostalgia filed on April 30, 1990 is incorporated herein by
reference: Exhibits 23.0 and 23.1 to Amendment No. 23 filed on January 10, 1994;
Exhibit 27.0 to Amendment No. 27 filed on April 11, 1995; Exhibit 47.1 to
Amendment No. 47 filed on January 16, 1998, Exhibit 68.1 to Amendment No. 68
filed on May 31, 2000 and Exhibit 70.4 to Amendment No. 70 filed on October 12,
2000. In addition, we have provided as Exhibit E to the Proxy Statement a copy
of the promissory note between Atlantic Video and One Up that is referred to in
the section entitled "THE MERGER -- Financing, Expense and Fees."

(c) The information set forth in Appendices B, D(1) and D(2) to the Proxy
Statement is incorporated herein by reference. In addition, we have provided as
Exhibits A(1) and A(2) to this Schedule 13E-3 a copy of a working and final
draft, respectively, of the analysis performed by Chatsworth that served as the
basis of Chatsworth's opinion and were presented to Nostalgia's Board of
Directors.

(d) The information set forth in Exhibit 10(i) (1987 Stock Option Plan) to
Nostalgia's Annual Report on Form 10-K of Nostalgia for the year end December
31, 1987, Exhibit 10(TT) (1990 Stock Option Plan) to Nostalgia's Annual Report
on Form 10-K for the year ended December 31, 1990 and Exhibit 10.21 (Stock
Option Agreement with SQuire Rushnell) to Nostalgia's Annual Report on Form 10-K
for the year ended December 31, 1999 is incorporated herein by reference.

(f) The information set forth in Appendix C of the Proxy Statement is
incorporated herein by reference.

(g) Not applicable.

Dated: November 16, 2000

THE NOSTALGIA NETWORK, INC.

/s/ WILLARD R. NICHOLS
--------------------------------------
By: Willard R. Nichols, Vice President
General Counsel and Secretary

CONCEPT COMMUNICATIONS, INC.

/s/ WERNER SEUBERT
--------------------------------------
By: Werner Seubert, Vice President

CROWN COMMUNICATIONS CORPORATION

/s/ WERNER SEUBERT
--------------------------------------
By: Werner Seubert, Vice President

CROWN CAPITAL CORPORATION

/s/ WERNER SEUBERT
--------------------------------------
By: Werner Seubert, Vice President

NNI ACQUISITION CORPORATION

/s/ WERNER SEUBERT
--------------------------------------
By: Werner Seubert, Vice President

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ATLANTIC VIDEO, INC.

/s/ WILLIAM TODD MASON
--------------------------------------
By: William Todd Mason, President

ONE UP ENTERPRISES, INC.

/s/ R. MICHAEL RUNYON
--------------------------------------
By: R. Michael Runyon, President

UNIFICATION CHURCH INTERNATIONAL

/s/ R. MICHAEL RUNYON
--------------------------------------
By: R. Michael Runyon, Vice President

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<PAGE> 8

EXHIBIT A(1)

GOODLIFE TV

GOING PRIVATE TRANSACTION

PREPARED BY
CHATSWORTH SECURITIES LLC
OCTOBER 5, 1999
A(1)-1
<PAGE> 9

GOING PRIVATE TRANSACTION

I. GOODLIFE TV

A. The Cable TV Industry
B. Industry Statistics
C. Goodlife TV
D. Goodlife Subscriber Base
E. Goodlife Advertising Revenue

II. GOING PRIVATE TRANSACTION

A. Market Comparables
B. Stock Price Trading History and Analysis
C. Considerations and Recommendation

APPENDIX

FINANCIALS (1995 - JUNE 30, 1999)
Income Statement
Balance Sheet

DAILY STOCK PRICE TRADING
(1/1/98 to 9/29/99)

A(1)-2
<PAGE> 10

I. GOODLIFE TV

A. THE CABLE TV INDUSTRY

Cable television, initially known as CATV, began in the United States in
the late 1940's. By 1950, 70 cable systems served 14,000 subscribers nationwide.
In the 1960's, cable operators were picking up broadcast signals from hundreds
of miles away, providing new programming choices. Local television stations saw
this as competition and the FCC responded by restricting the ability of cable
systems to import distant signals.

The freeze on development lasted until the early 1970's when a policy of
gradual cable deregulation led to modified restrictions on the importation of
distant signals. In 1972 Home Box Office launched the first pay-TV network, HBO.
This venture led to the creation of a national satellite distribution system,
paving the way for explosive growth of program networks.

The second service to use the satellite distribution system was a local
television station in Atlanta that broadcast sports and classic movies. Owned by
Ted Turner, WTBS, became known as the first "Superstation".

By the end of the 1970s, nearly 15 million households were cable
subscribers. The 1984 Cable Act effectively deregulated the industry,
stimulating investment in cable plant and programming on an unprecedented level.
From 1984 through 1992, the industry spent more than $15 billion on the wiring
of America. Nearly 53 million households subscribed to cable and cable networks
had increased from 28 in 1980 to 74 in 1989.

In the 1990's the idea of niche programming exploded the number of cable
programming networks available. In 1998, there were 174 networks with an average
of only 61 available channels per system. The 1997 FCC reforms, including the
"must carry" regulations, stipulating that cable operators must carry any local
television station seen by 35% of their subscribers in a given area, has
drastically reduced the available number of channels for cable programmers.
Competition for existing channels is fierce and programmers have begun paying
for carriage.

Today, there are nearly a hundred million US television households. There
are more than 67 million basic cable subscribers and annual cable revenues are
in excess of $33 billion. At the same time as the broadcast networks are
suffering continuing declines in ratings, basic cable continues to increase (up
13% in 1998). All but three cable programming services posted gains or remained
flat.

In 1998, the cable industry invested more than $6 billion in programming,
and it projected that $7 billion will be invested in 1999. This substantial
investment has resulted in more choice and higher quality programming that draws
increasingly more viewers to cable networks. In addition to more and better
programming, cable's investments have also resulted in the creation of more
cable networks -- from 87 networks in 1992 to 174 networks in 1998 -- a 100%
increase during the past six years.

However, the cable industry is facing a hostile regulatory environment,
plant upgrades, increased competition, digital services and the implementation
of telephony and data on cable systems. The Internet will be a boon to the
system operators but increased competition for the program networks. The "must
carry" legislation of 1997 reduced the number of channels available to
programmers and the pending digital "must carry" ruling could result in the loss
of as many as 15 channels on basic cable. The digital equipment allowing the
viewing of as many as 500 channels on a TV set is not yet in place and until a
cable system can integrate incompatible digital broadcast and digital
programming services at the headend, a cable subscriber will lose one analog
cable network for each digital TV signal.

Clearly, a programming network will be tremendously affected by the
decision made by the FCC on digital "must carry." The top programming networks,
with partners like Time Warner, ATT, and Viacom will likely remain unaffected.
They have additional digital networks ready to launch by 2000, tremendous
subscriber bases and ad revenues. Nickelodeon had $564mm in advertising revenues
last year, closely followed by TBS with $524mm. They have a clearly defined
audience and will continue growth regardless of satellite competition or
regulatory issues.

A(1)-3
<PAGE> 11

The highest risk group of programming networks will be those small
independent networks with limited subscribers. Although GoodLife TV appears to
have stemmed the losses caused by the increased competition (Nick at Nite, A&E,
etc.) and the initial impact of the "must carry" ruling in 1997, they remain in
a difficult position with only 8.5 million cable subscribers. The positioning of
the network over the next 12 months will be crucial as system operators try to
find clearly defined niche programming with growing viewership.

B. CABLE INDUSTRY STATISTICS
(as of December 31, 1998)

<TABLE>
<S> <C>
US Television Households (TVHH)(1) 99,391,780
Basic Cable Subscribers(1) 67,011,180
Cable Penetration of TVHH(1) 67.4%
Pay Cable Units(2) 48,130,000
Annual Cable Revenue(2) $33.78 Billion
Homes Passed By Cable(2) 95,520,000
Homes Passed as a Percent of TVHH(2) 96.56%
Cable Systems(3) 10,845
Cable Employees(4) 127,927
National cable Networks Video)(5) 174
</TABLE>

---------------
(1) Nielsen Media Research
(2) Paul Kagan Associates, Inc.
(3) Warren Publishing, Inc.
(4) Federal Communications Commission
(5) National Cable Television Association

C. GOODLIFE TV

GoodLife TV, which began in 1986 as The Nostalgia Network, was one of the
early cable programming networks running classic television shows and movies. In
1986, their only competition was from Turner's TBS, and as cable operators
strove to fill their empty channels, Nostalgia quickly grew to 15 million
subscribers. Over the next 5 years, Nostalgia faced a number of challenges,
including increased competition, consolidations within the industry of
programmers and operators increased programming costs and reduced advertising
revenues. Operators in the early 1990's required payment for carriage and GLTV
continued to decline in number of subscribers until March of 1998. Since that
time, there has been a definite trend upward in basic cable subscribers and as
GLTV continues to define itself as a niche programmer, with original programming
as well as reruns of classic television and movies. It is expected that this
trend will continue to grow, acquiring new subscribers and drawing increased
viewership through the original programs.

D. GOODLIFE SUBSCRIBER BASE

Goodlife TV has 8,400,935 subscribers of which 2,955,222 or 35% are
billable. Goodlife presently pays $1 to $2 per subscriber with up to five years
of free service. Much of the recent subscriber growth has come from new digital
cable systems given the increased demand for carriage and as subscribers are
marginally less expensive to acquire on digital systems.

Goodlife expects subscribers to remain and to commence monthly payments at
the end of the free service period, however free service as a subscriber
contract term is a relatively new concept and it is not certain what percentage
will continue as billable subscribers. Presently, billable subscribers pay an
average of $.07 per month ($.84 per year).

A(1)-4
<PAGE> 12

SUBSCRIBER SUMMARIES

<TABLE>
<CAPTION>
F/T BASIC F/T TIER C-BAND LOCAL P/T BASIC P/T TIER OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-96 5,054,180 548,081 969,634 1,487,353 180,465 49,368 8,289,081
Dec-96 4,556,297 445,796 947,551 1,501,812 192,008 50,519 7,693,983
Dec-97 3,584,478 300,207 1,009,683 720,493 1,170,298 234,008 40,714 7,059,881
Jan-98 3,621,072 301,969 990,351 718,120 1,051,616 275,543 8,299 6,966,970
Feb-98 3,537,876 302,480 970,063 717,427 1,148,731 275,543 8,233 6,960,353
Mar-98 3,525,326 285,285 964,737 716,365 1,199,572 260,543 8,254 6,960,082
Apr-98 3,584,009 314,326 963,264 716,174 1,201,636 266,193 8,267 7,053,869
May-98 3,605,275 325,591 956,509 716,297 1,177,302 265,533 8,262 7,054,769
Jun-98 3,640,318 339,917 943,674 717,583 1,174,827 265,587 8,456 7,090,362
Jul-98 3,767,197 332,964 930,145 716,805 1,120,342 265,471 -- 7,132,924
Aug-98 3,921,439 316,150 918,917 716,647 1,112,738 265,471 -- 7,251,362
Sep-98 4,016,539 319,986 908,315 716,248 1,118,043 265,378 10 7,344,519
Oct-98 4,159,998 288,124 897,932 716,060 1,116,740 265,378 10 7,444,242
Nov-98 4,241,354 289,870 986,209 715,849 1,110,827 265,221 10 7,609,340
Dec-98 4,327,110 291,158 983,089 715,849 1,135,545 265,292 10 7,718,053
Jan-99 4,405,293 291,592 1,021,752 715,671 1,230,213 235,138 10 7,899,669
Feb-99 4,475,935 292,598 1,053,547 715,473 1,230,460 235,100 10 8,003,123
Mar-99 4,554,654 287,055 1,027,248 715,473 1,231,476 235,065 10 8,050,981
Apr-99 4,622,738 288,075 1,016,646 715,533 1,231,858 235,006 10 8,109,866
May-99 4,651,261 288,582 1,006,619 715,533 1,231,955 235,023 10 8,128,983
Jun-99 4,708,494 283,207 993,067 715,533 1,289,512 235,049 10 8,224,872
Jul-99 4,885,995 283,842 1,051,355 655,611 1,289,137 234,985 10 8,400,935
</TABLE>

A(1)-5
<PAGE> 13

AFFILIATE BILLABLES VS NON-BILLABLES

<TABLE>
<CAPTION>
SUBSCRIBER SUBSCRIBER NON-
BILLABLES BILLABLES TOTAL
---------- --------------- ---------
<S> <C> <C> <C>
Dec-96 5,292,153 2,401,830 7,693,983
Dec-97 3,626,234 3,433,647 7,059,881
Jan-98 3,512,803 3,454,167 6,966,970
Feb-98 3,444,452 3,515,901 6,960,353
Mar-98 3,607,684 3,352,398 6,960,082
Apr-98 3,486,665 3,567,204 7,053,869
May-98 3,509,560 3,545,209 7,054,769
Jun-98 3,538,083 3,522,279 7,090,362
Jul-98 3,414,547 3,718,377 7,132,924
Aug-98 3,414,287 3,837,075 7,251,362
Sep-98 3,376,147 3,968,372 7,344,519
Oct-98 3,408,445 4,035,797 7,444,242
Nov-98 3,364,333 4,245,007 7,609,340
Dec-98 3,175,332 4,542,721 7,718,053
Jan-99 3,042,212 4,857,457 7,899,669
Feb-99 3,044,356 4,958,767 8,003,123
Mar-99 3,058,218 4,992,763 8,050,981
Apr-99 3,044,217 5,065,649 8,109,866
May-99 3,052,302 5,076,681 8,128,983
Jun-99 3,250,022 4,974,850 8,224,872
Jul-99 2,955,222 5,445,713 8,400,935
</TABLE>

E. GOODLIFE ADVERTISING REVENUE

Cable advertisements have generated nearly $10 billion in revenue in
1999 -- $7.5 billion from network cable, $2.5 billion in local spot advertising
and $351 mm in regional spots. This increase has come at a time when ad-agency
buyers are voicing concerns about commercial clutter and increased media
fragmentation as consumers' menu of media choices grows. GoodLife TV is still
too small to take advantage of the national advertising trends, but is looking
to maximize their revenue stream from advertising by focusing on key demographic
profiles through direct response advertising and infomercials. GoodLife TV has
an upscale viewer, college educated, over 40, with a household income of $60,000
plus.

Comparable cable networks, such as TV Land, have a minimum of 20 million
subscribers, without which it is nearly impossible to demand advertising rates
on a par with other cable programmers. Currently, national advertisers are
requiring a minimum of at least 15 million subs to measure demographics.
Although digital broadcasts and the Internet as competition are the two main
sources of concern in the cable sales end, the buyers (such as national
advertisers) are primarily concerned with inadequate audience research. In spite
of this handicap, GoodLife TV has shown recent advertising revenues for the
quarter ending June 30, 1999 of $754,916 or $3,019,664 annualized. The
annualized revenue is equivalent to $0.37 per subscriber using an average of 8.1
million subscribers. This number jumps to almost $0.50 when only 6.4 million
cable subscribers (without any satellite subscribers) are used. The Kagan
average for all cable systems is $0.60 of advertising revenue per subscriber.

GoodLife TV is targeting $3 million in advertising revenue and $3 million
in affiliate revenue for the year 2000. While this may seem ambitious, in fact,
it is in line with what other cable programmers are looking forward to in the
next few years. In order to achieve this target, the company plans to change the
current advertising mix. The company will not contract with national advertisers
in the year 2000, given their small subscriber base and subsequent problems with
substantial "make goods" as a consequence. Local and regional spots will
continue as a source of revenue, however, the primary sources of advertising
revenues will switch

A(1)-6
<PAGE> 14

over entirely to a combination of direct response advertising (including
infomercials) and the more profitable "nested networks".

Nested network sales involves the sale of blocks of time (usually
overnight) to religious and/or shopping channels that traditionally pay for
carriage. This is a profit center for many smaller networks, providing a steady
stream of income without any corresponding expenses. As channel space is at a
premium right now, and may well continue to be if the digital "must carry"
legislation passes, selling block time may become a solid source of advertising
revenue for GoodLife TV in the next few years.

II. GOING PRIVATE TRANSACTION

A. MARKET COMPARABLES

Given the limited number of public cable television networks, it is
difficult to find publicly traded market comparables. The following represents
the best market comparables available of which six have been acquired within the
past 18 months.

The most commonly used valuation multiples are Enterprise Value ("EV")
relative to sales, operating cashflow (EBITDA), net income, book value, and
total debt. Enterprise Value is defined as market capitalization (current market
price times the number of shares of common stock outstanding) plus short and
long term debt plus preferred stock less cash and cash equivalents.

As Goodlife has negative operating cashflow (EBITDA), net income, and book
value, ratio analysis for these multiples is not meaningful. However, the
following ratios provide a basis for comparison with Goodlife's peer group.

<TABLE>
<S> <C>
EV/Sales: Goodlife's ratio of 14.1x is substantially higher than the
2.7x for the peer group. This reflects below average revenue
given the level of debt held by the Company.

Total Debt/EV: Goodlife's ratio of 1.04x versus .17x reflects a
significantly greater level of debt versus its current
market capitalization.

EV/Subscribers: Goodlife's ratio of 9.1x is in line with the peer group of
14.3x (with FAM and VVTV) and 10.4x (without FAM and VVTV).
This indicates that the stock is fairly valued at current
levels and relative to its peer group.
</TABLE>

B. STOCK PRICE TRADING HISTORY AND ANALYSIS

The Company's stock is presently traded at $.05 bid and $.06 offer. The
stock seldom trades and when there is a trade it is normally for a small
transaction amount -- eg. 20,000 shares or $1,000 (see appendix: Daily Stock
Price and Trading).

The following graph "NNET Equity Volume" shows equity trading volume since
September 1997. The most significant activity during the past year occurred on
January 6, 7 and 8, 1999. This spike in volume trading was the result of
speculation by day traders who reacted to the announcement that Daniels &
Associates had been hired by Concept Communications to find a strategic partner
for the Company.

The "Price/Volume Table" shows the cumulative trading volume for each
respective price from $.01 to $.18 during the last 12 months. The speculative
trading activity that occurred in early January has been excluded from this
analysis since it does not reflect normal trading activity. The purpose of this
table is to show that an offer of $.08 per share for the minority stockholders
stock would represent a price higher than 79.2% of all normal stock trades
during the past year.

C. CONSIDERATIONS AND RECOMMENDATION

1. CONSIDERATIONS

During 1999, Goodlife has reduced overhead while focusing on new
strategies for (1) new programming, (2) increasing subscribers and (3)
establishing a joint venture relationship with a strategic

A(1)-7
<PAGE> 15

partner. These strategies may result in a substantial increase in the value
of Goodlife TV in the future. However, for this analysis, we must look at
historical results and the current environment for the Company in view of
the recent industry consolidation and increased competition for
distribution.

A. DISTRIBUTION

Goodlife continues to suffer from limited distribution. Typically,
distribution can be increased through (1) strategic partnerships or (2)
acquiring subscribers. A strategic partner with an equity investment
will have a vested interest in providing carriage. Initiatives to obtain
an equity investment from a strategic partner began in June 1999 and
continues at this time. With regard to the acquisition of subscribers,
the market has become increasingly difficult during the past several
years given the consolidation of the industry, the "must carry" rule and
the increased competition for subscribers with some cable companies
offering up to $10 per subscriber.

B. FINANCIALS

Affiliate revenue has declined 15.9% per annum from $4.2 million in
1995 to $2.5 million in 1998. At the same time, advertising revenues has
declined 19.7% per annum down from $5.8 million in 1995 to $3.0 million
in 1998. During this same period, programming and sales/advertising
expenses have been virtually flat while finance, general and
administrative expenses have declined substantially from $4.7 million in
1995 to $2.6 million in 1998. Interest expenses, while negligible during
1995 -- 1997, reached $3.2 million in 1998. As a result of these changes
in financial condition, the net loss per annum for Goodlife has now
doubled from $9 million in 1995 to $17 million in 1998. The accumulated
stockholders equity (deficit) has increased from $50 million in 1996 to
$103 million at June 30, 1999 and total stockholders equity (deficit)
has increased from $19 million in 1996 to $72 million at June 30, 1999.

Since 1995, Goodlife TV has become relatively smaller compared to
its industry peers. This relative decrease in size has occurred at the
same time that size has become increasingly important in order to use
scale and leverage to enhance market position.

As of October 4, 1999 Goodlife had a stock market capitalization of
$1.22 million. The net loss per share was $1.14 for the year ended
December 31, 1999 and $.32 for the three month period ended June 30,
1999. Given the financial condition of the Company and the illiquidity
of the stock, investors are not going to buy Goodlife stock. Therefore,
we do not expect the stock price to appreciate in the near future given
the present circumstances.

2. OFFER PRICE PER SHARE TO MINORITY SHAREHOLDERS

We have been asked to comment on a going private transaction and the
fair price per share to offer to minority shareholders at the time of a
going private transaction. As the company does not currently have financial
projections for three years approved by the board and due to the lack of
independent research on the company, we must conduct our analysis based on
historic information.

In this project, we have analyzed price trading history, audited
financial status, SEC filings and financial and market information from
comparable "peer" companies. Our analysis shows that none of the company's
ratios except "Enterprise Value/Subscribers" are comparable to similar
companies in the market. This is reflected in the low stock price and
market capitalization of the Company. Given the Company's negative net
income, EBITDA (operating loss) and negative book value as well as it's
nominal market capitalization of $1.22 million, the most positive measure
of valuation is "Enterprise Value/Subscribers". Enterprise Value is a
standard means of corporate finance valuation which is defined as market
capitalization plus preferred stock plus long and short term debt minus
cash and cash equivalent. The Enterprise Value/Subscribers ratio for
Goodlife is 9.1x. The ratio indicates that the stock is fully valued at
this time particularly given the acquisition premium included in the
multiples for acquired comparable companies.

A(1)-8
<PAGE> 16

For the past two years, no meaningful amount of stock has traded for a
sustained period of time. The stock is presently quoted at a price of $.06
bid and $.05 offer. A cash offer to the minority shareholders of $.08 would
clearly be deemed to be a fair offer given the historic price range as well
as the illiquidity of the stock. $.08 would represent a premium of 60% over
the current bid price.

3. RECOMMENDATION FOR A GOING PRIVATE TRANSACTION

The Company is effectively a private company with a public listing. In
other words, Goodlife does not presently receive the typical benefits of a
public company such as being able to raise capital in the public markets or
enjoying a stock price that provides the company with a high-priced,
valuable currency for acquisitions. On the contrary, as a public company,
Goodlife is subject to the negative aspects of being an SEC reporting
company. For example, SEC reporting requires considerable management time
from people who are operating with limited resources. In addition, SEC
"full disclosure" requires Goodlife to provide detailed financial and
market information that is not readily available from many competitors
given that a large percentage of US cable television companies are private.
As a consequence, industry reporters will occasionally write articles about
Goodlife (sometimes unfairly) simply because the information is available.
In addition, some private cable companies may not want to enter into
certain types of business agreements with Goodlife given the public
disclosure that would result.

We recommend that the company consider engaging in a going private
transaction with an offer of $.08 per share to minority shareholders. The
cost would be $467,515 given that Concept Communications owns 14,430,427
shares or 71% with minority shareholders owning 5,843,944 representing 29%.
Total shares outstanding of the Nostalgia Network Inc are currently
20,274,371.

A(1)-9
<PAGE> 17

APPENDIX

DAILY STOCK PRICE TRADING SINCE 1/1/98.

A(1)-10
<PAGE> 18

APPENDIX

FINANCIALS (1995 -- JUNE 30, 1999)
Income Statement
Balance Sheet

A(1)-11
<PAGE> 19

EXHIBIT A(2)

THE NOSTALGIA NETWORK, INC

MERGER TRANSACTION

PREPARED BY
CHATSWORTH SECURITIES LLC
OCTOBER 26, 1999
A(2)-1
<PAGE> 20

MERGER TRANSACTION

I. THE NOSTALGIA NETWORK, INC. ("NOSTALGIA" OR "GOODLIFE TV")

A. The Cable TV Industry
B. Industry Statistics
C. GoodLife TV
D. GoodLife TV Subscriber Base
E. GoodLife TV Advertising Revenue

II. VALUATION ANALYSIS

A. Methodology Summary
B. Peer Group Selection
C. Market Comparable Valuation Analysis
D. Stock Price Trading History and Analysis
E. Valuation per Subscriber Analysis

APPENDIX

FINANCIALS (1995 - JUNE 30, 1999)
Income Statement
Balance Sheet

DAILY STOCK PRICE TRADING
(1/1/98 to 10/15/99)

OPINION OF CHATSWORTH SECURITIES LLC

A(2)-2
<PAGE> 21

I. THE NOSTALGIA NETWORK, INC. ("NOSTALGIA" OR "GOODLIFE TV")

A. THE CABLE TV INDUSTRY

In 1998, the cable industry invested more than $6 billion in programming,
and it is projected that $7 billion will be invested in 1999. This substantial
investment has resulted in more choice and higher quality programming that draws
increasingly more viewers to cable networks. In addition to more and better
programming, cable's investments have also resulted in the creation of more
cable networks -- from 87 networks in 1992 to 174 networks in 1998 -- a 100%
increase during the past six years.

Clearly, a programming network will be tremendously affected by the
decision made by the FCC on digital "must carry." The top programming networks,
with partners like Time Warner, ATT and Viacom will likely remain unaffected.
They have additional digital networks ready to launch by 2000, tremendous
subscriber bases and ad revenues. Nickelodeon had $564 million in advertising
revenues last year, closely followed by TBS with $524 million. They have a
clearly defined audience and will continue growth regardless of satellite
competition or regulatory issues.

A(2)-3
<PAGE> 22

B. CABLE INDUSTRY STATISTICS
(as of December 31, 1998)

<TABLE>
<S> <C>
US Television Households (TVHH)(1) 99,391,780
Basic Cable Subscribers(1) 67,011,180
Cable Penetration of TVHH(1) 67.4%
Pay Cable Units(2) 48,130,000
Annual Cable Revenue(2) $33.78 billion
Homes Passed By Cable(2) 95,520,000
Homes Passed as a Percent of TVHH(2) 96.56%
Cable Systems(3) 10,845
Cable Employees(4) 127,927
National Cable Networks (Video)(5) 174
</TABLE>

---------------
(1) Nielsen Media Research
(2) Paul Kagan Associates, Inc.
(3) Warren Publishing, Inc.
(4) Federal Communications Commission
(5) National Cable Television Association

C. GOODLIFE TV

GoodLife TV, which began in 1986 as The Nostalgia Network, was one of the
early cable programming networks running classic television shows and movies. In
1986, their only competition was from Turner's TBS, and as cable operators
strove to fill their empty channels, Nostalgia quickly grew to 15 million
subscribers. Over the next 5 years, Nostalgia faced a number of challenges,
including increased competition, consolidations within the industry of
programmers and operators increased programming costs and reduced advertising
revenues. Operators in the early 1990's required payment for carriage and GLTV
continued to decline in number of subscribers until March of 1998. Since that
time, there has been a definite trend upward in basic cable subscribers and as
GoodLife TV continues to define itself as a niche programmer, with original
programming as well as reruns of classic television and movies. It is expected
that this trend will continue to grow, acquiring new subscribers and drawing
increased viewership through the original programs.

During 1999, GoodLife TV has reduced overhead while focusing on new
strategies for (1) new programming, (2) increasing subscribers and (3)
establishing a joint venture relationship with a strategic partner. These
strategies may result in a substantial increase in the value of GoodLife TV in
the future. However, for this analysis, we must look at historical results and
the current environment for the Company in view of the recent industry
consolidation and increased competition for distribution.

D. GOODLIFE TV SUBSCRIBER BASE

GoodLife TV continues to suffer from limited distribution. Typically,
distribution can be increased through (1) strategic partnerships or (2)
acquiring subscribers. A strategic partner with an equity investment will have a
vested interest in providing carriage. Initiatives to obtain an equity
investment from a strategic partner began in June 1999 and continues at this
time. With regard to the acquisition of subscribers, the market has become
increasingly difficult during the past several years given the consolidation of
the industry, the "must carry" rule and the increased competition for
subscribers with some cable companies offering up to $10 per subscriber.

A(2)-4
<PAGE> 23

GoodLife TV currently has 8,539,647 subscribers of which 3,009,133 or 35%
are billable. GoodLife TV presently pays $1 to $2 per subscriber with up to five
years of free service. Much of the recent subscriber growth has come from new
digital cable systems given the increased demand for carriage and as subscribers
are marginally less expensive to acquire on digital systems.

GoodLife TV expects subscribers to remain and to commence monthly payments
at the end of the free service period, however free service as a subscriber
contract term is a relatively new concept and it is not certain what percentage
will continue as billable subscribers. Presently, billable subscribers pay an
average of $.07 per month ($.84 per year).

SUBSCRIBER SUMMARIES

<TABLE>
<CAPTION>
F/T BASIC F/T TIER C-BAND LOCAL P/T BASIC P/T TIER OTHER TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-96 5,054,180 548,081 969,634 1,487,353 180,465 49,368 8,289,081
Dec-96 4,556,297 445,796 947,551 1,501,812 192,008 50,519 7,693,983
Dec-97 3,548,478 300,207 1,009,683 720,493 1,170,298 234,008 40,714 7,059,881
Jan-98 3,621,072 301,969 990,351 718,120 1,051,616 275,543 8,299 6,966,970
Feb-98 3,537,876 302,480 970,063 717,427 1,148,731 275,543 8,233 6,960,353
Mar-98 3,525,326 285,285 964,737 716,365 1,199,572 260,543 8,254 6,960,082
Apr-98 3,584,009 314,326 963,264 716,174 1,201,636 266,193 8,267 7,053,869
May-98 3,605,275 325,591 956,509 716,297 1,177,302 265,533 8,262 7,054,769
Jun-98 3,640,318 339,917 943,674 717,583 1,174,827 265,587 8,456 7,090,362
Jul-98 3,767,197 332,964 930,145 716,805 1,120,342 265,471 -- 7,132,924
Aug-98 3,921,439 316,150 918,917 716,647 1,112,738 265,471 -- 7,251,362
Sep-98 4,016,539 319,986 908,315 716,248 1,118,043 265,378 10 7,344,519
Oct-98 4,159,998 288,124 897,932 716,060 1,116,740 265,378 10 7,444,242
Nov-98 4,241,354 289,870 986,209 715,849 1,110,827 265,221 10 7,609,340
Dec-98 4,327,110 291,158 983,089 715,849 1,135,545 265,292 10 7,718,053
Jan-99 4,405,293 291,592 1,021,752 715,671 1,230,213 235,138 10 7,899,669
Feb-99 4,475,935 292,598 1,053,547 715,473 1,230,460 235,100 10 8,003,123
Mar-99 4,554,654 287,055 1,027,248 715,473 1,231,476 235,065 10 8,050,981
Apr-99 4,622,738 288,075 1,016,646 715,533 1,231,858 235,006 10 8,109,866
May-99 4,651,261 288,582 1,006,619 715,533 1,231,955 235,023 10 8,128,983
Jun-99 4,708,494 283,207 993,067 715,533 1,289,512 235,049 10 8,224,872
Jul-99 4,885,995 283,842 1,051,355 655,611 1,289,137 234,985 10 8,400,935
Aug-99 5,073,364 283,028 1,043,655 655,611 1,249,130 234,849 10 8,539,647
</TABLE>

A(2)-5
<PAGE> 24

AFFILIATE BILLABLES VS NON-BILLABLES

<TABLE>
<CAPTION>
SUBSCRIBER SUBSCRIBER NON-
BILLABLES BILLABLES TOTAL
---------- --------------- ---------
<S> <C> <C> <C>
Dec-96 5,292,153 2,401,830 7,693,983
Dec-97 3,626,234 3,433,647 7,059,881
Jan-98 3,512,803 3,454,167 6,966,970
Feb-98 3,444,452 3,515,901 6,960,353
Mar-98 3,607,684 3,352,398 6,960,082
Apr-98 3,486,665 3,567,204 7,053,869
May-98 3,509,560 3,545,209 7,054,769
Jun-98 3,538,083 3,552,279 7,090,362
Jul-98 3,414,547 3,718,377 7,132,924
Aug-98 3,414,287 3,837,075 7,251,362
Sep-98 3,376,147 3,968,372 7,344,519
Oct-98 3,408,445 4,035,797 7,444,242
Nov-98 3,364,333 4,245,007 7,609,340
Dec-98 3,175,332 4,542,721 7,718,053
Jan-99 3,042,212 4,857,457 7,899,669
Feb-99 3,044,356 4,958,767 8,003,123
Mar-99 3,058,218 4,992,763 8,050,981
Apr-99 3,044,217 5,065,649 8,109,866
May-99 3,052,302 5,076,681 8,128,983
Jun-99 3,250,022 4,974,850 8,224,872
Jul-99 2,955,222 5,445,713 8,400,935
Aug-99 3,009,133 5,530,514 8,539,647
</TABLE>

E. GOODLIFE TV ADVERTISING REVENUE

Cable advertisements have generated nearly $10 billion in revenue in
1999 -- $7.5 billion from network cable, $2.5 billion in local spot advertising
and $351 million in regional spots. This increase has come at a time when
ad-agency buyers are voicing concerns about commercial clutter and increased
media fragmentation as consumers' menu of media choices grows. GoodLife TV is
still too small to take advantage of the national advertising trends, but is
looking to maximize their revenue stream from advertising by focusing on key
demographic profiles through direct response advertising and informercials.
GoodLife TV has an upscale viewer, college educated, over 40, with a household
income of $60,000 plus.

GoodLife TV is targeting $3.7 million in advertising revenue and $2.26
million in affiliate revenue for the year 2000. While this may seem ambitious,
in fact, it is in line with what other cable programmers are looking forward to
in the next few years. In order to achieve this target, the company plans to
change the current advertising mix. The company will not contract with national
advertisers in the year 2000, given their small subscriber base and subsequent
problems with substantial "make goods" as a consequence. Local and regional
spots will continue as a source of revenue, however, the primary sources of
advertising revenues will switch

A(2)-6
<PAGE> 25

over entirely to a combination of direct response advertising (including
infomercials) and the more profitable "nested networks".

F. GOODLIFE TV FINANCIALS

Affiliate revenue has declined 15.9% per annum from $4.2 million in 1995 to
$2.5 million in 1998. At the same time, advertising revenues has declined 19.7%
per annum down from $5.8 million in 1995 to $3.0 million in 1998. During this
same period, programming and sales/advertising expenses have been virtually flat
while finance, general and administrative expenses have declined substantially
from $4.7 million in 1995 to $2.26 million in 1998. Interest expenses, while
negligible during 1995 - 1997, reached $3.2 million in 1998. As a result of
these changes in financial condition, the net loss per annum for GoodLife TV has
now doubled from $9 million in 1995 to $17 million in 1998. The accumulated
stockholders equity (deficit) has increased from $50 million in 1996 to $103
million at June 30, 1999 and total stockholders equity (deficit) has increased
from $19 million in 1996 to $72 million at June 30, 1999.

Since 1995, GoodLife TV has become relatively smaller compared to its
industry peers. This relative decrease in size has occurred at the same time
that size has become increasingly important in order to use scale and leverage
to enhance market position.

As of October 15, 1999 GoodLife TV had a stock market capitalization of
$1.01 million. The net loss per share was $1.14 for the year ended December 31,
1999 and $.32 for the three month period ended June 30, 1999.

II. VALUATION ANALYSIS

A. METHODOLOGY SUMMARY

Peer Group Selection

Using publicly available information, Chatsworth Securities identified
suitable companies that are comparable to The Nostalgia Network, Inc.
("Nostalgia" or "GoodLife TV"). This peer group was used in the valuation of
Nostalgia. Given the limited number of public cable television networks, it is
difficult to find publicly traded market comparables. The following represents
the best market comparables available of which six have been acquired within the
past 18 months.

Market Comparable Valuation Analysis

In this project, we have analyzed audited financial status, SEC filings and
financial and market information from comparable "Peer Group" companies. Our
analysis shows that none of the company's ratios except "Enterprise
Value/Subscribers" are comparable to similar companies in the market. This is
reflected in the low stock price and market capitalization of the Company. Given
the Company's negative net income, EBITDA (operating loss) and negative book
value as well as its nominal market capitalization of $1.01 million, the most
appropriate measure of valuation is "Enterprise Value/Subscribers". Enterprise
Value is a standard means of corporate finance valuation which is defined as
market capitalization plus preferred stock plus long and short term debt minus
cash and cash equivalent. The Enterprise Value/Subscribers ratio for GoodLife TV
is 9.1x. This ratio indicates that the stock is fully valued at this time
particularly given the acquisition premium included in the multiples for
acquired comparable companies.

A(2)-7
<PAGE> 26

Stock Price Trading History and Analysis

The Company's stock and volume trading history was analyzed to determine
liquidity, the frequency of trading, the average size stock trade, the average
price for stock trades within the past twelve months and the premium represented
by the offer price in relation to the current bid price.

Valuation per Subscriber Analysis

For this valuation methodology, we have analyzed all comparable merger and
acquisition transactions for basic cable networks completed during the last
twelve months. The basis for comparison is the price paid per subscriber which
is calculated by dividing the value of the transaction by the number of
subscribers.

Discounted Cash Flow Analysis

One of the most commonly used valuation techniques is the Discounted Cash
Flow Analysis. For various reasons, Management of the Company does not have a
3-year forecast approved by the Board of Directors, which could have been used
by Chatsworth Securities in the DCF analysis. Thus the DCF valuation analysis
was not used for the purpose of this opinion.

B. PEER GROUP SELECTION

Precedent Transaction Analysis

Chatsworth Securities reviewed certain publicly available information
regarding terms and financial characteristics of the following business
transactions that were announced or took place from January 1998 through April
1999, which Chatsworth Securities believed to be comparable to the valuation of
The Nostalgia Network, Inc. (identified by Acquirer/Acquiree):

- Liberty Media/BET Holdings

- Playboy Enterprises/Spice Entertainment Companies

- (*)/The Entertainment Channel (private)

- CBS/Country Music Channel (private)

- Nickelodeon/The Family Channel (private)

- Development Networks/TV Food Network

- The Football Network (private)

(*) The Entertainment Channel was acquired by a consortium consisting of
Comcast, Disney, Liberty One, and Media One.

Chatsworth reviewed certain publicly available information regarding the
financial and operational characteristics of the following publicly traded
companies, which Chatsworth believes to be comparable to be used in the
valuation of Nostalgia:

- Shop at Home (NASDAQ: SATH)

- ValueVision (NASDAQ: VVTV)

The following is a detailed description on the public and private companies
comparable to Nostalgia, which were used by Chatsworth Securities in the
valuation of Nostalgia.

BET Holdings (NYSE: BTV)

BET Holdings, Inc. is a multi-media entertainment company, which owns and
operates Black Entertainment Television, the first national cable network
primarily targeted toward African American viewers. The BET network is currently
available in %(+) million cable households nationwide according to Nielson media
research.

Acquired on August 3, 1998 by Liberty Media Group (NASDAQ: LBTYA) for $63
per share in cash.
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Forbes recognized BTV as one of "America's Best Small Companies" and they
had several strategic alliances with Microsoft, Encore Media Group and Walt
Disney, which resulted in a premium price of this network.

Spice Entertainment Companies, Inc. (NASDAQ: SPZE)

Spice Entertainment Companies, Inc. provides adult television entertainment
in over 50 countries and on the Internet. The Company operates through Spice
Networks United States adult pay-per-view networks, Spice International networks
and programming, Spice direct consumer products and services, and Spice
Productions adult film production and licensing. Spice had 4.4 million
subscribers in its network.

Acquired by Playboy Enterprises on March 16, 1999. The total transaction
value, including the assumption of debt, was approximately $105 million.

Private Transactions

The following private companies were acquired and were shown as comparable
by Salomon Brothers in the valuation section of the merger and acquisition
documents for BET Holdings dated June 30, 1998:

- The Entertainment Channel (E!)

- Country Music Channel (CMT)

- The Family Channel (FAM)

- The Football Network (TFN)

Shop At Home (NASDAQ: SATH)

Shop At Home, Inc. is a home shopping network. The Company sells its
products through a network of affiliated television, cable and direct broadcast
satellite systems, and its owned and operated stations. Shop At Home provides
on-line shopping at www.shopathomeonline.com.

The Company has 53.5 million households nationwide according to Nielson
Media Research.

ValueVision (NASDAQ: VVTV)

The Company's principal business is its television home shopping business
which uses recognized on-air television home shopping personalities to market
brand name and proprietary and private label consumer products. VVTV's 24-hour
per day home shopping programming is distributed primarily through long-term
cable affiliation agreements and the purchase of month-to-month full and part
time block lease agreements of cable and broadcast television time. VVTV
provides online shopping at vvtv.com.

On March 8, 1999 VVTV entered into a strategic alliance with National
Broadcasting Company ("NBC") and GE Capital who collectively will own 19.9% of
VVTV with the ability to increase their respective ownership in VVTV to 39.9%
based on milestones. Since this announcement the stock price has increased from
an $8-$10 range to $28-30 range in October 1999.

C. MARKET COMPARABLE VALUATION ANALYSIS

The most commonly used valuation multiples are Enterprise Value ("EV")
relative to Sales, Operating Cash Flow (EBITA), Net Income, Book Value, and
Total Debt. Enterprise Value is defined as market capitalization (current market
price times the number of shares of common stock outstanding) plus short and
long term debt plus preferred stock less cash and cash equivalents.

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As GoodLife TV has negative operating cash flow (EBITDA), net income, and
book value, ratio analysis for these multiples is not meaningful. However, the
following ratios provide a basis for comparison with GoodLife TV's peer group.

EV/Sales: GoodLife TV's ratio of 14.1x is substantially higher than
the 3.5x for the peer group. This reflects below average
revenue given the level of debt held by the Company.

Total Debt/EV: GoodLife TV's ratio of 1.04x versus .09x reflects a
significantly greater level of debt versus its current
market capitalization.

EV/Subscribers: GoodLife TV's ratio of 9.1x is in line with the peer group
ratio of 14.2x (with FAM and VVTV) and 13.4x (without FAM
and VVTV). This indicates that the stock is fairly valued at
current levels and relative to its peer group.
</TABLE>

D. STOCK PRICE TRADING HISTORY AND ANALYSIS

The Company's stock is presently traded at $.04 bid and $.06 offer. The
stock seldom trades and when there is a trade it is normally for a small
transaction amount -- e.g. 20,000 shares or $1,000 (see appendix: Daily Stock
Price and Trading).

To conduct our analysis, we developed a model that shows the cumulative
trading volume for each respective price from $.01 to $.18 during the last 12
months. The purpose of this analysis is to show that an offer of $.07 per share
would represent a price higher than 75.1% of all normal stock trades during the
past year.

It should also be noted that the Appendix contains "Daily Stock Price
Trading (1/1/98 to 10/15/99)". For the week of October 11 -- 15, 1999, Nostalgia
common stock was offered at a bid price of $0.04 per share. The cash price
offered of $0.07 by Crown Communications pursuant to the Merger represents a 75%
premium to the current bid price of $0.04 per share.

E. VALUATION PER SUBSCRIBER ANALYSIS

Comparable Transactions

The merger and acquisitions transactions for basic cable networks completed
during the last twelve months are set forth below:

<TABLE>
<CAPTION>
DATE NETWORK VALUE SUBS PER SUB
--------- ------------------ ------- ---- -------
($ MIL) (MIL) ($)
<S> <C> <C> <C> <C>
11/01/98 Odyssey Channel 222 30 7.40
11/01/98 ZDTV 162 9 18.00
12/01/98 Eye on People 100 11 9.10
02/01/99 The Travel Channel 176 20 8.80
-----
Weighted Average $8.20
</TABLE>

Source: Paul Kagan Associates, Inc.

ZDTV is not a comparable transaction and will be excluded from the
calculation of the weighted average "Per Sub" valuation. ZDTV is the Internet
cable channel purchased by Ziff-Davis from Softbank. Paul Allen's Vulcan
Ventures also announced a $54 million investment for one-third ownership
simultaneous with

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<PAGE> 29

the purchase by Ziff-Davis. Advertisers on ZDTV include 3Com, America Online,
Barnes & Noble, Canon, Charles Schwab, Comdisco, Dell, Earthlink, Egghead, IBM,
Intel, Hewlett Packard, Micron, Microsoft, NEC, Packard Bell, PSI Net, Siebel
Systems, Sprint, Sun Microsystems and ONSALE.

The weighted average value "Per Sub" for the above transactions excluding
ZDTV is $8.20. This includes the value of $8.80 per subscriber for The Travel
Channel transaction which closed on February 1, 1999 [nevertheless, it should be
noted that three separate equity investments in The Travel Channel which closed
from June 1997 to September 1997 ranged from $1.43 to $3.75 "Per Sub"]. In
addition, it should also be stated that while $8.20 is being used for purposes
of presenting a conservative valuation methodology, we do not believe that it
represents the true value per subscriber for Nostalgia. Nostalgia's value "Per
Sub" is clearly much lower for the following reasons:

- Only 63% of GoodLife TV's subscribers are full-time (see "GoodLife TV
Subscribers" below);

- GoodLife TV does not have a high concentration of subscribers in urban
markets;

- GoodLife TV is not able to carry national advertising given the present
size and demographic profile of it's subscriber base;

- GoodLife TV's programming is not being carried by the highest profile
networks.

GoodLife TV Subscribers

As of August 1999, Goodlife had 8,539,647 total subscribers. Total
subscribers consisted of 5,073,364 "F/T Basic" subscribers; 283,028 "F/T Tier"
subscribers; 655,611 "Local Access" subscribers; 1,043,655 "C-Band" subscribers;
1,249,130 "P/T Basic" subscribers and 234,849 "P/T Tier" subscribers. Although
the C-Band, Local and Part-Time are not as valuable as Full-Time subscribers,
nevertheless, we are attributing full value to all subscribers in order to be
conservative.

Valuation Calculation

GoodLife TV's 8,539,642 total subscribers valued at an average of $8.20 per
subscriber gives an implied value for the Company for $70,025,105 based on the
valuation of the subscriber base as of August 1, 1999 using the methodology
described above. The most recent 10-Q dated August 16, 1999 provides financial
statements dated June 30, 1999. The balance sheet shows Total Liabilities of
$83,832,695 and Total Assets of $11,774,791 for a net asset value of
($72,057,904). The valuation "Per Subscriber" of $70,025,105 less negative net
assets of $72,057,904 gives a valuation for The Nostalgia Network, Inc. of
($2,032,799) or ($.1) per share.

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APPENDIX

FINANCIALS (1995-JUNE 30, 1999)
Income Statement
Balance Sheet

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<PAGE> 31

APPENDIX

DAILY STOCK PRICE TRADING SINCE 1/1/98.

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APPENDIX

OPINION OF CHATSWORTH SECURITIES LLC

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