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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-SB
GENERAL FORM FOR
REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(G) OF
THE SECURITIES EXCHANGE ACT OF 1934
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AMERICAN INDEPENDENT NETWORK, INC.
(Exact name of small business issuer in its charter)
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DELAWARE 752504551
(State or Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6125 AIRPORT FREEWAY, SUITE 200
HALTOM CITY, TX 76117
(817) 222-1234
(Address and telephone number of principal executive offices)
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DR. DONALD T. SHELTON
CHIEF EXECUTIVE OFFICER
AMERICAN INDEPENDENT NETWORK, INC.
6125 AIRPORT FREEWAY, SUITE 200
HALTOM CITY, TX 76117
TELEPHONE (817) 222-1234
FACSIMILE (817) 222-9809
(Name, address and telephone number of agent for service of process)
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Copies to:
ROBERT E. GYEMANT, Esq.
PAMELA HICKS, Esq.
KNAPP, PETERSEN & CLARKE
A Professional Corporation
500 N. Brand Blvd., 20th Floor
Glendale, California 91203
Telephone (818) 547-5000
Facsimile (818) 547-5329
Securities to be issued under Section 12(g) of the Act: COMMON STOCK
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF BUSINESS
THE COMPANY
The Company was incorporated in the State of Delaware on December 11, 1992 under
the name Strictly Business, Inc. On September 16, 1993, pursuant to an amendment
to its Certificate of Incorporation, the Company changed its name to American
Independent Network, Inc. (the "Company" herein). The Company is engaged in the
business of providing programming, media production, and syndication services to
television and cable stations, as well as satellite uplink services on behalf of
certain cable channels (see "The Business"). The Company's principal offices are
located at 6125 Airport Freeway, Suite 200, Haltom City, Texas 76117.
The Company has a wholly-owned subsidiary, Eureka Media & Trading, Inc., which
was formed in the State of Nevada on September 6, 1995. To date, the subsidiary
corporation has not conducted operations.
THE BUSINESS
PRINCIPAL SERVICES
The Company provides family-oriented television to a network of television
stations and cable systems nationwide (the "Affiliates" or "Affiliate
Stations"). The Affiliate Stations serviced by the Company are primarily
"independent" stations, meaning that they have no affiliation with the major
network organizations (NBC; ABC; CBS; FOX; WB Network; and Paramount). A station
which is affiliated with one of the major networks is provided programming by
the managing network organization, whereas independent stations must either
produce their own programs at a significant expense, or purchase such
programming from an outside source, such as the Company. The programs provided
by the Company cover a wide array of topics and interests, and include cartoons,
sports, sitcoms, movies, news and weather, comedy, science, health shows,
documentaries, and public interest programs. The Company also offers original
programs such as National Golden Gloves, The Better Life Show, Television
Factory Direct, Under Sea Adventures, Travel Escapades, celebrity golf
tournaments, live professional boxing, fishing expeditions and interactive
programming. The Company maintains a library of over 2,000 programs, including
nostalgic and vintage genre films, as well as newly produced movies.
The Company amasses its program inventory by various methods, including
licensing the rights from third-party syndicators, purchasing the rights, or in
some instances, by producing its own programming. In general, most of the
Company's programs are procured pursuant to a license agreement on barter terms
whereby the Company obtains broadcasting rights to select programming from a
third-party syndicator and in exchange, the Company gives the third-party
syndicator advertising time during the broadcast of such programming. The
syndicator can then
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sell the advertising time to outside parties, thereby earning income on the
licensing of their program to the Company.
In 1997, the Company made the conversion from analog to digital transmission of
its programs in early compliance with the Federal Communications Commission
mandate that all broadcast stations convert to digital transmission by the year
2006. The Company was the first network to go digital with multi-channels.
Digital technologies enable the cable system to compress multiple digital
channels into the bandwidth currently required for a single analog channel,
thereby permitting a cable system to significantly expand its current channel
capacity with a much lower capital investment than would be required to install
fiber optic cables or to make other major infrastructure upgrades. As a result
of the conversion to digital transmission, the Company can uplink five (5)
different signals to its GE Americom transponder.
The Company currently broadcasts to its Affiliate Stations in digital format,
however, the Affiliate Stations then rebroadcast the transmission to its viewers
in analog. In order to effectively receive a digital signal and then rebroadcast
in analog, each Affiliate Station is required to install digital decoding
equipment to decompress the digital signal. It is customary within the
television industry for the network to provide its affiliates with the necessary
decoding equipment and, to date, the Company has provided such equipment to
thirty-three (33) Affiliate Stations. As the Company enters into agreements with
additional stations to become affiliates of the Company (the "Affiliate
Agreements"), it will provide each such station with the necessary digital
decoding equipment.
Upon conversion from analog to digital transmission, the Company was able to
expand its single channel to a total of five (5) channels. The Company has
entered into lease agreements with the "Senior Channel" and the "Hispanic
Channel" for two (2) of the additional broadcast channels and has a letter of
intent to lease the third channel. Broadcast Magazine estimated that there are
over 65 new cable channels who have announced that they are ready to commence
broadcasting and are seeking channel space. Accordingly, the Company believes
that it will be able to enter into a lease agreement for the remaining channel.
The Company has a website located at www.aini.com. The Company's website
provides information regarding the Company and about future programming. In
addition, the Company's website has video and audio feeds of the Company's
programs which are only accessible to computers with adequate memory via
Microsoft Netscope.
PRINCIPAL MARKETS AND CUSTOMERS
Once the Company has obtained its inventory of programs, either by licensing the
rights, as above, or by purchasing or producing its own programs, it then
essentially has two products to distribute: (1) the programming library; and (2)
the commercial time within the programming. The Company then markets these
products to both broadcast and cable television stations, as well as to
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independent advertisers. The Company's customers include its Affiliate Stations,
national advertisers, and "infomercial" commercial buyers.
Broadcast Television
Television stations, which are licensed and regulated by the Federal
Communications Commission ("FCC"), transmit audio and video signals over the
air-waves. There are three (3) basic types of broadcast television stations
operating in the United States today: (1) full-power network affiliates (ABC;
NBC; CBS; FOX; WB Network; and Paramount) ("Network Affiliate"); (2) full-power
independent stations, such as UHF channels ("Full Power Stations"); and (3) low
power independent stations ("LPTV"). A Network Affiliate receives its programs
from its network provider and is generally only permitted to air programs of
that particular network, with the exception of FOX, WB Network, and Paramount
affiliates who must obtain additional programming. Network Affiliates may air
programs from other sources, such as local programming, only a few hours per
week and may not broadcast programs of any of the other major networks.
Independent Stations include both full-power and low-power stations which are
not affiliated with one of the major networks and thus, do not have access to
network programming. Instead, they must seek their own programming sources.
Cable Television
Cable television was first developed in the 1940's primarily to serve rural
communities unable to receive broadcast television signals. Cable television is
defined by the FCC as a cable system facility consisting of closed transmission
paths and associated signal generation, reception, and control equipment that is
designed to provide cable service, including video programming, to multiple
subscribers within a designated community. To receive cable transmission, a
viewer is required to feed an outside, dedicated wire or cable directly into
their home. By 1995, there were more than 11,200 cable systems serving over 60
million subscribers in over 32,000 communities in the United States. Cable
system operators range from large multiple system operators that own many
systems, to small independent systems that serve as few as several thousand
households. Each system operates under a franchise from the local government in
the community in which it is located. Cable television is regulated by local
municipalities, as well as the FCC. In addition to basic, premium and pay-per
view programs provided on cable television, many municipal governments require
local cable operators to originate their own programming, called "Community
Access" television or "Local Origination."
Company Affiliates
The Company originally broadcast its programs in analog signal and, at one time,
had Affiliate Agreements with over 150 stations. In early 1997 the Company
converted its broadcast to digital transmission and, to enable its Affiliate
Stations to decompress the digital signal, the Company was required to provide
each Affiliate Station with decoding equipment. Due to the costs of providing
the decoding equipment, the Company was not able to furnish the necessary
equipment
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to all of its then existing Affiliate Stations. Accordingly, the Company
selectively entered into Affiliate Agreements with thirty-three (33) independent
Full Power and LPTV stations and Local Origination cable television systems to
provide programming services via digital transmission. The Company plans to
expand its current affiliate base by concentrating its marketing efforts on the
25 largest broadcast territories in terms of viewing households and by
reassociating with prior Affiliate Stations. The Company is currently evaluating
applications from 67 stations desirous of becoming Affiliate Stations and will
enter into Affiliate Agreements with these stations when it is able to provide
the stations with the necessary decoding equipment.
To identify themselves as an American Independent Network affiliate, a station
is required to broadcast a minimum of 12 hours of the Company's broadcast within
a 24 hour period. In general, the terms of the Affiliate Agreement between the
Company and each Affiliate Station provides that the Affiliate Station will
receive 24 hours of television programming, during which the Affiliate Station
may use approximately four (4) minutes per hour for local commercials or other
announcements. The Affiliate Agreement also provides that the Affiliate must
broadcast the Company's programs in their entirety, submit a weekly affidavit of
its broadcast logs showing the number of hours per day that the Company's
programming was broadcast on the Affiliate Station, maintain all necessary
permits and licenses, and may not preempt or disrupt the Company's national
advertisements.
Upon request, the Company also provides its Affiliate Stations with promotional
packages, as well as press releases and recorded radio announcements.
Promotional packages may include: (i) customized station IDs; (ii) Company
Network ID's with a common theme designed to show the distinctiveness of the
Affiliate Station by its association with the Company's network; (iii) 30 second
generic promotions for each element of Company program content; (iv) 10 second
and 30 second program-specific promotions for the different programs provided by
the Company, including movies and shorts; (v) opening and closing "bumpers" for
all programs (a bumper is a short introduction or closing which provides a
smooth transition from program segments to commercials and vice-versa); (vi)
animated promotions; and (vii) 30 second and 60 second radio commercials
promoting the station's affiliation with the Company.
In exchange for providing the Affiliate Stations with programming and commercial
time, the Company retains the remainder of the advertising time and gains access
to the Affiliated Stations' markets. The Company earns a significant percentage
of its income by selling the retained advertising time to outside advertisers. A
critical factor in attracting advertisers is the Affiliate Stations's market
since each viewer comprising such market represents a potential customer for the
advertiser's product. Therefore, the Company's access to the Affiliates' markets
is integral to selling the advertising time. Currently, the Company's Affiliate
Stations are located in the smaller market areas of the country.
In addition to the foregoing programming services and sale of advertising time,
the Company also generates revenues through (i) sales of programming time slots
to companies desiring to air their own programs; (ii) leasing of its four (4)
digital satellite channels; (iii) direct response marketing
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of products advertised on the network; and (iv) in-house production of various
programs and commercials.
The in-house production of various infomercials and programs by the Company is
accomplished at its full service production studio located at the Company's
facilities. The Company charges the customers various rates for production,
considering the length of the program, the degree of difficulty involved in
production, the time required to shoot the raw footage, and the editing time
required to complete the final product.
COMPETITION
The television industry is highly competitive and, as a result of the wide range
of programming available in both the broadcast and cable formats, the Company
competes with a large number of competitors, many of whom may offer similar
programs. The Company competes for available air time, channel capacity,
advertiser revenue and revenue from license fees. The Company competes primarily
on the basis of the quality of its family oriented programming, its advertising
rates and the markets in which its programming is broadcast.
The leading networks based upon total number of affiliated stations are ABC,
CBS, NBC, and FOX. Each of these competitors are more established than the
Company, have greater name recognition and viewer loyalty, as well as
significantly greater industry, financial, distribution and marketing,
programming, personnel and other resources than the Company. Moreover, the
television market has seen a continual increase in the number of networks,
including the addition of Warner Brothers Network (WB) and United Paramount
Network (UPN) in 1994. As the number of networks increase, the Company will face
greater competition for available syndicated programs, viewers, and for
affiliates who wish to carry their broadcasts. The Company also believes that
other forms of quasi-networks, including QVC and the Home Shopping Network and
so called "superstations" such as WTBS and WGN, will also be a significant
source of competition.
In addition to the foregoing, the Company believes that the recent introduction
of direct satellite services ("DSS") will directly compete with cable systems
and increase the pressure for additional channels and services. DSS systems
offer their subscribers more than twice as many channels as most cable systems,
with better audio and video quality. The price of satellite dishes are
competitive with premium cable fees and industry analysts expect the
approximately 4.5 million DSS subscribers to increase to 19 million by the year
2000. The Company has entered into discussions with various DSS providers to
carry the Company's broadcasts and the Company is optimistic that a deal can be
finalized within the next 18 months. However, in the event that the Company does
not enter into such an agreement, the Company believes that its conversion to
digital transmission will enable it to offer additional channels and services to
permit it to effectively compete with DSS systems.
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RELIANCE ON CUSTOMERS
The Company currently provides programming services to thirty-three (33)
Affiliate Stations. The Company is not dependant upon any one station for its
revenues, however, the loss of several stations could adversely effect the
Company's results of operations.
The Company also sells advertising time slots on its programming to various
advertisers. The revenues generated by sale of the advertising slots represents
25% of the Company's income, however, taken as a whole, no one company provides
a large portion of such income. Accordingly, the Company is not dependent upon
one or a few major advertisers, however, the loss of a significant number of
advertisers could adversely effect the Company's results of operations.
The Company has entered into lease agreements for channel space with the Senior
Channel and the Hispanic Channel and has a letter of intent with a third
channel. The Company believes that, as a result of current market conditions, in
the event that either or both of these agreements are terminated or the letter
of intent is not finalized into a lease agreement, they have a large number of
alternative companies with which to negotiate for channel space.
ENVIRONMENTAL COMPLIANCE
The Company's business is not subject to any federal, state or local
environmental laws.
PATENTS, TRADEMARKS AND SERVICE MARKS
The Company does not currently hold patents, copyright marks or service marks on
any of its products, however, the Company may apply for such intellectual
property right protections if future conditions indicate that this would be in
the Company's best interests.
On July 18, 1997, the Company was granted a Radio Station Authorization by the
United States Federal Communications Commission. The Radio Station
Authorization, which authorizes the Company to build and operate a domestic
fixed transmit/receive C-band earth station (uplink system) on the Company's
premises, expires July 18, 2007 (see Exhibit 6.18 "United State Federal
Communications Commission Radio Station Authorization").
The Company has entered into license agreements with several syndicators for the
use of their programming. Under the agreements, which are generally
non-exclusive, the Company is granted the right to exhibit, distribute and
transmit by means of broadcast or cablecast, a particular program. In
consideration thereof, the Company provides advertising time during such program
to the syndicator. The amount of advertising time, the length, and other terms
of the license agreement vary, depending upon the type of program being
licensed.
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The Company has also entered into Affiliate Agreements with each of its
Affiliate Stations pursuant to which the Company provides programming and other
amenities in exchange for advertising time during such programming. The Company
either utilizes such advertising time or sells it to third parties. The terms of
the Affiliate Agreements vary depending upon the type of programming being
provided by the Company, the length of the agreement, as well as other
variables. The Company currently has 33 Affiliate Stations with whom it has
entered into comparable Affiliate Agreements.
GOVERNMENT REGULATIONS
Broadcasting of the Company's programming, both by the Company and its
Affiliates, is subject to the rules and regulations of various federal, state
and local agencies. The Company believes that it currently complies with
applicable laws and regulations governing cable and television broadcasts,
however, in the event that such laws are subsequently modified, there can be no
assurance that the Company will be able to continue to comply with such laws.
Failure to comply could have serious negative implications for the Company.
EMPLOYEES
The Company has eleven (11) full time employees and three (3) part-time
employees. The Company's employees are not represented by any collective
bargaining organization, and the Company has never experienced a work stoppage.
The Company believes that its relations with its employees are satisfactory.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
Management's discussion and analysis is designed to provide a better
understanding of the Company's financial condition, results of operations,
liquidity, and capital resources. The discussion should be read in conjunction
with, and is qualified in its entirety by, the Financial Statements of the
Company for the fiscal year ended December 31, 1996 and the Notes thereto
included elsewhere herein. The following discussion includes information
pertaining to the Company's fiscal years ended December 31, 1995 and 1996, and
fiscal quarters ended June 30, 1996 and 1997.
The Company was founded on December 11, 1992 and provides programming, media
production and syndication services to television and cable stations, as well as
satellite uplink services to certain cable channels. The Company has a
wholly-owned subsidiary, Eureka Media & Trading, Inc., formed in the State of
Nevada on September 6, 1995, which has not commenced operations.
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The Company provides family-oriented television to a network of thirty-three
(33) television stations and cable systems nationwide. The stations serviced by
the Company are primarily "independent" stations, meaning that they have no
affiliation with the major network organizations (NBC; ABC; CBS; FOX; WB
Network; and Paramount). The Company maintains a library of over 2,000 programs
covering a wide array of topics and interests, and includes cartoons, sports,
sitcoms, movies, news and weather, comedy, science and health shows,
documentaries, and public interest programs. The Company also offers original
programs, celebrity golf tournaments, live professional boxing, fishing
expeditions and interactive programming.
The Company originally broadcast its programs via analog transmission and, at
one time, had over 150 affiliates, however, in early 1997, the Company converted
to digital transmission and currently broadcasts to 33 Affiliate Stations. In
connection with the conversion, the Company entered into a master equipment
lease for the digital compression system for a period of thirty-six (36) months
ending December 31, 1999 (see Exhibit 6.8 "Master Lease with Insight
Investments"). The lease has a fair market value purchase option at the end of
the lease. In addition, the Company leased satellite transponder space under an
operating lease. The lease is for three (3) years terminating on July 31, 1999
(see Exhibit 6.7 "GE Americom Lease Agreement").
RESULTS OF OPERATIONS
Revenues
Revenues are derived from the Company's programming services, sales of
advertising and programming time, leasing of digital satellite channels, direct
response marketing of products advertised on the network, and in-house
production of various programs and commercials. Revenues for were $1,092,399
compared to $1,277,999 for 1995, a decrease of $185,600 or 15%. The decrease in
revenues resulted from a reduction in the number of Affiliate Stations.
For the six months ended June 30, 1997 revenues were $723,194 and for the
comparable six month period in 1996, revenues were $632,445.
Cost of Operations
Costs of operations were $987,715 for the 1996 fiscal year and $861,395 for the
1995 fiscal year. The increase in 1996 was due to the Company's conversion to
digital transmission and the attendant lease of digital compression equipment,
as well as an increase in satellite rental and programming expenses. The cost
for satellite rental increased industry-wide and the Company experienced an
increase of approximately 12% during fiscal year 1996 for satellite rental as
compared to fiscal year 1995. Programming expenses, which include costs for
program development, editing, videotapes and other miscellaneous expenses,
increased by approximately 264% for fiscal year ended 1996 as compared to the
1995 fiscal year. Net rental expenses, which
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include office space, office equipment, and company vehicles increased by 89% in
1996 primarily as a result of the increased cost for office lease which the
Company incurred upon execution of a new lease for its offices.
For the six months ended June 30, 1997 and June 30, 1996, cost of operations
were $458,912 and $509,742, respectively.
General and Administrative
General and administrative expenses for the fiscal year ended December 31, 1996
were $482,858, an increase of 17% over administrative expenses of $411,795 for
fiscal year 1995. The stated general and administrative expenses represent 44%
and 32% of revenues for fiscal years 1996 and 1995, respectively. The Company's
general and administrative expenses consist of operating costs for the Company's
headquarters, the salaries of corporate officers and office staff, travel,
accounting, legal and other professional expenses, advertising and promotional
costs, rent and occupancy costs. Although the Company was associated with fewer
affiliates during 1996, the administrative expenses increased as a result of
increased travel, marketing and legal expenses.
For the six months ended June 30, 1996 general and administrative expenses were
$231,730 and for the six months ended June 30, 1995, general and administrative
expenses were $247,933.
Interest expense for the fiscal year 1996 was $204,757 and for fiscal year 1995
was $76,834, an increase of $127,923 or 166%. This increase was due to interest
paid on the outstanding balance on various bridge loans and a nine percent (9%)
interest factor payment on Series B Preferred Stock.
Operating Loss
The operating loss of the Company for the fiscal year 1996 was $786,169 as
compared to $59,130 for the fiscal year 1995. The operating loss for 1996
equaled approximately 72% of revenues and the loss for 1995 equaled 5% of
revenues. The operating loss for 1996 was largely due to an increase in
programming and rental expenses, interest on bridge loans, and interest factor
payments to Series B Preferred stock holders.
For the six month period ended June 30, 1997, the Company's operating losses
were $351,461 and for the comparable period in 1996, the Company realized a
profit of $264,896.
Net Loss
Net loss per share of common stock was $0.08 and $0.01 for the 1996 and 1995
fiscal years, respectively, and is based upon the weighted average of
outstanding common stock and convertible preferred stock. The outstanding
warrants that accompany the preferred stock are not dilutive, therefore, they
are not included in the weighted average. The Company believes that the
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losses for both years are consistent with the development of the Company.
Further, the increased loss for fiscal year 1996 is reflective of the increased
debt and other expenses of the Company resulting from acquisition of a digital
compression system and satellite equipment.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations through a combination of the issuance of
equity securities to private investors, issuance of private debt, loans from
affiliates, and cash flow from operations. Through fiscal year 1995, the
Company's revenues had been sufficient to fund operations, however, with
acquisition of the digital compression and satellite equipment and increases in
general and administrative expenses, revenues from operations were insufficient
to satisfy operating expenses. Accordingly, the Company was dependent upon the
private placement of its securities. The Company has incurred cumulative losses
from inception through December 31, 1996 of $837,264, including net losses of
$786,169 and $59,130 during the fiscal years 1996 and 1995, respectively.
Current liabilities for fiscal year 1996 were $2,141,559, which exceeded current
assets of $213,312 by $1,928,247. For fiscal year ended 1995, current
liabilities exceeded current assets by $1,055,294. The increase in current
assets in 1996 as compared to 1995 were primarily a result of certain prepaid
expenses. The current liabilities for 1996 increased significantly as compared
to 1995 due to an increase in notes payable of $624,944 and an increase in
accrued interest of $99,665, as well as $20,000 in customer deposits, $15,972
interest due to preferred shareholders, and $139,380 for equipment lease
payments.
The Company has been able to generate funds from private placements to finance
operations, however, in the event the Company requires additional capital
investments, there can be no assurance that a sufficient amount of the Company's
securities can be sold to fund the continuing operating needs of the Company.
During fiscal year 1995, the Company issued an aggregate of 47,841 Units
consisting of one share of Convertible Redeemable Series A Preferred Stock and
one Warrant at $6.50 per Unit ("Series A Units") and 95 15% Guaranteed
Promissory Notes with a face value of $1,000 ("Notes") for an aggregate cash
consideration of approximately $405,967 pursuant to private placements.
During fiscal year 1996, the Company completed private placements for 42,918
Series A Units, 109,854 Units consisting of one share of 9% Convertible
Redeemable Series B Preferred Stock and one Warrant ("Series B Units"), and an
aggregate of 1,028 Notes. In addition, Dr. Shelton and Mr. Moseley exercised
options for 2,000,000 shares of the Company's common stock at $0.10 per share.
The Company received total cash proceeds of approximately $2,220,764.
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For the six months ended June 30, 1997, the Company received the sum of
$1,274,009 from private placements of 176,770 shares of Series B Units and 15%
Promissory Notes with an aggregate face value of $125,000.
Management believes that anticipated cash flows from operations will be
sufficient to meet the Company's expected cash needs and to finance future
operations, however, in the event that future revenues are not sufficient, the
Company will conduct private and/or public offerings of its equity stock to
raise the necessary capital.
IMPACT OF INFLATION
Management does not believe that general inflation has had or will have a
material effect on operations.
ITEM 3. DESCRIPTION OF PROPERTY
The Company entered into a lease agreement ("Lease Agreement") on June 1, 1995
for its principal offices located at 6125 Airport Freeway, Haltom City, Texas
76117. The premises measure approximately 13,900 square feet and are used for
the Company's general office and administrative purposes, as well as for their
programming services, warehouse needs and full-service production studio. The
Company subleases part of the office space to other companies engaged in the
television and media business.
The initial term of the Lease Agreement was for a period of twenty-four (24)
months commencing on June 1, 1995 and terminating on May 31, 1997. The Company
renewed the lease for an additional twelve (12) months, up to and including May
31, 1998. The Company believes that the premises are acceptable for their
current operating needs.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of September 15, 1997 by (i) each person who is
known by the Company to beneficially own more than five percent of the Company's
Common Stock; (ii) by each of the Company's directors; and (iii) by all
executive officers and directors as a group. Except as otherwise indicated, the
persons named in the table have sole voting and investment power with respect to
all shares beneficially owned, subject to community property laws where
applicable. As of September 15, 1997, there were approximately 16,576,555 shares
of the Company's Common Stock outstanding on a fully diluted basis.
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<TABLE>
<CAPTION>
Number Percent
Name and Address of Beneficial Owner Of Shares of Class
------------------------------------ --------- --------
<S> <C> <C>
Dr. Donald Shelton 4,360,000 26.30%
6125 Airport Freeway, Suite 200
Haltom City, Texas 76117
Randy J. Moseley 4,360,000 26.30%
6125 Airport Freeway, Suite 200
Haltom City, Texas 76117
Charles Coburn 1,450,000 8.75%
10008 Walleye
Knoxville, Tennessee 37822
Pacific Acquisition Group, Inc. 990,000 5.97%
21800 Burbank Blvd., 3rd Floor
Woodland Hills, California 91367
Officers and Directors as a Group 8,720,000 52.60%
6125 Airport Freeway, Suite 200
Haltom City, Texas 76117
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The control of the Company rests in its shareholders who elect a Board of
Directors to oversee the business of the Company. The Board of Directors elect
officers who are charged with carrying out the directions of the Board and
running the day-to-day business affairs of the Company. The following table sets
forth certain information regarding directors and executive officers of the
Company:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Dr. Donald Shelton 54 Chairman of the Board of Directors,
Chief Executive Officer, and Director
Randy J. Moseley 49 President, Chief Financial Officer,
Secretary, and Director
</TABLE>
MANAGEMENT RESUMES
The Company's executives have significant experience in the television industry
and related businesses. Following are brief resumes of the key personnel for the
Company.
DR. DON SHELTON - Chairman, Chief Executive Officer and Director.
Dr. Shelton is a co-founder of the Company and has served as its Chairman, Chief
Executive Officer and as a Director since its inception in 1993. Dr. Shelton
holds a doctorate in English Literature from Louisiana Baptist University. He
has also attended Oklahoma University,
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Kansas University and the Philanthropy Tax Institute. Dr. Shelton has nine years
experience in television station construction, management and production. He has
produced various entertainment programs, infomercials and commercials. In
addition, since 1992, Dr. Shelton has been part owner and operator of television
stations in San Antonio, Phoenix, Oklahoma City, Bryan/College Station, and
Beaumont. Before entering the broadcasting industry, Dr. Shelton was the
Regional Representative of the Secretary for the U.S. Department of
Transportation and Vice Chairman of the Southwest Regional Council. He also has
served as the director of sales and marketing for a major oil company and
national pharmaceutical firm, and has owned his own real estate school and
development corporation.
RANDY MOSELEY - President, Chief Financial Officer, Secretary and Director.
Mr. Moseley is a co-founder of the Company and has served as its President,
Chief Financial Officer, Secretary and as a Director since its inception in
1993. Mr. Moseley received his Bachelor of Business Administration degree,
majoring in accounting, from Southern Methodist University in Dallas, Texas. Mr.
Moseley is a certified public accountant and worked for a national public
accounting firm for the six years following his graduation from college. Mr.
Moseley has over twenty-five years of fiscal management experience in such
industries as insurance, mortgage and real estate, hospital services and
agriculture, as well as the television broadcasting and media industries. Mr.
Moseley has been part owner and operator of six television stations.
ITEM 6. EXECUTIVE COMPENSATION
The following table sets forth the annual and other compensation of the
Company's Chief Executive Officer and each of the other executive officers whose
total salary and bonus exceeded $100,000 for the Company's fiscal years ended
December 31, 1994, 1995, and 1996. No other executive officers of the Company
had total salary and bonus which exceeded $100,000 for the reported period.
14
<PAGE> 15
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Name
Principal Position Year Salary Other Compensation(3)(4) Stock Options(5)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dr. Don Shelton 1996 $100,000(1) $5,805 $0
Chief Executive 1995 $25,000(2) $10,711 $0
Officer 1994 $25,000 $0 $0
- -------------------------------------------------------------------------------------------
Randy Moseley 1996 $100,000(1) $5,805 $0
Chief Financial 1995 $25,000(2) $10,711 $0
Officer 1994 $25,000 $0 $0
- -------------------------------------------------------------------------------------------
</TABLE>
- --------------------
1. Pursuant to their employment agreements, Dr. Shelton and Mr. Moseley are each
entitled to an annual salary of $100,000, however, in 1996, Dr. Shelton and Mr.
Moseley each deferred $72,220 of their salaries, which amounts have not been
accrued. Dr. Shelton and Mr. Moseley plan to continue to defer portions of their
salary until such time as the Company has sufficient earnings to pay their
salaries in full.
2. The employment agreements with Dr. Shelton and Mr. Moseley were effective on
October 2, 1995, accordingly, their salaries for fiscal year ended 1995 were
calculated on a pro rata basis of $8,333 per month, for total salary in 1995 of
$24,999 each.
3. The amounts shown are the aggregate lease payments for the automobiles
provided to Dr. Shelton and Mr. Moseley. Payments in 1997 for have been $965
each. These amounts will be accounted for in fiscal year 1997.
4. In August 1997, the Company purchased a life insurance policy for Dr. Shelton
in the amount of $500,000. The monthly premium is $588. This amount will be
accounted for in fiscal year 1997.
5. On October 2, 1995, in connection with their employment agreements, Dr.
Shelton and Mr. Moseley were each granted the option to purchase 1,000,000
shares of the Company's Common Stock at $0.10 per share. Dr. Shelton and Mr.
Moseley exercised their options in September 1996.
- --------------------
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Dr. Shelton to serve as
its Chairman and Chief Executive Officer for a period of five (5) years,
commencing October 2, 1995. Pursuant to the employment agreement, Dr. Shelton is
entitled to an annual salary of one hundred thousand dollars ($100,000), with
increases, if any, to be determined by the Board of Directors. As additional
compensation, Dr. Shelton was provided with a leased automobile and was granted
15
<PAGE> 16
an option to purchase 1,000,000 shares of the Company's common stock at $0.10
per share, which Dr. Shelton exercised in full on September 30, 1996.
The Company entered into an employment agreement with Mr. Moseley effective
October 2, 1995 whereby Mr. Moseley was engaged as President and Chief Financial
Officer of the Company for a period of five (5) years. Mr. Moseley is entitled
to an annual base salary equal to one hundred thousand dollars ($100,000), with
increases, if any, to be determined by the Board of Directors. As additional
compensation, Mr. Moseley was provided with a leased automobile and was granted
an option to purchase 1,000,000 shares of the Company's common stock at $0.10
per share, which Mr. Moseley exercised in full on September 30, 1996.
COMPENSATION OF DIRECTORS
All non-officer directors are entitled to receive an attendance fee for each
meeting of the Board of Directors at which they attend. Currently, the Company
does not have any non-officer directors. All other directors are entitled to
reimbursement for out-of -pocket expenses related to and arising out of Board of
Directors' meetings. For the fiscal years ended 1994, 1995, and 1996, there were
no such expenses reported.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Dr. Shelton and Mr. Moseley have joint ownership interests in six (6) television
stations which have contracted with the Company to broadcast as Affiliates of
the Company. The stations include (the aggregate respective ownership of Dr.
Shelton and Mr. Moseley is shown in parenthesis following the station name): (i)
TV Channel 22, Inc. (75%); (ii) TV 50, Inc. (50%); (iii) Cleveland Broadcasting
Co. (49%); (iv) ATN Network, Inc. (35%); (v) San Antonio Broadcasting Corp.
(52%); and (vi) Beaumont Broadcasting Corp. (100%). The terms of the Affiliate
Agreements with the foregoing television stations are the same as those with
other non- related Affiliates.
The Company has outstanding loans with various affiliates of the Company,
including:
In 1995, the Company borrowed $104,500 from Lyn Broadcasting Corporation ("LBC")
at an interest rate of 10%. Dr. Shelton and Mr. Moseley own 100% of LBC. In
September 1996, Dr. Shelton and Mr. Moseley exercised options to purchase
2,000,000 shares of the Company's Common Stock at $0.10 per share, for a
combined purchase price of $200,000. Of this amount, $100,000 was paid directly
to LBC in partial payment of the outstanding debt (the remaining $100,000 was
applied to debt owed to ATN, as further described hereinbelow). The maturity
date for the remaining balance owed to LBC has been extended to August 31, 1998.
16
<PAGE> 17
In 1995, the Company borrowed $52,531 from Shelly Media Marketing ("SMM") at an
interest rate of 10%. Dr. Shelton and Mr. Moseley own 100% of SMM. To date, the
Company has paid approximately $1,400 of this obligation. The maturity date for
the balance of $51,100 is October 30, 1997, however, the Company expects that
this date will be extended to October 31, 1998.
In 1995, the Company borrowed $38,274 from Cleveland Broadcasting Co. ("CBC") at
an interest rate of 10%. Dr. Shelton and Mr. Moseley own an aggregate of 49% of
CBC. The principal and interest are due on October 30, 1997, however, the
Company expects that this date will be extended to October 30, 1998.
In 1995, the Company borrowed $141,152 from ATN Network Inc. ("ATN") at an
interest rate of 10%. Dr. Shelton and Mr. Moseley own an aggregate of 35% of
ATN. In September 1996, Dr. Shelton and Mr. Moseley exercised options to
purchase 2,000,000 shares of the Company's Common Stock at $0.10 per share, for
a combined purchase price of $200,000. Of this amount, $100,000 was paid
directly to ATN in partial payment of the outstanding debt. At June 30, 1997
there remained a balance of approximately $33,475. The balance and interest are
due on October 30, 1998.
The Company borrowed a combined total of $10,257 in 1995 from San Antonio
Broadcasting Corp. ("SABC") and TV Channel 22, Inc. ("Channel 22"), at 10%
interest to be repaid upon demand. Dr. Shelton and Mr. Moseley own 52% and 75%
of SABC and Channel 22, respectively. To date, payment has not been demanded.
The Company believes that the terms of the foregoing loans are comparable to
terms that the Company could have received from nonaffiliate lenders in an
arms-length transaction. The Company intends to continue making payments as they
become due.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 20,000,000 shares of
Common Stock, $0.01 par value and 10,000,000 shares of blank Preferred Stock,
$0.01 par value. Pursuant to Certificates of Designation filed with the Delaware
Secretary of State, the Company designated the rights, preferences, privileges
and restrictions for the establishment of 1,000,000 shares of Convertible Series
A Preferred Stock, and 1,000,000 shares of 9% Convertible Redeemable Series B
Preferred Stock.
The following summary description of the Company's Common Stock, which is
covered by this Registration Statement, is qualified in its entirety by
reference to the Company's Articles of Incorporation, as amended.
17
<PAGE> 18
COMMON STOCK
The Company is authorized to issue 20,000,000 shares of Common Stock, $0.01 par
value and, as of September 15, 1997, there were approximately 16,576,555 shares
outstanding, on a fully-diluted basis, and approximately 835 holders of record.
Holders of Common Stock are entitled to one vote per share held of record on all
matters requiring a vote of shareholders, including the election of directors.
There is no right to cumulative voting in the election of directors,
accordingly, holders of more than fifty percent (50%) of the Common Stock, if
any, who vote for elections of directors can elect one hundred percent (100%)of
the Company's directors if they so choose. Subject to the prior rights of
holders of Preferred Stock and any contractual restrictions against the payment
of dividends, the holders of Common Stock are entitled to receive dividends on a
pro-rata basis when, if and as declared by the Board of Directors out of funds
legally available therefore. Upon liquidation or dissolution, each outstanding
share of Common Stock will be entitled to share equally in the assets of the
Company legally available for distribution to shareholders after the payment of
all debts, liabilities, and other obligations, including the preferences of any
outstanding shares of Preferred Stock. Shares of Common Stock are not
redeemable, have no conversion rights and carry no preemptive or other rights to
subscribe to or purchase additional shares in the event of a subsequent
offering. All outstanding shares of Common Stock are duly authorized and validly
issued, fully paid and non-assessable and free of preemptive rights.
18
<PAGE> 19
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
The Company is a private company and, at the time of filing this Registration
Statement, there is no established trading market for the Company's Common
Stock.
As of September 15, 1997 the Company had approximately 835 shareholders of
record for its Common Stock and approximately 16,576,555 shares of Common Stock
issued and outstanding. As of the date of this Registration Statement,
approximately 286,625 shares of the Company's Common Stock may be issuable upon
exercise of outstanding Warrants. In addition, the Company issued 286,625 Series
B Preferred shares which are eligible for conversion into a cumulative total of
573,250 shares of Common Stock. Approximately 9,566,998 shares of the Company's
Common Stock are eligible for resale pursuant to Rule 144 under the Securities
Act of 1933, as amended (the "Act").
Although holders of the Company's Common Stock are entitled to receive
dividends, there can be no assurance that the Company will have sufficient funds
to pay such dividends, or even if such funds are available, that the Company
will be permitted to make such dividend payments under the provisions of the
Delaware General Corporate Law or other applicable laws. Delaware law prohibits
the Company from paying dividends or making other distributions if the Company
would be unable to pay its debts as they become due in the usual course of
business or if the Company's assets would be less than its liabilities after
giving effect to such dividend or distribution. Further, the policy of the Board
of Directors has been and continues to be to retain earnings in order to fund
operations and continue the development and expansion of the Company. To date,
the Company has not declared or paid any dividends with respect to its Common
Stock. Future cash dividends on the Common Stock, if any, will be determined by
the Company's Board of Directors and will be based upon the Company's earnings,
capital requirements, financial conditions and other factors deemed relevant by
the Board of Directors.
None of the Company's current agreements contain restrictions on the payment of
dividends, however, future financing arrangements may contain such restrictions.
ITEM 2. LEGAL PROCEEDINGS
The Company is not currently involved in any material pending legal proceeding
and is not aware of any material legal proceeding threatened against it.
19
<PAGE> 20
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company engaged Jack F. Burke, Jr., Certified Public Accountant, as its
principal independent accountant. The Company has never had any disagreements
with its principal independent accountant on any matter related to the Company's
accounting principles or practices, financial disclosure, or auditing scope or
procedure, or any other matter.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
During fiscal year 1994 and 1995, Shelly Media Marketing, Cleveland Broadcasting
Co., and ATN Network, Inc. loaned the Company a cumulative of $332,000. The
loans are evidenced by promissory notes, all of which mature on September 30,
1997. As of the fiscal year ended 1996, there was $114,740 in principal
outstanding and $39,791 in accrued interest. In addition, the Company issued the
foregoing entities 592,000 shares of Common Stock as partial consideration for
extending the loans to the Company. There were no underwriting discounts or
commissions in connection with these transactions. The foregoing loans and
issuances of Common Stock were effected in reliance upon the exemptions from
registration provided by Section 4(2) of the Act and Regulation D promulgated
thereunder.
On January 2, 1995, the Company issued 70,000 and 60,000 shares of Common Stock
to Jerry Powell and Judy Bryant, respectively, for no consideration. Mr. Powell
and Ms. Bryant are partners of Dr. Shelton and Mr. Moseley in "Channel 56"
television station in Tucson, Arizona. There were no underwriting discounts or
commissions in connection with these transactions. The shares were issued in
reliance upon the exemption provided by Section 4(2) under the Act.
On February 2, 1995, the Company issued 10,000 shares of Common Stock each to
John George and Connie Ross for consulting services provided to the Company.
There were no underwriting discounts or commissions in connection with these
transactions. The shares were issued in reliance upon the exemption provided by
Section 4(2) under the Act.
During the period of July 1995 through March 1996, the Company undertook a
private offering of Units at an offering price of $6.50 per Unit for total gross
proceeds of $589,928.50. Each Unit consisted of one (1) share of Convertible
Redeemable Series A Preferred Stock, which was convertible into two (2) shares
of Common Stock, and one (1) Warrant to purchase one (1) share of the Company's
Common Stock. The offering was not underwritten, and there were no underwriting
discounts or commissions. There were a total of 90,758 Units sold. The Units
were sold in reliance upon the exemption from registration provided by Section
4(2) and Regulation D under the Act.
During March 1996, 100% of the issued and outstanding Series A Preferred Shares
were converted into the Company's Common Stock. The Common Stock was issued
pursuant to an exemption from registration under Section 3(a)(9) of the Act. The
Warrants expired by their
20
<PAGE> 21
terms and were not converted into Common Stock. All shares of Common Stock
issued upon conversion of the Series A Preferred shares were issued with the
appropriate restrictive legend.
During the period from December 1995 through April 1996, the Company sold 15%
Guaranteed Promissory Notes with a face value of $1,000 for an aggregate of
$548,750 in gross proceeds. The offering was not underwritten, and there were no
underwriting discounts or commissions. The sales were made in reliance upon
exemptions from registration pursuant to Section 4(2) and Regulation D
promulgated under the Act.
The Company commenced a private offering of 15% Guaranteed Promissory Notes,
with a face value of $1,000, in March 1996. From March 1996 through June 1996,
the Company sold 574 notes for an aggregate of $574,000 in offering proceeds.
The offering was not underwritten, consequently, there were no underwriting
discounts or commissions. The sales were made in reliance upon exemptions from
registration pursuant to Section 4(2), Section 4(6), and Regulation D under the
Act.
In connection with certain employment agreements for key positions within the
Company, 2,000,000 options were granted to purchase 2,000,000 shares of the
Company's Common Stock at $0.10 per share. The Company received aggregate
proceeds in the amount of $200,000. The shares of Common Stock were issued in
reliance upon Section 4(2) and Regulation D promulgated under the Act.
During the period of July 1996 through May 1997, the Company conducted a private
offering of Units at an offering price of $6.50 per Unit. Each Unit was
comprised of one share of Series B Preferred share and one Investor Warrant. The
Series B Preferred Shares are convertible into two (2) shares of Common Stock
and the Investor Warrants are exercisable into one share of Common Stock upon
the occurrence of certain events. The offering was not underwritten,
consequently there were no underwriting discounts or commissions. There were a
total of 286,625 Units sold for a total of $1,863,059 in gross offering
proceeds. The Units were sold in reliance upon the exemptions from registration
pursuant to Section 4(2) and Regulation D under the Act. None of the Series B
Preferred shares or Investor Warrants have been converted into Common Stock of
the Company.
On July 19, 1996, the Company issued 50,000 shares of its Common Stock to Harvey
Huffstetler for consulting services provided to the Company. There were no
underwriting discounts or commissions in connection with this transaction. The
shares were issued in reliance upon the exemption provided by Section 4(2) of
the Act.
On July 19, 1996, the Company issued 50,000 shares of Common Stock to Keith
Lowery for providing consulting advice relating to various engineering matters
and counsel regarding compliance with the rules and regulations of the Federal
Communications Commission. There were no underwriting discounts or commissions
in connection with these transactions. The shares were issued in reliance upon
the exemption provided by Section 4(2) of the Act.
21
<PAGE> 22
On November 8, 1996, the Company sold 400,000 shares of Common Stock to Winco
Corporation for $200,000. There were no underwriting discounts or commissions in
connection with this transaction. The sale and issuance was effected in reliance
upon the exemptions from registration provided by Section 4(2) of the Act and
Regulation D promulgated thereunder.
During March 1997, the Company sold 15% Guaranteed Promissory Notes with a face
value of $10,000 each for an aggregate of $125,000 in gross proceeds. The notes
were sold in reliance upon Section 4(2) and Regulation D promulgated under the
Act. The offer and sale of such notes did not involve a public offering and were
sold only to accredited investors, as that term is defined in Rule 501 of
Regulation D promulgated under the Act. The offering was not underwritten,
therefore, there were no underwriting discounts or commissions.
On May 12, 1997, Frank J. Lyons ("Lyons"), an individual, loaned $100,000 to the
Company. The loan is evidenced by a promissory note of even date therewith, the
terms of which provide for an interest payment of $10,000 on the maturity date,
August 12, 1997. The Company is currently negotiating an extension on the
foregoing promissory note. In addition, the Company issued Lyons 20,000 shares
of Common Stock as partial consideration for extending the loan to the Company.
There were no underwriting discounts or commissions in connection with this
transaction. The foregoing loan and issuance of Common Stock were effected in
reliance upon the exemptions from registration provided by Section 4(2) of the
Act and Regulation D promulgated thereunder.
On May 12, 1997, Gary Lamberg ("Lamberg"), an individual, loaned $50,000 to the
Company. The loan is evidenced by a promissory note of even date therewith. In
addition, the Company issued Lamberg 10,000 shares of Common Stock as partial
consideration for extending the loan to the Company. The Company has satisfied
its debt to Lamberg in full. There were no underwriting discounts or commissions
in connection with this transaction. The foregoing loan and issuance of Common
Stock were effected in reliance upon the exemptions from registration provided
by Section 4(2) of the Act and Regulation D promulgated thereunder.
On July 1, 1997, Super Six, Inc. ("Super Six") loaned $30,000 to the Company.
The loan is evidenced by a promissory note of even date therewith, the terms of
which provide for the accrual of simple interest at the rate of twelve percent
(12%) per annum, pro-rated to the maturity date of December 31, 1997. All
outstanding principal and accrued interest is due and payable on December 31,
1997. In addition, the Company issued Super Six 60,000 shares of Common Stock as
partial consideration for extending the loan to the Company. There were no
underwriting discounts or commissions in connection with these transactions. The
foregoing loan and issuance of Common Stock were effected in reliance upon the
exemptions from registration provided by Section 4(2) of the Act and Regulation
D promulgated thereunder.
22
<PAGE> 23
On August 1, 1997, James Thornbo ("Thornbo"), an individual, loaned $25,000 to
the Company. The loan is evidenced by a promissory note of even date therewith,
the terms of which provide for the accrual of simple interest at the rate of
twelve percent (12%) per annum, pro-rated to the maturity date of September 30,
1997. All outstanding principal and accrued interest is due and payable on
September 30, 1997. In addition, the Company issued Thornbo 9,079 shares of
Common Stock as partial consideration for extending the loan to the Company.
There were no underwriting discounts or commissions in connection with these
transactions. The foregoing loan and issuance of Common Stock were effected in
reliance upon the exemptions from registration provided by Section 4(2) of the
Act and Regulation D promulgated thereunder.
On August 1, 1997, Raji Shah ("Shah"), an individual, loaned $38,000 to the
Company. The loan is evidenced by a promissory note, the terms of which provide
for the accrual of simple interest at the rate of nine percent (9%) per annum,
pro-rated to the maturity date of September 30, 1997. At the maturity date, Shah
has the option to (i) convert the $38,000 of Note principal into 38,000 shares
of Common Stock of the Company, or (ii) receive the outstanding principal and
accrued interest as of such date. There were no underwriting discounts or
commissions in connection with these transactions. The foregoing loan was
effected in reliance upon the exemptions from registration provided by Section
4(2) of the Act and Regulation D promulgated thereunder.
On August 4, 1997, Logistics Services International, Inc. ("Logistics") loaned
$50,000 to the Company. The loan is evidenced by a promissory note of even date
therewith, the terms of which provide for the accrual of simple interest at the
rate of twelve percent (12%) per annum, pro-rated to the maturity date of
December 31, 1997. All outstanding principal and accrued interest is due and
payable to Logistics on December 31, 1997. In addition, the Company issued
Logistics 4,285 shares of Common Stock as partial consideration for extending
the loan to the Company. The offering was not underwritten, and there were no
underwriting discounts or commissions. There were no underwriting discounts or
commissions in connection with these transactions. The foregoing loan and
issuance of Common Stock were effected in reliance upon the exemptions from
registration provided by Section 4(2) of the Act and Regulation D promulgated
thereunder.
On August 28, 1997, Midas Fund Ltd. ("Midas") loaned $100,000 to the Company.
The loan is evidenced by a promissory note of even date therewith, maturing on
February 28, 1997, the terms of which provide for a $5,000 interest payment on
November 28, 1997, and an additional $5,000 interest payment on February 28,
1998. In addition, the Company issued Midas 20,000 shares of Common Stock as
partial consideration for extending the loan to the Company. There were no
underwriting discounts or commissions in connection with these transactions. The
foregoing loan and issuance of Common Stock were effected in reliance upon the
exemptions from registration provided by Section 4(2) of the Act and Regulation
D promulgated thereunder.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is permitted to indemnify its directors and officers in accordance
with and as limited by its Bylaws and Delaware and Federal law.
23
<PAGE> 24
The above provisions in the Certificate of Incorporation and Bylaws and the
written indemnity agreements may have the effect of reducing the likelihood of
derivative litigation against directors and may discourage or deter stockholders
or management from bringing a lawsuit against directors for breach of their
fiduciary duty, even though such an action, if successful, might otherwise have
benefitted the Company and its stockholders. However, the Company believes the
foregoing provisions are necessary to attract and retain qualified persons as
directors and officers.
At present there is no pending litigation or proceeding involving a director or
officer of the Company in which indemnification is required or permitted, and
the Company is not aware of any threatened litigation or proceeding that may
result in a claim for such indemnification.
For liabilities against directors and officers arising under the federal
securities laws, the Securities and Exchange Commission has stated that, in its
opinion, indemnification of directors and officers for such liabilities is
against public policy and is therefore unenforceable.
24
<PAGE> 25
PART F/S
The following financial statements are filed as part of this
Registration Statement:
<TABLE>
<CAPTION>
Financial Statements: Page
--------------------- ----
<S> <C>
Report of Independent Certified Public Accountants F-1
Balance Sheets at December 31, 1996
and December 31, 1995 F-2
Statements of Operations for the Twelve Months
ended December 31, 1996 and 1995 F-4
Statement of Stockholders' Investment for the
Twelve Months ended December 31, 1996 and 1995 F-5
Statements of Cash Flows for the Twelve Months
ended December 31, 1996 and 1995 F-6
Notes to Financial Statements F-7
</TABLE>
25
<PAGE> 26
JACK F. BURKE, JR.
CERTIFIED PUBLIC ACCOUNTANT
2010 OAK GROVE ROAD
BUILDING THREE-SUITE THREE
HATTIESBURG, MISSISSIPPI 39402
Board of Directors
American Independent Network, Inc.
Haltom City, TX 76117
I have Audited the accompanying comparative balance sheets of American
Independent Network, Inc. as of December 31, 1996 and 1995, and the related
comparative statements of income, retained earnings, and cash flows for the
years then ended. These statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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 principals used and significant estimates made by
management as well as evaluating the overall financial statement presentation. I
believe that my audits provide a reasonable basis for my opinion.
In my opinion, the comparative financial statements referred to above present
fairly, in all material respects, the financial position of American Independent
Network, Inc. at December 31, 1996 and 1995, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principals.
/s/ JACK F. BURKE, JR.
- ------------------------------------
Jack F. Burke, Jr.
February 21, 1997
- --------------------------------------------------------------------------------
TELEPHONE 601 264-1988 FACSIMILE 601 264-1801
- --------------------------------------------------------------------------------
F-1
<PAGE> 27
AMERICAN INDEPENDENT NETWORK, INC.
COMPARATIVE BALANCE SHEET
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 59,846 $ 83,701
Accounts Receivable 10,730 23,076
Trade credits receivable 30,000 27,407
Prepaid expenses 112,736
Investment in common stock 52,000
Income tax refund 1,418
----------- -----------
Total Current Assets 213,312 187,702
----------- -----------
Plant, Property and Equipment
Leasehold improvements 22,851 22,851
Equipment and furnishings 88,144 88,144
Digital compression equipment 605,000
-----------
715,995 110,995
Accumulated depreciation (52,700) (34,014)
----------- -----------
Total Plant, Property and Equipment 663,295 76,981
----------- -----------
Other Assets
Deferred tax benefits 207,477 11,477
Trade credits receivable 432,128 465,721
Other assets 1,037,000 836,000
Inventory 1,426,933 1,426,933
Prepaid expenses 337,500 0
----------- -----------
Total Other Assets 3,441,038 2,740,131
----------- -----------
Total Assets $ 4,317,645 $ 3,004,714
=========== ===========
</TABLE>
The Accompanying "Notes to Financial Statements" are An
Integral Part of these Financial Statements.
F-2
<PAGE> 28
AMERICAN INDEPENDENT NETWORK, INC.
COMPARATIVE BALANCE SHEET
DECEMBER 31, 1996 AND 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Current Liabilities
Accounts payable $ 284,336 $ 279,731
Notes payable 1,533,867 908,923
Income tax due 1,418
Accrued interest - notes 142,962 43,297
Advances from affiliates 5,042 10,257
Customer deposits 20,000
Interest due preferred shareholders 15,972
Equipment lease payments 139,380
----------- -----------
Total Current Liabilities 2,141,559 1,243,626
Long term debt 251,617
----------- -----------
Total Liabilities 2,393,176 1,243,626
----------- -----------
Stockholders' Equity
Preferred Stock - 1,000,000
Shares $1 Par - 1995 47,841 shares issued
Shares $1 Par - 1996 107,546 shares issued 107,546 47,841
Common Stock - 20,000,000
Shares $.01 Par Authorized,
1995 10,000,000 shares issued,
1996 14,045,300 shares issued, 140,453 100,000
Additional Paid in Capital 2,513,734 1,664,341
Retained Earnings (837,264) (51,094)
----------- -----------
Total Stockholders' Equity 1,924,469 1,761,088
----------- -----------
Total Liabilities and Stockholders Equity $ 4,317,645 $ 3,004,714
=========== ===========
</TABLE>
The Accompanying "Notes to Financial Statements" are An
Integral Part of these Financial Statements.
F-3
<PAGE> 29
AMERICAN INDEPENDENT NETWORK, INC.
COMPARATIVE STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1996
------------ ------------
<S> <C> <C>
Income from Network Operations $ 1,092,399 $ 1,277,999
------------ ------------
Cost and Expenses
Satellite rental 598,590 553,960
Uplinking of programming 115,802 140,100
Programming expenses 81,849 22,513
Production expenses 110,802 113,090
Depreciation 18,686 18,901
Rental expense (Net) 61,986 32,831
Administrative expenses 482,858 411,795
------------ ------------
Total Cost and Expenses 1,470,573 1,273,190
------------ ------------
Net Income (Loss) from Operations (378,174) 4,809
------------ ------------
Other Expenses
Interest expense (net) 204,757 76,834
Amortization of debt issue cost 385,000
Loss on sale of assets 14,238
------------
Total Other Expense 603,995 76,834
------------ ------------
Loss Before Income Taxes (982,169) (72,025)
Income Tax Benefits 196,000 12,895
------------ ------------
Net Loss $ (786,169) $ (59,130)
============ ============
Weighted average of common stock
and common stock equivalents 10,235,733 10,047,972
Net loss per share (0.08) (0.01)
</TABLE>
The Accompanying "Notes to Financial Statements" are An
Integral Part of these Financial Statements.
F-4
<PAGE> 30
AMERICAN INDEPENDENT NETWORK, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
Preferred Stock Common Stock Additional Retained
Shares Amount Shares Amount Paid-in Capital Earnings
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 10,000,000 $100,000 $2,800,678 $ 8035
Reduce investment in
other assets (1,324,201)
Preferred A Shares Issued 47,841 $ 47,841 263,124
Issue cost of Preferred A (75,260)
Net loss, December 31, 1995 (59,130)
------- -------- ---------- -------- ---------- ---------
Balance, December 31, 1995 47,841 47,841 10,000,00 $100,000 1,664,341 (51,095)
Preferred A Shares Issued 42,918 42,918 229,546
Issue cost of Preferred A (82,793)
Conversion of Preferred A
Shares to Common (90,759) (90,759) 181,518 1,815 88,944
Preferred B Shares Issued 107,546 107,546 591,504
Issue cost of Preferred B (255,808)
Common Issued to
Bridge Loan Investors 201,230 2,012
Issuance of Common Stock
for contributed capital 1,462,520 14,626
Issuance of Common Stock
for exercise of stock options 2,000,000 20,000 180,000
Sale of Common Stock 200,000 2,000 98,000
Net Loss for the Twelve Months
ended December 31, 1996 (786,169)
------- -------- ---------- -------- ---------- ---------
Balance, December 31, 1996 107,546 $107,546 14,045,268 140,453 $2,513,734 $(837,264)
======= ======== ========== ======= ========== =========
</TABLE>
The Accompanying "Notes to Financial Statements" are An
Integral Part of these Financial Statements.
F-5
<PAGE> 31
AMERICAN INDEPENDENT NETWORK, INC.
COMPARATIVE STATEMENT OF CASH FLOW
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996 AND 1995
CASH FLOW PROVIDED (USED) BY OPERATING ACTIVITIES
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Net Loss $(786,170) $ (59,130)
Adjustment to reconcile net income to net cash
from operating activities:
Depreciation 18,686 18,901
Amortization of deferred income (900,000)
Accounts receivable 12,346 (23,076)
Trade credits receivable 31,000 27,407
Deferred tax benefit (196,000) (11,477)
Income tax refund (1,418)
Investment in stocks 52,000
Prepaid assets (112,736)
Accounts payable 4,605 160,840
Notes payable 624,944 704,742
Accrued interest 115,637 39,296
Advances from affiliates (5,215) (3,250)
Customer deposits 20,000
Equipment lease payments capitalized 139,380
--------- ---------
Total Cash Used by Operating Activities (81,523) (47,165)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in equipment (605,000) (17,559)
Increase in long term equipment lease payments 251,617
Investment in film library (1,000)
Investment in common stock (200,000
Investment in prepaid assets (337,500)
--------- ---------
Total Cash Flows by Investing Activities (891,883) (17,559)
--------- ---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Long term notes decrease (112,067)
Preferred stock increase 59,705 235,705
Common stock increase 40,453
Additional paid-in capital increase 849,393
--------- ---------
Total Cash Provided by Financing Activity 949,551 123,638
--------- ---------
Net Increase (Decrease) in Cash (23,855) 58,914
Cash, Beginning of Period 83,701 24,787
--------- ---------
Cash, December 31, 1996 $ 59,846 $ 83,701
========= =========
</TABLE>
The Accompanying "Notes to Financial Statements" are An
Integral Part of these Financial Statements.
F-6
<PAGE> 32
AMERICAN INDEPENDENT NETWORK, INC.
NOTES TO COMPARATIVE FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
Note: Summary of Significant Accounting Policies
Cash and Cash Equivalents - Consist of cash balances. Cash equivalents
consist of highly liquid investments with an original maturity date of
ninety days or less. The company does not have any cash equivalents.
Trade credits receivable - the company owns trade credits in the amounts
of $462,128 at December 31, 1996 and $493,128 at December 31, 1995. As
defined by the International Reciprocal Trade Association, a trade
credit is a unit of account that denotes the right to receive
(receivable) or the obligation to pay (payable) one U.S. dollars worth
of goods and services within a barter system or network. While all of
the trade credits may be used by the company at any time, the company
has shown a pattern of using $25,000 to $30,000 worth of the credits in
each of the past two years. Therefore, the company's trade credits are
being classified as current $30,000 and other assets of $432,128, at
December 31, 1996.
Accounts Receivable - Allowance for Doubtful Accounts. The company has
accounts receivable at December 31, 1996 of $10,730 owed by regular
customers. Management deems this amount to be fully collectable. No
allowance for doubtful accounts is necessary. At December 31, 1995, the
total was $23,076.
Inventory - Consists of television advertising time of affiliated
television stations available for sale. The company did not sell any of
the advertising time last year but is planning to aggressively market
this advertising time in the near future.
Plant, Property and Equipment is recorded at cost.
Depreciation - the cost of plant, property and equipment is depreciated
over the estimated useful life of the assets ranging from equipment at 5
years to leasehold improvement at 20 years. Book depreciation is on a
straight line basis, while income tax depreciation is accelerated. For
income tax information see Note 3.
Other Investments - in the year ended December 31, 1995, the Company
wrote down other assets. These assets were sold or traded in the year
ended December 31, 1996. The assets written down in 1995 were Fine Arts
of $2,000,000. They were exchanged for prepaid telephone cards with a
face value of $750,000. The investment in common stocks were written
down $1,748,000 and were sold in 1996 for $37,762, resulting in a loss
of $14,238. These transactions are summarized in the table below:
F-7
<PAGE> 33
Note: Summary of Significant Accounting Policies (Continued)
<TABLE>
<CAPTION>
Original Write Down Book Value Disposition
Asset Book Value 1995 12/31/95 Amount
<S> <C> <C> <C> <C>
Fine Arts $2,000,000 $2,000,000 0 $750,000
Common Stock $1,800,000 $1,748,000 $52,000 $ 37,762
(Restricted)
</TABLE>
The remaining asset consisting of the prepaid telephone cards have been
recorded at a discounted value of $450,000. The Company has four years
to liquidate these prepaid telephone cards. One-fourth of the recorded
value $112,500 has been classified as a current asset with the remainder
of $337,500 classified as other assets. The entire $450,000 was realized
as income in 1996. As the cards are utilized, the $450,000 will be
charged to telephone expense on a prorated basis.
The company owns advertising time from commercial television stations
recorded at $1,426,933. The company also holds television trade due
bills with advertising time with a face value of $1,100,000. The trade
due bills were recorded at a discounted value of $836,000. These assets
have been enhanced by the digitizing of the network's signal to its
affiliates where this advertising time is available. The company is
currently negotiating with another party to market this time. The
inventory time valued at $1,426,933 has unlimited utilization time and
the time to utilize the trade due bills has been extended from its
original expiration date of September 22, 1998 to December 31, 1999. The
company believes all of this time can be sold in the allotted time.
Advertising revenues are generally generated by entering into an
advertising contract accompanied by full payment. The company is
required to perform on the contract generally within a few days. The
company records the income when payment is received. The company has
some customers which it bills after performing the advertising function.
F-8
<PAGE> 34
Note 2: Notes Payable
Notes Payable at December 31, 1996 consist of the following notes:
<TABLE>
<CAPTION>
Accrued
Creditor(1) Due Date Rate Principal Interest
<S> <C> <C> <C> <C>
Lyn Broadcasting
Corporation(1) 08/31/97 10% $ 4,500 $ 17,047
Shelly Media
Marketing(1) 09/30/97 10% 51,100 10,398
Cleveland
Broadcasting Co.(1) 09/30/97 10% 38,274 7,654
ATN Network,
Inc.(1) 09/30/97 10% 25,366 21,739
Advances from
Affiliates(1) Demand 10% 5,042 1,545
Pacific Acquisition
Group 12/31/97 11% 485,500 42,476
Bridge Loan 06/30/97 15% 1,122,750 42,103
Less Cost of Bridge
Loan Acquisition (193,623)
----------
Total 1,538,909 142,962
---------- --------
Less amount classified
as advances from affiliates 5,042
Total $1,533,867 $142,962
========== ========
</TABLE>
Notes Payable at December 31, 1995 consist of the following notes:
<TABLE>
<S> <C> <C> <C> <C>
Lynn Broadcasting
Corporation(1) 08/31/96 10% $104,500 $ 9,097
Shelly Media
Marketing(1) 09/30/96 10% 52,531 5,253
Cleveland
Broadcasting Co.(1) 09/30/96 10% 38,274 3,827
ATN Network,
Inc.(1) 09/30/96 10% 141,152 10,994
Advances from
Affiliates(1) Demand 10% 10,257 1,226
Pacific Acquisition
Group 12/31/96 11% 500,500 12,900
Bridge Loan 12/31/96 15% 95,000
Less Cost of Bridge
Loan Acquisition (23,034)
--------
Total 919,180 43,297
Less amount classified
as advances from affiliates 10,257
--------
Total $980,923 $ 43,297
======== ========
</TABLE>
(1) Affiliated companies
F-9
<PAGE> 35
Note 3: Income Taxes - Net Operating Loss
The company has a tax asset at December 31, 1996 due to the net
operating loss (NOL) of $982,169 (Book loss of $982,169) in 1996 and net
operating loss of $80,386 (Book loss of $72,025) in 1995. The
reconciliation of book and tax losses for the years ended are:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Book loss $982,169 $ 72,025
Add: Additional depreciation
per tax return 0 8,342
-------- ---------
Net operating loss per tax return 982,169 80,368
-------- ---------
Tax benefit computation as follows:
Tax refund generated by the carryback
of the Net Operating Loss to 1984 0 1,418
-------- ---------
Deferred tax asset computation:
Deferred tax liability generated by
timing difference of depreciation 0 (1,251)
-------- ---------
Estimated tax asset to be generated by
Net Operating Loss carryforward 196,000 12,728
-------- ---------
Net Deferred Tax Assets $196,000 $ 11,417
======== =========
Note 4: Supplemental Cash Flow Information
Cash used for:
Interest $ 91,724 $ 76,834
Taxes 1,418
Non cash Investment and Financing
Transactions:
Write off of Fine Art 2,000,000
Write off of Common Stock Investments 1,748,000
Trade of unrecorded assets
Trade of unrecorded asset (fine art) for
prepaid telephone cost. Recorded as Income
and Prepaid Assets to be amortized to
expense when used 450,000
</TABLE>
F-10
<PAGE> 36
Note 5: Disbursements from Bridge Loan Proceeds
and Preferred Stock Sales
Financing Activities during 1995 and 1996 consisted of bridge loans
($1,122,750) and preferred stock sales ($1,288,979). The
disbursements from the financing escrows were $1,331,500 to the
operating account, $829,767 for issue costs and $249,000 for debt
repayment.
Note 6: Disclosure about fair value of Financial Instruments
The following methods and assumptions were used to estimate the fair
value of each class of financial instrument for where it is
practicable to estimate that value.
Cash and Accounts Receivable:
The carrying amount approximates fair value because of the
short maturity of those instruments.
Long Term Investments:
The fair value of these investments are estimated based on
quoted market prices for those and similar investments.
The estimated Fair Values of the Company's Financial Instruments are
as follows:
<TABLE>
<CAPTION>
1996 1995
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and Accounts
receivable $134,187 $134,187 $100,576 $100,576
Long Term Investments $836,000 $836,000 $1,037,000 $1,037,000
</TABLE>
Note 7: Lease Obligations and Long Term Debt Disclosure
The Company is obligated on three leases. The leases are as follows:
Building. The Company utilizes the space as both corporate offices and
studios. The lease is $4883 per month and expires May 31,
1997.
Equipment. The Company has entered a master equipment lease (digital
compression equipment) for a period of thirty-six months
ending December 1, 1999. The lease has a fair market value
purchase option at the end of the lease. Total lease
obligation is $390,996 and the lease has been treated as a
capital lease.
Satellite. The Company leases satellite transponder space under an
operating lease. The lease is for three years ending July
31, 1999, with a total lease obligation of $2,250,000.
F-11
<PAGE> 37
Note 7: Lease Obligations and Long Term Debt Disclosure (continued)
Details of lease obligations are as follows:
<TABLE>
<CAPTION>
Capitalized Operating
Equipment Transponder
Lease Lease
<S> <C> <C>
1997 $127,765 $750,000
1998 139,380 750,000
1999 123,851 437,500
</TABLE>
Note 8: Digital Compression System
The company installed a digital compression system during 1996, which,
as compared to one channel analog transmission, allows for the
transmitting of multiple signals (in the company's case 5 signals) to
the satellite transponder. Utilizing state-of-the-art technology, the
encoders digitize and compress the video and audio signals which then
enter the multiplexer which combines and encrypts the information and
outputs the multiplexed information to the modulator which controls the
variability of the signal strengths being uplinked to the satellite
transponder that has been divided into 5 sections (channels). The
multiplexer and modulator also will provide continuous and dynamic
allocation of bandwidth to each channel, optimizing the video quality
across every channel sharing the system.
The company believes that the revenue from leasing these additional
channels will be greater than the monthly cost of the satellite and
compression equipment.
The company's conversion to digital will require its affiliates to have
a decoder box to convert the digital signal back to analog for local
broadcasting. The company will supply the affiliates with the decoders
which will give the company a monitoring mechanism in determining what
programming the affiliates are airing, since the company has control
over the codes necessary to make the decoder equipment operate.
Note 9: Earnings (loss) per Share
The weighted average of common shares includes issued common stock and
common stock equivalents consisting of convertible preferred stock
outstanding. The warrants that accompany the preferred stock is
antidilutive and are not included in the weighted average.
F-12
<PAGE> 38
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
AMERICAN INDEPENDENT NETWORK, INC.
Date: September 17, 1997 /s/ Dr. Donald Shelton
----------------------------------------
Dr. Don Shelton, Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Donald Shelton Chairman of the Board of September 17, 1997
- ----------------------------- Directors, Chief Executive
Dr. Don Shelton Officer, and Director
/s/ Randy Moseley President, Chief Financial September 17, 1997
- ----------------------------- Officer, Secretary, and
Randy Moseley Director
</TABLE>
26
<PAGE> 39
PART III
ITEM 1. INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Title of Exhibit Page
- -------------- ---------------- ----
<S> <C> <C>
2.1 Articles of Incorporation of the Company, as amended
2.2 Bylaws of the Company, as amended
3.1 Form of Warrant Agreement
6.1 Lease for Offices
6.2 Employment Agreement with Dr. Donald Shelton
6.3 Employment Agreement with Randy Moseley
6.4 Stock Option Agreement with Dr. Donald Shelton
6.5 Stock Option Agreement with Randy Moseley
6.6 Form of License Agreement (Affiliate Agreement)
6.7 GE Americom Lease Agreement
6.8 Master Lease with Insight Investments
6.9 Promissory Note Extension Agreement with Lyn
Broadcasting Corporation
6.10 Promissory Note Extension Agreement with
Shelly Media Marketing
6.11 Promissory Note Extension Agreement with Cleveland
Broadcasting Co.
6.12 Promissory Note Extension Agreement with ATN
Network, Inc.
6.13 Promissory Note with Super Six, Inc.
6.14 Promissory Note with Jim Thornbro
6.15 Promissory Note with Logistic Services International, Inc.
6.16 Promissory Note with Rajendra Shah
6.17 Promissory Note with Gary Lamberg
6.18 Promissory Note with Frank Lyons
6.19 Loan and Security Agreement with Midas Fund
6.20 United State Federal Communications Commission Radio
Station Authorization
6.21 Addendum #1 to the Bridge Loan and Consulting Agreement
with Pacific Acquisition Group, Inc.
6.22 Consulting Agreement and Amendment #1 to Consulting Agreement
with James E. Hock, Jr.
6.23 Engagement of Equity Communications
10.1 Consent of Jack F. Burke, Jr., Certified Public Accountant
27.1 Financial Data Schedule
</TABLE>
27
<PAGE> 1
Exhibit 2.1
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/11/1992
762346034 - 2318767
CERTIFICATE OF INCORPORATION
OF
Strictly Business Inc.
FIRST: The name of this corporation is Strictly Business Inc.
SECOND: It registered office in the state of Delaware is to be located
at 201 N. Walnut Street, Wilmington DE 19801, New Castle County. The registered
agent in charge thereof is The Company Corporation, address "same as above".
THIRD: The nature of the business and, the objects and purposes
proposed to be transacted, promoted and carried on, are to do any or all the
things herein mentioned as fully and to the same extent as natural persons
might or could do, and in any part of the world, viz:
The purpose of the corporation is to engage in any lawful act or
activity for which corporation may be organized under the General Corporation
Law of Delaware.
FOURTH: The amount of the total authorized capital stock of this
corporation is divided into 1,500 shares of No par value.
FIFTH: The name and mailing address of the incorporator is as follows:
Vanessa Foster 201 N. Walnut Street, Wilmington DE 19801
SIXTH: The Directors shall have power to make and to alter or amend
the By-Laws: to fix the amount to be reserved as working capital and to
authorize and cause to be executed, mortgages and liens without limit as to
the amount, upon the property and franchise of the Corporation.
With the consent in writing, and pursuant to a vote of the holders of a
majority of the capital stock issued and outstanding, the Directors shall have
the authority to dispose, in any manner, of the whole property of this
corporation.
The By-Laws shall determine whether and to what extent the accounts and
books of this corporation, or any of them shall be open to the inspection of
the stockholders; and no stockholder shall have any right of inspecting any
account or book or document of this Corporation, except as conferred by the law
or the By-Laws, or by resolution of the stockholders.
The stockholders and directors shall have power to hold their meetings
and keep the books, documents and papers of the Corporation outside of the
State of Delaware, at such places as may be from time to time designated by
the By-Laws or by resolution of the stockholders or directors, except as
otherwise required by the laws of Delaware.
It is the intention that the objects, purposes and powers specified in
the Third paragraph hereof shall, except where otherwise specified in said
paragraph, be nowise limited or restricted by reference to or inference from
the terms of any other clause or paragraph in this certificate of
incorporation, that the objects, purposes and powers specified in the Third
paragraph and in each of the clauses or paragraphs of this charter shall be
regarded as independent objects, purposes and powers.
SEVENTH: Directors of the corporation shall not be liable to either
the corporation or its stockholders for monetary damages for a breach of
fiduciary duties unless the breach involves: (1) a director's duty of loyalty to
the corporation or its stockholders; (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (3)
liability for unlawful payments of dividends or unlawful stock purchase or
redemption by the corporation or (4) a transaction from which the director
derived an improper personal benefit.
1. THE UNDERSIGNED, for the purpose of forming a Corporation under the
laws of the State of Delaware, do make, file and record this Certificate and do
certify that the facts herein are true; and I have accordingly hereunto set my
hand.
DATED: December 11, 1992 /s/ [SIG]
-----------------------------
<PAGE> 2
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/16/93
932635079 - 2318767
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
Strictly Business Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Strictly Business
Inc., resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to
be advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of Incorporation of
this corporation be amended by changing the Article
thereof numbered "First" so that, as amended said
Article shall be and read as follows:
"The name of this corporation is
---------------------------------------------------
AMERICAN INDEPENDENT NETWORK, INC.
---------------------------------------------------
"
---------------------------------------------------
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting of the necessary
number of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendments as duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced
under or by reason of said amendment.
IN WITNESS WHEREOF, said corporation has caused its corporate seal to
be hereunto affixed and this certificate to be signed by Robert C. Coburn, its
President and M.A. Coburn its Secretary, this 10th day of September, 1993.
/s/ M.A. COBURN /s/ ROBERT C. COBURN
- ---------------------------- -------------------------------
Secretary President
<PAGE> 3
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
American Independent Network, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, does
hereby certify:
FIRST: That at a meeting of the Board of Directors of American
Independent Network, Inc., resolutions were duly adopted setting forth a
proposed amendment of the Certificate of Incorporation of said corporation,
declaring said amendment to be advisable and calling a meeting of the
stockholders of said corporation thereof. The resolution setting forth
the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
corporation be amended by changing the Article thereof numbered
"fourth" so that, as amended said Article shall be and read as
follows:
"The total of the authorized capital stock Corporation is
divided into 20,000,000 shares of .01 Par Common Stock."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General Law
of the State of Delaware at which meeting of the necessary number of shares by
statute were voted in favor of the amendment.
THIRD: That said amendment as duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said Corporation has caused its corporate seal to
be hereunto affixed and this certificate to be signed by Randy Moseley its
President and Randy Moseley its Secretary, this 18th day of October, 1993.
/s/ RANDY MOSELEY
-----------------------------
President
/s/ RANDY MOSELEY
-----------------------------
Secretary
<PAGE> 4
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
AMERICAN INDEPENDENT NETWORK, INC.
American Independent Network, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the
unanimous written consent of its members, filed with the minutes of the Board,
adopted a resolution proposing and declaring advisable the following amendment
to the Certificate of Incorporation of said corporation;
RESOLVED, that the Certificate of Incorporation of American Independent
Network, Inc., be amended by changing the Fourth Article thereof so that, as
amended, said Article shall be read as follows:
FOURTH: This Corporation is authorized to issue two classes of capital
stock designated respectively "Common Stock" and "Preferred Stock" and
referred to either as Common Stock or Common shares and Preferred Stock
or Preferred shares, respectively. The number of shares of Common Stock
is 20,000,000 and the number of shares of Preferred Stock is 10,000,000.
The par value of Common shares is $0.01 and the par value of the
Preferred shares is $1.00.
The Preferred shares may be issued from time to time in one or more
series. The Board of Directors is authorized to fix the number of shares
of any series of Preferred shares and to determine the designation of
any such series. The Board of Directors is also authorized to determine
or alter the rights, preferences, privileges and restrictions granted or
imposed upon any wholly unissued series of Preferred shares and, within
the limits and restrictions stated in any resolution or resolutions of
the Board of Directors originally fixing the number of shares
constituting any series, to increase or decrease (but not below the
number of shares then outstanding) the number of shares in any such
series subsequent to the issue of shares of that series.
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware, at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
1
<PAGE> 5
THIRD: That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Sections 242 and 228 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, said Corporation has caused this certificate to be
signed by Randy Moseley, its President and Secretary, on this 29th day of
August, 1995.
By: /s/ RANDY MOSELEY
---------------------------------
Randy Moseley
President
2
<PAGE> 1
EXHIBIT 2.2
MINUTES
AND
BYLAWS
OF
AMERICAN INDEPENDENT NETWORK, INC.
INCORPORATED UNDER THE LAWS OF
THE STATE OF
DELAWARE
<PAGE> 2
BY-LAWS
ARTICLE I - OFFICES
Section 1. The registered office of the corporation shall be at
3950 Fossil Creek Blvd.
Suite 200
Fort Worth Texas 76137
The registered agent in charge thereof shall be
Randy Moseley
Section 2. The corporation may also have offices at such other places
as the Board of Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II - SEAL
Section 1. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware".
ARTICLE III - STOCKHOLDERS' MEETINGS
Section 1. Meetings of stockholders shall be held at the registered
office of the corporation in this state or at such place, either within or
without this state, as may be selected from time to time by the Board of
Directors.
Section 2. Annual Meetings: The annual meeting of the stockholders
shall be held on the 3rd Wednesday of March in each year if not a legal
holiday, and if a legal holiday, then on the next secular day following at
10:00 o'clock A.M., when they shall elect a Board of Directors and transact
such other business as may properly be brought before the meeting. If the
annual meeting for election of directors is not held on the date designated
therefor, the directors shall cause the meeting to be held as soon thereafter
as convenient.
Section 3. Election of Directors: Elections of the directors of the
corporation be by written ballot.
<PAGE> 3
Section 4. Special Meetings: Special meetings of the stockholders may
be called at any time by the President, or the Board of Directors, or
stockholders entitled to cast at least one-fifth of the votes which all
stockholders are entitled to cast at the particular meeting. At any time, upon
written request of any person or persons who have duly called a special
meeting, it shall be the duty of the Secretary to fix the date of the meeting,
to be held not more than sixty days after receipt of the request, and to give
due notice thereof. If the Secretary shall neglect or refuse to fix the date of
the meeting and give notice thereof, the person or persons calling the meeting
may do so.
Business transacted at all special meetings shall be confined to the
objects stated in the call and matters germane thereto, unless all stockholders
entitled to vote are present and consent.
Written notice of a special meeting of stockholders stating the time
and place and object thereof, shall be given to each stockholder entitled to
vote thereat at least 10 days before such meeting, unless a greater period of
notice is required by statute in a particular case.
Sanction 5. Quorum: A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than a majority of
the outstanding shares entitled to vote is represented at a meeting, a majority
of the shares so represented may adjourn the meeting from time to time without
further notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. The stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum.
Section 6. Proxies: Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy, but no such proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is an
interest in the stock itself or an interest in the corporation generally. All
proxies shall be filed with the Secretary of the meeting before being voted
upon.
<PAGE> 4
Section 7. Notice of Meetings: Whenever stockholders are required
or permitted to take any action at a meeting, a written notice of the meeting
shall be given which shall state the place, date and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called.
Unless otherwise provided by law, written notice of any meeting shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 8. Consent in Lieu of Meetings: Any action required to be
taken at any annual or special meeting of stockholders or a corporation, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
Section 9. List of Stockholders: The officer who has charge of the
stock ledger of the corporation shall prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. No share of stock upon which any installment is due and unpaid
shall be voted at any meeting. The list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
ARTICLE IV - DIRECTORS
Section 1. The business and affairs of this corporation shall be
managed by its Board of Directors, in number. The directors need not be
residents of this state or stockholders in the corporation. They shall be
elected by the stockholders at
<PAGE> 5
the annual meeting of stockholders of the corporation, and each director shall
be elected for the term of one year, and until his successor shall be elected
and shall qualify or until his earlier resignation or removal.
Section 2. Regular Meetings: Regular meetings of the Board shall be
held without notice at the registered office of the corporation,
or at such other time and place as shall be determined by the Board.
Section 3. Special Meetings: Special Meetings of the Board may be
called by the President on 7 days notice to each director, either personally or
by mail or by telegram; special meetings shall be called by the President or
Secretary in like manner and on like notice on the written request of a majority
of the directors in office.
Section 4. Quorum: A majority of the total number of directors
shall constitute a quorum for the transaction of business.
Section 5. Consent in Lieu of Meeting: Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board
of committee, as the case may be, consent thereto in writing, and the writing
or writings are filed with the minutes of proceedings of the Board or
committee. The Board of Directors may hold its meetings, and have an office or
offices, outside of this state.
Section 6. Conference Telephone: One or more directors may
participate in a meeting of the Board, of a committee of the Board or of the
stockholders, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other; participation in this manner shall constitute presence in person at
such meeting.
Section 7. Compensation: Directors as such, shall not receive any
stated salary for their services, but by resolution of the Board, a fixed sum
and expenses of attendance at each regular or special meeting of the Board
PROVIDED; that nothing herein contained shall be construed to preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor.
Section 8. Removal: Any director or the entire Board of Directors
may be removed, with or without cause, by the holders
<PAGE> 6
of a majority of the shares then entitled to vote at an election of directors,
except that when cumulative voting is permitted, if less than the entire Board
is to be removed, no director may be removed without cause if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors, at an election of the class of directors of which he is a part.
ARTICLE V - OFFICERS
Section 1. The executive officers of the corporation shall be chosen by
the directors and shall be a President, Secretary and Treasurer. The Board of
Directors may also choose a Chairman, one or more Vice Presidents and such
other officers as it shall deem necessary. Any number of offices may be held by
the same person.
Section 2. Salaries: Salaries of all officers and agents of the
corporation shall be fixed by the Board of Directors.
Section 3. Term of Office: The officers of the corporation shall hold
office for one year and until their successors are chosen and have qualified.
Any officer or agent elected or appointed by the Board may be removed by the
Board of Directors whenever in its judgment the best interest of the
corporation will be served thereby.
Section 4. President: The President shall be the chief executive
officer of the corporation; he shall preside at all meetings of the
stockholders and directors; he shall have general and active management of the
business of the corporation, shall see that all orders and resolutions of the
Board are carried into effect, subject, however, to the right of the directors
to delegate any specific powers, except such as may be by statute exclusively
conferred on the President, to any other officer or officers of the
corporation. He shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation. He shall be EX-OFFICIO a member of all
committees, and shall have the general power and duties of supervision and
management usually vested in the office of President of a corporation.
Section 5. Secretary: The Secretary shall attend all sessions of the
Board and all meetings of the stockholders and act as clerk thereof, and record
all the votes of the corporation and the minutes of all its transactions in a
book to be kept for
<PAGE> 7
that purpose, and shall perform like duties for all committees of the Board of
Directors when required. He shall give, or cause to be given, notice of all
meetings of the stockholders and of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or President,
and under whose supervision he shall be. He shall keep in safe custody the
corporate seal of the corporation, and when authorized by the Board, affix the
same to any instrument requiring it.
Section 6. Treasurer: The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation, and shall keep the moneys
of corporation in separate account to the credit of the corporation. He shall
disburse the funds of the corporation as may be ???? by the Board, taking
proper vouchers for such disbursements, and shall render to the President and
directors, at the regular meetings of the Board, or whenever they may require
it, an account of all his transactions as Treasurer and of the financial
condition of the corporation.
ARTICLE VI - VACANCIES
Section 1. Any vacancy occurring in any office of the corporation by
death, resignation, removal or otherwise, shall be filled by the Board of
Directors. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, although not less than a quorum, or by a sole
remaining director. If at any time, by reason of death or resignation or other
cause, the corporation should have no directors in office, then any officer or
any stockholder or an executor, administrator, trustee or guardian of a
stockholder, or other fiduciary entrusted with like responsibility for the
person or estate of stockholder, may call a special meeting of stockholders in
accordance with the provisions of these By-Laws.
Section 2. Resignations Effective at Future Date: When one or more
directors shall resign from the Board, effective at a future date, a majority
of the directors then in office, including those who have so resigned, shall
have power to fill such vacancy or vacancies, the vote thereon to take effect
when such resignation or resignations shall become effective.
ARTICLE VII - CORPORATE RECORDS
<PAGE> 8
Section 1. Any stockholder of record, in person or by attorney or other
agent, shall, upon written demand under oath stating the purpose thereof, have
the right during the usual hours for business to inspect for any proper purpose
the corporation's stock ledger, a list of its stockholders, and its other books
and records, and to make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a stockholder.
In every instance where an attorney or other agent shall be the person who
seeks the right to inspection, the demand under oath shall be accompanied by a
power of attorney or such other writing which authorizes the attorney or other
agent to so act on behalf of the stockholder. The demand under oath shall be
directed to the corporation at its registered office in this state or at its
principal place of business.
ARTICLE VIII - STOCK CERTIFICATES, DIVIDENDS, ETC.
Section 1. The stock certificates of the corporation shall be numbered
and registered in the share ledger and transfer books of the corporation as
they are issued. They shall bear the corporate seal and shall be signed by the
Section 2. Transfers: Transfers of shares shall be made on the books of
the corporation upon surrender of the certificates therefor, endorsed by the
person named in the certificate or by attorney, lawfully constituted in
writing. No transfer shall be made which is inconsistent with law.
Section 3. Lost Certificate: The corporation may issue a new certificate
of stock in the place of any certificate theretofore signed by it, alleged to
have been lost, stolen or destroyed, and the corporation may require the owner
of the lost, stolen or destroyed certificate, or his legal representative to
give the corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Section 4. Record Date: In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or the express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be
<PAGE> 9
more than sixty nor less than ten days before the date of such meeting, nor
more than sixty days prior to any other action.
If no record date is fixed:
(a) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close
of business on the day next preceding the day on which notice is given,
or if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting, when
no prior action by the Board of Directors is necessary, shall be the day
on which the first written consent is expressed.
(c) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto.
(d) A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Section 5. Dividends: The Board of Directors may declare and pay
dividends upon the outstanding shares of the corporation from time to time and
to such extent as they deem advisable, in the manner and upon the terms and
conditions provided by the statute and the Certificate of Incorporation.
Section 6. Reserves: Before payment of any dividend there may be set
aside out of the net profits of the corporation such sum or sums as the
directors, from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve in the manner in
which it was created.
<PAGE> 10
ARTICLE XI - MISCELLANEOUS PROVISIONS
Section 1. Checks: All checks or demands for money and notes of the
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
Section 2. Fiscal Year: The fiscal year shall begin on the first day of
January.
Section 3. Notice: Whenever written notice is required to be given to
any person, it may be given to such person, either personally or by sending a
copy thereof through the mail, or by telegram, charges prepaid, to his address
appearing on the books of the corporation, or supplied by him to the
corporation for the purpose of notice. If the notice is sent by mail or by
telegraph, it shall be deemed to have been given to the person entitled thereto
when deposited in the United States mail or with a telegraph office for
transmission to such person. Such notice shall specify the place, day and hour
of the meeting and, in the case of a special meeting of stockholders, the
general nature of the business to be transacted.
Section 4. Waiver of Notice: Whenever any written notice is required by
statute, or by the Certificate or the By-Laws of this corporation a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Except in the case of a special meeting of
stockholders, neither the business to be transacted at nor the purpose of the
meeting need be specified in the waiver of notice of such meeting. Attendance
of a person either in person or by proxy, at any meeting shall constitute a
waiver of notice of such meeting, except where a person attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting was not lawfully called or convened.
Section 5. Disallowed Compensation: Any payments made to an officer or
employee of the corporation such as a salary, commission, bonus, interest,
rent, travel or entertainment expense incurred by him, which shall be
disallowed in whole or in part as a deductible expense by the Internal Revenue
Service, shall be reimbursed by such officer or employee to the corporation to
the full extent of such disallowance. It shall be the duty of the directors, as
a Board, to enforce payment of each such amount disallowed. In lieu of payment
by the officer or employee, subject to the determination of the directors,
proportionate amounts may be withheld from his future
<PAGE> 11
compensation payments until the amount owed to the corporation has been
recovered.
Section 6. Resignations: Any director or other officer may resign at
anytime, such resignation to be in writing, and to take effect from the time of
its receipt by the corporation, unless some time be fixed in the resignation
and then from that date. The acceptance of a resignation shall not be required
to make it effective.
ARTICLE X - ANNUAL STATEMENT
Section 1. The President and Board of Directors shall present at each
annual meeting a full and complete statement of the business and affairs of the
corporation for the preceding year. Such statement shall be prepared and
presented in whatever manner the Board of Directors shall deem advisable and
need not be verified by a certified public accountant.
ARTICLE XI - AMENDMENTS
Section 1. These By-Laws may be amended or repealed by the vote of
stockholders entitled to cast at least a majority of the votes which all
stockholders are entitled to cast thereon, at any regular or special meeting of
the stockholders, duly convened after notice to the stockholders of that
purpose.
<PAGE> 1
EXHIBIT 3.1
AMERICAN INDEPENDENT NETWORK, INC.
WARRANT CERTIFICATE
W-____________ ____________ Warrants
This Warrant Certificate (the "Warrant Certificate") certifies that
_________________ or registered assigns (the "Warrant Holder") is the registered
owner of _________ Warrants (the "Investor Warrants") of American Independent
Network, Inc., a Delaware corporation (the "Company"). One Investor Warrant
entitles the Warrant Holder to purchase from the Company, one fully paid and
non-assessable share of Common Stock of the Company (the "Warrant Shares"), at
an exercise price equal to 120% of the offering price per share of Common Stock
of the Company, as adjusted by any stock splits or stock dividends, in any
firmly underwritten initial public offering, secondary public offering, or
Reorganization involving at least $5,000,000 of the Company's securities (the
"Exercise Price"), in lawful money of the United States of America. The Investor
Warrants are exercisable during the period commencing ninety days after the
conclusion of the Company's initial public offering, secondary public offering
or Reorganization involving at least $5,000,000 of the Company's securities, and
concluding one (1) year from the conclusion of same (the "Warrant Exercise
Period"). Warrant Holder must surrender this Warrant Certificate, with payment
of the Exercise Price at the principal office of the Company, at the time of
exercise of the Investor Warrants, subject to the conditions set forth herein
and in the Warrant terms applicable hereto which have been approved by the Board
of Directors of the Company (the "Warrant Terms").
The Exercise Price, the number of Warrant Shares purchasable upon
exercise of each Investor Warrant, the number of Investor Warrants outstanding
are subject to adjustments upon the occurrence of certain events set forth
herein and in the Warrant Terms. Reference is hereby made to other provisions of
the Warrant Terms, all of which are incorporated herein by reference and made a
part of this Warrant Certificate and which shall for all purposes have the same
effect as though fully set forth herein.
The Investor Warrants and this Warrant Certificate are subject to
restrictions on transfer under the Securities Act of 1933, as amended, and state
securities laws, and may not be offered for sale, sold, assigned, transferred,
pledged or otherwise disposed of unless so registered or qualified under the
applicable laws or unless an exemption from registration exists, the
availability of which is to be established by an opinion of counsel (which
opinion and counsel shall both be reasonably satisfactory to the Company). The
Company shall include the Investor Warrants and the underlying common stock in
any registration statement filed with the Securities and Exchange Commission,
pursuant to the Securities Act of 1933, as amended.
The Warrant Holder may exercise the Investor Warrants in the manner
stated herein, provided that each such exercise must be in minimum increments of
100 units. The Exercise
1
<PAGE> 2
Price shall be payable in lawful money of the United States of America in cash
or by certified or cashier's check or bank draft payable to the order of the
Company. Upon any exercise of the Warrant Certificate in an amount less than
100% of the Warrant Shares so evidenced, there shall be issued to the Warrant
Holder a new Warrant Certificate evidencing the number of Warrant Shares not
issued pursuant to such partial exercise. Adjustments shall be made for any
stock splits or stock dividends on any Warrant Shares issued upon exercise of
this Investor Warrant.
No Investor Warrant may be exercised after 5:00 p.m. Los Angeles,
California time, on the last day of the Warrant Exercise Period, unless extended
by the Company's Board of Directors. Any Investor Warrant not exercised by such
time shall become void.
This Warrant Certificate, when surrendered to the Company, in person or
by attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided herein, without payment of a charge, except
for any tax or other governmental charge imposed in connection with such
exchange, for another Warrant Certificate or Warrant Certificates of like tenor
and evidencing a right to purchase a like number of Warrant Shares subject to
any adjustment made in accordance with the Warrant Terms.
The Company may deem and treat the registered holder hereof as the
absolute owner of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone) for all purposes and the
Company shall not be affected by any notice to the contrary. No Warrant Holder,
as such, shall have any rights of a shareholder of the Company, either at law or
in equity, and the rights of the Warrant Holder, as such, are limited to those
rights expressly provided in the Warrant Terms and in this Warrant Certificate.
The Company shall not be required to issue fractions of Warrant Shares
upon any adjustment provided for in the Warrant Terms or to issue fractions of
Warrant Shares upon the exercise of any Investor Warrant after any such
adjustment, but the Company, in lieu of issuing any such fractional interest,
shall pay an amount in cash equal to such fraction times the current market
value of one Investor Warrant Share, determined in accordance with the Warrant
Terms.
The Investor Warrant represented by this Warrant Certificate may not be
exercised by a Warrant Holder unless at the time of exercise the Warrant Shares
are qualified for sale by a registration or otherwise, in the state where the
Warrant Holder resides or unless the issuance of the Warrant Shares would be
exempt under the applicable state securities laws. A registration statement
under the Securities Act of 1933, as amended, covering the exercise of the
Investor Warrants must be in effect and current at the time of exercise unless
the issuance of Warrant Shares upon any exercise is exempt from the registration
requirements of the Securities Act of 1933, as amended. Notwithstanding the
provisions hereof, unless such registration statement and qualification are in
effect and current at the time of exercise, or unless exemptions are available,
the Company may decline to permit the exercise of the
2
<PAGE> 3
Investor Warrant and the Warrant Holder would then only have the choice of
attempting to sell the Investor Warrant consistent with its terms, if a market
existed therefor, or letting the Investor Warrant expire.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be signed by its President and by its Secretary, and has caused its corporate
seal to be imprinted hereon.
Dated: ____________ AMERICAN INDEPENDENT NETWORK, INC.
a Delaware corporation
By:
--------------------------------
Randy Moseley
President and Secretary
3
<PAGE> 4
ASSIGNMENT
(To be executed if Warrant Holder
desires to transfer Investor Warrants)
FOR VALUE RECEIVED, ____________________________________________ hereby sells,
assigns and transfers to _______________________________________________________
________________________________________________________________________________
(Please print name and address, including zip code)
__________________________________ Investor Warrants represented by this Warrant
Certificate and does hereby irrevocably constitute and appoint _________________
__________________________ Attorney, to transfer said Investor Warrants on the
books of the Company with full power of substitution.
Date:__________________ ______________________________________________
Signature
(Signature must conform in all respects to
name of Warrant Holder as specified on the
face of the attached Warrant Certificate)
______________________________________________
Social Security Number, Federal Identification
Number or other identifying number)
SIGNATURE GUARANTEED:
- -----------------------------
IMPORTANT: Signature guarantee must be made by a participant of STAMP or
another signature guarantee program acceptable to the Securities and Exchange
Commission, the Securities Transfer Associatiation and the Transfer Agent of the
Company or the Company.
4
<PAGE> 5
ELECTION OF EXERCISE
(To be executed if Warrant Holder
desires to exercise Investor Warrants)
TO THE COMPANY:
The undersigned Warrant Holder hereby irrevocably elects to exercise the
Investor Warrants represented by the attached Warrant Certificate, No.
W-___________, to purchase thereunder Investor Warrants and encloses
$____________ as the purchase price therefor, and requests that certificates for
such shares shall be paid to,
Please insert Social Security
Number or other identifying
number
-----------------------------
- --------------------------------------------------------------------------------
(Please print Name and Address, including Zip Code)
and, if said number of shares shall not be all the shares which said Warrant
Certificate entitles the undersigned Warrant Holder to purchase, that a new
Warrant Certificate for the unexercised Investor Warrants be issued and
delivered to the undersigned.
Dated:_____________________ ___________________________________________
Signature
(Signature must conform in all respects to
name of Warrant Holder as specified on the
face of the Warrant Certificate)
SIGNATURE GUARANTEED:
- -----------------------------
IMPORTANT: Signature guarantee must be made by a participant of STAMP or
another signature guarantee program acceptable to the Securities and Exchange
Commission, the Securities Transfer Association and the Transfer Agent of the
Company or the Company.
5
<PAGE> 1
EXHIBIT 6.1
LEASE AGREEMENT
THE STATE OF TEXAS
COUNTY OF TARRANT
THIS AGREEMENT made and entered into on this the 1st day of June 1995
by and between LESSOR: VAN EYNSBERGEN/HOLLAND GENERAL PARTNERSHIP of Fort
Worth, Texas (hereinafter referred to as "Lessor") and AMERICAN INDEPENDENT
NETWORK of Fort Worth, Texas (hereinafter referred to as "Lessee").
1. PREMISES, TERMS, USE, RENTAL:
1.1 Premises, Term and Use. Subject to the terms and conditions
hereinafter set forth, Lessor hereby leases and lets to Lessee, and Lessee
rents, takes and accepts pursuant to the terms of this agreement, for the term
of 24 months, commencing on the 1st day of June 1995 and expiring on the 31st
day of May 1997 for Suite 200 (2,750 square feet), Suite 102 (1,600 square
feet) and 9,568 square feet of warehouse space at 6125 Airport Freeway, in the
City of Haltom City, Tarrant County, Texas: to be continually used and occupied
during the full term of this Lease by Lessee and for no other purposes than its
present business use without written consent of Lessor first had and obtained.
This Lease covers no other part of the said building or ground upon which the
same is located except the non-exclusive rights hereby granted by Lessor to
Lessee, it agents, servants, employees, contractors, guests and customers to
use the public corridors, the elevators, stairways and similar common areas
within said building, and the parking lot located at the building.
1.2 Rental. This lease is subject and subordinate to all present or
future first mortgages and/or lien deeds of trust which may now or hereinafter
affect the real estate of which the demised premises form a part, and to all
renewals and extensions thereof. Lessee shall execute promptly any requisite
appropriate certificate that Lessor may request to confirm such subordination
and in the furtherance of this covenant.
In consideration for this lease, Lessee promises and agrees to pay
Lessor at the office of Lessor at 6125 Airport Frwy., Suite 200, Haltom City,
Tarrant County, Texas, in lawful money of the United States of America, the
monthly rent of Four Thousand Eight Hundred Eighty Three and N0/100 dollars
(4,883.00) for the initial term of this lease, said monthly installments of
rental to be paid in advance, without demand on by the seventh day of each and
every calendar month during the full term hereof. One monthly installment
($4,883.00) of rent shall be due and payable on the date of execution of this
lease by Lessee for the first month's rent.
Lessee shall have the option to extend this lease at the end of the
initial lease period for an additional twelve months by giving Lessor notice by
May 1, 1997. The monthly lease this additional period will be $5,400.00 per
month to be paid on the same terms as the initial lease period.
On the date of commencement of this lease by Lessee, there shall be due
and payable by Lessee a security deposit in an amount equal to ($.00) to be
held for the performance of Lessee of Lessee's covenants and obligations under
this lease, it being expressly understood that the deposit shall not be
considered an adverse payment of rental or a measure of Lessor's damage in case
of default by Lessee.
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2. LESSOR AGREES AS FOLLOWS:
2.1 Services to be furnished by Lessor. Lessor will furnish Lessee,
while Lessee occupies the premises, with water service at those points of
supply provided for general use of its Lessees, heated and refrigerated air
conditioning in season, at such times as Lessor normally furnished these
services to all other Lessees in the building, and at such temperatures and in
such amounts as are considered by Lessor to be standard, such services on
Saturday, Sunday and Holidays shall be optional on the part of Lessor, janitor
service for all public areas and special service areas of the building in the
manner and to the extent deemed by Lessor to be standard, but failure by Lessor
to any extent to furnish, or any stoppage of these defined services resulting
from causes beyond the control of Lessor or from any other cause shall not
render Lessor liable in any respect for damages to either person or property,
nor be construed as an eviction of Lessee nor work an abatement of rent, nor
relieve Lessee from fulfillment of any covenant or agreement hereof, should any
equipment or machinery breakdown, or for any cause to cease to function
properly. Lessor shall use reasonable diligence to repair the same promptly but
Lessee shall have no claim for rebate of rent on account of any interruptions
in service occasioned thereby or resulting therefrom.
2.2 Peaceful Enjoyment. Lessee shall and may peacefully have, hold
and enjoy the demised premises subject to the other terms hereof, and provided
Lessee pays the rentals herein recited and performs all of his covenants and
agreements herein contained.
3. LESSEE AGREES AS FOLLOWS:
3.1 Payments. Lessee shall pay all rents and sums provided to be paid
to Lessor hereunder at the times and in the manner provided.
3.2 Electric Current. Electric Current for normal office and
equipment usage of Lessee will be supplied by Lessor. Lessor will not be
responsible for failure of said services.
3.3 Repair and Re-Entry. Except for normal electrical and plumbing
repairs, Lessor shall not be required to make any improvements or repairs of any
kind or character on the demised premises during the term of this lease. Lessee
will at Lessee's own cost and expense repair or replace any damage or injury
done to the building, or any part thereof, caused by Lessee or Lessee's agents,
employees, invitees or visitors. If Lessee fails to make such repairs or
replacements promptly, or within fifteen (15) days of occurrence, Lessor may at
its option make such repairs or replacements, and Lessee shall repay the cost
thereof to Lessor, and shall at the termination of this lease by lapse of time
or otherwise deliver up said premises to Lessor in as good condition as at the
date of possession by Lessee, except for reasonable wear and tear and damage by
fire or tornado alone excepted, and upon such termination of lease, Lessor shall
have the right to re-enter and resume possession of the demised premises.
3.4 Assignment of Subletting, Alterations, Additions and
Improvements. Lessee will not assign this lease or allow the same to be
assigned by operation of law or otherwise, or sublet the demised premises, or
any part thereof, or use or permit the same to be used for any other purpose
than stated in the use clause hereof, or make or allow to be made any
alterations or physical additions in or to the demised premises without
written consent of Lessor first had and obtained. Any and all such
alterations, physical additions or improvements, when made to the demised
premises by Lessee shall at once become the property of Lessor and shall be
surrendered to Lessor upon the termination in any manner of this lease; but
this clause shall not apply to movable fixtures or furniture of Lessor. All
improvements beyond the "building standard" will be paid by Lessee; "building
standard" being defined as keys, directory plate, suite number and tenant name
plates, hardware, painted walls, carpeted flooring and drapery or mini-blinds
(Lessor's decision). Should Lessee require Lessor to change or re-key existing
locks, it shall be done at Lessee's sole expense.
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3.5 Legal Use and Violation of Insurance Coverage. Lessee will not
occupy or use, or permit any portion of the demised premises to be occupied or
used, for any business or purpose which is unlawful in part or in whole or
deemed to be disreputable in any manner, or extra hazardous on account of fire,
or permit anything to be done which will in any way increase the fare of fire
insurance on the said building and/or its contents, and in the event that, by
reason of acts of Lessee, there shall be any increase in rate of insurance on
the building or its contents by Lessee's acts or conduct of business, then
Lessee hereby agrees to pay such increases.
3.6 Laws and Regulations. Lessee will keep and maintain the demised
premises in a clean healthful condition and comply with all laws, ordinances,
orders, rules and regulations (state, federal, municipal and other agencies or
bodies having any jurisdictions thereof) with reference to use, condition or
occupancy of the demised premises. Lessee shall be responsible for obtaining all
necessary city permits required for tenant occupancy solely at Lessee's expense.
3.7 Indemnity and Liability. Lessee will indemnify and save harmless
Lessor of and from any and all fines, suits, claims, or non-performance of any
condition hereof on the part of Lessee its agents or employees. Lessee is
familiar with the demised premises, acknowledges that the same are received by
Lessee in good state of repair, accepted by Lessee in the condition in which
they are now, and that Lessor shall not be liable to Lessee or Lessee's agents,
invitees or visitors for damage to persons or property due to condition, design
or defect in the building or its mechanical systems or elsewhere in the demised
or building which may now exist or hereafter occur. Lessee accepts the demised
premises as suitable for the purposes for which the same are leased and assumes
all risk of damage to persons or property.
3.8 Rules of Building. Lessee and Lessee's agents, employees,
invitees and visitors will comply fully with all requirements or rules of the
building which are printed below and made a part hereof as though fully set
forth herein. Lessor shall at all times have the right to change such rules and
regulations or to amend them in any reasonable manner as may be deemed
advisable by Lessor for the preservation of good order therein, all of which
changes and amendments will be sent by Lessor to Lessee in writing and shall be
thereafter carried out and observed by Lessee.
3.9 Entry for Repairs and Inspection. Lessee will permit Lessor or
its officers, agents or representatives the right to enter into and upon any
and all parts of the demised premises at all reasonable hours to inspect same
or clean or make repairs or alterations or additions as Lessor may deem
necessary or desirable, and Lessee shall not be entitled to any abatement or
reduction of rent by reason thereof.
3.10 Nuisance. Lessee will conduct its business, and control its
agents, employees, invitees and visitors in such a manner as not to create any
nuisance, or interfere with, annoy or disturb any other Lessee or Lessor in its
management of the building.
5. LESSOR AND LESSEE MUTUALLY AGREE AS FOLLOWS:
5.1 Condemnation and Loss or Damage. If the demised premises shall be
taken or condemned in whole or in part for any public purposes, then the term
of this lease shall, at the option of Lessee, forthwith cause and terminate;
and Lessor shall not be liable or responsible for any loss or damage to any
property or person occasioned by theft, fire, act of God, public enemy,
injunction, riot, strike, insurrection, war, court order, requisition or order
of governmental body of authority, or other manner beyond the control of Lessor
or for any damage or inconvenience which may arise through repair or alteration
of any part of the building, or failure to make any such repairs, or from any
cause whatever, unless caused solely by Lessor's gross negligence.
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<PAGE> 4
5.2 Lien for Rent. In consideration of the mutual benefits arising
under this contract, Lessee does hereby mortgage unto Lessor all furniture and
fixture property of Lessee now or hereafter placed in or upon the demised
premises (except such part of any property or merchandise as may be exchanged,
replaced or sold from time to time in the ordinary course of operations or
trade), and such property is hereby subjected to a lien in favor of Lessor and
shall be and remain subject to such lien of Lessor for payment of all rents and
other sums agreed to be paid by Lessee hereunder. Said liens shall be in
addition to and cumulative of the landlord's lien provided by law.
5.3 Abandonment. If the demised premises be abandoned or vacated by
Lessee, Lessor shall have the right, but not the obligation, to relet same for
the remainder of the period covered hereby; and if the rent is not received
through such reletting at least equal to the rent provided for hereunder,
Lessee shall pay and satisfy any deficiencies between the amount of the rent
called for and that received through reletting, and all expenses incurred by
renovating, altering and decorating for a new occupancy. Nothing herein shall
be construed as in any way denying Lessor the right, in case of abandonment,
vacating of premises or other breach of this contract by Lessee, to treat the
same as an entire breach and at Lessor's option immediately sue for the entire
breach of this contract and any and all damages occasioned Lessor thereby.
5.4 Holding Over. In case of holding over by Lessee after expiration
or termination of this lease, Lessee will pay as liquidated damages the monthly
rent set forth in 1.2 for the entire holdover period. No holding over by Lessee
after the term of this lease, either with or without consent and acquiescence
of Lessor shall operate to extend the lease for a longer period than six
months, and any holding over with the consent of Lessor in writing shall
thereafter constitute this lease a lease from month to month.
5.5 Fire and Casualty Clause. Lessee shall, in case of fire or other
casualty to the demised premises give immediate notice thereof to Lessor. If
the demised premises shall be partially destroyed by fire or other casualty so
as to render a part of such premises untenantable, the rental herein recited
shall cease thereafter until such time as the demised premises are made
tenantable by Lessor. In case of total destruction of the demised premises
without fault or neglect of Lessee, his agents, employees, invitees or visitors
or if from such cause the same shall be so damaged that Lessor shall decide
within sixty (60) days after such damage not to rebuild, then all rental due up
to the time of destruction or termination shall be paid by Lessee, and
thereforth this lease shall cease and come to an end.
5.6 Attorney's Fees. In case Lessee makes default in the performance
of any of the terms, covenants, agreements or conditions contained in this
lease, and Lessor places the enforcement of this lease or any part of the
possession of the demised premises in the hands of an attorney, or files suit
upon the same, Lessee agrees to pay Lessor reasonable attorney's fees, and
payment of the same shall be secured in like manner as is herein provided as to
security for rent.
5.7 Amendments to Lease Agreement. This instrument may not be
altered, changed or amended, except by an instrument in writing, signed by both
parties hereto.
5.8 Lessor's Right to Assignment. Lessor shall have the right to
transfer and assign, in whole or in part, all and every feature of its rights
and obligations hereunder and in building property referred to herein, such
transfers or assignments may be made either to a corporation, trust company,
individual or group of individuals, and howsoever made, are to be in all things
respected and recognized by Lessee.
5.9 Default by Lessee. Default on the part of Lessee in paying said
rent or any installment thereof, as herein above provided, or default on
Lessee's part in keeping or performing any other term, covenant or condition of
this lease, shall authorize Lessor, at its option, at any time after such
default, and after ten (10) days written notice thereof to Lessee, to declare
this lease terminated, and upon the occurrence of any one or more of such
defaults Lessor immediately or at any time thereafter, may re-enter said
premises and remove all persons therefrom with or without legal process and
without prejudice to any
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of its other legal rights, and all claims for damages by reason of such re-entry
are expressly waived, as also are all claims for damages by reason of any
distress warrants or proceedings by way sequestration which Lessor may employ to
recover said rents, or possession of said premises; provided that Lessor shall
not have the right to declare this lease terminated if, within ten (10) days
after notice of any default, Lessee corrects same to the entire satisfaction of
Lessor.
5.10 Waiver. Failure of Lessor to declare any default immediately
upon occurrence thereof or delay in taking any action in connection therewith
shall not waive such default, but Lessor shall have the right to declare any
such default at any time and take such action as might be lawful or authorized
hereunder, either at law or in equity.
5.11 Possession. If for any reason the demised premises shall not
be ready for occupancy by Lessee at the time of commencement of this lease, the
lease shall not be affected thereby, nor shall lessee have any claim on Lessor
by reason thereof, but no rent shall be payable from the period during which the
premises shall not be ready for occupancy, and all claims for damages arising
out of such delay are waived and released by Lessee.
5.12 Bankruptcy. If voluntary bankruptcy proceedings be initiated by
Lessee, or if proceedings be instituted by anyone else to adjudge Lessee a
bankrupt, or if Lessee makes an assignment for the benefit of his creditors, or
if execution be issued against him, or if the interest of Lessee in this
contract pass by operation of law to any person other than Lessee, this lease
may, at the option of Lessor, be terminated by notice addressed to Lessee, and
mailed in the post office at Fort Worth, Texas.
5.13 Assignment by Lessor. This lease shall also inure to the
benefit of the successors and assigns of Lessor and, with the written consent
of Lessor had and obtained, but not otherwise, to the benefit of the heirs,
executors, and/or administrators, successors and assigns of Lessee.
5.14 Pronouns and Gender. When this lease contract is executed by
more than one person it shall be construed as though Lessee were written
"Lessees" and the words in their number were changed to correspond; and pronouns
of the masculine gender whenever used herein shall include persons of the female
sex, and corporations and associations of every kind and character.
5.15 Waiver of Subrogation.
(a) Lessor hereby waives any claim it may have against Lessee
for loss or damage to the premises caused by Lessee to the extent, but only to
the extent, that Lessor is fully compensated for such loss or damage by actual
receipt of proceeds from insurance policies covering such loss or damage.
(b) Lessee hereby waives any claim it may have against Lessor
for loss or damage to it caused by Lessor in connection with Lessee's occupancy
of the above described premises and storage of goods, wares and merchandise
therein to the extent that Lessee is fully compensated for such loss or damage
by actual receipt of proceeds from insurance policies covering such loss or
damage.
6. RULES AND REGULATIONS:
6.1 Lessee will refer to contracts, contractors' representatives
and installation technicians rendering any service for Lessee, to Lessor for
Lessor's supervision and/or approval before performance of any such contractual
services not in Lessee's normal business. This shall apply to all work, outside
of Lessee's normal business, performed in the building including, but not
limited to installation of telephones, telegraph equipment, electrical devices
and attachments, and installation of any and every nature affecting floors,
walls, woodwork, trim, windows, ceilings, equipment or any other physical
portion of the building. None of this work will be done by Lessee without
Lessor's written approval first had and obtained.
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6.2 The work of the janitor or cleaning personnel shall not be
hindered by Lessee after 5:30 P.M., and such work may be done at any time when
offices are vacant. The windows, doors and fixtures may be cleaned at any time.
Lessee shall provide waste and rubbish receptacles, cabinets, book cases, map
cases, etc., necessary to prevent unreasonable hardship to Lessor in
discharging his obligations regarding cleaning service.
6.3 Movement in or out of the building of furniture or office
equipment, or dispatch or receipt by Lessee of any merchandise or materials
which require the use of elevators or stairways, or movement through the
building entrances or lobby shall be restricted to the hours designated by
Lessor from time to time. All such movement shall be as directed by Lessor and
in a manner to be agreed upon between Lessor and Lessee by prearrangement before
performance. Such prearrangement initiated by Lessee shall include determination
by Lessor and subject to its decision and control of the time, method, and
routing of movement, limitations imposed by safety or other concerns which may
prohibit any article, equipment or any other item from being brought into the
building. Lessee expressly assumes all risk of damage to any and all articles so
moved, as well as injury to any person or persons, or the public engaged or not
engaged in such movement, including equipment, property and personnel of Lessor
if damaged or injured as a result of acts in connection with carrying out this
service for Lessee from the time of entering property to completion of the work;
and Lessor shall not be liable for the act or acts of any person or persons so
engaged in or damage or loss to any property of persons resulting directly or
indirectly from any act in connection with such service performed by or for
Lessee.
6.4 No sign or signs will be allowed in any form on the exterior of
or on any window or windows inside or outside of the building without the
permission of the Lessor, and no sign or signs, except in uniform location and
uniform style fixed by Lessor, will be permitted in the public corridors or on
corridor doors or entrances to Lessee's space.
6.5 Lessee shall not place, install or operate on the demised
premises or in any part of the building, any engine, stove or machinery, or
conduct mechanical operations or cook thereon or therein, or place or use in
or about the demised premises any explosives, gasoline, kerosene, oil acids,
caustics, or any other inflammable explosives, or hazardous material without
the consent of Lessor first had and obtained.
6.6 Lessor will be responsible for any lost or stolen personal
property, equipment, money or jewelry from Lessee's area or public rooms
regardless of whether such loss occurs when the area is locked against entry or
not.
6.7 Corridor doors, outside doors, when not in use, shall be kept
closed. No birds or animals shall be brought into or kept in or about the
building. Nothing shall be swept or thrown into the corridors, halls, elevator
shaft or stairway.
6.8 Lessor may permit entrance to Lessee's office by use of pass
keys controlled by Lessor or employees, contractors or service personnel
supervised or employed by Lessor.
6.9 None of the entries, passages, doors, elevators, elevator
doors, hallways or stairways shall be blocked or obstructed, or any rubbish,
litter, trash or material of any nature placed, emptied or thrown in to these
areas, or such areas be used at any time except for access or egress by
Lessee, Lessee's agents, employees or invitees.
6.10 Plumbing, fixtures and appliances shall be used only for the
purposes for which designed, and no sweepings, rubbish, rags or other
unsuitable material shall be thrown or deposited herein. Damage resulting to
any such fixtures or appliances from misuse by a tenant or its agents,
employees or invitees, shall be paid by such Lessee.
6.11 Tenant shall not make or permit any improper, objectionable or
unpleasant noises or odors in building or odors in building or otherwise
interfere in any way with other tenants or persons having business with them.
6.12 The entire building is considered a non-smoking area and strict
compliance is expected by Lessee, its employees, its agents and its invitees.
Violations of these rules will be considered grounds for eviction by Lessor.
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6.14 Lessee will be allowed ten parking spaces in the front parking
lot and all other employees and agents of Lessee will be required to park in
the additional parking areas around the building.
Lessor desires to maintain a high standard of environment, comfort and
conveniences for its Lessees. It will be appreciated if any undesirable
condition or lack of courtesy or attention by its employees is reported directly
to Lessor.
IN TESTIMONY WHEREOF, the parties hereto have executed this Lease on
the date aforesaid.
HOLLAND SIGN & DISPLAY, INC.
LESSOR
/s/ GORDON HALL
----------------------------
Gordon Hall, Adoption Agent
AMERICAN INDEPENDENT NETWORK
/s/ DON SHELTON
----------------------------
Don Shelton, CEO
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<PAGE> 1
EXHIBIT 6.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, hereinafter referred to as the "Agreement", is
entered into by and between, AMERICAN INDEPENDENT NETWORK, INC. ("Employer"), a
Delaware corporation, having a principal place of business at 6125 Airport
Freeway, Suite 200, Fort Worth, Texas, 76117, and DR. DON SHELTON, hereinafter
referred to as the "Employee".
ARTICLE 1
Term
1.1 Term of Employment. The Employer hereby employs the Employee and the
Employee hereby accepts employment by Employer for a period of five (5) years
beginning on the date of execution hereof, and expiring five years later,
provided, however, that this Agreement may be terminated earlier as hereinafter
described.
ARTICLE 2
Duties of Employee
2.1 Duties of Employee, Uniqueness. Employee shall perform all the
duties customarily performed by the Chairman and Chief Executive Officer of a
corporation engaged in the business in which Employer is engaged and consistent
with the Bylaws of the Employer, or, in such other capacity as the Board of
Directors of Employer may reasonably direct from time to time. When so acting,
Employee shall have all the powers of, and be subject to all the restrictions
upon, the Chairman and Chief Executive Officer. From time to time, the Board of
Directors may give Employee specific directions on certain aspects of managing
the Employer, which are consistent with his employment with the Employer. The
parties hereto agree that Employee's services are unique.
2.2 Best Efforts of Employee. Employee agrees that he will at all times
faithfully, industriously, and to the best of his ability, experience, and
talents, perform all of the duties that may be required of and from him pursuant
to the express and implicit terms hereof to the reasonable satisfaction of
Employer. The parties acknowledge and agree that Employee shall not be required
by Employer to change his place of residence or to relocate without the mutual
written consent of the parties.
2.3 Exclusive Service on Behalf of Employer. The Employee shall devote,
during reasonable business hours, his entire productive time, ability and
attention to the business (except as noted herein), of the Employer during the
term of this Agreement. Employee shall not, during his employment, compete
directly against the Company or have ownership in excess of 5% of the securities
of a competing company.
2.4 Communications to Employer. From the time that this agreement
commences until the termination of this Agreement, Employee shall communicate
and channel to Employer all
<PAGE> 2
EMPLOYMENT AGREEMENT
PAGE 2
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knowledge, business and customer contacts and any other matters of information
that could concern or be in any way beneficial to Employer, whether acquired by
Employee before or during the term of this Agreement, provided, however, that
nothing under this Agreement shall be construed as requiring such communications
where the information is lawfully protected from disclosure as a trade secret of
a third party. Any such information communicated to Employer shall be and remain
the property of Employer, without regard to the termination or expiration of
this Agreement.
2.5 Regulations. The Employee agrees to comply with all federal, state
and local laws, ordinances and regulations in the conduct of his business on
behalf of Employer.
If and when licenses or other registrations become required by law or
pertinent regulatory bodies or agencies, the Employee shall undertake to make
any necessary applications or do what may be required to secure such licenses or
registrations on behalf of Employer.
ARTICLE 3
Duties of Employer
3.1 Payment of Compensation and Provision of Benefits. During the term
hereof, Employer agrees to pay all base compensation due to Employee on at least
a monthly basis as provided in Article 4, as well as to provide bonuses,
benefits, allowances and vacation as set forth therein.
3.2 Working Environment. During the term hereof, Employer agrees to
create a suitable working environment, including all office amenities
appropriate for one occupying Employee's position at the Employer.
ARTICLE 4
Compensation
4.1 Basic Compensation. As compensation for services rendered under this
Agreement, the Employee shall be entitled to receive from the Employer a minimum
base salary of $100,000 per year, which salary shall be subject to an annual
review by the Board of Directors of Employer for the purpose of considering any
increase in base salary, based on past performance of the Employee in carrying
out his duties.
4.2 Stock Option. Employee is granted an option (the "Option") to
purchase an aggregate of One Million (1,000,000) shares of Employer's Common
Stock, at a price of $0.10 per share. The Option shall be exercisable in its
entirety upon the execution of this Agreement, and shall remain exercisable for
a period not to exceed ten (10) years. A copy of the Stock Option
<PAGE> 3
EMPLOYMENT AGREEMENT
PAGE 3
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Agreement has been attached hereto as Exhibit 4.2, and is incorporated in its
entirety herein by reference.
4.3 Benefits. So long as Employee is employed by Employer, Employer will
provide and pay for medical and dental insurance for Employee. Employee shall
receive medical and dental benefits which are substantially identical to those
which are provided for all other executive-level employees of the Employer.
Employee shall also be eligible for any such other benefits which Employee may
provide to employees, as determined from time to time by the Board of Directors.
4.4 Vehicular Transportation. As additional compensation, Employee shall
receive the use of a motor vehicle to be provided at the expense of Employer.
Employee shall be entitled to use such motor vehicle for any reasonable business
purpose, and Employer agrees to pay all sums necessary to ensure the normal
operation and maintenance of the vehicle.
4.5 Vacation. Employee shall be entitled to vacation of up to fifteen
(15) work days per year. Employee shall be entitled to observe all nationally
observed holidays and to take and accrue such vacation time and sick days as
determined by Employer's policy on such accruals for all employees.
4.6 Expenses. Employer shall reimburse Employee for any reasonable
out-of-pocket expenses which Employee may from time to time incur, in connection
with his services under this Agreement, on presentation by Employee to Employer
of true and correct copies of the appropriate vouchers and/or receipts for such
expenses to Employer.
ARTICLE 5
Confidentiality and Non-Competition
5.1 Confidentiality. During the course of employment, Employee shall
become aware of certain methods, practices and procedures with which Employer
conducts its business, including but not limited to: any trade secrets,
confidential information, knowledge, data or other information of Employer
relating to products, processes, know how, designs, customer lists, business
plans, marketing plans and strategies, and pricing strategies or any subject
matter pertaining to any business of Employer or any of its clients, licensees
or affiliates, all of which Employer and Employee agree are proprietary
information and as such are trade secrets.
Employee agrees to keep confidential, except as Employer may
otherwise consent, and not to disclose, or make any use of except for the
benefit of Employer, at any time either during or subsequent to his employment,
any trade secrets, confidential information, knowledge, data or other
information of Employer relating to products, processes, know-how, designs,
<PAGE> 4
EMPLOYMENT AGREEMENT
PAGE 4
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customer lists, business plans, marketing plans and strategies, and pricing
strategies or any subject matter pertaining to any business of Employer or any
of its clients, licensees or affiliates, which Employee may produce, obtain or
otherwise acquire during the course of employment.
5.2 Return of Confidential Material. In the event of Employee's
termination of employment with Employer, for any reason whatsoever, Employee
agrees to promptly surrender and deliver to Employer all records, materials,
equipment, drawings and data of any nature pertaining to any invention or
confidential information of Employer, or to his employment and Employee will not
take any written description containing or pertaining to any confidential
information, knowledge or data of Employer which he may produce or obtain during
the course of his employment.
5.3 Uniqueness of Services and Non-Competition. The parties to this
Agreement recognize that the performance of the obligations under this Agreement
is special, unique and extraordinary in character and that in the event of the
breach by Employee of the terms and conditions of this Agreement to be
performed, the Employer shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction, either in law or
in equity, to obtain damages for any breach of this Agreement or to enforce the
specific performance thereof by Employee or to enjoin Employee from performing
services for any such other person, firm or corporation.
ARTICLE 6
Termination
6.1 Termination by Employee. Employee may terminate this agreement in
the event of:
(a) inability of Employee to perform his duties set forth in
clause 2.1 hereof, whether by reason of injury (physical or
mental), illness or otherwise, incapacitating Employee for a
continuous period exceeding 120 days; or
(b) the filing by Employer of a voluntary petition under the
United States Bankruptcy Code; or
(c) any material breach by Employer of any of the provisions of
this Agreement if such breach is not cured within thirty (30)
days after written notice thereof to Employer by Employee.
6.2 Termination by Employer without Cause. The Employer may not
terminate this Agreement without Cause.
6.3 Termination by Employer for Cause. For purposes of this Agreement,
an event or occurrence constituting "Cause" shall mean:
<PAGE> 5
EMPLOYMENT AGREEMENT
PAGE 5
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(a) Employee's willful failure, or refusal after notice thereof,
to perform specific directives of the Board of Directors of
Employer, when such directives are consistent with the scope and
nature of Employee's duties and responsibilities as set forth in
clause 2.1 hereof; or
(b) Dishonesty of Employee affecting Employer; or
(c) Chemical dependency which interferes with the performance of
Employee's duties and responsibilities under this Agreement; or
(d) Employee's conviction of a felony or of any crime of moral
turpitude, fraud or misrepresentation; or
(e) Any gross or willful conduct of Employee resulting in
substantial loss to Employer, substantial damage to Employer's
reputation, or theft or defalcation from Employer; or
(f) Gross incompetence on the part of the Employee in the
performance of the duties and responsibilities under this
Agreement; or
(g) Any material breach (not covered by any of subclauses (a)
through (f)) of any of the provisions of this Agreement if such
breach is not cured within thirty (30) days after written notice
thereof to Employee by Employer.
Employer may at its option terminate this Agreement for Cause by giving
written notice of termination to the Employee without prejudice to any other
remedy to which the Employer may be entitled either at law, in equity, or under
this Agreement.
6.4 Termination by Employer upon Inability or Death of Employee.
Employer may terminate this Agreement (a) upon death of Employee, or (b) at the
option of Employer upon thirty (30) days prior written notice to Employee in the
event of the inability of Employee to perform his duties set forth in clause 2.1
hereof, whether by reason of injury (physical or mental), illness or otherwise,
incapacitating Employee for a continuous period exceeding 120 days.
6.5. Effect of Termination on Compensation. In the event of the
termination of this Agreement by Employer prior to the completion of the term of
employment specified herein, other than for cause, or by Employee by reason of
6.1(c), Employee shall be entitled to the compensation earned by him, including
bonuses, prior to the date of termination as provided for in this Agreement
computed pro rata up to and including that date, together with an amount equal
to twelve (12) months base compensation, as full and complete severance
compensation. Furthermore, all stock options granted to Employee shall become
immediately and fully exercisable.
In the event of termination for cause, Employee shall receive no
additional compensation beyond the termination date. Furthermore, if terminated
for cause, Employee shall forfeit his interest in any portion of the Option, as
defined and described in Article 4.3 above, which has not yet been exercised
<PAGE> 6
EMPLOYMENT AGREEMENT
PAGE 6
- --------------------
6.6 Effect of Termination on other Employees. In the event of
termination, with the exception of termination by Employer other than for cause,
the Employee shall not, for a period of at least one (1) year after termination,
hire any employee of the Employer or any of its subsidiaries. Employee shall not
persuade or attempt to persuade any employee of employer or any of its
subsidiaries to become employed by any company in which Employee has more than a
10% ownership interest.
6.7 Effect of Termination on Article 5. In the event of the termination
of this Agreement, with the exception of termination by Employer other than for
cause, the parties agree that Article 5 will survive termination of this
Agreement.
ARTICLE 7
General Provisions
7.1 Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at addresses appearing in the
introductory paragraph of this Agreement, but each party may change his address
by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of five (5) days after mailing.
7.2 Inclusion of Entire Agreement Herein. This Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of the Employee by the Employer and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever with exception of such stock bonus plans,
stock options or other deferred compensation as may from time to time be granted
to Employee by action of the Board of Directors of Employer.
7.3 Law Governing Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
It is the desire and intent of the parties to this Agreement that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought; and that if any particular provision or portion of this
Agreement shall adjudicate to be invalid or unenforceable, such Agreement shall
be deemed amended to delete therefrom such provision or portion adjudicated to
be invalid or unenforceable, such amendment to apply only with respect to the
operation of such provision or portion in the particular jurisdiction in which
such adjudication is made.
<PAGE> 7
EMPLOYMENT AGREEMENT
PAGE 7
- --------------------
The parties to this Agreement recognize that the performance of the
obligations under this Agreement is special, unique and extraordinary in
character and that in the event of the breach by Employee of the terms and
conditions of this Agreement to be performed, the Employer shall be entitled, if
it so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages for any breach of
this Agreement or to enforce the specific performance thereof by Employee or to
enjoin Employee from performing services for any such other person, firm or
corporation.
7.4 Mediation. In the event of any controversy or claim arising out of
or related to this Employment Agreement, or the breach thereof, if such
controversy or claim cannot be settled through negotiations between the parties,
the parties agree first to try in good faith to settle the dispute by mediation
administered by the American Arbitration Association, under its Commercial
Mediation Rules, subject to the laws of the state of Texas, before resorting to
arbitration.
7.5 Arbitration. In the event of any controversy or claim arising out of
or related to this Employment Agreement, or the breach thereof, which has not
been settled through negotiation or the mediation procedures provided for in the
previous paragraph, such controversy or claim shall be settled by binding
arbitration administered by the American Arbitration Association (AAA) under its
Commercial Arbitration Rules, subject to the laws of the state of Texas, and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
7.6 Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, it is agreed that
the each party shall be required to pay its own attorneys fees, regardless of
whom the prevailing party may be.
7.7 Payment of Moneys Due Deceased Employee. If the Employee dies prior
to the expiration of the term of employment, any moneys that may be due him from
the Employer under this Agreement as of the date of his death shall be paid to
his executors, administrators, heirs, personal representatives, successors and
assigns.
7.8 Modification or Extension of Agreement. This Agreement may not be
changed, modified, released, discharged, extended, abandoned or otherwise
amended, in whole or in part, except in writing, signed by the Employee and the
Employer, but only after written approval of the Employer's Board of Directors.
Employee agrees that any subsequent change or changes in his duties, salary or
compensation shall not effect the validity or scope of this Agreement.
If, on the request or with the consent of Employer, Employee continues
in his employment beyond the period described in Article 1, this Agreement shall
remain in effect during continuance of such service.
<PAGE> 8
EMPLOYMENT AGREEMENT
PAGE 8
- --------------------
7.9 Absence of Waiver. The failure of either party to this Agreement to
insist upon the performance of any of the terms and conditions of this
Agreement, or the waiver of any breach of any of the terms and conditions of
this Agreement, shall not be construed as thereafter waiving any such terms and
conditions, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred.
<PAGE> 9
EMPLOYMENT AGREEMENT
PAGE 9
- --------------------
IN WITNESS WHEREOF, the parties have executed this Agreement at the
Employer's offices in Fort Worth, Texas.
EMPLOYER:
AMERICAN INDEPENDENT NETWORK, INC.
By: Dated: October 2, 1995
-----------------------------------
Randy Moseley
President
EMPLOYEE:
Dated: October 2, 1995
- ---------------------------------------
Dr. Don Shelton
<PAGE> 1
EXHIBIT 6.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, hereinafter referred to as the "Agreement", is
entered into by and between, AMERICAN INDEPENDENT NETWORK, INC. ("Employer"), a
Delaware corporation, having a principal place of business at 6125 Airport
Freeway, Suite 200, Fort Worth, Texas, 76117, and RANDY MOSELEY, hereinafter
referred to as the "Employee".
ARTICLE 1
Term
1.1 Term of Employment. The Employer hereby employs the Employee and the
Employee hereby accepts employment by Employer for a period of five (5) years
beginning on the date of execution hereof, and expiring five years later,
provided, however, that this Agreement may be terminated earlier as hereinafter
described.
ARTICLE 2
Duties of Employee
2.1 Duties of Employee, Uniqueness. Employee shall perform all the
duties customarily performed by the President, Chief Financial Officer and
Treasurer of a corporation engaged in the business in which Employer is engaged
and consistent with the Bylaws of the Employer, or, in such other capacity as
the Board of Directors of Employer may reasonably direct from time to time. When
so acting, Employee shall have all the powers of, and be subject to all the
restrictions upon, the President, Chief Financial Officer and Treasurer. From
time to time, the Board of Directors may give Employee specific directions on
certain aspects of managing the Employer, which are consistent with his
employment with the Employer. The parties hereto agree that Employee's services
are unique.
2.2 Best Efforts of Employee. Employee agrees that he will at all times
faithfully, industriously, and to the best of his ability, experience, and
talents, perform all of the duties that may be required of and from him pursuant
to the express and implicit terms hereof to the reasonable satisfaction of
Employer. The parties acknowledge and agree that Employee shall not be required
by Employer to change his place of residence or to relocate without the mutual
written consent of the parties.
2.3 Exclusive Service on Behalf of Employer. The Employee shall devote,
during reasonable business hours, his entire productive time, ability and
attention to the business (except as noted herein), of the Employer during the
term of this Agreement. Employee shall not, during his employment, compete
directly against the Company or have ownership in excess of 5% of the securities
of a competing company.
<PAGE> 2
EMPLOYMENT AGREEMENT
PAGE 2
- --------------------
2.4 Communications to Employer. From the time that this agreement
commences until the termination of this Agreement, Employee shall communicate
and channel to Employer all knowledge, business and customer contacts and any
other matters of information that could concern or be in any way beneficial to
Employer, whether acquired by Employee before or during the term of this
Agreement, provided, however, that nothing under this Agreement shall be
construed as requiring such communications where the information is lawfully
protected from disclosure as a trade secret of a third party. Any such
information communicated to Employer shall be and remain the property of
Employer, without regard to the termination or expiration of this Agreement.
2.5 Regulations. The Employee agrees to comply with all federal, state
and local laws, ordinances and regulations in the conduct of his business on
behalf of Employer.
If and when licenses or other registrations become required by law or
pertinent regulatory bodies or agencies, the Employee shall undertake to make
any necessary applications or do what may be required to secure such licenses or
registrations on behalf of Employer.
ARTICLE 3
Duties of Employer
3.1 Payment of Compensation and Provision of Benefits. During the term
hereof, Employer agrees to pay all base compensation due to Employee on at least
a monthly basis as provided in Article 4, as well as to provide bonuses,
benefits, allowances and vacation as set forth therein.
3.2 Working Environment. During the term hereof, Employer agrees to
create a suitable working environment, including all office amenities
appropriate for one occupying Employee's position at the Employer.
ARTICLE 4
Compensation
4.1 Basic Compensation. As compensation for services rendered under this
Agreement, the Employee shall be entitled to receive from the Employer a minimum
base salary of $100,000 per year, which salary shall be subject to an annual
review by the Board of Directors of Employer for the purpose of considering any
increase in base salary, based on past performance of the Employee in carrying
out his duties.
4.2 Stock Option. Employee is granted an option (the "Option") to
purchase an aggregate of One Million (1,000,000) shares of Employer's Common
Stock, at a price of $0.10 per share.
<PAGE> 3
EMPLOYMENT AGREEMENT
PAGE 3
- --------------------
The Option shall be exercisable in its entirety upon the execution of this
Agreement, and shall remain exercisable for a period not to exceed ten (10)
years. A copy of the Stock Option Agreement has been attached hereto as Exhibit
4.2, and is incorporated in its entirety herein by reference.
4.3 Benefits. So long as Employee is employed by Employer, Employer will
provide and pay for medical and dental insurance for Employee. Employee shall
receive medical and dental benefits which are substantially identical to those
which are provided for all other executive-level employees of the Employer.
Employee shall also be eligible for any such other benefits which Employee may
provide to employees, as determined from time to time by the Board of Directors.
4.4 Vehicular Transportation. As additional compensation, Employee shall
receive the use of a motor vehicle to be provided at the expense of Employer.
Employee shall be entitled to use such motor vehicle for any reasonable business
purpose, and Employer agrees to pay all sums necessary to ensure the normal
operation and maintenance of the vehicle.
4.5 Vacation. Employee shall be entitled to vacation of up to fifteen
(15) work days per year. Employee shall be entitled to observe all nationally
observed holidays and to take and accrue such vacation time and sick days as
determined by Employer's policy on such accruals for all employees.
4.6 Expenses. Employer shall reimburse Employee for any reasonable
out-of-pocket expenses which Employee may from time to time incur, in connection
with his services under this Agreement, on presentation by Employee to Employer
of true and correct copies of the appropriate vouchers and/or receipts for such
expenses to Employer.
ARTICLE 5
Confidentiality and Non-Competition
5.1 Confidentiality. During the course of employment, Employee shall
become aware of certain methods, practices and procedures with which Employer
conducts its business, including but not limited to: any trade secrets,
confidential information, knowledge, data or other information of Employer
relating to products, processes, know how, designs, customer lists, business
plans, marketing plans and strategies, and pricing strategies or any subject
matter pertaining to any business of Employer or any of its clients, licensees
or affiliates, all of which Employer and Employee agree are proprietary
information and as such are trade secrets.
Employee agrees to keep confidential, except as Employer may
otherwise consent, and not to disclose, or make any use of except for the
benefit of Employer, at any time either during or subsequent to his employment,
any trade secrets, confidential information, knowledge,
<PAGE> 4
EMPLOYMENT AGREEMENT
PAGE 4
- --------------------
data or other information of Employer relating to products, processes, know-how,
designs, customer lists, business plans, marketing plans and strategies, and
pricing strategies or any subject matter pertaining to any business of Employer
or any of its clients, licensees or affiliates, which Employee may produce,
obtain or otherwise acquire during the course of employment.
5.2 Return of Confidential Material. In the event of Employee's
termination of employment with Employer, for any reason whatsoever, Employee
agrees to promptly surrender and deliver to Employer all records, materials,
equipment, drawings and data of any nature pertaining to any invention or
confidential information of Employer, or to his employment and Employee will not
take any written description containing or pertaining to any confidential
information, knowledge or data of Employer which he may produce or obtain during
the course of his employment.
5.3 Uniqueness of Services and Non-Competition. The parties to this
Agreement recognize that the performance of the obligations under this Agreement
is special, unique and extraordinary in character and that in the event of the
breach by Employee of the terms and conditions of this Agreement to be
performed, the Employer shall be entitled, if it so elects, to institute and
prosecute proceedings in any court of competent jurisdiction, either in law or
in equity, to obtain damages for any breach of this Agreement or to enforce the
specific performance thereof by Employee or to enjoin Employee from performing
services for any such other person, firm or corporation.
ARTICLE 6
Termination
6.1 Termination by Employee. Employee may terminate this agreement in
the event of:
(a) inability of Employee to perform his duties set forth in
clause 2.1 hereof, whether by reason of injury (physical or
mental), illness or otherwise, incapacitating Employee for a
continuous period exceeding 120 days; or
(b) the filing by Employer of a voluntary petition under the
United States Bankruptcy Code; or
(c) any material breach by Employer of any of the provisions of
this Agreement if such breach is not cured within thirty (30)
days after written notice thereof to Employer by Employee.
6.2 Termination by Employer without Cause. The Employer may not
terminate this Agreement without Cause.
6.3 Termination by Employer for Cause. For purposes of this Agreement,
an event or occurrence constituting "Cause" shall mean:
<PAGE> 5
EMPLOYMENT AGREEMENT
PAGE 5
- --------------------
(a) Employee's willful failure, or refusal after notice thereof,
to perform specific directives of the Board of Directors of
Employer, when such directives are consistent with the scope and
nature of Employee's duties and responsibilities as set forth in
clause 2.1 hereof; or
(b) Dishonesty of Employee affecting Employer; or
(c) Chemical dependency which interferes with the performance of
Employee's duties and responsibilities under this Agreement; or
(d) Employee's conviction of a felony or of any crime of moral
turpitude, fraud or misrepresentation; or
(e) Any gross or willful conduct of Employee resulting in
substantial loss to Employer, substantial damage to Employer's
reputation, or theft or defalcation from Employer; or (f) Gross
incompetence on the part of the Employee in the performance of
the duties and responsibilities under this Agreement; or
(g) Any material breach (not covered by any of subclauses (a)
through (f)) of any of the provisions of this Agreement if such
breach is not cured within thirty (30) days after written notice
thereof to Employee by Employer.
Employer may at its option terminate this Agreement for Cause by giving
written notice of termination to the Employee without prejudice to any other
remedy to which the Employer may be entitled either at law, in equity, or under
this Agreement.
6.4 Termination by Employer upon Inability or Death of Employee.
Employer may terminate this Agreement (a) upon death of Employee, or (b) at the
option of Employer upon thirty (30) days prior written notice to Employee in the
event of the inability of Employee to perform his duties set forth in clause 2.1
hereof, whether by reason of injury (physical or mental), illness or otherwise,
incapacitating Employee for a continuous period exceeding 120 days.
6.5. Effect of Termination on Compensation. In the event of the
termination of this Agreement by Employer prior to the completion of the term of
employment specified herein, other than for cause, or by Employee by reason of
6.1(c), Employee shall be entitled to the compensation earned by him, including
bonuses, prior to the date of termination as provided for in this Agreement
computed pro rata up to and including that date, together with an amount equal
to twelve (12) months base compensation, as full and complete severance
compensation. Furthermore, all stock options granted to Employee shall become
immediately and fully exercisable.
In the event of termination for cause, Employee shall receive no
additional compensation beyond the termination date. Furthermore, if terminated
for cause, Employee shall forfeit his interest in any portion of the Option, as
defined and described in Article 4.3 above, which has not yet been exercised
<PAGE> 6
EMPLOYMENT AGREEMENT
PAGE 6
- --------------------
6.6 Effect of Termination on other Employees. In the event of
termination, with the exception of termination by Employer other than for cause,
the Employee shall not, for a period of at least one (1) year after termination,
hire any employee of the Employer or any of its subsidiaries. Employee shall not
persuade or attempt to persuade any employee of employer or any of its
subsidiaries to become employed by any company in which Employee has more than a
10% ownership interest.
6.7 Effect of Termination on Article 5. In the event of the termination
of this Agreement, with the exception of termination by Employer other than for
cause, the parties agree that Article 5 will survive termination of this
Agreement.
ARTICLE 7
General Provisions
7.1 Notices. Any notices to be given hereunder by either party to the
other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at addresses appearing in the
introductory paragraph of this Agreement, but each party may change his address
by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of five (5) days after mailing.
7.2 Inclusion of Entire Agreement Herein. This Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of the Employee by the Employer and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever with exception of such stock bonus plans,
stock options or other deferred compensation as may from time to time be granted
to Employee by action of the Board of Directors of Employer.
7.3 Law Governing Agreement. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
It is the desire and intent of the parties to this Agreement that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought; and that if any particular provision or portion of this
Agreement shall adjudicate to be invalid or unenforceable, such Agreement shall
be deemed amended to delete therefrom such provision or portion adjudicated to
be invalid or unenforceable, such amendment to apply only with respect to the
operation of such provision or portion in the particular jurisdiction in which
such adjudication is made.
<PAGE> 7
EMPLOYMENT AGREEMENT
PAGE 7
- --------------------
The parties to this Agreement recognize that the performance of the
obligations under this Agreement is special, unique and extraordinary in
character and that in the event of the breach by Employee of the terms and
conditions of this Agreement to be performed, the Employer shall be entitled, if
it so elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to obtain damages for any breach of
this Agreement or to enforce the specific performance thereof by Employee or to
enjoin Employee from performing services for any such other person, firm or
corporation.
7.4 Mediation. In the event of any controversy or claim arising out of
or related to this Employment Agreement, or the breach thereof, if such
controversy or claim cannot be settled through negotiations between the parties,
the parties agree first to try in good faith to settle the dispute by mediation
administered by the American Arbitration Association, under its Commercial
Mediation Rules, subject to the laws of the state of Texas, before resorting to
arbitration.
7.5 Arbitration. In the event of any controversy or claim arising out of
or related to this Employment Agreement, or the breach thereof, which has not
been settled through negotiation or the mediation procedures provided for in the
previous paragraph, such controversy or claim shall be settled by binding
arbitration administered by the American Arbitration Association (AAA) under its
Commercial Arbitration Rules, subject to the laws of the state of Texas, and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
7.6 Attorney's Fees and Costs. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, it is agreed that
the each party shall be required to pay its own attorneys fees, regardless of
whom the prevailing party may be.
7.7 Payment of Moneys Due Deceased Employee. If the Employee dies prior
to the expiration of the term of employment, any moneys that may be due him from
the Employer under this Agreement as of the date of his death shall be paid to
his executors, administrators, heirs, personal representatives, successors and
assigns.
7.8 Modification or Extension of Agreement. This Agreement may not be
changed, modified, released, discharged, extended, abandoned or otherwise
amended, in whole or in part, except in writing, signed by the Employee and the
Employer, but only after written approval of the Employer's Board of Directors.
Employee agrees that any subsequent change or changes in his duties, salary or
compensation shall not effect the validity or scope of this Agreement.
If, on the request or with the consent of Employer, Employee continues
in his employment beyond the period described in Article 1, this Agreement shall
remain in effect during continuance of such service.
<PAGE> 8
EMPLOYMENT AGREEMENT
PAGE 8
- --------------------
7.9 Absence of Waiver. The failure of either party to this Agreement to
insist upon the performance of any of the terms and conditions of this
Agreement, or the waiver of any breach of any of the terms and conditions of
this Agreement, shall not be construed as thereafter waiving any such terms and
conditions, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred.
<PAGE> 9
EMPLOYMENT AGREEMENT
PAGE 9
- --------------------
IN WITNESS WHEREOF, the parties have executed this Agreement at the
Employer's offices in Fort Worth, Texas.
Dated: October 2, 1995
EMPLOYER:
AMERICAN INDEPENDENT NETWORK, INC.
By:
-----------------------------------
Dr. Don Shelton
Chief Executive Officer
EMPLOYEE:
- ---------------------------------------
Randy Moseley
<PAGE> 1
EXHIBIT 6.4
AMERICAN INDEPENDENT NETWORK, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into by and between
AMERICAN INDEPENDENT NETWORK, INC., a Delaware corporation ("Corporation"), and
Dr. Don Shelton, a Texas resident ("Optionee").
R E C I T A L S
A. On September 1, 1995, the Board of Directors of the Corporation,
acting as the Plan Committee, adopted the American Independent Network, Inc.,
1995 Stock Option Plan (the "Plan").
B. Pursuant to the Plan, and the Employment Agreement (the "Employment
Agreement") entered into by and between the Optionee and the Corporation on
October 2, 1995, the Plan Committee of (the "Committee") or an independent Plan
Administrator, authorized granting to Optionee an option to purchase shares of
the common stock of the Corporation, subject to the terms and conditions
hereinafter set forth.
A G R E E M E N T
It is hereby agreed as follows:
1. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the context
otherwise clearly requires, terms with initial capital letters used herein shall
have the meanings assigned to such terms in the Plan.
2. GRANT OF OPTION. Pursuant to the Plan, the Corporation hereby grants
to Optionee, an Option (the "Option") to purchase 1,000,000 Shares of the
Corporation's Common Stock (the "Shares"). The granting of the Option shall, in
all cases, be subject to the terms and conditions of the Plan, which is
incorporated in full herein by this reference, and upon the other terms and
conditions set forth herein.
3. OPTION PERIOD AND EXERCISABILITY. The Option shall be exercisable
immediately upon the execution of the Employment Agreement by Optionee. The
Options shall thereafter remain exercisable for a period not to exceed ten (10)
years.
4. METHOD OF EXERCISE. The Option, or any exercisable portion thereof,
shall be exercisable by Optionee by giving written notice to the Corporation of
the election to purchase and of the number of Shares Optionee elects to
purchase, such notice to be accompanied by such other executed instruments or
documents as may be required by the Committee pursuant to this Agreement, and
unless otherwise directed by the Committee, Optionee shall at the time of such
<PAGE> 2
STOCK OPTION AGREEMENT
PAGE 2
- ----------------------
exercise tender the purchase price of the Shares he has elected to purchase. The
Optionee may purchase less than the total number of Shares for which the Option
is exercisable, provided that a partial exercise of an Option may not be for
less than One Hundred (100) Shares. If Optionee shall not purchase all of the
Shares which he is entitled to purchase under the Option, his right to purchase
the remaining unpurchased Shares shall continue until expiration of the Option.
The Option shall be exercisable with respect of whole Shares only, and
fractional Share interests shall be disregarded.
5. AMOUNT OF PURCHASE PRICE. The purchase price per Share for each Share
which Optionee is entitled to purchase under the Option shall be $0.10, such
that the purchase price, in the event that the Optionee exercises the entire
Option, shall be $100,000.00.
6. PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice of
exercise of the Option, or a portion thereof, Optionee shall tender in cash or
by certified or bank cashier's check payable to the Corporation, the purchase
price for all Shares then being purchased, or may at the discretion of and by
the actions of the Board of Directors, exercise the Option by forgiveness of
indebtedness incurred by the corporation.
7. EFFECT OF TERMINATION OF EMPLOYMENT. If the Optionee's employment
with the Corporation, pursuant to the Employment Agreement, is terminated, the
effect of the termination on the Optionee's rights to acquire Shares shall be as
follows:
7.1 Termination Other Than For Cause. If the Optionee is
terminated under the Employment Agreement other than for cause, as that
term is defined in Section 6.3 therein, or if Optionee terminates the
Employment Agreement pursuant to the terms of 6.1(b) or (c) of such
Agreement, any portion of the Option which has not yet been exercised
shall remain exercisable for a period of six (6) months from the date of
termination, after which date it shall expire and no longer be
exercisable.
7.2 Termination for Cause or Termination by Optionee. If the
Optionee's employment by the Employer is terminated for cause, or
Optionee terminates his employment other than as permitted under Section
6.1(b) or (c) of the Employment Agreement, any portion of the Option
which has not yet been exercised, or was exercised within thirty (30)
days prior to such termination, shall expire immediately; provided,
however, the Committee may, in its sole discretion, within thirty (30)
days of such termination, waive the expiration of the Option by giving
written notice of such waiver to the Optionee at such Optionee's last
known address. In the event of such waiver, the Optionee may exercise
the Option only to such extent, for such time, and upon such terms and
conditions as if such Optionee had ceased to be employed by the Employer
upon the date of such termination other than for cause.
7.3 Death of an Optionee. If an Optionee ceases to be employed by
Employer by
<PAGE> 3
STOCK OPTION AGREEMENT
PAGE 3
- ----------------------
reason of death, Optionee's Option which has become exercisable, but has
not yet been exercised, shall expire not later than six (6) months
thereafter. During such six (6) month period and prior to the expiration
of the Option by its terms, such Option may be exercised by his executor
or administrator or the person or persons to whom the Option is
transferred by will or the applicable laws of descent and distribution,
but only to the extent such Option was exercisable on the date Optionee
ceased to be employed by the Employer by reason of death.
8. NONTRANSFERABILITY OF OPTION. The Option shall not be transferable,
either voluntarily or by operation of law, other than by will or the laws of
descent and distribution and shall be exercisable during the Optionee's lifetime
only by Optionee.
9. ADDITIONAL RESTRICTIONS REGARDING DISPOSITIONS OF SHARES. The
Shares acquired pursuant to the exercise of Option shall be subject to any
restrictions then in effect with respect to the Shares, arising out of either
federal or state securities law provisions.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein, the term
"Adjustment Event" means an event pursuant to which the outstanding Shares of
the Corporation are exchanged for a different number or kind of shares or
securities, without receipt of consideration by the Corporation, through
reorganization, merger, recapitalization, reclassification, stock split, reverse
stock split or otherwise. Upon the occurrence of an Adjustment Event, (i)
appropriate and proportionate adjustments shall be made to the number and kind
and exercise price for the shares subject to the Option, and (ii) appropriate
amendments to this Agreement shall be executed by the Corporation and Optionee
if the Committee determines that such an amendment is necessary or desirable to
reflect such adjustments. If determined by the Committee to be appropriate, in
the event of an Adjustment Event which involves the substitution of securities
of a corporation other than the Corporation, the Committee shall make
arrangements for the assumptions by such other corporation of the Option.
Notwithstanding the foregoing, any such adjustment to the Option shall be made
without change in the total exercise price applicable to the unexercised portion
of the Option, but with an appropriate adjustment to the number of shares, kind
of shares and exercise price for each share subject to the Option. The
determination by the Committee as to what adjustments, amendments or
arrangements shall be made pursuant to this Section 10, and the extent thereof,
shall be final and conclusive. No fractional Shares shall be issued on account
of any such adjustment or arrangement.
11. TIME OF GRANTING OPTION. The time that the Option shall be deemed
granted, sometimes referred to herein as the "date of grant," shall be the date
of execution of the Employment Agreement.
12. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not be entitled to the
privileges of stock ownership as to any Shares not actually issued and delivered
to Optionee. No Shares shall be purchased upon the exercise of any Option unless
and until, in the opinion of the
<PAGE> 4
STOCK OPTION AGREEMENT
PAGE 4
- ----------------------
Corporation's counsel, any then applicable requirements of any laws, or
governmental or regulatory agencies having jurisdiction, and of any exchanges
upon which the stock of the Corporation may be listed shall have been fully
complied with.
13. SECURITIES LAWS COMPLIANCE. The Corporation will diligently endeavor
to comply with all applicable securities laws before any stock is issued
pursuant to the Option. Without limiting the generality of the foregoing, the
Corporation may require from the Optionee such investment representations or
such agreements, if any, as counsel for the Corporation may consider necessary
in order to comply with the Securities Act of 1933, as amended, and may require
that the Optionee agree that any sale of the Shares will be made only in such
manner as is permitted by the Committee. The Committee may in its discretion
cause the Shares underlying the Option to be registered under the Securities Act
of 1933. Optionee shall take any action reasonably requested by the Corporation
in connection with registration or qualification of the Shares under federal or
state securities laws.
14. PLAN CONTROLS. The Option shall be subject to and governed by the
provisions of the Plan. All determinations and interpretations of the Plan made
by the Committee shall be final and conclusive.
17. SHARES SUBJECT TO LEGEND. If deemed necessary by the Corporation's
counsel, all certificates issued to represent Shares purchased upon exercise of
the Option shall bear such appropriate legend conditions as counsel for the
Corporation shall require.
18. CONDITIONS TO OPTION.
18.1 Compliance with Applicable Laws. THE CORPORATION'S
OBLIGATION TO ISSUE SHARES OF ITS COMMON STOCK UPON EXERCISE OF THE OPTION IS
EXPRESSLY CONDITIONED UPON THE COMPLETION BY THE CORPORATION OF ANY REGISTRATION
OR OTHER QUALIFICATION OF SUCH SHARES UNDER ANY STATE AND/OR FEDERAL LAW OR
RULINGS OR REGULATIONS OF ANY GOVERNMENTAL REGULATORY BODY, OR THE MAKING OF
SUCH INVESTMENT REPRESENTATIONS OR OTHER REPRESENTATIONS AND UNDERTAKINGS BY THE
OPTIONEE OR ANY PERSON ENTITLED TO EXERCISE THE OPTION IN ORDER TO COMPLY WITH
THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH REGISTRATION OR OTHER
QUALIFICATION OF SUCH SHARES WHICH THE COMMITTEE SHALL, IN ITS SOLE DISCRETION,
DEEM NECESSARY OR ADVISABLE. SUCH REQUIRED REPRESENTATIONS AND UNDERTAKINGS MAY
INCLUDE REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE (i) IS NOT PURCHASING
SUCH SHARES FOR DISTRIBUTION AND (ii) AGREES TO HAVE PLACED UPON THE FACE AND
REVERSE OF ANY CERTIFICATES A LEGEND SETTING FORTH ANY REPRESENTATIONS AND
UNDERTAKINGS WHICH HAVE BEEN GIVEN TO THE COMMITTEE OR A REFERENCE THERETO.
<PAGE> 5
STOCK OPTION AGREEMENT
PAGE 5
- ----------------------
18.2 Maximum Exercise Period. Notwithstanding any provision of
this Agreement to the contrary, the Option shall expire no later than ten years
from the date of grant.
19. MISCELLANEOUS.
19.1 Binding Effect. This Agreement shall bind and inure to the
benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.
19.2 Further Acts. Each party agrees to perform any further acts
and execute and deliver any documents which may be necessary to carry out the
provisions of this Agreement.
19.3 Amendment. This Agreement may be amended at any time by the
written agreement of the Corporation and the Optionee.
19.4 Syntax. Throughout this Agreement, whenever the context so
requires, the singular shall include the plural, and the masculine gender shall
include the feminine and neuter genders. The headings and captions of the
various Sections hereof are for convenience only and they shall not limit,
expand or otherwise affect the construction or interpretation of this Agreement.
19.5 Choice of Law. The parties hereby agree that this Agreement
has been executed and delivered in the State of Texas and shall be construed,
enforced and governed by the laws thereof. This Agreement is in all respects
intended by each party hereto to be deemed and construed to have been jointly
prepared by the parties and the parties hereby expressly agree that any
uncertainty or ambiguity existing herein shall not be interpreted against either
of them.
19.6 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
19.7 Notices. Any notices to be given hereunder by either party
to the other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at addresses appearing in the
introductory paragraph of this Agreement, but each party may change its address
by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of five (5) days after mailing.
19.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof,
this Agreement supersedes all prior and
<PAGE> 6
STOCK OPTION AGREEMENT
PAGE 6
- ----------------------
contemporaneous agreements and understandings of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth or referred to
herein. No supplement, modification or waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
19.9 Attorneys' Fees. In the event that any party to this
Agreement institutes any action or proceeding, including, but not limited to,
litigation or arbitration, to preserve, to protect or to enforce any right or
benefit created by or granted under this Agreement, the prevailing party in each
respective such action or proceeding shall be entitled, in addition to any and
all other relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum of money which
represents the attorneys' fees reasonably incurred by the prevailing party
therein in filing or otherwise instituting and in prosecuting or otherwise
pursuing or defending such action or proceeding, and, additionally, the
attorneys' fees reasonably incurred by such prevailing party in negotiating any
and all matters underlying such action or proceeding and in preparation for
instituting or defending such action or proceeding.
19.10 Mediation. In the event of any controversy or claim arising
out of or related to this Agreement, or the breach thereof, if such controversy
or claim cannot be settled through negotiations between the parties, the parties
agree first to try in good faith to settle the dispute by mediation administered
by the American Arbitration Association, under its Commercial Mediation Rules,
subject to the laws of the state of Texas, before resorting to arbitration.
19.11 Arbitration. In the event of any controversy or claim
arising out of or related to this Agreement, or the breach thereof, which has
not been settled through negotiation or the mediation procedures provided for in
the previous paragraph, such controversy or claim shall be settled by binding
arbitration administered by the American Arbitration Association (AAA) under its
Commercial Arbitration Rules, subject to the laws of the state of Texas, and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
"CORPORATION"
AMERICAN INDEPENDENT NETWORK, INC.,
a Delaware Corporation
<PAGE> 7
STOCK OPTION AGREEMENT
PAGE 7
- ------
- ----------------
Dated: October 2, 1995
- ------------------------------------
By: Randy Moseley
Title: President
"OPTIONEE"
Dated: October 2, 1995
- ------------------------------------
Dr. Don Shelton
<PAGE> 1
EXHIBIT 6.5
AMERICAN INDEPENDENT NETWORK, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into by and between
AMERICAN INDEPENDENT NETWORK, INC., a Delaware corporation ("Corporation"), and
Randy Moseley, a Texas resident ("Optionee").
R E C I T A L S
A. On September 1, 1995, the Board of Directors of the Corporation,
acting as the Plan Committee, adopted the American Independent Network, Inc.,
1995 Stock Option Plan (the "Plan").
B. Pursuant to the Plan, and the Employment Agreement (the "Employment
Agreement") entered into by and between the Optionee and the Corporation on
October 2, 1995, the Plan Committee of (the "Committee") or an independent Plan
Administrator, authorized granting to Optionee an option to purchase shares of
the common stock of the Corporation, subject to the terms and conditions
hereinafter set forth.
A G R E E M E N T
It is hereby agreed as follows:
1. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the context
otherwise clearly requires, terms with initial capital letters used herein shall
have the meanings assigned to such terms in the Plan.
2. GRANT OF OPTION. Pursuant to the Plan, the Corporation hereby grants
to Optionee, an Option (the "Option") to purchase 1,000,000 Shares of the
Corporation's Common Stock (the "Shares"). The granting of the Option shall, in
all cases, be subject to the terms and conditions of the Plan, which is
incorporated in full herein by this reference, and upon the other terms and
conditions set forth herein.
3. OPTION PERIOD AND EXERCISABILITY. The Option shall be exercisable
immediately upon the execution of the Employment Agreement by Optionee. The
Options shall thereafter remain exercisable for a period not to exceed ten (10)
years.
4. METHOD OF EXERCISE. The Option, or any exercisable portion thereof,
shall be exercisable by Optionee by giving written notice to the Corporation of
the election to purchase and of the number of Shares Optionee elects to
purchase, such notice to be accompanied by such other executed instruments or
documents as may be required by the Committee pursuant to this Agreement, and
unless otherwise directed by the Committee, Optionee shall at the time of such
<PAGE> 2
STOCK OPTION AGREEMENT
PAGE 2
- ----------------------
exercise tender the purchase price of the Shares he has elected to purchase. The
Optionee may purchase less than the total number of Shares for which the Option
is exercisable, provided that a partial exercise of an Option may not be for
less than One Hundred (100) Shares. If Optionee shall not purchase all of the
Shares which he is entitled to purchase under the Option, his right to purchase
the remaining unpurchased Shares shall continue until expiration of the Option.
The Option shall be exercisable with respect of whole Shares only, and
fractional Share interests shall be disregarded.
5. AMOUNT OF PURCHASE PRICE. The purchase price per Share for each Share
which Optionee is entitled to purchase under the Option shall be $0.10, such
that the purchase price, in the event that the Optionee exercises the entire
Option, shall be $100,000.00.
6. PAYMENT OF PURCHASE PRICE. At the time of Optionee's notice of
exercise of the Option, or a portion thereof, Optionee shall tender in cash or
by certified or bank cashier's check payable to the Corporation, the purchase
price for all Shares then being purchased, or may at the discretion of and by
the actions of the Board of Directors, exercise the Option by forgiveness of
indebtedness incurred by the corporation.
7. EFFECT OF TERMINATION OF EMPLOYMENT. If the Optionee's employment
with the Corporation, pursuant to the Employment Agreement, is terminated, the
effect of the termination on the Optionee's rights to acquire Shares shall be as
follows:
7.1 Termination Other Than For Cause. If the Optionee is
terminated under the Employment Agreement other than for cause, as that
term is defined in Section 6.3 therein, or if Optionee terminates the
Employment Agreement pursuant to the terms of 6.1(b) or (c) of such
Agreement, any portion of the Option which has not yet been exercised
shall remain exercisable for a period of six (6) months from the date of
termination, after which date it shall expire and no longer be
exercisable.
7.2 Termination for Cause or Termination by Optionee. If the
Optionee's employment by the Employer is terminated for cause, or
Optionee terminates his employment other than as permitted under Section
6.1(b) or (c) of the Employment Agreement, any portion of the Option
which has not yet been exercised, or was exercised within thirty (30)
days prior to such termination, shall expire immediately; provided,
however, the Committee may, in its sole discretion, within thirty (30)
days of such termination, waive the expiration of the Option by giving
written notice of such waiver to the Optionee at such Optionee's last
known address. In the event of such waiver, the Optionee may exercise
the Option only to such extent, for such time, and upon such terms and
conditions as if such Optionee had ceased to be employed by the Employer
upon the date of such termination other than for cause.
7.3 Death of an Optionee. If an Optionee ceases to be employed by
Employer by
<PAGE> 3
STOCK OPTION AGREEMENT
PAGE 3
- ----------------------
reason of death, Optionee's Option which has become exercisable, but has
not yet been exercised, shall expire not later than six (6) months
thereafter. During such six (6) month period and prior to the expiration
of the Option by its terms, such Option may be exercised by his executor
or administrator or the person or persons to whom the Option is
transferred by will or the applicable laws of descent and distribution,
but only to the extent such Option was exercisable on the date Optionee
ceased to be employed by the Employer by reason of death.
8. NONTRANSFERABILITY OF OPTION. The Option shall not be transferable,
either voluntarily or by operation of law, other than by will or the laws of
descent and distribution and shall be exercisable during the Optionee's lifetime
only by Optionee.
9. ADDITIONAL RESTRICTIONS REGARDING DISPOSITIONS OF SHARES. The
Shares acquired pursuant to the exercise of Option shall be subject to any
restrictions then in effect with respect to the Shares, arising out of either
federal or state securities law provisions.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. As used herein, the term
"Adjustment Event" means an event pursuant to which the outstanding Shares of
the Corporation are exchanged for a different number or kind of shares or
securities, without receipt of consideration by the Corporation, through
reorganization, merger, recapitalization, reclassification, stock split, reverse
stock split or otherwise. Upon the occurrence of an Adjustment Event, (i)
appropriate and proportionate adjustments shall be made to the number and kind
and exercise price for the shares subject to the Option, and (ii) appropriate
amendments to this Agreement shall be executed by the Corporation and Optionee
if the Committee determines that such an amendment is necessary or desirable to
reflect such adjustments. If determined by the Committee to be appropriate, in
the event of an Adjustment Event which involves the substitution of securities
of a corporation other than the Corporation, the Committee shall make
arrangements for the assumptions by such other corporation of the Option.
Notwithstanding the foregoing, any such adjustment to the Option shall be made
without change in the total exercise price applicable to the unexercised portion
of the Option, but with an appropriate adjustment to the number of shares, kind
of shares and exercise price for each share subject to the Option. The
determination by the Committee as to what adjustments, amendments or
arrangements shall be made pursuant to this Section 10, and the extent thereof,
shall be final and conclusive. No fractional Shares shall be issued on account
of any such adjustment or arrangement.
11. TIME OF GRANTING OPTION. The time that the Option shall be deemed
granted, sometimes referred to herein as the "date of grant," shall be the date
of execution of the Employment Agreement.
12. PRIVILEGES OF STOCK OWNERSHIP. Optionee shall not be entitled to the
privileges of stock ownership as to any Shares not actually issued and delivered
to Optionee. No Shares shall be purchased upon the exercise of any Option unless
and until, in the opinion of the
<PAGE> 4
STOCK OPTION AGREEMENT
PAGE 4
- ----------------------
Corporation's counsel, any then applicable requirements of any laws, or
governmental or regulatory agencies having jurisdiction, and of any exchanges
upon which the stock of the Corporation may be listed shall have been fully
complied with.
13. SECURITIES LAWS COMPLIANCE. The Corporation will diligently endeavor
to comply with all applicable securities laws before any stock is issued
pursuant to the Option. Without limiting the generality of the foregoing, the
Corporation may require from the Optionee such investment representations or
such agreements, if any, as counsel for the Corporation may consider necessary
in order to comply with the Securities Act of 1933, as amended, and may require
that the Optionee agree that any sale of the Shares will be made only in such
manner as is permitted by the Committee. The Committee may in its discretion
cause the Shares underlying the Option to be registered under the Securities Act
of 1933. Optionee shall take any action reasonably requested by the Corporation
in connection with registration or qualification of the Shares under federal or
state securities laws.
14. PLAN CONTROLS. The Option shall be subject to and governed by the
provisions of the Plan. All determinations and interpretations of the Plan made
by the Committee shall be final and conclusive.
17. SHARES SUBJECT TO LEGEND. If deemed necessary by the Corporation's
counsel, all certificates issued to represent Shares purchased upon exercise of
the Option shall bear such appropriate legend conditions as counsel for the
Corporation shall require.
18. CONDITIONS TO OPTION.
18.1 Compliance with Applicable Laws. THE CORPORATION'S
OBLIGATION TO ISSUE SHARES OF ITS COMMON STOCK UPON EXERCISE OF THE OPTION IS
EXPRESSLY CONDITIONED UPON THE COMPLETION BY THE CORPORATION OF ANY REGISTRATION
OR OTHER QUALIFICATION OF SUCH SHARES UNDER ANY STATE AND/OR FEDERAL LAW OR
RULINGS OR REGULATIONS OF ANY GOVERNMENTAL REGULATORY BODY, OR THE MAKING OF
SUCH INVESTMENT REPRESENTATIONS OR OTHER REPRESENTATIONS AND UNDERTAKINGS BY THE
OPTIONEE OR ANY PERSON ENTITLED TO EXERCISE THE OPTION IN ORDER TO COMPLY WITH
THE REQUIREMENTS OF ANY EXEMPTION FROM ANY SUCH REGISTRATION OR OTHER
QUALIFICATION OF SUCH SHARES WHICH THE COMMITTEE SHALL, IN ITS SOLE DISCRETION,
DEEM NECESSARY OR ADVISABLE. SUCH REQUIRED REPRESENTATIONS AND UNDERTAKINGS MAY
INCLUDE REPRESENTATIONS AND AGREEMENTS THAT THE OPTIONEE (i) IS NOT PURCHASING
SUCH SHARES FOR DISTRIBUTION AND (ii) AGREES TO HAVE PLACED UPON THE FACE AND
REVERSE OF ANY CERTIFICATES A LEGEND SETTING FORTH ANY REPRESENTATIONS AND
UNDERTAKINGS WHICH HAVE BEEN GIVEN TO THE COMMITTEE OR A REFERENCE THERETO.
<PAGE> 5
STOCK OPTION AGREEMENT
PAGE 5
- ----------------------
18.2 Maximum Exercise Period. Notwithstanding any provision of
this Agreement to the contrary, the Option shall expire no later than ten years
from the date of grant.
19. MISCELLANEOUS.
19.1 Binding Effect. This Agreement shall bind and inure to the
benefit of the successors, assigns, transferees, agents, personal
representatives, heirs and legatees of the respective parties.
19.2 Further Acts. Each party agrees to perform any further acts
and execute and deliver any documents which may be necessary to carry out the
provisions of this Agreement.
19.3 Amendment. This Agreement may be amended at any time by the
written agreement of the Corporation and the Optionee.
19.4 Syntax. Throughout this Agreement, whenever the context so
requires, the singular shall include the plural, and the masculine gender shall
include the feminine and neuter genders. The headings and captions of the
various Sections hereof are for convenience only and they shall not limit,
expand or otherwise affect the construction or interpretation of this Agreement.
19.5 Choice of Law. The parties hereby agree that this Agreement
has been executed and delivered in the State of Texas and shall be construed,
enforced and governed by the laws thereof. This Agreement is in all respects
intended by each party hereto to be deemed and construed to have been jointly
prepared by the parties and the parties hereby expressly agree that any
uncertainty or ambiguity existing herein shall not be interpreted against either
of them.
19.6 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
19.7 Notices. Any notices to be given hereunder by either party
to the other may be effected either by personal delivery in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at addresses appearing in the
introductory paragraph of this Agreement, but each party may change its address
by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed communicated as of actual receipt; mailed notices
shall be deemed communicated as of five (5) days after mailing.
19.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof,
this Agreement supersedes all prior and
<PAGE> 6
STOCK OPTION AGREEMENT
PAGE 6
- ----------------------
contemporaneous agreements and understandings of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth or referred to
herein. No supplement, modification or waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any of the provisions of this Agreement shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
19.9 Attorneys' Fees. In the event that any party to this
Agreement institutes any action or proceeding, including, but not limited to,
litigation or arbitration, to preserve, to protect or to enforce any right or
benefit created by or granted under this Agreement, the prevailing party in each
respective such action or proceeding shall be entitled, in addition to any and
all other relief granted by a court or other tribunal or body, as may be
appropriate, to an award in such action or proceeding of that sum of money which
represents the attorneys' fees reasonably incurred by the prevailing party
therein in filing or otherwise instituting and in prosecuting or otherwise
pursuing or defending such action or proceeding, and, additionally, the
attorneys' fees reasonably incurred by such prevailing party in negotiating any
and all matters underlying such action or proceeding and in preparation for
instituting or defending such action or proceeding.
19.10 Mediation. In the event of any controversy or claim arising
out of or related to this Agreement, or the breach thereof, if such controversy
or claim cannot be settled through negotiations between the parties, the parties
agree first to try in good faith to settle the dispute by mediation administered
by the American Arbitration Association, under its Commercial Mediation Rules,
subject to the laws of the state of Texas, before resorting to arbitration.
19.11 Arbitration. In the event of any controversy or claim
arising out of or related to this Agreement, or the breach thereof, which has
not been settled through negotiation or the mediation procedures provided for in
the previous paragraph, such controversy or claim shall be settled by binding
arbitration administered by the American Arbitration Association (AAA) under its
Commercial Arbitration Rules, subject to the laws of the state of Texas, and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
"CORPORATION"
AMERICAN INDEPENDENT NETWORK, INC.,
a Delaware Corporation
Dated: October 2, 1995
- ------------------------------------
<PAGE> 7
STOCK OPTION AGREEMENT
PAGE 7
- ----------------------
By: Dr. Don Shelton
Title: Chief Executive Officer
"OPTIONEE"
Dated: October 2, 1995
- ------------------------------------
Randy Moseley
<PAGE> 1
EXHIBIT 6.6
LICENSE AGREEMENT
This Agreement is made this _____ day of _____________, 1997 between
AMERICAN INDEPENDENT NETWORK, INC. ("AMERICAN INDEPENDENT"), a Delaware
Corporation, and __________________________, ("LICENSEE"). LICENSEE owns and
operates a television station or cable operation (hereinafter referred to as
"Station") pursuant to valid authority issued by the Federal Communications
Commission. Said Station is identified as _______________ and operates in the
City of _______________________, _____________________, with a viewing area
of ________________________, ______________________ and surrounding areas.
AMERICAN INDEPENDENT and LICENSEE, in consideration of the mutual
covenants and stipulations herein, agree as follows:
1. LICENSEE shall be given a limited license to receive at its option
via satellite transmission, exhibit, and rebroadcast video programming as is
more fully set out in attached Schedule A which is incorporated herein and made
a part of this Agreement. This license is limited to the Station and viewing
area set out above. AMERICAN INDEPENDENT NETWORK expressly reserves and retains
all other rights.
2. LICENSEE shall be permitted to rebroadcast any portion of
programming received from AMERICAN INDEPENDENT up to a maximum of two time(s)
within 24 hours of receiving the satellite transmission. No further
rebroadcasts will be permitted without the express written permission of
AMERICAN INDEPENDENT. The programming must be rebroadcast in its entirety by
the LICENSEE at least one time between the hours of 7:00 a.m. and 1:00 a.m.
3. LICENSEE shall be permitted to insert local commercials or other
announcements into the programming according to the following terms:
A. LICENSEE shall be allowed two minutes at or around the
eleven thirty second mark of each hour and two minutes at or around the
forty-one minute ten second mark of each hour for news, public service
announcements or other programming treating the problem, interest and needs of
its service area, or commercial announcements. In the event LICENSEE desires not
to use any portion of its retained time, AMERICAN INDEPENDENT will supply
programming for these times.
B. LICENSEE will also be allowed two ten (10) second station
breaks; one at the top of the hour and one at the half hour.
4. LICENSEE will not preempt, cover or in any way disrupt national
advertisements contained in the satellite transmission from AMERICAN
INDEPENDENT, except for the times allowed in Number 3A above. If any program or
portion of a program is broadcast by LICENSEE, all national advertisements
contained in the program must be broadcast in their entirety.
5. LICENSEE agrees to furnish AMERICAN INDEPENDENT weekly affidavits
of its broadcast logs showing the number of hours per day that AMERICAN
INDEPENDENT's programming was broadcast on LICENSEE's Station and/or Cable
System. These affidavits must be received by AMERICAN INDEPENDENT within one
week of the Monday preceding the initial week's broadcast. LICENSEE
understands failure to return affidavits could result in cancellation of this
agreement.
1
<PAGE> 2
6. LICENSEE agrees to obtain and maintain such licenses, permits and
authorizations as may be required to operate the station by the Federal
Communications Commission and to comply with all laws and regulations imposed
by federal, state, or local authorities relating to the operation of the
Station. LICENSEE agrees that if it is a low-power television station as
defined by the FCC, AMERICAN INDEPENDENT shall have the right to cancel this
Agreement by giving LICENSEE thirty (30) days notice should AMERICAN
INDEPENDENT enter into a License Agreement with a full-power television
station, as defined by the FCC, in LICENSEE'S viewing area. LICENSEE shall also
have the right to cancel this Agreement by giving AMERICAN INDEPENDENT thirty
(30) days notice should they decide to affiliate with another network.
7. All notices given or required to be given shall be in writing and
sent by registered or certified mail, postage prepaid to the parties at their
respective addresses given herein or at such other address as may be
subsequently be given in writing by any party.
8. AMERICAN INDEPENDENT shall not incur any liability hereunder,
because of the failure to properly transmit any programming due to actions or
rules by the FCC, or any other governmental authority, act of God, labor
disputes, failures of facilities, or other causes beyond the control of
AMERICAN INDEPENDENT. In the event of the existence of the aforesaid events or
conditions, the terms of this agreement shall be extended and the dates of
payments postponed for an equivalent period of time in each case.
9. AMERICAN INDEPENDENT warrants and represents that the performing
rights in the music, if any, in said programming is either (a) controlled by
BMI, ASCAP, SESAC; or (b) in the public domain; or (c) controlled by AMERICAN
INDEPENDENT to the extent required for the purpose of this license.
10. LICENSEE represents that it has obtained the necessary licenses
for the performance of music in all of its programming within category (a)
above.
11. LICENSEE shall not assign or transfer its rights and obligations
under this Agreement without the prior written consent of AMERICAN INDEPENDENT.
In the event that AMERICAN INDEPENDENT refuses to give consent, AMERICAN
INDEPENDENT shall not be obliged to give a reason for such refusal.
12. This Agreement shall be binding upon the parties hereto, their
heirs, legatees, representatives, successors and assigns.
13. Nothing contained in this Agreement shall be deemed to create, and
the parties do not intend to create, any relationship of partners or joint
ventures as between LICENSEE and AMERICAN INDEPENDENT, and neither party is
authorized to or shall act toward third parties, or the public, in a manner
which would indicate any such relationship with the other. Neither AMERICAN
INDEPENDENT nor LICENSEE shall be or hold itself out as the agent of the other
party under the Agreement.
14. AMERICAN INDEPENDENT represents and warrants to LICENSEE that: (i)
it is a corporation duly organized and validly existing under the laws of the
State of Delaware; (ii) it has the power and authority to enter into this
Agreement and to perform all of its obligations hereunder; (iii) the person
executing this Agreement on behalf of AMERICAN INDEPENDENT has express
authority to do so and in so doing binds AMERICAN INDEPENDENT hereto.
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15. LICENSEE represents and warrants to AMERICAN INDEPENDENT that (i)
it is a corporation; (ii) it has the power and authority to enter into this
Agreement and to perform all of its obligations hereunder; and (iii) the person
executing this Agreement on behalf of LICENSEE has express authority to do so
and in so doing binds LICENSEE hereto.
16. LICENSEE agrees that final payment of eight-hundred dollars
($800.00) is due upon the execution of this agreement. Payment shall be
received within five (5) working days of the date of this agreement or the IRD
is to be returned in the condition it was received.
17. This Agreement contains the entire understanding and Agreement of
the parties and may not be changed except by written agreement.
18. This Agreement shall be governed by the laws of the state of Texas
and any action at law, suit in equity or judicial proceeding relating to this
Agreement shall be instituted in the Courts of the County of Tarrant, State of
Texas.
19. The initial limited license granted herein shall commence on the
_______ day of __________, 1997, and will expire on the _____ day of _________,
1998, but shall be renewed automatically on a year to year basis unless
AMERICAN INDEPENDENT or LICENSEE gives notice of intent to cancel at least 30
days prior to the end of any license year.
IN WITNESS WHEREOF, the parties have executed this Agreement as the
date first written above.
AMERICAN INDEPENDENT NETWORK, INC. ----------------------------------
(LICENSEE)
By: _______________________________ By: ______________________________
Don Shelton ______________________________
CEO ______________________________
6125 Airport Freeway, Suite 200 ______________________________
Haltom City, TX 76117 ______________________________
Phone: (817) 222-1234 Phone: ___________________________
Fax: (817) 222-9809 Fax: ___________________________
DMA: _____________________________
Households: ______________________
Call Letters: ____________________
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EXHIBIT 6.7
TRANSPONDER CHANNEL LICENSING AGREEMENT
Preamble
This Agreement is made as of the 27th day of June, 1996, by and between
Miralite Communications, a California Corporation, 4041 MacArthur Blvd., Ste.
490, Newport Beach, CA 92660, and American Independent Network, 6125 Airport
Freeway 200, Fort Worth, 76117 ("Licensee").
WHEREAS, pursuant to an agreement with GE Americom (the "GE Americom
Agreement"), Miralite Communications is authorized to use, subject to
availability and certain specified conditions, Transponder 13 on GE Spacenet 3,
together with certain backup on-board components, and
WHEREAS, there is excess capacity on certain channels of Transponder 13
and Miralite Communications desires to license other entities to use excess
capacity on such channels;
WHEREAS, Licensee desires to acquire a license to use 24 MHz of such
excess capacity;
NOW, THEREFORE, the parties hereby agree to the following:
Terms and Conditions
1. Term.
a. Initial Term. The term of service to be provided hereunder, unless
this Agreement is terminated or extended in accordance with its provisions,
shall run from July 15, 1996 (the "Channel Start Date") through July 31, 1999
(the "Channel End Date") (collectively, the "Term").
b. Option to Renew. Upon expiration of the Term of this Agreement and
subject to the termination provisions of Paragraph 19 hereof, Licensee will
have the option of continuing its license to use the Channel, on a prorated
month-to-month basis, pursuant to the terms and conditions of this Agreement.
c. Cancellation of License for Years Two and Three. Licensee shall
have the right to cancel the license provided under this agreement for years
two and three (July 15, 1997 through July 31, 1999), provided that written
notice is tendered, as per Paragraph 28, no later than sixty (60) days prior to
July 15, 1997. Upon termination of this agreement under this provision,
Licensee shall forfeit all Prepaid License Fees as per Paragraph 7. No such
right to cancel this license is provided in year one, two or three of this
agreement, except in the case where affiliates are not able to pick up a
quality grade signal.
2. Miralite Communication's Transponder Rights. During the Term, Miralite
Communications has rights to transponder capacity, specifically Transponder 13
on Spacenet 3, through the end of life of Spacenet 3, projected to be
February, 2000.
3. Licensee's Channels. Consistent with Miralite Communications' primary
use of Transponder 13 capacity for several services, including MCPC and SCPC
transmissions, Miralite Communications agrees that Licensee may use the
channel(s) on Transponder 13 as specified in Attachment I (sometimes
collectively referred to as the
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"Channel") for transmissions consistent with the GE Americom Agreement, as set
forth in Attachment IV.
4. Transponder Usage.
a. Licensee acknowledges that the exercise of its rights under this
Agreement is subject to Miralite Communications' rights to Transponder 13
under the GE Americom Agreement and that the Channel to be provided to
Licensee will be a channel or channels on Transponder 13 available to Miralite
Communications at the time service to Licensee is being provided. In the event
that Miralite Communications's rights to transponder capacity (including the
channel or any other capacity) on Transponder 13 shall be limited or shall
cease, at any time, this Agreement may be terminated without any liability to
Miralite Communications, as of the date of cessation.
b. In the event that Miralite Communications must utilize the
transponder capacity of Spare Components available to it pursuant to the GE
Americom Agreement, or for any other reason, Miralite Communications may in
good faith, in its sole discretion, reassign Licensee to a channel of
equivalent power and bandwidth other than the Channel. Miralite Communications
will promptly notify Licensee of any anticipated change in the channel
frequency assignment of the Channel. Except as expressly provided by this
Agreement, this Agreement will continue in effect regardless of any change in
channel(s) being used to provide service to Licensee. Any substitute channel
provided shall be subject to the same terms and conditions as the Channel under
this Agreement.
5. Transmission/Reception Facilities and Service Fees. This Agreement is
for the provision of the Channel only and does not provide for the use of or
access to satellite transmit and/or receive ground terminal facilities or any
services by Miralite Communications. Miralite Communications reserves the
right to charge Licensee reasonable fees for any technical consultation,
scheduling, or other support services provided Licensee or Licensee's
sublicensees using the Channel.
6. License Fees. Licensee shall pay Miralite Communications, without
further notice or demand, as follows:
a. For the Channel, the monthly license payment specified on
Attachment I hereto (the "Monthly License Fee").
b. Time of Payment. The Monthly License Fee is payable without demand
or invoice from Miralite Communications in advance on the first day of each
calendar month during the portion of the Term hereof beginning on the Channel
Start Date and ending on the Channel End Date. In the event that the Channel
Start Date and/or Channel End Date is other than the first and last days of
the calendar month, the monthly installments of rent for the first and last
months of the Channel service period shall be prorated on the basis of the
number of days within such month falling within the Channel service provided.
c. Method and Place of Payment. All payments by Licensee shall be made
by company, cashiers, or certified check payable to "Miralite Communications,"
and sent to the following address:
Miralite Communications
4041 MacArthur Blvd., Ste. 490
Newport Beach, CA 92660
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<PAGE> 3
d. Late Fees. For any amount not paid within thirty (30) days of its due
date, Licensee shall be assessed a late payment penalty of 1.5% of the amount
of the overdue payment per month calculated from the date payment was due until
the date it is received by Miralite Communications. This penalty is in addition
to and does not waive any remedies Miralite Communications may have under other
provisions of this Agreement.
7. Prepaid License Fees. Within fifteen days after the execution of this
Agreement or prior to the Channel Start Date, whichever occurs earlier,
Licensee shall pay to Miralite Communications, in cash or cash equivalent, a
sum equal to one Monthly License Fee, based on year one monthly rental fees,
which shall be held as a security deposit during the remainder of the Term. If
this Agreement is terminated by Licensee, as set forth in Paragraph 1(c), or
due to an Event of Licensee Default, as set forth in Paragraph 21 herein,
Miralite Communications shall be entitled to retain as liquidated damages only
(and not as a penalty), the amount of this security deposit. A total of $20,000
License Fee needs to be prepaid by June 27, 1996.
8. Noninterference by Licensee. Licensee's operations on and transmissions
to Transponder 13 (and those of its sublicensees) shall not interfere with the
use of any other Channel of Transponder 13 or any other transponder on
Spacenet 3. Licensee shall not utilize (or permit or allow any of its
sublicensees to utilize) the Transponder in a manner which will or may violate
the requirements of the Operations Procedures set forth in Attachment II.
9. Noninterference by Miralite Communications and Other Licensees.
Miralite Communications will operates all channels it controls on Transponder
13 to provide service in a manner that will not interfere with Licensee's use
of the Channel and will require any other parties with whom Miralite
Communications contracts for the licensing of any such channels to so operate.
10. Law. Licensee shall comply with all applicable FCC regulations,
federal statutes and laws, and any other law or regulation, including any
international or common law, affecting the provision and use of the Channel.
Licensee warrants that the Channel shall not be used on a common carrier basis.
Licensee shall apply promptly for any necessary governmental authorizations and
warrants that it shall maintain all appropriate authorizations, licenses, and
permits for the use of the Channel, including licenses for earth stations.
11. Channel Operations. Licensee shall operate and use the Channel
pursuant to the terms of this Agreement and its Attachments, as such
Attachments may be modified from time to time by Miralite Communications on 30
days' written notice to Licensee. Specifically (without limitation):
a. Licensee shall operate on the frequency and within the transmission
parameters specified in "Specific Frequency Assignments and Transmission
Parameters of the Channel," Attachment I;
b. Licensee shall operate within all the technical and operational
requirements specified in "NETC Minimum Technical and Operational Requirements
for Uplinks for Accessing NEB*SAT Transponder, Attachment II" and the other GE
Americom Operational Procedures incorporated by reference in Attachment II;
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c. Licensee shall submit to Miralite Communications an "Earth Station Data
Sheet." Attachment III, for each uplink transmitting to the Channel, and
Licensee shall update that information upon any change.
d. Licensee shall comply with all provisions material to Miralite
Communications' compliance with the GE Americom Agreement as excerpted in
Attachment IV.
12. RESOLVING INTERFERENCE. Licensee shall cooperate in good faith with
and aid Miralite Communications in curing any failure of, interference with, or
technical problem concerning the Channel or the transponder on which the
Channel is located Specifically (without limitation):
a. Licensee shall correct any problems with the Channel which Miralite
Communications, in its sole discretion, determines are technical violations by
Licensee of this Agreement or the Attachments hereto. Licensee shall make
corrections within the time period specified by Miralite Communications in its
notice of violation to Licensee; and
b. If directed by Miralite Communications, in Miralite Communications'
sole discretion, Licensee shall immediately cease or modify transmissions to
Transponder 13 in order to remedy interference.
13. Sublicensing.
A. During the Term, Licensee shall not sublicense all or any portion of
the Channel to, or otherwise provide services on, the Channel (any such
provision of services on the Channel for others to be regarded as
"sublicensing" for all purposes under this Agreement) for others without the
prior written consent of Miralite Communications. Upon the prior written
consent of Miralite Communications, Licensee may sublicense the Channel or a
portion thereof; provided however, any such sublicense shall be subject to all
terms and conditions contained in this Agreement.
b. Whether or not Licensee sublicenses all or any portion of the Channel to
any other entity, Licensee shall not delegate its duties under this Agreement
and shall remain fully and primarily liable for all of its and its sublicensee's
representations, warranties and duties under this Agreement including timely
payment to Miralite Communications for use of the Channel notwithstanding the
failure of any sublicensee of Licensee to pay Licensee for its use of the
Channel or any portion thereof.
c. Licensee warrants that it, and not Miralite Communications, shall be
liable for any damage, loss or claim arising in connection with any
sublicensee's use of the Channel or any portion thereof to the full extent set
forth in the indemnification provision of Paragraph 15 of this Agreement.
d. Licensee shall ensure that its sublicensee comply with all provisions
material to the GE Americom Agreement, as set forth in Attachment IV.
14. Assignment.
a. Upon prior written notice to Licensee, Miralite Communications may
assign any or all of its rights and/or obligations under this Agreement to any
other entity.
b. Licensee may assign any or all of its obligations under this Agreement
only with the
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prior written consent of Miralite Communications; provided, however, that
Licensee shall remain fully and primarily liable for the payment of all amounts
and fees payable to Miralite Communications under this Agreement
notwithstanding such assignment. Any purported transfer or assignment made
contrary to the terms hereof hall be null and void.
15. Indemnification. Licensee shall indemnify and hold Miralite
Communications and its officers, directors, and employees (and the owner and/or
operator of the satellite on which the applicable transponder is located),
harmless from and against any liability, damage, loss, expense, or claim
(including collection costs and legal fees and expenses) in connection with all
legal or other formal or informal proceedings, instituted by any private third
party or any governmental authority, and arising out of or related to
Licensee's, and/or its sublicensee's, use of the Channel, or its failure to use
the Channel, or Licensee's and/or its sublicensee's breach of any of its
representations, warranties, responsibilities or obligations under this
Agreement, including liability, damage, loss, expense or claims from copyright,
trademark and infringement of patents arising from the use of the facilities
furnished by Miralite Communications in connection with, Licensee's and/or its
sublicensee's equipment or from Licensee's and/or its sublicensee's use in a
manner not contemplated by Miralite Communications. Licensee shall satisfy all
judgments, fines, penalties, costs or other award which may be incurred by or
rendered against Miralite Communications as a result thereof, as and to the
extent permitted by law. Miralite Communications has no responsibility for the
content of any transmission of Licensee, and/or its sublicensee, and, exercises
no control over Licensee's or its sublicensee's, transmissions on the Channel
other than as prohibited by the terms of this Agreement.
16. Programming Restriction and Legal Qualification. Licensee may not use the
Channels to transmit materials deemed likely to be deemed embarrassing in any
direct way to Miralite Communications or the State of Nebraska, including
transmission of illegal, indecent or obscene materials. Licensee and its
principals represent that they have not been convicted for the criminal
violation of, and have not been found by the FCC or other federal, state or
local government authority, to have violated any federal, state or local law or
regulation, as applicable, concerning illegal, indecent or obscene program
material or the transmission thereof (the "Indecency and Obscenity Laws") and
Licensee is not aware of any pending investigation involving Licensee's program
material for the violation of any Indecency and Obscenity Laws. Licensee
represents that it shall acquire, or require its sublicensee's to acquire, all
necessary rights to transmit, receive and use all copyrighted and trademarked
content transmitted on the Channel.
17. Taxes. Licensee shall be solely responsible for all regular or special
assignments, fees, costs, expenses and taxes accruing during the Term in
connection with Licensee's and/or its sublicensee's individual use of the
Channel.
18. Legal and FCC Compliance. Licensee (and its sublicensee, if any)
represents that it is in compliance in all material respects with all applicable
laws, rules or regulations of the United States of America and any other
country receiving international transmissions from the Channel and of any
state, county, municipality or other political subdivision or any agency of any
of the foregoing having jurisdiction over Licensee or the Channel, including
the Federal Communications Commission, except for such noncompliance which
would not have a material adverse effect upon Miralite Communications' ability
to perform its obligations under this Agreement.
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19. Termination
a. Miralite Communications may terminate this Agreement without liability
by giving Licensee written notice in the event of any of the following
circumstances:
(i) Miralite Communications's authority to use the Channel,
to license Licensee to use excess capacity, or to manage the use of such
capacity, terminates at any time during the Term.
(ii) Transponder 13 on which the Channel is being provided
fails or the owner or operator of the satellite determines that the transponder
may not be used by Miralite Communications and Miralite Communications, in its
sole discretion, does not reassign Licensee to an equivalent channel.
(iii) The occurrence of an Event of Licensee Default.
b. Licensee may terminate this Agreement without further liability after
the date of termination by giving Miralite Communications written notice in the
event of any change in Licensee's frequency assignment that is not in
accordance with the provision of Section 4(b) hereof; provided, however, that
Licensee must notify Miralite Communications of such termination within fifteen
(15) days of the date of Miralite Communications's notice to Licensee of the
change in frequency assignment.
20. Expiration. At the expiration of the Term or earlier termination of
this Agreement, Licensee shall surrender immediately to Miralite Communications
the Channel provided hereunder.
21. Licensee Default. The following are Events of Licensee Default under
this Agreement:
a. Licensee fails to make payment in full of any amount due under this
Agreement within ten (10) days of the receipt of notice from Miralite
Communications of nonpayment.
b. Licensee becomes insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.
c. Licensee files a voluntary petition for relief under the Bankruptcy
Code or under any law relating to bankruptcy, insolvency, reorganization or
liquidation or an order for relief shall be entered against Licensee in any
involuntary case under the Bankruptcy Code or any law relating to bankruptcy,
insolvency, reorganization or liquidation.
d. A receiver or trustee is appointed for all or substantially all of the
assets of Licensee.
e. Licensee attempts to pledge, hypothecate, encumber or create any lien
with respect to the capacity provided herein.
f. The Federal Communications Commission determines that Licensee's or
sublicensee's use of the Channel is unlawful.
g. Licensee fails to comply with any term, condition, or covenant of this
Agreement and except for Paragraph 21(a) through (f), as to which notice and
additional time to cure are not provided, does not cure such failure with ten
(10) days after Miralite Communications gives written notice thereof to
Licensee.
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22. MIRALITE COMMUNICATIONS' REMEDIES. Upon the occurrence of any Event of
Licensee Default, Miralite Communications shall have the option to pursue any
one or more of the following remedies without notice or demand:
a. Miralite Communications may suspend service or terminate this
Agreement, in which event Licensee shall immediately surrender the Channel to
Miralite Communications; if Licensee fails to do so, Miralite Communications
may take steps to secure control over the Channel.
b. Licensee shall reimburse Miralite Communications for expenses and
losses due to Licensee's Default. Miralite Communications shall not be liable
to Licensee for any damages resulting to Licensee or any sublicensee of
Licensee from any action Miralite Communications takes to enforce its rights
under this Agreement.
c. Miralite Communications' pursuit of any remedy does not constitute a
waiver of any right to receive payment from Licensee under this Agreement
(including interest and penalties) or of claims for any damages occurring to
Miralite Communications by reason of the violation by Licensee of its
sublicensee of any terms, conditions or covenants contained in this Agreement.
d. Miralite Communications may accelerate the balance of sums payable
hereunder with all such sums due and payable forthwith upon such notice of
acceleration and demand for payment.
e. Miralite Communications may pursue any other remedy specified in this
Agreement or any other remedy available at law or in equity.
23. MIRALITE COMMUNICATIONS DEFAULT. The following is an Event of Miralite
Communications Default under this Agreement.
Miralite Communications fails to make available the Channel in
compliance with the provisions of Paragraph 3 (unless the failure is pursuant
to the provisions of Paragraphs 4, 8, 19, or 32) and does not correct
such failure within ten (10) days after Miralite Communications receives written
notice therefrom from Licensee.
24. LICENSEE'S REMEDIES. Upon the occurrence of any Event of Miralite
Communications Default, Licensee shall have the option to pursue any one or
more of the following remedies without notice or demand:
a. Licensee may obtain an allowance for interruption of service of a
prorated reduction in the monthly charge, but only for continuous interruptions
of twenty-four (24) hours or more.
b. In the event an Event of Miralite Communications Default continues for
thirty (30) days or longer, Licensee may terminate this Agreement upon fifteen
(15) days prior written notice to Miralite Communications, in such event,
Licensee shall be obligated to pay Miralite Communications fees and other
expenses (including interest and penalties) incurred under this Agreement to
the date of the occurrence of the Event of Miralite Communications Default, net
of any allowance specified under this subparagraph 24(a).
c. Except for the provisions of Paragraph 26, the remedies specified in
this Paragraph 24 shall be the sole remedies of Licensee.
25. THE LIABILITY OF MIRALITE COMMUNICATIONS ARISING OUT OF THE FURNISHING
OF THE CHANNEL, INCLUDING BUT NOT LIMITED TO MISTAKES, OMISSIONS,
INTERRUPTIONS, DELAYS, ERRORS OR OTHER DEFECTS OR REPRESENTATIONS OR USE
THEREOF, OR ARISING OUT OF FAILURE TO FURNISH THE
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CHANNEL, AND WHETHER CAUSED BY ACTS OF COMMISSION OR OMISSION SHALL BE LIMITED
TO THE REMEDIES SPECIFIED IN PARAGRAPH 24. IN NO EVENT SHALL OF MIRALITE
COMMUNICATIONS BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL SPECIAL OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, INCOME OR
BUSINESS OPPORTUNITIES, REGARDLESS OF THE NATURE OF THE CLAIM OR THE FORM OF
ACTION, ARISING FROM THE LICENSEE'S OR ITS SUBLICENSEE'S USE OF THE SERVICE,
WHETHER OR NOT OF MIRALITE COMMUNICATIONS SHALL HAVE HAD ANY KNOWLEDGE, ACTUAL
OR CONSTRUCTIVE, THAT SUCH DAMAGES MIGHT BE INCURRED.
26. Attorney's Fees. If, on account of the breach or default by Licensee or
Miralite Communications of its obligations under the terms, conditions, and
covenants of this Agreement, it shall become necessary for either party hereto
to employ an attorney in an action or to defend any of its rights or remedies
hereunder, the prevailing party shall be entitled to reasonable legal fees and
expenses incurred in connection with such action.
27. Relationship. No party shall be deemed an agent, employee, fiduciary or
contractor of the other as a result of this Agreement or any undertaking
assumed hereunder, and nothing herein shall be deemed or construed by the
parties hereto or other third party to create any rights, obligations or
interest in third parties, except as specified herein.
28. Notice. Except as otherwise provided in this Agreement, any notice,
approval, consent, waiver or other communication required or permitted to be
given or to be served upon any person in connection with this Agreement shall
be in writing given or served by a party or its counsel. Such notice shall be
personally served, sent by telegram, FAX, or sent prepaid by registered or
certified mail with return receipt requested and shall be deemed given, (i) if
personally served or sent by telegram, when delivered to the person to
whom such notice is addressed, (ii) if given by telegram, FAX, when sent, or
(iii) if given by mail, five business days following deposit in the United
States mail. Any notice given by telegram or FAX shall be confirmed in writing
within forty-eight hours after sent. Such notices shall be addressed to the
party to whom such notice is to be given at the party's address set forth below
or as such party shall otherwise direct.
If to Miralite Communications: If to Licensee:
Miralite Communications
Tim Anderson
4041 MacArthur Blvd., Ste 490
Newport Beach, CA 92660
Phone: 714-474-1900 Phone:
FAX: 714-474-1885 FAX:
Either party may designate a new address or addresses of five (5) day's
notice to the other.
29. Waiver. No provision of this Agreement may be waived except in writing by
the party who benefits from the provision; moreover, the parties hereto
understand and agree that the waiver by any party of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of that provision by the same party, or of any other
provision or condition of this Agreement.
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30. Severability. If any covenant, term, provision, agreement or obligation
contained in this Agreement, or the application thereof to any person or
circumstance shall be determined to be invalid or unenforceable by an official
body, the remainder of this Agreement shall remain in force and effect.
31. Insurance. Licensee represents that it has in effect general liability
insurance, including error and omissions insurance, with a minimum limitation
of liability of $1,000,000 and agrees to maintain such insurance during the
Term of this Agreement. Upon Miralite Communication's request, Licensee shall
provide Miralite Communications with a certificate of insurance demonstrating
such insurance coverage.
32. Force Majeure. Neither Miralite Communications nor Licensee shall be
required to perform any term, condition, or covenant in this Agreement so long
as such performance is delayed or prevented by force majeure, which shall mean
acts of God, transponder or other satellite failure (except as set forth in
Paragraph 4(b)), strikes, lockouts, material or labor restrictions by any
governmental authority, civil riots and any other cause not reasonably within
the control of Miralite Communications or Licensee or which either is unable,
wholly or in part, to prevent or overcome.
33. Successors and Assigns. The terms, conditions, and covenants contained in
this Agreement shall apply to, inure to the benefit of, and are binding upon
the parties hereto and their respective successors and assigns.
34. Integration. This Agreement, along with Attachments I, II, III and IV
hereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede and replace any previous documents,
correspondence, conversations, or written or oral understanding related to this
Agreement and may be changed only in a writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.
35. Applicable Law. This Agreement shall be governed by and construed under
the internal laws of Nebraska (but not the laws pertaining to choice or
conflict of laws) and the laws of the United States whether or not the work is
performed within or without these jurisdictions. All instruments executed
pursuant to this Agreement shall be governed by the internal laws of California
etc. and the United States, regardless of the place of execution or
performance. Licensee agrees that any action concerning this Agreement shall be
brought only in the following courts: U.S. District Court for the District of
California which is located in Sacramento, California, and the Orange County
District Court, State of Nebraska.
36. MIRALITE COMMUNICATIONS MAKES NO REPRESENTATION OR WARRANTY, EXPRESSED OR
IMPLIED, AS TO THE MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR USE OF THE
CHANNEL.
37. Binding. This Agreement is not considered final and binding until it has
been signed by all the parties below.
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38. Survival. Any provisions which by their terms survive the expiration or
earlier termination of this Agreement shall bind the parties, and their legal
representatives, heirs, and assigns as set forth herein.
IN WITNESS WHEREOF, each of the parties hereto, by an authorized
person, has caused this Agreement to be duly executed, sealed and delivered in
its name and on its behalf, as of the day and year first written above.
Miralite Communications Licensee
By: /s/ TIM ANDERSON By: /s/ DON SHELTON
------------------------- -------------------------
Tim Anderson
President Name: Don Shelton
-----------------------
Title: CEO
-----------------------
Date: 6/25/96 Date: 6/25/96
----------------------- -----------------------
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ATTACHMENT I
Transponder Channel Licensing Agreement between Miralite Communications, and
American Independent Network (Licensee), dated June 27, 1996.
SPECIFIC FREQUENCY ASSIGNMENTS AND TRANSMISSION
CHARACTERISTICS OF THE CHANNEL(S):
Satellite: Spacenet 3
Transponder: 13
Downlink Center Frequency (Mhz): 3740 MHz
*Nominal Downlink EIRP (dBW): 29.1 dBW
Channel Bandwidth (Khz): 24 MHz
Transmission Parameters: OQPSK
Channel Start Date: July 15, 1996
Channel End Date: July 31, 1999
Year One (July 15, 1996 through
July 31, 1997) Monthly Rental Payment: $62,500
Year Two (August 1, 1997 through
July 31, 1998) Monthly Rental Payment: $62,500
Year Three (August 1, 1998 through
July 31, 1999) Monthly Rental Payment: $62,500
Prepaid License Fees: $62,500
*Downlink EIRP as measured in Lincoln, Nebraska by Miralite Communications.
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ATTACHMENT II
NEBRASKA EDUCATIONAL TELECOMMUNICATIONS COMMISSION
SATELLITE SYSTEM
MINIMUM TECHNICAL AND OPERATIONAL REQUIREMENTS
FOR UPLINKS ACCESSING NETC TRANSPONDER
The Nebraska Educational Telecommunications Commission (NETC) manages the
NEB*SAT Interconnection System, and is contractually obligated to oversee
activity on the NEB*SAT transponder.
The NEB*SAT System Technical Center (STC) is responsible for monitoring the
technical operation of users of the Transponder. The STC is staffed
approximately 20 hours a day, seven days a week. The STC telephone number is
(402)472-2413.
STC works closely with the technical staff of the Satellite Operator to ensure
that all users of the Transponder meet minimum technical standards and operate
on a mutual non-interference basis. STC has the responsibility and the
authority to disallow or terminate any transmission which fails to meet the
technical requirements and specifications listed below.
IF STC DIRECTS THAT TRANSMISSIONS TO A TRANSPONDER CEASE OR BE MODIFIED, IT IS
MANDATORY THAT THE OPERATOR RESPONSIBLE FOR SIGNAL TRANSMISSIONS TO THE
SATELLITE HAVE THE TECHNICAL CAPABILITY EITHER DIRECTLY OR BY REMOTE CONTROL,
AND THE ABSOLUTE AUTHORITY WITHOUT RECOURSE TO HIGHER AUTHORITY, TO IMMEDIATELY
CARRY OUT SUCH A DIRECTION.
TECHNICAL REQUIREMENTS AND SPECIFICATIONS
The uplink facility must be licensed by, and operate in compliance with all
applicable sections of Part 25 of the Rules and Regulations of the Federal
Communications Commission. Transmit antennas must comply with the Antenna
Performance Standards specified in Part 25.209 of the FCC Rules and
Regulations. Each uplink facility must complete an NETC Earth Station Data
Sheet prior to any transmission to the transponder. Downlink EIRP will be
measured in Lincoln, Nebraska.
Each carrier transmitted to the Transponders must not exceed the following
limits:
- Downlink EIRP shall not exceed the contracted power level [plus or
minus] 25 kHx uplink frequency error
- -60 dBc incidental phase modulation of program carrier
- Spurious emissions outside the contracted channel bandwidth must be
within the limitations of Part 25.202 of the FDCC's Rules &
Regulations.
- Cross-polarization isolation shall be [greater than or equal to]
30 dB.
- When multiple carriers are simultaneously transmitted, third or
higher order intermodulation products must not exceed 1.5 dBw
downlink EIRP at any frequency inside or outside the transponder.
OPERATING PROCEDURES
1. TELEPHONE COMMUNICATIONS
<PAGE> 13
The Licensee must provide STC with the telephone number where the
person responsible for signal transmission can be reached at all times
during transmission to the Transponder. This telephone line must
remain free of call at all times while the uplink is radiating to the
satellite. This requirement is not met if the phone goes unanswered or
is busy, or is located too far away for the uplink operator to effect
instant changes at STC's direction.
Licensee MUST NOT contact the Satellite Operator directly; all
communications with the Satellite Operator relating to operations on
the Transponder must be through STC.
2. ACCESS TO THE TRANSPONDER
A. Uplink Access Tests
Each uplink facility must complete an Uplink Access Test (UAT):
- prior to initial access to the transponder;
- whenever the antenna used during the most recent UAT has been
repointed or moved; and
- the Satellite Operator or STC has reason to believe that the
facility may be causing interference to other users.
Uplink Access Tests will be conducted by STC using the procedures of,
and in cooperation with, the technical staff of the Satellite Operator.
These tests are arranged by the STC staff on a schedule basis. It is
recommended that such testing occur at least 24 hours in advance of the
scheduled program transmission to provide the uplink operator with
adequate time to correct any problems discovered during the test period.
The uplink operator is responsible for contacting STC to arrange the
scheduling of such tests with the Satellite Operator.
B. Beginning Transmission to the Transponders
Particular care must be exercised by the uplink operator at the
commencement of any transmission to the satellite. Uplink radiation
should begin at a minimum power level, and be gradually increased until
optimum performance is achieved within the contract limits.
C. Routine Operations
After an uplink has successfully completed a UAT and has established
nominal operating levels, it is not necessary to contact STC for
routine operations. The Licensee is solely responsible for proper
operation of the earth uplink terminal. If the transmitting chain is
changed in any way that might affect the uplink's ability to operate
within the specified operating parameters, STC should be contacted
and the uplink's performance re-evaluated. The STC will assist Licensees
in the determination of proper parameters upon request.
D. Interference Resolution
<PAGE> 14
If a Licensee feels that its signal is being interfered with by another
user, the complaint should be referred to STC for resolution. STC will
work with the Licensee and all other necessary parties including the
Satellite Operator, and if necessary the FCC to resolve the
interference.
If the Licensee's transmission is determined to be the cause of, or is
contributing to an anomalous condition on the Transponder or Satellite,
STC has the authority to require the Licensee to modify or cease
transmission to the Transponder to resolve the condition.
Lessees shall be liable for the cost of retransmitting or making-good
any transmission with which their uplink has interfered.
<PAGE> 15
GTE SPACENET CORPORATION
TRANSPONDER SALE AGREEMENT Agreement No. 756
ANNEX C
Operations Procedures
1.0 GENERAL
1.1 Purpose - The purpose of these Operations Procedures
("Procedures") is to delineate the responsibilities of the
Purchaser with respect to access to GTE Spacenet Satellites and
the procedures by which such access will be initiated,
maintained, and terminated.
1.2 Definitions
The "uplink" consists of analog or digital, single or
multiplexed-channel baseband communications signals which have
been modulated onto an intermediate frequency carrier,
translated to the appropriate radio frequency for the satellite,
amplified to a suitable power level, and transmitted through a
directional antenna to the satellite by a transmit earth
station. The key uplink parameters are uplink antenna
performance characteristics, Effective Isotropic Radiated Power
(EIRP), and signal modulation characteristics in the single and
multiple carrier mode.
The "downlink" consists of the signal transmitted from the
satellite and the equipment at the earth station where the
signal is received by a directional antenna, amplified by a low
noise amplifier (LNA), translated in frequency by a
downconverter, demodulated, and further amplified for
distribution to end users. The key downlink parameters are the
receiving system figure of merit (G/T), the antenna half-power
beamwidth, the signal modulation characteristics and the
demodulator performance.
The "transponder" receives the uplink signal and translates it
to the output frequency, amplifying and retransmitting the
signal as the downlink signal, on the opposite polarity from the
uplink. The key transponder parameters are Saturation Flux
Density, G/T, transfer characteristics, and downlink EIRP.
An "anomalous condition" (or an "anomaly") is the transmission
of a signal which fails to meet the technical requirements of
these Procedures or which otherwise causes, or threatens to
cause; interference to the transmissions of others; harm to a
GTE satellite or the satellite of another carrier; or degraded
service to another customer of GTE or a customer of another
carrier.
The term "earth station" includes fixed and transportable earth
stations.
1.3 Satellite Access Control Center - The Satellite Access Control
Center is located at GTE Spacenet headquarters in McLean,
Virginia and is the Purchaser's contact point for performance
verification, and link establishment each time Purchaser
accesses its Transponder. This facility consists of the staff,
equipment, and information necessary for coordinating and
operating all types of GTE Spacenet Satellite Services.
1.4 Video Service Coordinators, Satellite Service Technicians, and
Satellite Services Engineers (See Table 1)
GTE Satellite Service Technicians at the Satellite Access
Control Center are responsible for all activities involved in
establishing the uplink, including coordination of earth station
access to the satellites, initial earth station performance
verification, termination of earth station access, major changes
to an existing earth station, and fault isolation and
restoration operations.
Each Satellite Service Technician has the authority and
responsibility to direct Purchaser to modify an uplink
transmission when it exceeds the tolerances specified in these
Procedures. The Satellite Service Technician may
<PAGE> 16
also order cessation of any transmission or take other appropriate
action as defined in 3.4.2 of these Procedures when out-of-tolerance
operation creates an anomalous condition.
GTE Satellite Service Engineers are responsible to approve frequency
plans for operating multiple carriers on a single Transponder.
2.0 EARTH STATION AND NETWORK OPERATIONAL IMPLEMENTATION - Anyone accessing
a GTE Satellite must design transmitting earth stations with networking
analysis, RF monitoring, and control systems that allow station
operators to have, at a minimum, basic status information and control
over the earth station's operating parameters. Earth stations shall
either be manned or equipped to allow immediate correction of anomalies
in the signal transmitted by the earth station.
2.1 Earth Station Transmitted Power Limits - Earth stations in any type
of service should be designed and operated so that an alarm or
indicator alerts the operator when an increase in earth station
uplink EIRP results in a flux density at the satellite that exceeds
the level authorized for the service by 1 dB or more. The alarm or
indicator must be readily available to an individual with the
authority and means to immediately reduce the uplink EIRP to an
acceptable level or terminate transmission until the out-of-
tolerance condition can be corrected.
2.2 Transmit Earth Station Antenna Sidelobe Performance Requirements -
Transmit earth station antennas must comply at all times with
applicable FCC Antenna Performance Standards (currently contained in
Section 25.209, Part 25 of FCC Rules and Regulations).
2.3 Maximum Emission Levels Within Assigned Transponders - To provide
protection to multiple users of a transponder, a constraint has been
established with respect to emissions generated by an earth station
HPA. This constraint includes all multicarrier intermodulation
products. TDMA carrier energy spreading spurious signals, and
harmonic products. Unless authorized in writing by GTE, the maximum
emission level radiated by an earth station antenna to the assigned
transponder, but outside the User's allocated bandwidth as defined
in the Service Statement, must not, as measured by GTE exceed 8 dBW
per 25 kHz.
2.4 Maximum Emission Levels Into Adjacent Transponders - The emissions
radiated by an earth station antenna which fall outside of the
assigned transponder bandwidth, but within the bandwidth of adjacent
transponders, must not, as measured by GTE, exceed 18 dBW per 25
kHz.
2.5 Unlink Power Control - Earth stations using uplink power control
may not relax constraints stated in Paragraphs 2.3 and 2.4 by more
than 7 dB during rain fade conditions. EARTH STATIONS WITHOUT UPLINK
POWER CONTROL, MAY NOT MAKE CHANGES IN UPLINK POWER FOR ANY REASON
(INCLUDING ADVERSE WEATHER) WITHOUT PRIOR APPROVAL OF A SATELLITE
SERVICE TECHNICIAN.
2.6 Maximum Emission Levels Outside Spacecraft Frequency Spectrum -
Earth station transmitters must not radiate out-of-band emissions
which exceed the levels specified in applicable FCC rules (currently
specified in Paragraph 25.302, FCC Rules and Regulations).
2.7 Polarization Isolation - The cross-polarized signal component
radiated by transmitting earth stations must be a minimum of 30 dB
below the on-axis co-polarized components as measured by GTE. For
transportable earth stations, it is recommended that a motorized
polarization adjustment system be employed which can be operated
while the user is in voice communication with a Satellite Service
Technician. GTE reserves the right to charge Purchaser for
Transponder time in excess of 5 minutes used to optimize the
polarization of a transportable earth station.
2.8 Antenna Pointing Stability - The pointing stability of the uplink
antenna shall be such that environmental conditions, both internal
and external to the uplink earth station, will not cause sufficient
antenna movement to produce more than a +/- 1 dB change in
operational flux density at the Satellite. Under no conditions may
the earth station violate crosspole isolation requirements of
Paragraph 2.7.
2.9 Automatic Transmitter Identification - In accordance with Section
25.308 of FCC Rules, effective March 1, 1991, all satellite video
uplink transmissions must be equipped with an automatic transmitter
identification systems (ATIS).
<PAGE> 17
2.9.1 Uplink equipment manufactured on or after March 1, 1991
shall use the FCC-specified subcarrier based ATIS
approach. The ATIS signal shall be a separate subcarrier
which is automatically activated whenever any RF
emissions occur. The encoder shall be integrated into
the uplink transmitter chain in a method that cannot
easily be defeated. The ATIS information shall
continuously repeat. The ATIS signal shall consist of
the following:
a. A subcarrier signal generated at a frequency of
7.1 MHz [plus or minus] 25 KHz and injected at a
level no less than -26 JB (referenced to the
unmodulated carrier). The subcarrier deviation
shall not exceed 25 KHz peak deviation.
b. The protocol shall be International Morse Code
keyed by a 1200 Hz [plus or minus] 800 Hz tone
representing a mark and a message rate of 15 to
25 words per minute. The tone shall frequency
modulate the subcarrier signal.
c. The ATIS signal as a minimum shall consist of: the
FCC assigned earth station call sign; a telephone
number providing immediate access to personnel
capable of resolving ongoing interference or
coordination problems with the station; and a
unique ten-digit serial number or random number
code programmed into the ATIS device on a
permanent manner such that it cannot be readily
changed by the operator on duty. Additional
information may be included within the ATIS data
stream provided the total message length,
including ATIS, does not exceed 30 seconds.
2.9.2 Uplink equipment manufactured before March 1, 1991 will
be permitted to use either the newly-adopted FCC
sub-carrier based ATIS, or the SID-AMOL vertical
blanking interval ATIS presently used by some uplinkers.
3.0 ESTABLISHING AND MAINTAINING FULL AND PARTIAL TRANSPONDER LINKS -
Responsibilities for establishing and maintaining Full and Partial
transponder links are defined in this section.
3.1 GTE Responsibilities - GTE is responsible for Satellite and
Transponder integrity, and for compliance with all applicable
Federal Communications Commission (FCC) Rules and the provisions
of this Agreement.
3.2 Purchaser Responsibilities
3.2.1 Earth Station Permits and Licenses - Purchaser is
responsible for all necessary frequency coordination and
FCC filings, compliance with local zoning ordinances,
procurement of all construction and building permits and
operating licenses for such earth station, and
compliance with pertinent FCC Rules and Regulations
regarding earth station radiations. All transmitting
earth stations shall also comply with the requirements
of Paragraph 2.0 of these Procedures.
3.2.2 Earth Station Data Sheet - Unless otherwise specified in
the agreement under which satellite service is provided
to Purchaser, Purchaser shall submit to GTE a completed
copy of the "Earth Station Data Sheet" (included in this
Agreement) for each earth station employed. This
information is required by GTE not later than the date
of execution of the Transponder Sale Agreement. An Earth
Station Data Sheet shall also be submitted thirty (30)
days prior to the initiation by Purchaser of a change to
any parameter identified on the Sheet. All Sheets shall
be mailed to GTE at the date identified on said Sheet.
3.2.3 Frequency Plan - If Purchaser intends to modify its then
current operating frequency plan, Purchaser shall
coordinate with GTE's Satellite Services Engineering
department to develop an optimum frequency plan,
including power levels, which considers traffic on the
cross-polarized and adjacent transponders, and on the
co-polarized transponder(s) on the adjacent
satellite(s). Any proposed changes in the frequency plan
must be submitted thirty (30) days prior to initiation
of the change. This information is required in order for
GTE Spacenet to maintain a minimized interference
environment for the Purchaser and for other users of the
assigned satellite.
3.3 Facility Performance Verification
3.3.1 Initial Earth Station Performance Verification - Initial
performance verification is the process whereby a
Satellite Service Technician certifies the suitability
of a new or reconfigured transmitting earth station
<PAGE> 18
prior to the operational use of that station on Purchaser's
Transponder. The purpose of the process is to prevent damage to
the Transponder or Satellite and interference to users of other
satellites or transponders due to an out-of-tolerance anomaly of
the earth station, and to allow the Purchaser to correct
problems with earth stations prior to operational use of such
stations. The station's performance must conform to the
requirements of these Procedures.
It is recommended that all transmit earth stations be verified
in accordance with this Paragraph at least ten (10) days prior
to the commencement of use of Purchaser's Transponder to assure
that (a) access time is available for testing the earth station
and (b) that problems can be corrected. GTE will not be
responsible for any delays in the commencement of Purchaser's
use of its Transponder where Purchaser has not obtained
performance verification of an earth station ten (10) days or
more prior to such date.
3.3.2 Operational Performance Verification - Prior to bringing an
earth station on line for operational service, the station's
performance must be verified by a Satellite Service Technician
as complying with the requirements of these Procedures.
3.3.3 Verification Procedure - Verification of earth station
performance under either Paragraph 3.3.1 or 3.3.2 shall be
determined in accordance with the following procedure:
a. Prior to activation of an earth station, Purchaser shall
optimize the pointing and polarization of the earth
station antenna by monitoring existing downlink signals
from the satellite assigned to Purchaser. Satellite
Service Technicians are available to assist Purchaser
with this activity.
b. Prior to activation of an earth station, the Purchaser
must establish continuous telephone contact with the
Satellite Service Technician until the link is
established and operating satisfactorily.
c. The Transponder number(s) and carrier frequency(ies) of
the scheduled transmission(s) are confirmed by the
Purchaser and the Satellite Service Technician.
d. The earth station transmits an unmodulated, low level
continuous wave (cw) carrier to the Transponder on the
assigned frequency.
e. The Purchaser adjusts the polarization of the uplink
antenna as directed by the Satellite Service Technician
until the earth station achieves acceptable
cross-polarization isolation.
f. The carrier power is increased as directed by the
Satellite Service Technician until the proper carrier
operating point is achieved.
g. Modulation is applied to the carrier and the Satellite
Service Technician verifies that Purchaser is occupying
only the bandwidth authorized in the Transponder Sale
Agreement.
h. For fixed, non-tracking transmit earth stations, if the
above procedure is conducted when the Satellite is not
at the stationkeeping center-of-box, the procedure shall
be repeated at the next center-of-box time convenient to
Purchaser. Information regarding the center-of-box times
for a particular satellite may be obtained from the
Video Services Center.
3.4 Performance Degradation; Anomalous Conditions
3.4.1 Fault Isolation - When a Purchaser (or other user of the
Satellite) or a Satellite Service Technician detects degraded
link performance, a fault isolation procedure will be initiated
to isolate the cause. The Purchaser is responsible for
verification of proper uplink and downlink performance. If such
initial action does not identify the fault, contact should be
established with the Satellite Service Technician for
verification of Transponder performance.
3.4.2 Anomalous Conditions - If Purchaser's transmission is determined
by GTE to be the cause, or to be contributing to, an anomalous
condition as defined in Paragraph 1.2, GTE has the authority to
require Purchaser to modify or cease transmission to the
Satellite. Failure of the Purchaser to immediately rectify the
anomaly may result in the Purchaser being denied access to the
Satellite. If the Satellite Service Technician is unable to
contact the Purchaser or if Purchaser fails to correct the
anomaly, the Satellite
<PAGE> 19
Service Technician has the authority and responsibility to take
appropriate action to prevent possible degradation to Satellite
or Transponder life or interference to other satellite users.
Such actions may include suspension of Purchasers access to
the Satellite.
4.0 RELATIONSHIP TO THIRD PARTIES
4.1 Purchaser's Responsibility - If Purchaser resells any capacity on
its Transponder to a third party or allows a third party to use
the Purchaser's Transponder, or uses a transmit earth station
operated by a third party, Purchaser shall be responsible for
assuring that any such third party complies with these Procedures.
4.2 Scheduling of Service - Purchasers may authorize a third party to
access Purchasers Transponder, provided that the right to schedule
such access, including any right to change a scheduled access
remains with Purchaser and may not be assigned or delegated to a
third party without the express written permission of GTE.
4.3 Third Party Access
4.3.1 Pre-Authorization - GTE will allow a third party to access
Purchaser's Transponder only if GTE is notified by
Purchaser in writing in advance that such third party may
access such Transponder and only during the time period
scheduled by Purchaser.
4.3.2 Coordination and Verification - A third party authorized to
access Purchaser's Transponder shall comply with all
coordination and verification requirements of these
Procedures. For purposes of clarity, the term "Purchaser"
used in such requirements shall be read as "the Authorized
Third Party". All authorized third party shall report any
technical problems encountered in its use of Purchaser's
Transponder directly to GTE.
4.3.3 Denial of Access to Third Parties - GTE may, without
liability to Purchaser or any third party, deny access to
a third party where such third party:
a. Is not pre-authorized to access Purchaser's
Transponder, or
b. Fails to comply with any requirements of these
Procedures, including the coordination and verification
procedures.
4.4 Third Party Service Charges - Nothing in this Paragraph 4 shall be
construed as creating any rights in any third party to receive
Service from GTE, nor shall this Paragraph 4 be construed as
preventing GTE from charging Purchaser or a third party using
Purchaser's Transponder for any support services provided by GTE
to such third party.
5.0 TELEPHONE CONTACT AND COORDINATION - Telephone Contact and Coordination
telephone and telex numbers, addresses, are listed in Table 1 below.
<PAGE> 20
ATTACHMENT III
NEBRASKA EDUCATIONAL TELECOMMUNICATIONS COMMISSION
EARTH STATION DATA SHEET
INSTRUCTIONS:
Make a copy of this Earth Station Data Sheet for each earth station
which will be used to access the satellite. Completed Data Sheets must
be submitted with the Space Segment Channel Leasing Agreement.
A revised copy of this Earth Station Data Sheet must be submitted to
NETC upon change of any information contained herein.
EARTH STATION DATA
1. Traffic Type ____ Analog SCPC ____ Digital SCPC ____ Digital MCPC ____ Other
2. Earth Station Information: Station Name (if any): ___________________________
City, State and ZIP:_____________________________ Elevation: _______________
Latitude:_________________________ Longitude: ______________________________
3. Earth Station Type (check one): ____ Transmit/Receive ____ Transmit Only ____
Receive Only
4. Earth Station Operation: ____ Attended ____ Unattended Uplink Tel.: ________
5. Earth Station Technical Data:
a. Antenna: Manufacturer __________ Model No. _________ Diameter _____ Meters
Transmit Gain: ____ dB
Type of feed (check one): __ Single polarization __ Dual polarization
b. Power: At Antenna Feed: Nominal ___________ Watts Maximum __________ Watts
HPA: Manufacturer __________ Rated Output Power __________ Watts
6. Modulation:
<TABLE>
<CAPTION>
Type (eg FM) Access Technique Carrier Or Uncoded FM Deviation Carriers
BPSK, (QPSK) (e.g., TDMA, FDMA) BW* (kHz) Data Rate (Kbps) or FEC Rate of this type
<C> <S> <S> <S> <S> <S>
- ----------- ----------------- -------- --------------- ------------ ------------
- ----------- ----------------- -------- --------------- ------------ ------------
- ----------- ----------------- -------- --------------- ------------ ------------
- ----------- ----------------- -------- --------------- ------------ ------------
- ----------- ----------------- -------- --------------- ------------ ------------
</TABLE>
May 17, 1996
<PAGE> 21
ATTACHMENT IV
NEBRASKA EDUCATIONAL TELECOMMUNICATIONS COMMISSION
SATELLITE SYSTEM
INCORPORATING BY REFERENCE
SELECTED PROVISIONS OF THE GE AMERICOM AGREEMENT
NOTE: GE AMERICOM IS THE SUCCESSOR IN INTEREST OF GTE SPACENET
CORPORATION, DESIGNATED AS "GTE" IN THESE PROVISIONS. NETC IS
DESIGNATED AS "PURCHASER" IN THESE PROVISIONS.
<PAGE> 22
ARTICLE 4 USE OF SIII/T13
(a) GTE has advised Purchaser that SPACENET III may be used for the
transmission of single and dual analog video, single channel per
carrier ("SCPC") traffic and analog or digitized voice or data
services. Purchaser has advised GTE that SIII/T13 will be used
solely for the transmission of single and dual analog video,
single channel per carrier ("SCPC") traffic and analog or
digitized voice or data services. GTE has made the assignment of
the SIII/T13 on the basis of Purchaser's intended use and in
consideration of other GTE customers using the SPACENET III
satellite and users of other satellites adjacent to SPACENET
III.
(b) Should Purchaser desire to use SIII/T13 for transmission of a
signal type other than that identified above, it shall notify
GTE in writing of the desired signal type and GTE will undertake
a review of the affect of such change on then current and
planned use of the
<PAGE> 23
SPACENET III Satellite and other satellites adjacent to SPACENET
III. Should GTE determine in its sole discretion that the
transmission of the signal type desired by Purchaser:
(i) will not interfere with other GTE customer's
services on SPACENET III or the users of other satellites;
and
(ii) will not interfere with the future use of the
SPACENET III Satellite by GTE or its customers; and
(iii) will not be in violation of statute, rule,
regulation, or the order of a court or governmental agency.
then GTE will undertake to coordinate the proposed use of
SIII/T13 as may be required to allow SIII/T13 to be used for
such transmission type.
(c) Purchaser shall not use SIII/T13 for any purpose other than that
stated in paragraph (a) above without the prior coordination
with GTE as provided in the Operations Procedures and without
the written consent of GTE.
<PAGE> 24
ARTICLE 9 SATELLITE OPERATIONS
9.1 GTE shall be the sole FCC licensee of the Satellite, and shall be
responsible for operating and maintaining the Satellite in a manner that
complies with all applicable FCC Rules and Regulations. GTE shall be the
sole controller and operator of the Satellite.
9.2 Nothing in this Agreement shall be construed to prevent GTE from taking
any action necessary to protect its Satellites or to act in accordance
with the Operations Procedures.
9.3 GTE reserves the right to periodically transmit essential
station-keeping signals to selected Transponders. Such transmissions
will not degrade the performance of the receiving Transponder.
9.4 GTE reserves the right to relocate the Serving Satellite in accordance
with applicable regulations of the FCC or other governmental agencies
having jurisdiction.
<PAGE> 25
ARTICLE 11 RESPONSIBILITY OF PURCHASER
11.1 In connection with its use of SIII/T13. Purchaser shall comply with all
applicable FCC regulations and with all applicable laws, rules and
regulations, both current and as may come into effect, as well as with
this Agreement.
11.2 Purchaser will not transmit or otherwise act in any manner that violates
the requirements of the Operations Procedures attached as Annex C. In
the event that Purchaser materially breaches those Procedures, GTE may,
without waiving any other rights it may have and without liability to
Purchaser, exercise its rights under Paragraph 3.4.2 of the Operations
Procedures.
11.3 Purchaser shall be responsible for the design, engineering, and the
provision of all necessary uplink, downlink and terrestrial
transmission facilities.
11.4 Should Purchaser resell, or otherwise allow a third party to utilize
for any purpose, SIII/T13 or any portion thereof, Purchaser shall
remain liable to GTE for compliance with the obligations imposed by
this Agreement (including the Operations Procedures) by any person
directly or indirectly receiving services or benefits under this
Agreement (collectively, "Derivative Users"). Any action or failure to
act by a Derivative User which if performed (or not performed) by
Purchaser would constitute a breach of this Agreement, shall be deemed
to have been committed by Purchaser. Any Service resold or otherwise
provided to a Derivative User may be utilized by the end-user only to
the extent, and for the type of transmission for which, Purchaser was
authorized to use SIII/T13. GTE reserves the right to charge Purchaser
fees for any technical consultation, scheduling, or other support
services provided Derivative Users using SIII/T13.
ARTICLE 12 INDEMNIFICATION
12.1 Purchaser shall indemnify and save GTE, and its officers, directors,
and employees, harmless from and against any and all claims, damages,
expenses and losses (including reasonable attorney's fees) of third
parties (including, but not limited to, Derivative Users), directly or
indirectly arising out of or in connection with any of the following:
(a) Any interference or disruption of communications arising out of
the use by Purchaser or a Derivative User of SIII/T13, except
that Purchaser shall be relieved of its indemnity obligation
under this Article 12 with respect to third parties (other than
Derivative Users) if such interference or disruption is solely
the result of: (A) adherence by Purchaser or a Derivative User
to specific applicable written direction of GTE which
<PAGE> 26
Purchaser is, or Purchaser and its Derivative Users are,
obligated by this Agreement to follow: (B) actions taken by GTE
in the management of the Serving Satellite; or (C) the willful
misconduct of GTE.
(b) The failure or unavailability of SIII/T13 to provide satellite
transmission service to Purchaser or Derivative Users under this
Agreement; or errors or defects in, or losses of (including
misappropriation), any communication transmitted by Purchaser or
a Derivative User using SIII/T13.
(c) The content or form of the information in any communication
transmitted by Purchaser or a Derivative User using SIII/T13.
12.2 Purchaser shall reimburse GTE for all damage to GTE's property caused by
Purchaser, or Derivative Users.
<PAGE> 27
ARTICLE 18 PUBLICITY
All advertising and publicity by GTE or Purchaser, where the other party to
this Agreement is mentioned by name, must be submitted to and approved by the
other party in writing prior to release for publication. In addition, neither
party may use the other party's trademarks, trade name, or logos in any manner
without the prior written permission of the other party. GTE may disclose to
other of its customers or prospective customers the fact that Purchaser has
purchased a Transponder on the Satellite.
<PAGE> 28
ARTICLE 19 CONFIDENTIALITY
The parties hereto agree that all documents and information which a reasonable
person would regard as confidential or proprietary under the circumstances or
which, by their nature, are inherently confidential or proprietary and which
are furnished to a party hereunder, shall be held in strict confidence and
shall not, without the prior written consent of the other party, be made
available or disclosed to any third party or be used by the other party hereto
except as contemplated hereunder. Moreover, each party hereto agrees to
restrict dissemination of such confidential documents and information to only
those persons in their respective organizations who are directly involved in
the performance of the obligations under this Agreement. Notwithstanding the
above restriction, neither party shall have any obligation (a) for any
disclosure of confidential documents or information which is, or becomes,
generally known to the public without breach of the terms of this Agreement, or
(b) for any disclosure of information which is required (i) by court order or
(ii) by order of any governmental or administrative tribunal having
jurisdiction over the parties hereto or (iii) by the laws of the State of
Nebraska or (c) for any disclosure of information which must necessarily or
appropriately be disclosed in order to facilitate issuance of the bonds for the
funding of the purchase of SIII/T13 under this Agreement.
<PAGE> 1
EXHIBIT 6.8
INSIGHT INVESTMENTS, CORP
MASTER LEASE #6239
MASTER LEASE dated June 24, 1996, by and between INSIGHT INVESTMENTS, CORP., a
California corporation ("Lessor"), 265 South Anita Drive, Suite 200, Orange,
California 92868 and AMERICAN INDEPENDENT NETWORK, a Texas corporation
("Lessee"), 6125 Airport Freeway #200, Fort Worth, Texas 76117.
For and in consideration of the mutual covenants and promises set forth herein
and the payment of Rent as provided herein, Lessor and Lessee agree as follows:
1. LEASE OR EQUIPMENT. Lessor leases to Lessee, and Lessee leases from
Lessor, all of the personal property, together with all replacements, parts and
repairs incorporated therein (collectively, the "Equipment"; and individually,
an "Item") described in each Equipment Schedule ("Schedule") executed and
delivered from time to time pursuant to the Master Lease.
2. SCHEDULES. Each Schedule shall incorporate the terms and conditions of this
Master Lease and such other terms and conditions as Lessor and Lessee shall
agree upon. Each Schedule is a separate and independent lease and contractual
obligation. In the event of a conflict between the provisions of the Master
Lease and those of any Schedule, the provisions of the Schedule shall control.
The term "Lease" shall mean an individual Schedule which incorporates the terms
and conditions of this Master Lease. The Lease shall be effective upon execution
by Lessee and subsequent acceptance by Lessor at its principal place of
business.
3. LEAST TERM. The term of lease ("Lease Term") for each item shall begin on
its Acceptance Date and continue after the Commencement Date for that number of
months specified in the Schedule as the "Initial Lease Term", and thereafter
until terminated by either party upon not less than ninety (90) days prior
notice (which notice shall apply to all the Equipment and may not be revoked
without the consent of the other party). The term "Commencement Date" means the
first day of the month immediately following the month during which the
Acceptance Date occurs for the Item to be last installed or delivered, as
applicable.
4. ACCEPTANCE. The Acceptance Date for each Item shall be the earliest of (i)
the date the manufacturer, or other party acceptable to Lessor, installs the
Item and certifies that Item to be in good working order, or (ii) if Lessee has
caused a delay in the installation of an Item, then the fifth day after the
Item is delivered to the location specified in the Schedule, or (iii) if Lessee
is to install the Item, the fifth day after delivery; or (iv) if the Item does
not require installation, the third day after the day the Item is delivered to
Lessee. If the Equipment is already installed at the Lessee's location, the
Acceptance Date shall be the date on which the Lessor pays for the Equipment.
On each Acceptance Date, Lessee shall execute and deliver to Lessor a
Certificate of Acceptance.
5. RENT.
(a) "Rent" as used herein shall mean and include all of the following:
(1) INTERIM RENT. Lessee's interim rental obligation for each Item shall
commence on its Acceptance Date and continue through the day immediately
preceding the Commencement Date ("Interim Rent"). Interim Rent for each Item
shall be one-thirtieth (1/30) of the Monthly Rent for that Item, with Interim
Rent for all Items being due and payable on the Commencement Date. If the
Acceptance Date for all the Equipment is the first day of a calendar month,
there shall be no Interim Rent.
(2) MONTHLY RENT. Lessee shall pay Lessor Monthly Rent for the Equipment in
the amount set forth in the Schedule. Monthly Rent shall begin to accrue on the
Commencement Date and shall be due and payable by Lessee in advance on the
Commencement Date and on the first day of each month thereafter during the
Lease Term.
(3) ADDITIONAL RENT. Lessee shall also owe to Lessor, as additional rent
("Additional Rent") any and all charges, expenses, indemnities and other sums
which become due by Lessee to Lessor under the terms of this Lease. Any such
Additional Rent shall be paid to Lessor within thirty (30) days after the date
that Lessor gives notice to Lessee that such Additional Rent is due, unless a
longer or shorter period is otherwise specified herein.
(b) LATE CHARGE. If Lessee fails to pay to Lessor within ten (10) days after
the due date thereof (and without regard as to whether Lessor has given Lessee
notice of such failure or whether an Event of Default has occurred) any Rent due
hereunder, the Lessee shall also owe to Lessor Late Charges of such delinquent
payment from the due date until paid at the lower or two percent (2%) per month
or the maximum rate permitted by applicable law.
(c) METHOD OF PAYMENT. All payment of Rent, Late Charges or other amounts
required to be paid by Lessee shall be paid to
<PAGE> 2
Lessor by check or wire transfer so as to constitute immediately available
funds at the address of Lessor set forth above or at such other place as Lessor
shall designate in writing, or, if to an Assignee of Lessor, at such place as
such Assignee shall designate in writing.
6. USE AND LOCATION.
(a) USE. Lessee shall use the Equipment in a careful and proper manner in
conformance with all manufacturer's specifications and shall comply with all
federal, state, municipal and other laws, ordinances and regulations in any way
relating to the possession, use or maintenance of the Equipment, and in
compliance with all requirements of the insurance policies required to be
maintained by Lessee pursuant to Section 12 herein.
(b) LOCATION. Each item will at all times be and remain in Lessee's sole
possession and control at the place of installation/location shown in the
Schedule. The Equipment may be moved to another location of Lessee within the
continental contiguous United States with Lessor's prior written consent; such
consent shall not be unreasonably withheld but as a condition of such consent
Lessor may require Lessee to execute such documents, including, but not limited
to, Uniform Commercial Code ("UCC") financing statements, as Lessor may
reasonably require to provide notice, perfect, or maintain the notification or
perfection of, Lessor's or Assignee's interest in such Equipment. Any
relocation of the Equipment pursuant to this Section and all UCC financing
statement filing fees shall be at the sole expense of Lessee.
7. MAINTENANCE AND REPAIR. Lessee hereby assumes the sole duty to maintain the
Equipment and shall not look to Lessor or any Assignee for such maintenance. At
its own expense, Lessee shall maintain and keep the Equipment in good repair,
condition and working order and shall furnish any and all parts, mechanisms,
devices and labor required therefor, and shall enter into and maintain during
the Lease Term a maintenance agreement with the Equipment manufacturer or other
party acceptable to Lessor. Lessee shall furnish a copy of such agreement to
Lessor upon Lessor's request.
8. QUIET ENJOYMENT. Lessor hereby covenants that so long as no Event of Default
has occurred, Lessee shall and may quietly have, hold and enjoy the Equipment
in accordance with the terms and conditions of the Lease, free from disturbance
by Lessor or anyone claiming by or through Lessor.
9. LESSOR'S RIGHT TO INSPECT. Lessor shall at all times during business hours,
and subject to Lessee's reasonable security requirements, have the right to
enter upon the premises where an item may be located for the purpose of
inspecting such item.
10. EQUIPMENT IMPROVEMENTS.
(a) Lessee may, with the prior consent of Lessor and subject to compliance with
this Section 10, affix or install any accessory, feature or device to the
Equipment and make any improvement, upgrade, modification, alteration or
addition to the Equipment (each of the foregoing being an "Improvement"). The
affixing or installation of the improvement must not adversely effect the
Equipment manufacturer's warranties or maintenance agreement, or require that
substantial original parts of the Equipment be removed; nor can it impair the
originally intended function, value or use of the Equipment. Title to each
improvement shall, without further action, upon the affixing or installing of
such improvement, vest solely in Lessor. Upon the expiration or earlier
termination of this Lease, Lessee may remove and retain any readily detachable
improvement provided that: (i) no Event of Default has occurred; (ii) by such
removal the Equipment is not rendered any less useful or valuable to Lessor
than if such improvement had not been made and later removed, and (iii) the
Equipment is returned in compliance with Section 13 herein. Upon Lessee's
permitted removal of a detachable improvement and compliance with this Section
10, title shall thereupon revert to Lessee free and clear of any claims of
Lessor whatsoever.
(b) Lessee shall notify Lessor not less than sixty (60) days prior to the
anticipated Acceptance Date of the type of improvement Lessee desires to
obtain. Lessor may, within fifteen (15) days after receipt of such notice,
offer to lease or sell the improvement to Lessee upon mutually agreeable terms
and conditions. If Lessee leases the improvement from Lessor, such improvement
shall be on a separate Schedule with an Initial Lease Term co-terminus with
that of the Equipment.
11. LOSS AND DAMAGES; STIPULATED LOSS VALUE.
(a) LESSEE'S ASSUMPTION OF RISK. Lessee hereby assumes and shall bear the
entire risk of loss, damage, theft or destruction to the Equipment from any
cause whatsoever, or governmental taking. No loss, damage, theft or destruction
to the Equipment, or any part thereof, or governmental taking shall affect any
obligation of Lessee under this Lease, which shall continue in full force and
effect notwithstanding any such loss or damage. Lessee's assumption of risk of
loss shall commence when the Equipment or item is placed in transit to Lessee
and shall continue until Lessor has received and accepted the surrendered
Equipment pursuant to Section 13.
(b) NOTICE OF LOSS OR DAMAGE. Lessee shall promptly notify Lessor of the loss,
damage, destruction, theft or governmental taking of any item.
(c) DUTY TO REPAIR. Unless such item is lost, stolen, damaged beyond repair or
there is a governmental taking ("Casualty Loss"), Lessee shall promptly repair
and restore such item to the same condition, working order and appearance as
of the Acceptance Date.
(d) CASUALTY LOSS; PAYMENT OF STIPULATED LOSS VALUE. If the Equipment or any
item is a Casualty Loss, then Lessee, at Lessee's option:
(1) shall pay Lessor in cash the Stipulated Loss Value (as per Attachment A to
this Master Lease) for such Equipment or item calculated as of the next Monthly
Rent payment date, which amount shall be due and payable not later than thirty
(30) days after the date of the occurrence of the Casualty Loss. Upon payment
of the Stipulated Loss Value, and provided that no Event of Default (as
hereinafter defined) has occurred:
(i) Lessee's obligation to pay Rent for all remaining items shall
remain in full force and effect and shall terminate
<PAGE> 3
only with respect to such Casualty Loss Item.
(ii) Lessee shall become entitled to such item, as-is, where-is,
without warranty, express or implied, with respect to any matter whatsoever; OR,
(2) shall continue all payments under the Lease without interruption as if no
such loss had occurred, and shall request that Lessor, within thirty (30) days
after the date of the occurrence of the Casualty Loss, replace the Casualty
Loss item with a "Replacement Item". Lessee shall pay all costs of such
Replacement Item; provided, however, that the cost of the Replacement Item
shall not exceed Lessor's list price. Unless otherwise mutually agreed, the
Replacement Item shall be of the same manufacture, model and type and of at
least equal capacity, function and value as the Casualty Loss Item.
(e) Insurance Proceeds. Lessee's obligation to repair or pay Stipulated Loss
Value shall not be contingent upon receipt of any insurance proceeds.
12. INSURANCE. Lessee shall at its expense keep each item insured from every
cause whatever for not less than the Stipulated Loss Value thereof, and shall
carry public liability and property damage insurance in amounts acceptable to
Lessor. All such insurance shall be with companies acceptable to Lessor, and
shall name Lessor and any Assignee as additional insureds and, as to the
all-risk insurance, loss payees as their interests may appear. Such insurance
policies shall provide that they may not be invalidated against Lessor or any
Assignee by reason of any violation of a condition or breach of warranty of the
policies or the application therefor by Lessee and that Lessor shall be given
written notice thirty (30) days prior to any alteration or cancellation of such
policies. The proceeds of such insurance, if Lessee is not in default hereunder,
shall be applied to reimburse Lessee for Stipulated Loss Value to the extent
previously paid by Lessee; or shall be paid to Lessor or Assignee to the extent
of Stipulated Loss Value not previously paid by Lessee; or shall be applied to
repair the Equipment or to reimburse Lessee for repairs for which Lessee
previously paid. If Lessee is in default hereunder, then such insurance proceeds
shall be paid to Lessor or Assignee to be applied to the satisfaction of
Lessee's obligations under the Lease.
13. DELIVERY AND SURRENDER.
Lessee hereby assumes all cost and expense of the transportation, rigging,
drayage, unpacking and in-transit insurance to Lessee's premises and
installation of the Equipment. Upon the expiration of the Lease Term, or sooner
termination of this Lease with respect to any Item, Lessee shall (unless Lessee
had paid Lessor the Stipulated Loss Value of such item pursuant to Section 11)
return at its expense, including but not limited to the expenses of
deinstallation, packing, transportation and in-transit insurance, the item to a
location designated by Lessor in the same repair, condition, appearance and
working order as of the Acceptance Date, ordinary wear and tear from proper use
alone excepted, and certified as acceptable by the Equipment manufacturer for
the standard manufacturer's maintenance agreement.
14. TAX BENEFITS. Lessee acknowledges that Lessor or other owner of the
Equipment shall be entitled to claim for federal tax purposes (i) deductions on
Lessor's cost of the Equipment for each of its tax years during the Lease Term
under any method of depreciation or other cost recovery formula permitted by the
Internal Revenue Code of 1986, as amended (the "Code"); (ii) interest deductions
as permitted by the Code on the aggregate interest paid to any Assignee; and
(iii) investment tax credit, or similar credit, as may be available as of the
Acceptance Date to the owner of the Equipment (all the foregoing being hereafter
referred to as the "Tax Benefits"). Lessee agrees to take no action inconsistent
with the foregoing or which would result in the loss, disallowance, recapture or
unavailability of the Tax Benefits to Lessor or other owner of the Equipment.
Lessee hereby indemnifies Lessor or other owner of the Equipment from and
against (a) any loss, disallowance, unavailability or recapture of any Tax
Benefit resulting from any action or failure to act of Lessee, plus (b) all
interest, penalties, costs (including legal fees) or additions to tax resulting
from such loss, disallowance, unavailability or recapture.
15. TAXES. In addition to the Rent as provided in Section 5, Lessee shall be
responsible for the payment of all taxes (exclusive of taxes based on Lessor's
net income), fees, charges, licenses and assessments whatsoever, however
designated, whether based on the Rent or levied, assessed or imposed upon the
Equipment or upon or in respect of the manufacture, purchase, delivery,
ownership, leasing, use or return of the Equipment, now or hereafter levied,
assessed or imposed during the Lease Term by a federal, state or local taxing
jurisdiction, regardless of when and by whom payable, and Lessee shall timely
prepare, file and pay all applicable tax returns.
16. LESSOR'S PAYMENT. If Lessee fails to procure or maintain insurance or to
pay fees, assessments, charges, taxes or expenses, all as herein required,
Lessor shall have the right, but not the obligation, to pay the premiums for
such insurance and such fees, assessments, charges, taxes and expenses. In such
event, the cost thereof shall be Additional Rent payable to Lessor with the
next installment of Rent, plus interest, taxes and penalties, if any, imposed
by the charging entity, and the Late Charge from the date of such payment by
Lessor until receipt by Lessor of reimbursement from Lessee.
17. DISCLAIMER OF WARRANTIES.
(a) The following acknowledgments by Lessee are integral to this Lease and are
made to induce Lessor to enter into and perform under this Lease:
(1) EACH ITEM IS, AS OF ITS ACCEPTANCE DATE, OF A SIZE, DESIGN, TYPE AND
MANUFACTURE SELECTED BY LESSEE AND, AS BETWEEN LESSOR AND LESSEE, LESSEE HAS
UNCONDITIONALLY ACCEPTED SUCH ITEM.
(2) SINCE LESSOR IS NOT THE MANUFACTURER OF THE EQUIPMENT OR AGENT OF THE
MANUFACTURER, LESSEE ACCEPTS THE EQUIPMENT FROM LESSOR "AS IS".
(3) LESSOR SHALL HAVE NO LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE
CAUSED OR ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY,
<PAGE> 4
INCIDENTLY OR CONSEQUENTIALLY BY THE EQUIPMENT, BY ANY INADEQUACY THEREOF OR
DEFECT THEREIN, OR BY ANY INCIDENT WHATSOEVER IN CONNECTION THEREWITH, ARISING
IN STRICT LIABILITY, NEGLIGENCE OR OTHERWISE, OR IN ANY WAY RELATING TO OR
ARISING OUT OF THE LEASE, WHETHER OR NOT KNOWN OR DISCLOSED TO LESSOR.
(4) LESSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING
THOSE OF MERCHANTABILITY, DURABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
USE, OR RELATING TO PATENT INFRINGEMENT OR THE LIKE WITH RESPECT TO THE
EQUIPMENT AND EXPRESSLY DISCLAIMS THE SAME.
(5) IT IS AGREED AND UNDERSTOOD THAT LESSOR SHALL HAVE NO OBLIGATION TO
INSTALL, TEST, ADJUST, REPAIR OR SERVICE THE EQUIPMENT.
(b) Lessor warrants that Lessor has the right to lease the Equipment to Lessee
under the terms of this Lease. So long as no Event of Default has occurred,
Lessee shall have the right during the Lease Term to obtain the benefit of and
enforce in Lessee's own name and at Lessee's sole expense any manufacturer's
warranty in respect of the Equipment to the extent such warranty is assignable.
18. INDEMNIFICATION. Except for the gross negligence of Lessor, Lessee hereby
assumes liability for and indemnifies, protects, saves and keeps harmless Lessor
and its Assignees from and against any and all liabilities, losses, damages,
penalties, claims, actions, suits, costs and expenses, including attorney's fees
and other legal expenses, imposed on, incurred by, or asserted against Lessor or
its Assignees (whether or not also indemnified against by any other person) in
any way relating to or arising out of this Lease or the manufacture, purchase,
ownership, delivery, lease, possession, use, operation, condition, return or
other disposition of the Equipment by Lessor or Lessee, including without
limitation, latent and other defects, whether or not discoverable by Lessor or
Lessee, any claim for patent, trademark or copyright infringement, or any claim
arising out of strict liability. Lessee agrees to give Lessor, and Lessor agrees
to give Lessee, prompt written notice of any claim or liability hereby
indemnified against. The indemnities and assumptions of liability set forth in
this Section 18 do not guarantee a residual value of the Equipment; nor shall
they be construed to limit or restrict Lessee's right to prosecute any claim,
action or suit against the manufacturer of the Equipment.
19. EVENTS OF DEFAULT; REMEDIES.
(a) EVENTS OF DEFAULT. Occurrence of any of the following events or conditions
shall constitute an Event of Default hereunder:
(1) Lessee's failure to pay, when due, any Rent, and such failure continues for
a period of ten (10) days after notice that such Rent is overdue; or
(2) Except as expressly permitted in the Lease, Lessee attempts to remove,
sell, encumber, assign or sublease or fails to insure the Equipment, or fails
(within five (5) days after notice of such failure) to deliver any document
required of Lessee under the Lease; or
(3) Failure of Lessee to perform, within thirty (30) days after Lessor gives
Lessee notice of such failure (or, with respect to performance which cannot be
completed in such time, failure to commence such performance within such time
and to pursue such performance diligently thereafter) any other obligation,
term or condition of this Lease; or
(4) A writ, order of attachment, execution or other legal process is levied on
or charged against any item and not released or satisfied within ten (10) days
after Lessee is notified thereof; or
(5) The filing by or against Lessee of a petition under any federal or state
bankruptcy or insolvency law or law providing for the relief of debtors, the
making by Lessee of any general assignment for the benefit of creditors, the
appointment of a receiver or trustee for Lessee or for any of Lessee's assets,
or any formal or informal proceeding for the dissolution, liquidation,
settlement of claims against, or winding up of the affairs of Lessee, any of
which remains undismissed for forty-five (45) days; or the making by Lessee of
a transfer of all or a material portion of Lessee's assets or inventory not in
the ordinary course of business, or the admission by Lessee of inability to pay
debts as they become due; or
(6) The occurrence of any event described in Subsection 19(a)(5) with respect
to any guarantor or any other party liable for payment or performance of this
Lease; or
(7) If any certificate, statement, representation, warranty or financial
information previously or hereafter furnished by or on behalf of Lessee or any
guarantor or other party liable for payment or performance of the Lease proves
to have been false or misleading in any material respect as of the time made or
furnished to Lessor, or to have been afterward breached; or
(8) The giving to Lessee of three (3) notices pursuant to one or more of
Subsections 19(a)(1), (2) or (3) within any consecutive twelve (12) month
period, notwithstanding Lessee's cure of the defaults within the notice periods
applicable.
(b) REMEDIES. Upon the occurrence of an Event of Default:
(1) Lessee hereby authorizes Lessor without notice or process of law to enter
any premises where the Equipment is located and take possession of and remove
the Equipment; and
(2) Lessee shall forthwith and without demand pay to Lessor as liquidated
damages for loss of a bargain and not as a penalty an amount equal to the
Stipulated Loss Value for the Equipment computed as of the date of the Monthly
Rent payment last received by Lessor, plus all previously due but unpaid Rent
and all legal and other expenses incurred by Lessor in enforcing its remedies
hereunder; and
(3) Lessor may upon notice to Lessee effective immediately terminate the Lease,
but such termination shall not affect Lessor's right to enforce the remedies
granted to Lessor in this Subsection 19(b); and
(4) Lessor may pursue any other remedy available at law or in equity.
(5) Lessor may sell the Equipment at public or private sale, without notice and
without having the Equipment present at the place of sale; or Lessor may lease,
otherwise dispose of or keep idle all or part of the Equipment; subject,
however, to Lessor's obligation to mitigate damages. The proceeds of any such
sale, lease or other disposition, if any, of the
<PAGE> 5
Equipment shall be applied as follows: FIRST, to Lessor's costs and expenses
incurred in taking, removing, holding, repairing and selling, leasing or
otherwise disposing of the equipment including legal fees and costs; SECOND, to
pay to Lessor the stipulated Loss Value to the extent not previously paid by
Lessee and all previously due but unpaid Rent; THIRD, to reimburse to Lessee
the Stipulated Loss Value to the extent previously paid by Lessee pursuant to
Subsection 19(b)(2); and FOURTH, any surplus to Lessor.
Notwithstanding repossession or any other action which Lessor may take, Lessee
shall be and remain liable for the full performance of all its obligations
under this Lease.
Lessee hereby waives any requirement of law, now or hereafter in effect, which
might limit or modify any of the remedies herein provided, to the extent that
such waiver is permitted by law. No right or remedy of Lessor herein granted
is exclusive of any other right or remedy herein or by law or equity provided
or permitted; but each shall be cumulative of every other right or remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise, and may be enforced concurrently or from time to time, and in any
order.
(c) LESSOR'S EXPENSES. Lessee shall pay Lessor all costs and expenses,
including attorneys fees, incurred by Lessor in exercising any of its rights or
remedies hereunder or enforcing any of the terms, conditions, or provisions
hereof.
20. ASSIGNMENT.
(a) BY LESSEE. LESSEE SHALL KEEP THE LEASE AND THE EQUIPMENT FREE AND CLEAR OF
ALL LIENS AND ENCUMBRANCES OF WHATSOEVER KIND (EXCEPT THOSE CREATED BY OR
THROUGH LESSOR) AND LESSEE SHALL NOT ASSIGN, TRANSFER, SUBLEASE OR IN ANY WAY
TRANSFER OR DISPOSE OF ITS INTERESTS OR OBLIGATIONS UNDER THE LEASE OR IN THE
EQUIPMENT WITHOUT LESSOR'S PRIOR WRITTEN CONSENT. NO ASSIGNMENT, TRANSFER,
SUBLEASE OR OTHER DISPOSITION BY LESSEE SHALL IN ANY MANNER WHATSOEVER RELIEVE
LESSEE OF ANY OBLIGATION HEREUNDER, AND LESSEE SHALL REMAIN PRIMARILY LIABLE TO
PAY RENT AND PERFORM ALL ITS OBLIGATIONS HEREUNDER.
b. BY LESSOR. All rights of Lessor hereunder or to the Equipment may be sold,
assigned, pledged, mortgaged, or otherwise transferred, either in whole or in
part, without notice to Lessee but always, however, subject to the rights of
Lessee under this Lease. If Lessor sells the Equipment or assigns this Lease or
the Rent due or to become due hereunder or any other interest herein, whether
as security for any of its indebtedness or otherwise, no breach or default by
Lessor hereunder or pursuant to any other agreement between Lessor and Lessee,
should there be one, shall excuse performance by Lessee of any provision hereof.
No such vendee or assignee (each an "Assignee") shall be obligated to perform
any duty, covenant or condition required to be performed by Lessor under the
terms of this Lease; except that Lessor covenants with Lessee not to transfer
any interest in the Lease or the Equipment to any Assignee unless such Assignee
agrees in writing not to disturb Lessee's quiet enjoyment of the Equipment
while no Event of Default has occurred. Lessee acknowledged that any such sale,
assignment or grant of security interest shall not materially change Lessee's
obligations under this Lease nor materially increase the burdens imposed Lessee.
Lessee agrees and acknowledges that any such Assignee shall rely on and be
entitled to the benefit of the provisions of this Lease. Lessee agrees to
acknowledge any such assignment within five (5) days of receipt of written
request to do so in the form requested by Lessor. LESSEE'S OBLIGATION TO PAY
RENT IS ABSOLUTE AND UNCONDITIONAL AND LESSEE SHALL NOT ASSERT AGAINST ANY
ASSIGNEE ANY DEFENSE, COUNTERCLAIM OR SETOFF THAT THE LESSEE MAY HAVE AGAINST
THE LESSOR OR ANY OTHER PARTY, AND LESSEE ACKNOWLEDGES THAT ANY ASSIGNEE IS
RELYING ON THE FOREGOING.
21. OWNERSHIP. Lessee shall have no right, title or interest in the Equipment
except as expressly set forth in the Lease, which interest is a leasehold
interest. Lessor and Lessee agree, and Lessee represents for the benefit of
Lessor and its Assignees, that the Lease is intended to be a "finance lease"
and not a "lease intended as security" as those terms are used in Article 2A of
the UCC. Lessor may upon notice to Lessee advise Lessee that certain items are
leased to Lessor and provided to Lessee under the Lease as a sublease. Lessee
agrees to execute and deliver such acknowledgments and assignments in
connection with such Lease as are reasonably required. If, at any time during
the Lease Term, Lessor's right to lease the Equipment expires, Lessor may
remove the Equipment from Lessee's premises and immediately provide identical
substitute Equipment. All expenses of such substitution shall be borne by
Lessor.
22. PERSONAL PROPERTY. The Equipment is, and shall at all times be and remain,
personal property, notwithstanding that the Equipment or any Item or part
thereof may now be, or hereafter become, in any manner affixed or attached to
any real property. If requested by Lessor prior to or at any time during the
Lease Term, Lessee will obtain and deliver to Lessor waivers of interest or
liens in recordable form and satisfactory to Lessor, from all persons claiming
any interest in the real property on which such item or Equipment is installed
or located.
23. NET LEASE; OFFSET. This lease is a net lease, it being the intention of
the parties that all costs, expenses and liabilities associated with the
Equipment or its lease shall be the obligations of Lessee. Except in the event
of a Casualty Loss and payment of Stipulated Loss Value pursuant to Section 11,
Lessee shall not be entitled, and hereby waives any right it may have, to any
abatement of Rent or other payments due hereunder or any reduction thereof
under any circumstances or for any reason whatsoever.
24. FINANCIAL AND OTHER COVENANTS.
(a) Lessee hereby represents, warrants and agrees with Lessor and any Assignee
as follows:
(1) Lessee is a legal entity, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and in each
jurisdiction where the Equipment will be located and has adequate power to
enter into and perform the Master Lease and each Schedule.
<PAGE> 6
(2) The Master Lease and each Schedule have been duly authorized, executed and
delivered by Lessee, and constitute valid, legal and binding agreements of
Lessee, enforceable in accordance with their terms.
(3) The entering into and performance of the Master Lease and each Schedule
does not and will not violate any judgment, order, law or regulation applicable
to Lessee or any provision of Lessee's Articles of Incorporation or Bylaws, or
result in any breach of, or constitute a default under, or result in any breach
of, or constitute a default under, or result in the creation of any lien,
charge, security interest or other encumbrance upon any assets of Lessee or on
the Equipment pursuant to any instrument to which Lessee is a party or by which
it or its assets may be bound.
(4) There are no actions, suits or proceedings pending, or to the knowledge of
Lessee threatened, before any court, administrative agency, arbitrator or
governmental body which will, if determined adversely to Lessee, materially
adversely affect its ability to perform its obligations under this Master
Lease, any Schedule or any related agreement to which it is a party.
(5) No consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of any state, federal or other
governmental authority or agency is required with respect to the execution,
delivery and performance by Lessee of the Master Lease or any Schedule, or, if
any such approval, notice, registration or action is required, it has been
obtained.
(6) Prior to and during the Lease Term, Lessee will furnish Lessor with
Lessee's audited financial statements. If Lessee is a subsidiary of another
company, Lessee shall supply such company's financial statements and guarantees
as are reasonably acceptable to Lessor. Lessor's obligation to perform under
any Lease is subject to the condition that the financial statements furnished
to Lessor by Lessee present the financial condition and results of operations
of Lessee and its affiliated corporations, if any, and any guarantor of
Lessee's obligations under any Lease, as of the date of such financial
statements, and that since the date of such statements there have been no
material adverse changes in the assets or liabilities, the financial condition
or other condition which in Lessor's or Assignee's sole discretion are deemed
to be materially adverse.
(b) Upon Lessor's request, Lessee shall, with respect to each Lease, deliver to
Lessor (i) a certificate of a secretarial officer of Lessee certifying the
bylaw, resolution (specific or general) or corporate action authorizing the
transaction contemplated in the Lease; (ii) an incumbency certificate
certifying that the person signing this Master Lease and the Schedule holds the
office the person purports to hold and has authority to sign on behalf of
Lessee; (iii) an opinion of counsel with respect to the representations in this
Section 24, (iv) an agreement with Lessor's Assignee with regard to any
assignment as referred to in Subsection 20(b), (v) purchase documents if Lessee
has sold or assigned its interest in the Equipment to Lessor; (vi) an insurance
certificate evidencing the insurance provided by Lessee pursuant to Section 12;
and (vii) Certificate of Acceptance(s) duly executed by Lessee.
(c) The foregoing representations, warranties and agreements shall continue
throughout the Lease Term and shall, upon request of Lessor, be made to any
Assignee.
25. LESSEE CHANGE OF OWNERSHIP; FINANCIAL CONDITION.
(a) During the Lease Term should controlling interest in Lessee be acquired by
another company, or should a substantial portion of Lessee's assets be acquired
by another entity, such other company or entity shall (i) agree in writing to be
bound by the terms and conditions of this Lease and, if requested by Lessor,
shall (ii) execute and deliver to Lessor a guaranty in form and substance
acceptable to Lessor.
(b) If, at any time during the Lease Term, upon the occurrence of an event
described in Subsection 25(a) or for any other reason, Lessor reasonably
determines that there has been a material adverse change in the financial
condition of Lessee or Lessee's ability to meet current or future obligations
under the Lease, then Lessee, upon Lessor's request, shall provide to Lessor
additional security acceptable to Lessor for Lessee's obligations hereunder.
26. ADDITIONAL DOCUMENTS.
(a) NOTICE OR PERFECTION OF INTEREST. Lessee shall execute and deliver to
Lessor such documents as Lessor shall deem necessary or desirable to protect
Lessor's or Assignee's title to or interest in the Equipment and the Lease
including, without limitation, UCC financing statements, which shall be filed
at Lessee's expense.
(b) OTHER DOCUMENTS. Lessee shall execute and deliver to Lessor, duly
acknowledged and in recordable form if so requested, any other document
reasonably requested by Lessor.
27. NON-WAIVER. No covenants or condition of this Lease can be waived except
by written consent of Lessor. The waiver by Lessor or any breach of Lessee
shall not be a waiver of any other breach of the same or any other obligation.
The subsequent acceptance of Rent by Lessor shall not be deemed a waiver of any
such prior existing breach at the time of acceptance of such Rent payment.
28. NOTICE. Any notice, consent or request required or permitted hereunder
shall be in writing and will be conclusively deemed to have been received by a
party hereto on the day it is delivered to such party at the address set forth
above (or at such other address as such party specifies to the other in
writing) and shall be sent by registered mail, return receipt requested,
overnight courier service, or facsimile (with telephonic verification of
receipt).
29. SEVERABILITY. Any provision of the Lease prohibited by or unlawful or
unenforceable under any applicable law or any jurisdiction shall be ineffective
as to such jurisdiction without invalidating the remaining provisions of the
Lease.
30. SECURITY INTEREST. Each Schedule shall be executed in three counterparts,
consecutively numbered. To the extent, if any, that a Schedule constitutes
chattel paper (as such term is defined in the UCC) no security interest may be
created through the transfer or possession of any counterpart other than that
designated "Counterpart No. 1". The Master Lease, in the form of a photocopy,
is incorporated into the Schedule and is not chattel paper by itself.
<PAGE> 7
31. SUSPENSION OF OBLIGATIONS OF LESSOR. Prior to delivery of any item
hereunder, the obligations of Lessor will be suspended to the extent that it is
hindered or prevented from complying therewith because of labor disturbances,
including but not limited to, strikes and lockouts, or acts of God, fires,
storms, accidents, failure of the manufacturer to deliver any item,
governmental regulations or interference or any cause whatsoever not within the
exclusive control of Lessor.
32. NON-SPECIFIED FEATURES. If Equipment delivered pursuant to any Lease
contains any feature not specified therein, Lessee grants Lessor, at Lessor's
option and expense, the right to remove or deactivate any such feature. Such
removal or deactivation shall be performed by the manufacturer or other
acceptable party at the request of Lessor at a time convenient to Lessee,
provided that Lessee shall not unreasonably delay the removal or deactivation
of such feature.
33. MISCELLANEOUS.
(a) Lessor and Lessee acknowledge that there are no agreements or
understandings, written or oral, between Lessor and Lessee with respect to the
Equipment, other than as set forth in the Lease, and the Lease contains the
entire agreement between Lessor and Lessee with respect thereto. NEITHER THE
MASTER LEASE NOR ANY SCHEDULE MAY BE ALTERED, MODIFIED, TERMINATED OR
DISCHARGED EXCEPT BY A WRITING SIGNED BY BOTH PARTIES, AND AGREEMENT TO THE
FOREGOING IS EVIDENCED BY THE FOLLOWING INITIALS:
Lessor: ______ Lessee: ______
(b) If there is more than one Lessee named in this Lease, the liability of each
shall be joint and several.
(c) Section headings are for convenience only and shall not be construed as
part of the Lease.
(d) Time is of the essence of this Lease and each and all of its provisions.
(e) This Lease shall be governed by the laws of the State of California without
giving effect to the principles of conflict of laws, and shall be deemed to
have been made in California. NO RIGHTS OR REMEDIES REFERRED TO IN ARTICLE 2A
OF THE UCC WILL BE CONFERRED ON LESSOR OR LESSEE UNLESS EXPRESSLY GRANTED IN
THIS MASTER LEASE OR THE SCHEDULE.
(f) Lessee's obligations and liabilities hereunder shall not be affected by,
and shall survive, the expiration or earlier termination of this Lease.
(g) This Lease shall inure to the benefit of and shall be binding upon Lessee
and Lessor and their respective successors and assigns.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS MASTER LEASE AS OF THE DATE
FIRST ABOVE WRITTEN.
LESSOR: INSIGHT INVESTMENTS, CORP.
By: /s/ CHARLES F. ADAMS
-----------------------------
Name: CHARLES F. ADAMS
----------------------------
Title: Vice President, C.O.O.
---------------------------
LESSEE: AMERICAN INDEPENDENT NETWORK
By: /s/ RANDY MOSELEY
-----------------------------
Name: RANDY MOSELEY
----------------------------
Title: President
---------------------------
<PAGE> 8
EQUIPMENT SCHEDULE NO. 1
TO
MASTER LEASE AGREEMENT NO. 6239 DATED June 24, 1996 (THE "LEASE")
BETWEEN INSIGHT INVESTMENTS, CORP. ("LESSOR")
AND American Independent Network ("LESSEE")
- -------------------------------------------------------------------------------
EQUIPMENT SCHEDULE NO. 1
- -------------------------------------------------------------------------------
Equipment Location:
AMERICAN INDEPENDENT NETWORK
6125 Airport Freeway #200
Fort Worth, TX 76117
<TABLE>
<CAPTION>
QTY MODEL / TYPE EQUIPMENT DESCRIPTION MFG
<S> <C> <C> <C> <C>
1 3200-CHASSIS 110V UNIVERSAL CHASSIS CLI
1 3200- CIB CHASSIS INTERFACE BOARD CLI
4 3200- POWER SUPPLY UNIVERSAL POWER SUPPLY CLI
3 3200-VE- NTSC NTSC VIDEO ENCODER-MPEG2 CLI6
4 3200- AE AUDIO ENCODER - MPEG2 CLI
2 3200-DIU- DOM DOMESTIC DATE INTERFACE CLI
2 3200-MUX- DES DES ENCRYPTION MULTIPLEXER CLI6
1 3200-MUX- MOD-INTER MULTIPLEXER & MODULATOR INTRFC CLI
1 3200- SUPER SYSTEM SUPERVISOR VISION W/FREQ GENER CLI
1 3200- CABINET SYSTEM INTEGRATION CABINET CLI
2 SDM 2020 2020 18 Mbaud DVB Compliant Modul. CLI
1 NACS MAGNITUDE NETWORK ACCESS SYSTM CLI
1 MAG-ENC- INSTALL MAGNITUDE ENCODR INSTAL MANUAL CLI
1 MAG-USER- MPEG2 MAGNITUDE ENCODER USER GUIDES CLI
1 570 3.7 METER TRANSMIT ANTENNA MIRALITE
1 C BAND 2 PORT OMT GAMMA F
1 AFC-HD Transportable Ground Mount Baird
2 SDC600 CBank Up-Converter EF Data
1 EPS 3012 12KVa Phase 220 Wire UPS PPSI
2 30-710020-002 3 Kwatt Klystron Aydin
1 30-710148-001 1:1 Klystron Switch Aydin
1 WRKSA 72" Rack w/10" Fans Ford
1 HP Hardware Ford
1 SW Washers (set of 100) Ford
1 40525 A-4 Pressurization Equipment Andrew
1 Reducer Local
1 Clamp Local
2 hood Vent Hood Virginia Bldg.
1 48940-2 Wall Feed through Plate Andrew
3 42396A-8 Waveguide Hanger Kit Andres
1 48939-52 Waveguide Boot Andrew
1 55001-137 Pressure Window Andrew
1 WFTP137-36-59 Flexible Waveguide Andres
</TABLE>
<PAGE> 9
- ------------------------------------------------------------------------------
EQUIPMENT SCHEDULE NO. 1
Page 2
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QTY MODEL/TYPE EQUIPMENT DESCRIPTION MFG
<S> <C> <C> <C>
2 55072-137 Half Gasket Andrew
1 Hose Vent Hose Aydin
1 5521-137 90 H Plane Elbow Andres
1 EW52w/2ea Waveguide w/Connectors 100ft. Andrew
252DE
1 55224-112 Flange hardware Kit Andrew
1 VJ2-E24-2u Blank Video Patch Panel Marketech
1 ISO 3X20 Hardware Marketech
9 VWJ2-W Dual Video Jack Marketech
1 PJ-739 Audio Patch Panel Marketech
1 U82 Shelf Marketech
3 SR-3150 Integrated Receiver Decoder G.I.
4 PVM8041Q NTSC Monitor Sony
4 RKPM8044 Rack Mount Kit Sony
1 PS37D Spectrum Analyzer Avcom
1 961024KC 6 KVA 110V UPS PP81
3 Compsite Video Input Decoder NovaSystems
1 TD-3100 Local Confidence Monitor G.I.
</TABLE>
Initial Term: 36 Months Commencement Date: January 1, 1997
Rental Payments: 1-24; $11,615.00/Month Installation Date:
25-36; $ 9,353.00/Month
Other: At end of term the Lessee has the option to renew, return the leased
equipment to the Lessor or purchase the equipment at Fair Market Value. The
equipment listed on Schedule #1 will be the basis for determining the Fair
Market Value of the equipment at end of term. At commencement the agreed to
value of the equipment listed on Schedule #1 is $511,419.00.
The payment of a $200,000 capital reduction by the Lessee to Mira Lite
Communications, the vendor, in advance of equipment delivery and commencement
of the Lease is a condition required by Lessor and agreed to by the Lessee
and Vendor.
LESSOR: Insight Investment Corp. LESSEE: American Independent Network
BY: /s/ RICHARD M. HEARD BY: /s/ RANDY MOSELEY
-------------------------- -------------------------
Richard M. Heard Randy Moseley
TITLE: Chief Financial Officer TITLE: President/CFO
-------------------------
DATE: January 17, 1997 DATE: 1-17-97
-------------------------
<PAGE> 10
NOTICE OF ASSIGNMENT AND
LESSEE'S ACKNOWLEDGEMENT
To: American Independent Network
6125 Airport Freeway #200
(Lessee)
Fort Worth, TX 76117
Please be advised that Insight Investments Corporation ("Lessor") has assigned
to Data Sales Co. Inc. all rights of Lessor in the equipment schedules listed
below ("the Schedules") to the Lease No. 6239 between you and Lessor dated, June
24, 1996 ("Lease"), including all rights to receive the lease payments listed
below payable by you commencing with the first payment referenced below and
continuing up to and including the last payment referenced below and all other
sums which may become due and payable from you to Lessor under the Schedule.
<TABLE>
<CAPTION>
SCHEDULE PAYMENT NO. OF MONTHS FIRST PAYMENT/LAST PAYMENT
- -------- ------- ------------- --------------------------
<S> <C> <C> <C>
1 $11,615.00 1-24 January 1, 1997/December 1, 1998
$ 9,353.00 25-36 January 1, 1999/December 1, 1999
</TABLE>
Except as otherwise directed by the Data Sales Co. Inc., please pay any and all
rents and any other amounts payable by you under the Schedule directly to Data
Sales Co., Inc. at the address listed below:
Data Sales Co., Inc.
3450 W. Burnsville Parkway
Burnsville, MN 55337
Please acknowledge this assignment on the following page.
INSIGHT INVESTMENTS, CORP.
(Lessor)
By: /s/ RICHARD M. HEARD
----------------------------
Richard M. Heard
Title: Chief Financial Officer
-------------------------
<PAGE> 11
NOTICE OF ASSIGNMENT AND
LESSEE'S ACKNOWLEDGEMENT
To: American Independent Network
6125 Airport Freeway #200
(Lessee)
Fort Worth, TX 76117
Please be advised that Insight Investments Corporation ("Lessor") has assigned
to Data Sales Co. Inc. all rights of Lessor in the equipment schedules listed
below ("the Schedules") to the Lease No. 6239 between you and Lessor dated, June
24, 1996 ("Lease"), including all rights to receive the lease payments listed
below payable by you commencing with the first payment referenced below and
continuing up to and including the last payment referenced below and all other
sums which may become due and payable from you to Lessor under the Schedule.
<TABLE>
<CAPTION>
SCHEDULE PAYMENT NO. OF MONTHS FIRST PAYMENT/LAST PAYMENT
- -------- ------- ------------- --------------------------
<S> <C> <C> <C>
1 $ 9,055.00 1-24 January 1, 1997/December 1, 1998
$11,615.00 25-36 January 1, 1999/December 1, 1999
</TABLE>
Except as otherwise directed by the Data Sales Co. Inc., please pay any and all
rents and any other amounts payable by you under the Schedule directly to Data
Sales Co., Inc. at the address listed below:
Data Sales Co., Inc.
3450 W. Burnsville Parkway
Burnsville, MN 55337
Please acknowledge this assignment on the following page.
INSIGHT INVESTMENTS, CORP.
(Lessor)
By: /s/ RICHARD M. HEARD
----------------------------
Richard M. Heard
Title: Chief Financial Officer
-------------------------
<PAGE> 12
The undersigned acknowledges receipt of the foregoing Notice of Assignment and
in consideration of the financing extended by Data Sales Co. Inc. to Lessor and
the benefits derived therefrom to the undersigned agrees: (1) to be bound by
the provisions of the Lease, the Schedule and the foregoing Notice of
Assignment; (2) that the undersigned has received no notice of any other
assignments or claims relating to the Schedule and has no reason to refuse to
make payments of rent and other proceeds due thereunder to Data Sales Co. Inc.;
(3) not to amend the Lease or Schedule or substitute the equipment subject to
the Schedule without prior written consent of Data Sales Co. Inc.; (4) that the
Lease and Schedule as executed are binding and legally enforceable against the
undersigned in accordance with their terms; and (5) to make payments to Data
Sales Co. Inc. until instructed to do otherwise by Data Sales Co. Inc. without
any set-off or deduction whatsoever, notwithstanding any defect in, damage to
or requisition of any of the equipment leased under the Schedule, or any other
similar or dissimilar event, or any defense, set-off, counterclaim or
recoupment arising out of any claim the undersigned may have against Lessor, it
being understood that the undersigned retains the right to assert any such
claim in a separate action against Lessor.
The undersigned further acknowledges that Data Sales Co. Inc. has not assumed
any duties of Lessor under the Lease or Schedule and has made no
representations or warranties whatsoever as to the Lease, the Schedule or any
of the leased equipment.
AMERICAN INDEPENDENT NETWORK
By: /s/ RANDY MOSELEY
-----------------------------
Randy Moseley
Title: President/CFO
--------------------------
Date: 1-17-97
---------------------------
<PAGE> 13
THIS FINANCING STATEMENT IS PRESENTED
TO A FILING OFFICER FOR FILING PURSUANT
TO THE UNIFORM COMMERCIAL CODE.
<TABLE>
<S> <C> <C> <C> <C>
-------------------------------------------
11. [ ] CHECK TO REQUEST SAME DEBTOR
SEARCH CERTIFICATE (INSTRUCTION B.11)
- ----------------------------------------------------------------------------------------------------------------
1. DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I. 1A. PREFIX 1B. SUFFIX
American Independent Network
- ----------------------------------------------------------------------------------------------------------------
1C MAILING ADDRESS 1D. CITY, STATE 1E. ZIP CODE
6125 Airport Freeway #200 Fort Worth, TX 76117
- ----------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I. 2A. PREFIX 2B. SUFFIX
- ----------------------------------------------------------------------------------------------------------------
2C. MAILING ADDRESS 2D. CITY, STATE 2E. ZIP CODE
- ----------------------------------------------------------------------------------------------------------------
3. ADDITIONAL DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I. 3A. PREFIX 3B. SUFFIX
- ----------------------------------------------------------------------------------------------------------------
3C. MAILING ADDRESS 3D. CITY, STATE 3E. ZIP CODE
- ----------------------------------------------------------------------------------------------------------------
4. SECURED PARTY (IF PERSONAL) LAST NAME FIRST NAME M.I.
Insight Investments, Corp.
- ----------------------------------------------------------------------------------------------------------------
4A. MAILING ADDRESS 4B. CITY, STATE 4C. ZIP CODE
265 S. Anita Dr., #200 Orange, CA 92868
- ----------------------------------------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY) LAST NAME
Data Sales Co., Inc.
- ----------------------------------------------------------------------------------------------------------------
5A. MAILING ADDRESS 5B. CITY, STATE 5C. ZIP CODE
3450 W. Burnsville Pkwy Burnsville, MN 55337
- ----------------------------------------------------------------------------------------------------------------
6. This FINANCING STATEMENT covers the following types or items of property. (If collateral is crops, fixtures,
timber or minerals, read instruction B. 6-7).
Cover equipment on Schedule #1 to Master Lease #6239
- ----------------------------------------------------------------------------------------------------------------
7. CHECK ONLY 7A. PRODUCTS OF 7B. THIS FINANCIAL STATEMENT IS NUMBER OF ADDITIONAL
IF COLLATERAL ARE TO BE FILED FOR RECORD IN SHEETS
APPLICABLE [ ] ALSO COVERED [ ] THE REAL ESTATE RECORDS PRESENTED ______
- ----------------------------------------------------------------------------------------------------------------
8. CHECK 8A. THIS FINANCIAL STATEMENT IS SIGNED BY THE SECURED PARTY
APPROPRIATE INSTEAD OF THE DEBTOR TO PERFECT A SECURITY INTEREST IN
BOX COLLATERAL IN ACCORDANCE WITH INSTRUCTION 8.8 ITEM: [ ](1) [ ](2) [ ](3) [ ](4) [ ](5)
- ----------------------------------------------------------------------------------------------------------------
9. SIGNATURE(S)
OF
DEBTOR(S) /s/ RANDY MOSELEY, President
- -------------------------------------------------------------------
American Independent Network
- -------------------------------------------------------------------
SIGNATURE(S)
OF
SECURED PARTY(IES)
- -------------------------------------------------------------------
Insight Investments, Corp.
- -------------------------------------------------------------------
10. Return copy to:
NAME
ADDRESS
CITY
STATE
ZIP
- -----------------------------------------------------------------------------------------------------------------
STANDARD FORM - FORM UCC-1 (REV. 9/1/92) (C) OFFICE OF THE SECRETARY OF STATE OF TEXAS
</TABLE>
<PAGE> 1
EXHIBIT 6.9
PROMISSORY NOTE EXTENSION AGREEMENT
Dated September 20, 1996
FOR VALUE RECEIVED, LYN BROADCASTING CORPORATION, An Oklahoma
corporation agrees to extend the maturity date of the Promissory Note dated
September 11, 1994 and related accrued interest due from American Independent
Network, Inc., a Delaware corporation, to September 30, 1997 on the same terms
and conditions as the original promissory note attached hereto as Exhibit A.
AMERICAN INDEPENDENT NETWORK, INC. acknowledges that the terms and
conditions of the original promissory note per Exhibit A shall continue to
apply during the promissory note extension period as granted by LYN
BROADCASTING CORPORATION.
LYN BROADCASTING CORPORATION
/s/ RANDY MOSELEY
- -----------------------------
Randy Moseley, CFO
AMERICAN INDEPENDENT NETWORK, INC.
/s/ DON SHELTON
- -----------------------------
Dr. Don Shelton, CEO
<PAGE> 1
EXHIBIT 6.10
PROMISSORY NOTE EXTENSION AGREEMENT
Dated September 20, 1996
FOR VALUE RECEIVED, SHELLEY MEDIA MARKETING CORPORATION, a Texas
corporation agrees to extend the maturity date of the Promissory Note dated
September 6, 1994 and related accrued interest due from American Independent
Network, Inc., a Delaware corporation, to September 30, 1997 on the same terms
and conditions as the original promissory note attached hereto as Exhibit A.
AMERICAN INDEPENDENT NETWORK, INC. acknowledges that the terms and
conditions of the original promissory note per Exhibit A shall continue to
apply during the promissory note extension period as granted by SHELLEY MEDIA
MARKETING CORPORATION.
SHELLEY MEDIA MARKETING CORPORATION
/s/ RANDY MOSELEY
- -----------------------------
Randy Moseley, CFO
AMERICAN INDEPENDENT NETWORK, INC.
/s/ DON SHELTON
- -----------------------------
Dr. Don Shelton, CEO
<PAGE> 1
EXHIBIT 6.11
PROMISSORY NOTE EXTENSION AGREEMENT
Dated September 20, 1996
FOR VALUE RECEIVED, CLEVELAND BROADCASTING CORPORATION, a Texas
corporation agrees to extend the maturity date of the Promissory Note dated
September 6, 1994 and related accrued interest due from American Independent
Network, Inc., a Delaware corporation, to September 30, 1997 on the same terms
and conditions as the original promissory note attached hereto as Exhibit A.
AMERICAN INDEPENDENT NETWORK, INC. acknowledges that the terms and
conditions of the original promissory note per Exhibit A shall continue to
apply during the promissory note extension period as granted by CLEVELAND
BROADCASTING CORPORATION.
CLEVELAND BROADCASTING CORPORATION
/s/ RANDY MOSELEY
- -----------------------------
Randy Moseley, CFO
AMERICAN INDEPENDENT NETWORK, INC.
/s/ DON SHELTON
- -----------------------------
Dr. Don Shelton, CEO
<PAGE> 1
EXHIBIT 6.12
PROMISSORY NOTE EXTENSION AGREEMENT
Dated September 20, 1996
FOR VALUE RECEIVED, ATN NETWORK, INC., a Texas corporation agrees to
extend the maturity date of the Promissory Note dated September 29, 1994 and
related accrued interest due from American Independent Network, Inc., a Delaware
corporation, to September 30, 1997 on the same terms and conditions as the
original promissory note attached hereto as Exhibit A.
AMERICAN INDEPENDENT NETWORK, INC. acknowledges that the terms and
conditions of the original promissory note per Exhibit A shall continue to
apply during the promissory note extension period as granted by ATN NETWORK,
INC.
ATN NETWORK, INC.
/s/ RANDY MOSELEY
- -----------------------------
Randy Moseley, CFO
AMERICAN INDEPENDENT NETWORK, INC.
/s/ DON SHELTON
- -----------------------------
Dr. Don Shelton, CEO
<PAGE> 1
EXHIBIT 6.13
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount: $30,000.00 Dated: July 15, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network,
Inc., a Delaware corporation ("Maker"), promises to pay to the order of Super
Six, Inc., ("Lender"), the principal sum of Thirty Thousand Dollars $30,000.00,
(the "Amount Advanced") on or before December 31, 1997 (the "Maturity Date").
1. INTEREST RATE.
The unpaid principal under this Promissory Note (the "Note")
shall bear interest at a rate of nine percent (9%) per annum, payable at the
maturity of the Note.
2. COMPUTATION.
Interest chargeable hereunder shall be calculated from the date
of the Note on a simple interest basis. Interest not paid when due shall be
added to the unpaid principal balance and shall thereafter bear interest at the
same rate as principal. All payments hereunder are to be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
3. PAYMENTS.
All unpaid principal and accrued interest shall be payable on
the Maturity Date at the Lender's address of record. Maker agrees that any of
its common stock shares owned by Lender shall not be subject to any reverse
provisions of the Maker before the initial public offering.
4. VOLUNTARY PREPAYMENTS.
Upon providing advance written notice to Lender, Maker may
prepay the unpaid Amount Advanced evidenced by this Promissory Note, in whole or
in part, by paying to Lender, in cash or by wire transfer or immediately
available federal funds, the amount of such prepayment. If any such prepayment
is less than a full prepayment, such prepayment shall be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
1
<PAGE> 2
5. LAWFUL MONEY; DESIGNATED PLACES OF PAYMENT.
All principal and interest due hereunder is payable in lawful money
of the United States of America, in immediately available funds, at Lender's
designated address, set forth in Section 11, not later than 5:00 p.m., Pacific
Standard Time, on the day payment is due.
6. USURY MATTERS.
It is expressly stipulated and agreed to be the intent of Maker and
Lender to comply with, at all times, the applicable state law governing the
maximum rate or amount of interest payable on the Note (or applicable federal
law to the extent that it permits the Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable state
law). In the event the applicable law is judicially interpreted so as to render
usurious any amount called for under the Note or contracted for, charged,
taken, reserved or received with respect to such indebtedness, or if Lender's
exercise of his, her or its option to accelerate the maturity of the Note, or if
any prepayment by Maker results in Maker having paid any interest in excess of
that permitted by applicable law, then it is the express intent of both Maker
and Lender that all excess amounts theretofore collected by Lender be credited
on the principal balance of the Note (or, if this Note has been or would
thereby be paid in full, refunded to Maker), and the provisions of the Note
shall immediately be deemed amended and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of
any new, or amendment to any existing document to comply with the applicable
law and to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder.
7. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself and its legal
representatives, successors, and assigns, expressly waives presentment, protest,
demand, notice of dishonor, notice of nonpayment, notice of maturity, notice of
protest, notice of intent to accelerate, notice of acceleration, presentment for
the purpose of accelerating maturity, and diligence in collection.
8. DEFAULT.
The occurrence of one or more of the following events shall
constitute as an event of default of this Note: (a) the entry of a decree or
order by a court having appropriate jurisdiction adjudging Maker a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization or
liquidation of Maker under the Federal Bankruptcy Act or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee or trustee
over any substantial portion of Debtor's property or collateral, or ordering the
winding up or liquidation of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of sixty (60) consecutive days; (b)
the institution by Maker of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
2
<PAGE> 3
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Act or any other
applicable federal or state law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assigned or trustee
of Maker, or any substantial part of its property, or if the collateral
("collateral") shall become subject to the jurisdiction of a federal bankruptcy
court or similar state court, of if Maker shall make an assignment for the
benefit of its creditors, or if there is an attachment, receivership, execution
or other judicial seizure, or if there is an admission in writing by Maker of
its inability to pay its debts generally as they become due, or the taking of
corporate action by Maker in furtherance of any such action; (c) default in the
obligation of Maker for borrowed money, other than this Note, which shall
continue for a period of sixty (60) days, or any event that results in
acceleration of the maturity of any indebtedness of Maker under any note,
indenture, contract, or agreement; (d) Maker's failure to comply with any
material term, obligation, covenant, or condition contained in this Note,
within ten (10) days after receipt of written notice from Lender demanding
such compliance; (e) any levy, seizure, attachment, lien or encumbrance of or on
the collateral other than those existing as of the date of this Note, which is
not discharged by Maker within ten (10) days: (f) any sale, transfer, or
disposition of any interest in the collateral, other than in the ordinary
course of business, without the written consent of Lender.
9. ATTORNEY'S FEES.
In the event it should become necessary to employ counsel to collect
this Note, Maker agrees to pay the reasonable attorney's fees and costs of
Lender, or its assigns, incurred in connection with Lender's collection
efforts, irrespective of whether suit is brought.
10. LENDER'S ADDRESS OF RECORD.
All payment of principal and interest, provided by Section 3 herein,
shall be mailed to Lender at:
Super Six, Inc.
1801 Oak Knoll Dr.
Colleyville, TX 76034
11. SECTION HEADINGS.
Headings and numbers have set forth for convenience only. Unless the
contrary is complied by the context, everything contained in each Section
applies equally to the entire Note.
12. AMENDMENTS IN WRITING.
This Note may be changed, modified or amended only by a writing
signed by both Maker and Lender.
3
<PAGE> 4
13. CHOICE OF LAW.
This Note and all transactions hereunder and/or evidenced hereby
shall be governed by, construed under, and enforced in accordance with the
laws of the State of Texas.
14. WAIVER OF TRIAL BY JURY.
Maker hereby waives, to the extent permitted under applicable law,
any right to trial by jury in any action or proceeding relating to this Note.
Made and Executed at
Fort Worth, Texas
American Independent Network, Inc.
a Delaware corporation
/s/ [SIG]
- ---------------------------------------
Randy Moseley
President, CFO
4
<PAGE> 1
EXHIBIT 6.14
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount: $25,000.00 Dated: August 31, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network,
Inc., a Delaware corporation ("Maker"), promises to pay to the order of Jim
Thornbro, ("Lender"), the principal sum of Twenty Five Thousand Dollars
$25,000.00, (the "Amount Advanced") on or before September 30, 1997 (the
"Maturity Date").
1. INTEREST RATE.
The unpaid principal under this Promissory Note (the "Note")
shall bear interest at a rate of nine percent (9%) per annum, payable at the
maturity of the Note.
2. COMPUTATION.
Interest chargeable hereunder shall be calculated from the date
of the Note on a simple interest basis. Interest not paid when due shall be
added to the unpaid principal balance and shall thereafter bear interest at the
same rate as principal. All payments hereunder are to be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
3. PAYMENTS.
All unpaid principal and accrued interest shall be payable on
the Maturity Date at the Lender's address of record. Maker agrees that any of
its common stock shares owned by Lender shall not be subject to any reverse
provisions of the Maker before the initial public offering.
4. VOLUNTARY PREPAYMENTS.
Upon providing advance written notice to Lender, Maker may
prepay the unpaid Amount Advanced evidenced by this Promissory Note, in whole or
in part, by paying to Lender, in cash or by wire transfer or immediately
available federal funds, the amount of such prepayment. If any such prepayment
is less than a full prepayment, such prepayment shall be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
1
<PAGE> 2
5. LAWFUL MONEY: DESIGNATED PLACES OF PAYMENT.
All principal and interest due hereunder is payable in lawful
money of the United States of America, in immediately available funds, at
Lender's designated address, set forth in Section 11, not later than 5:00 p.m.,
Pacific Standard Time, on the day payment is due.
6. USURY MATTERS.
It is expressly stipulated and agreed to be the intent of Maker
and Lender to comply with, at all times, the applicable state law governing the
maximum rate or amount of interest payable on the Note (or applicable federal
law to the extent that it permits the Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable state
law). In the event the applicable law is judicially interpreted so as to render
usurious any amount called for under the Note or contracted for, charged,
taken, reserved or received with respect to such indebtedness, or if Lender's
exercise of his, her or its option to accelerate the maturity of the Note, or
if any prepayment by Maker results in Maker having paid any interest in excess
of that permitted by applicable law, then it is the express intent of both
Maker and Lender that all excess amounts therefore collected by Lender be
credited on the principal balance of the Note (or, if this Note has been or
would thereby be paid in full, refunded to Maker), and the provisions of the
Note shall immediately be deemed amended and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new, or amendment to any existing document to comply with the applicable law
and to permit the recovery of the fullest amount otherwise called for hereunder
and thereunder.
7. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself and its
legal representatives, successors, and assigns, expressly waives presentations,
protest, demand, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, notice of intent to accelerate, notice of acceleration,
presentment for the purpose of accelerating maturity, and diligence in
collection.
8. DEFAULT.
The occurrence of one or more of the following events shall
constitute as an event of default of this Note: (a) the entry of a decree or
order by a court having appropriate jurisdiction adjudging Maker a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization or
liquidation of Maker under the Federal Bankruptcy Act or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee or trustee
over any substantial portion of Debtor's property or collateral, or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60) consecutive
days; (b) the institution by Maker of proceedings to be adjudicated a bankrupt
or insolvent, or the consent by it to the institution of bankruptcy or
insolvency
2
<PAGE> 3
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Act or any other
applicable federal or state law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assigned or trustee
of Maker, or any substantial part of its property, or if the collateral
("collateral") shall become subject to the jurisdiction of a federal bankruptcy
court or similar state court, or if Maker shall make an assignment for the
benefit of its creditors, or if there is an attachment, receivership, execution
or other judicial seizure, or if there is an admission in writing by Maker of
its inability to pay its debts generally as they become due, or the taking of
corporate action by Maker in furtherance of any such action; (c) default in the
obligation of Maker for borrowed money, other than this Note, which shall
continue for a period of sixty (60) days, or any event that results in
acceleration of the maturity of any indebtedness of Maker under any note,
indenture, contract, or agreement; (d) Maker's failure to comply with any
material term, obligation, covenant, or condition contained in this Note,
within ten (10) days after receipt of written notice from Lender demanding such
compliance; (e) any levy, seizure, attachment, lien or encumbrance of or on the
collateral other than those existing as of the date of this Note, which is not
discharged by Maker within ten (10) days; (f) any sale, transfer, or
disposition of any interest in the collateral, other than in the ordinary
course of business, without the written consent of Lender.
9. ATTORNEY'S FEES.
In the event it should become necessary to employ counsel to
collect this Note, Maker agrees to pay the reasonable attorney's fees and costs
of Lender, or its assigns, incurred in connection with Lender's collection
efforts, irrespective of whether suit is brought.
10. LENDERS ADDRESS OF RECORD.
All payments of principal and interest, provided by Section 3
herein, shall be mailed to Lender at:
Jim Thornbro
1304 E. Holly Ave.
Sterling, VA 20164
11. SECTION HEADINGS.
Headings and numbers have set forth for convenience only.
Unless the contrary is complied by the context, everything contained in each
Section applies equally to the entire Note.
12. AMENDMENTS IN WRITING.
This Note may be changed, modified or amended only by a writing
signed by both Maker and Lender.
3
<PAGE> 4
13. CHOICE OF LAW.
This Note and all transactions hereunder and/or evidenced
hereby shall be governed by, construed under, and enforced in accordance with
the laws of the State of Texas.
14. WAIVER OF TRIAL BY JURY.
Maker hereby waives, to the extent permitted under applicable
law, any right to trial by jury in any action or proceeding relating to this
Note.
Made and Executed at
Fort Worth, Texas
American Independent Network, Inc.
a Delaware corporation
/s/ RANDY MOSELEY
__________________________________
Randy Moseley
President, CEO
4
<PAGE> 1
EXHIBIT 6.15
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount: $50,000.00 Dated: August 4, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network, Inc.,
a Delaware corporation ("Maker"), promises to pay to the order of Logistics
Services International, Inc., ("Lender"), the principal sum of Fifty Thousand
Dollars $50,000.00, (the "Amount Advanced") on or before December 31, 1997 (the
"Maturity Date").
1. INTEREST RATE.
The unpaid principal under this Promissory Note (the "Note")
shall bear interest at a rate of fifteen percent (15%) per annum, payable at the
maturity of the Note.
2. COMPUTATION.
Interest chargeable hereunder shall be calculated from the date
of the Note on a simple interest basis. Interest not paid when due shall be
added to the unpaid principal balance and shall thereafter bear interest at the
same rate as principal. All payments hereunder are to be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
3. PAYMENTS.
All unpaid principal and accrued interest shall be payable on
the Maturity Date at the Lender's address of record.
4. VOLUNTARY PREPAYMENTS.
Upon providing advance written notice to Lender, Maker may
prepay the unpaid Amount Advanced evidenced by this Promissory Note, in whole or
in part, by paying to Lender, in cash or by wire transfer or immediately
available federal funds, the amount of such prepayment. If any such prepayment
is less than a full prepayment, such prepayment shall be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
1
<PAGE> 2
5. LAWFUL MONEY; DESIGNATED PLACES OF PAYMENT.
All principal and interest due hereunder is payable in lawful
money of the United States of America, in immediately available funds, at
Lender's designated address, set forth in Section 11, not later than 5:00 p.m.,
Pacific Standard Time, on the day payment is due.
6. USURY MATTERS.
It is expressly stipulated and agreed to be the intent of Maker
and lender to comply with, at all times, the applicable state law governing the
maximum rate or amount of interest payable on the Note (or applicable federal
law to the extent that it permits the Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable state
law). In the event the applicable law is judicially interpreted so as to render
usurious any amount called for under the Note or contracted for, charged,
taken, reserved or received with respect to such indebtedness, or if Lender's
exercise of his, her or its option to accelerate the maturity of the Note, or
if any prepayment by Maker results in Maker having paid any interest in excess
of that permitted by applicable law, then it is the express intent of both
Maker and Lender that all excess amounts theretofore collected by Lender be
credited on the principal balance of the Note (or, if this Note has been or
would thereby be paid in full, refunded to Maker), and the provisions of the
Note shall immediately be deemed amended and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new, or amendment to any existing document to comply with the applicable law
and to permit the recovery of the fullest amount otherwise called for hereunder
and thereunder.
7. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself and its
legal representatives, successors, and assigns, expressly waives presentment,
protest, demand, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, notice of intent to accelerate, notice of acceleration,
presentment for the purpose of accelerating maturity, and diligence in
collection.
8. DEFAULT.
The occurrence of one or more of the following events shall
constitute as an event of default of this Note: (a) the entry of a decree or
order by a court having appropriate jurisdiction adjudging Maker a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization or
liquidation of Maker under the Federal Bankruptcy Act or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee or trustee
over any substantial portion of Debtor's property or collateral, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60) consecutive
days; (b) the institution by Maker of proceedings to be adjudicated a bankrupt
or insolvent, or the consent by it to the institution of bankruptcy or
insolvency
<PAGE> 3
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Act or any other
applicable federal or state law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assigned or trustee
of Maker, or any substantial part of its property, or if the collateral
("collateral") shall become subject to the jurisdiction of a federal bankruptcy
court or similar state court, or if Maker shall make an assignment for the
benefits of its creditors, or if there is an attachment, receivership,
execution or other judicial seizure, or if there is an admission in writing by
Maker of its inability to pay its debts generally as they become due, or the
taking of corporate action by Maker in furtherance of any such action; (c)
default in the obligation of Maker for borrowed money, other than this Note,
which shall continue for a period of sixty (60) days, or any event that results
in the acceleration of the maturity of any indebtedness of Maker under any
note, indenture, contract, or agreement; (d) Maker's failure to comply with any
material term, obligation, covenant, or condition contained in this Note,
within ten (10) days after receipt of written notice from Lender demanding such
compliance; (e) any levy, seizure, attachment, lien or encumbrance of or on the
collateral other than those existing as of the date of this Note, which is not
discharged by Maker within ten (10) days; (f) any sale, transfer, or
disposition of any interest in the collateral, other than in the ordinary
course of business, without the written consent of Lender.
9. SECURITY INTEREST; UCC-1 FILING.
If an event of default should occur, Lender may enforce the
rights granted to him or her, pursuant to the Uniform Commercial Code, as
provided by the Uniform Commercial Code Financing Statement filed on behalf of
Lender in the State of Texas against all assets of Maker.
10. ATTORNEY'S FEES.
In the event it should become necessary to employ counsel to
collect this Note, Maker agrees to pay the reasonable attorney's fees and costs
of Lender, or its assigns, incurred in connection with Lender's collection
efforts, irrespective of whether suit is brought.
11. LENDERS ADDRESS OF RECORD.
All payments of principal and interest, provided by Section 3
herein, shall be mailed to Lender at:
Logistic Services International, Inc.
2310 Woodsong Trail
Arlington, Texas 75016
817-589-1090
3
<PAGE> 4
12. SECTION HEADINGS.
Headings and numbers have set forth for convenience only.
Unless the contrary is complied by the context, everything contained in each
Section applies equally to the entire Note.
13. AMENDMENTS IN WRITING.
This Note may be changed, modified or amended only by a writing
signed by both Maker and Lender.
14. CHOICE OF LAW.
This Note and all transactions hereunder and/or evidenced
hereby shall be governed by, construed under, and enforced in accordance with
the laws of the State of Texas.
15. WAIVER OF TRIAL BY JURY.
Maker hereby waives, to the extent permitted under applicable
law, any right to trial by jury in any action or proceeding relating to this
Note.
Made and Executed at
Fort Worth, Texas
American Independent Network, Inc.
a Delaware corporation.
/s/ RANDY MOSELEY
- ----------------------------------
Randy Moseley
President, CFO
<PAGE> 1
EXHIBIT 6.16
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount: $38,000.00 Dated: August 29, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network, Inc.,
a Delaware corporation ("Maker"), promises to pay to the order of Rajendra S.
Shah, ("Lender"), the principal sum of Thirty Eight Thousand Dollars $38,000.00,
(the "Amount Advanced") on or before September 30, 1997 (the "Maturity Date").
1. INTEREST RATE.
The unpaid principal under this Promissory Note (the "Note")
shall bear interest at a rate of ten percent (10%) per annum, payable at the
maturity of the Note.
2. COMPUTATION.
Interest chargeable hereunder shall be calculated from the date
of the Note on a simple interest basis. Interest not paid when due shall be
added to the unpaid principal balance and shall thereafter bear interest at the
same rate as principal. All payments hereunder are to be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
3. PAYMENTS.
All unpaid principal and accrued interest shall be payable on
the Maturity Date at the Lender's address of record. Lender shall have the
option of taking thirty eight thousand (38,000) shares of American Independent
Network, Inc. common stock issued in his name in lieu of payment by Maker.
Lender shall give Maker five (5) days notice before the due date if he wants to
exercise the option to take the common stock as payment of this note. Lender
shall be issued ten thousand (10,000) shares of American Independent Network,
Inc. common stock if this promissory note is paid by Maker and the thirty eight
thousand (38,000) shares of American Independent Network, Inc. common stock is
returned to Maker. Maker agrees that any of its common stock shares owned by
Lender shall not be subject to any reverse provisions of the Maker before the
initial public offering.
4. VOLUNTARY PREPAYMENTS.
Upon providing advance written notice to Lender, Maker may
prepay the unpaid Amount Advanced evidenced by this Promissory Note, in whole or
in part, by paying to Lender, in cash or by wire transfer or immediately
available federal funds, the amount of such prepayment. If any such prepayment
is less than a full prepayment, such prepayment shall be applied first to the
payment of accrued interest and the balance remaining applied to the payment of
principal.
1
<PAGE> 2
5. LAWFUL MONEY; DESIGNATED PLACES OF PAYMENT.
All principal and interest due hereunder is payable in lawful
money of the United States of America, in immediately available funds, at
Lender's designated address, set forth in Section 11, not later than 5:00 p.m.,
Pacific Standard Time, on the day payment is due.
6. USURY MATTERS
It is expressly stipulated and agreed to be the intent of Maker
and Lender to comply with, at all times, the applicable state law governing the
maximum rate or amount of interest payable on the Note (or applicable federal
law to the extent that it permits the Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable state
law). In the event the applicable law is judicially interpreted so as to render
usurious any amount called for under the Note or contracted for, charged,
taken, reserved or received with respect to such indebtedness, or if Lender's
exercise of his, her or its option to accelerate the maturity of the Note, or
if any prepayment by Maker results in Maker having paid any interest in excess
of that permitted by applicable law, then it is the express intent of both
Maker and Lender that all excess amounts theretofore collected by Lender be
credited on the principal balance of the Note (or, if this Note has been or
would thereby be paid in full, refunded to Maker), and the provisions of the
Note shall immediately be deemed amended and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new, or amendment to any existing document to comply with the applicable law
and to permit the recovery of the fullest amount otherwise called for hereunder
and thereunder.
7. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself and its
legal representatives, successors, and assigns, expressly waives presentment,
protest, demand, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, notice of intent to accelerate, notice of acceleration,
presentment for the purpose of accelerating maturity, and diligence in
collection.
8. DEFAULT.
The occurrence of one or more of the following events shall
constitute as an event of default of this Note: (a) the entry of a decree or
order by a court having appropriate jurisdiction adjudging Maker a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization or
liquidation of Maker under the Federal Bankruptcy Act or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee or trustee
over any substantial portion of Debtor's property or collateral, or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of sixty (60) consecutive
days; (b) the institution by Maker of proceedings to be adjudicated a bankrupt
or insolvent, or the consent by it to the institution of bankruptcy or
insolvency
2
<PAGE> 3
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Federal Bankruptcy Act or any other
applicable federal or state law, or the consent by it to the filing of any such
petition or to the appointment of a receiver, liquidator, assigned or trustee
of Maker, or any substantial part of its property, or if the collateral
("collateral") shall become subject to the jurisdiction of a federal bankruptcy
court or similar state court, of if Maker shall make an assignment for the
benefit of its creditors, or if there is an attachment, receivership, execution
or other judicial seizure, or if there is an admission in writing by Maker of
its inability to pay its debts generally as they become due, or the taking of
corporate action by Maker in furtherance of any such action; (c) default in the
obligation of Maker for borrowed money, other than this Note, which shall
continue for a period of sixty (60) days, or any event that results in
acceleration of the maturity of any indebtedness of Maker under any note,
indenture, contract, or agreement; (d) Maker's failure to comply with any
material term, obligation, covenant, or condition contained in this Note, within
ten (10) days after receipt of written notice from Lender demanding such
compliance; (e) any levy, seizure, attachment, lien or encumbrance of or on the
collateral other than those existing as of the date of this Note, which is not
discharged by Maker within ten (10) days; (f) any sale, transfer, or disposition
of any interest in the collateral, other than in the ordinary course of
business, without the written consent of Lender.
9. ATTORNEY'S FEES.
In the event it should become necessary to employ counsel to
collect this Note, Maker agrees to pay the reasonable attorney's fees and costs
of Lender, or its assigns, incurred in connection with Lender's collection
efforts, irrespective of whether suit is brought.
10. LENDERS ADDRESS OF RECORD.
All payments of principal and interest, provided by Section 3
herein, shall be mailed to Lender at:
Rajendra S. Shah
2518 Ivy Brook #1308
Arlington, Texas 76006
11. SECTION HEADINGS.
Headings and numbers have set forth for convenience only.
Unless the contrary is complied by the context, everything contained in each
Section applies equally to the entire Note.
12. AMENDMENTS IN WRITING.
This Note may be changed, modified or amended only by a writing
signed by both Maker and Lender.
3
<PAGE> 4
13. CHOICE OF LAW.
This Note and all transactions hereunder and/or evidenced
hereby shall be governed by, construed under, and enforced in accordance with
the laws of the State of Texas.
14. WAIVER OF TRIAL BY JURY.
Maker hereby waives, to the extent permitted under the
applicable law, any right to trial by jury in any action or proceeding relating
to this Note.
Made and Executed at
Fort Worth, Texas
American Independent Network, Inc.
a Delaware corporation
/s/ RANDY MOSELEY
- --------------------------------------
Randy Moseley
President, CFO
4
<PAGE> 1
EXHIBIT 6.17
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount: $50,000 Dated_______________, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network,
Inc., a Delaware corporation ("Maker"), promises to pay to the order of Gary
R. Lamberg ("Lender"), the principal sum of Fifty Thousand Dollars
($50,000)(the "Amount Advanced") on or before the end of the ninety (90) day
term set forth below.
1. INTEREST AND MATURITY DATE.
The principal under this Promissory Note (the "Note")
shall bear interest at a flat rate of $5,000, payable at maturity, with a term
of ninety (90) days from the date of issuance (the "Maturity Date").
2. COMPUTATION.
Interest not paid when due shall be added to the unpaid
principal balance and shall thereafter bear interest at the same rate as
principal. All payments (including prepayments) hereunder are to be applied
first to the payment of accrued interest and the remaining balance shall be
applied to the payment of principal. Accrued interest shall be computed on the
basis of a 360 day year, based on the actual number of days elapsed.
3. PAYMENT.
Except as otherwise set forth herein, the unpaid
principal under this Note, plus all accrued but unpaid interest thereon,
shall be due and payable at the Maturity Date. All principal and interest
payments are due at 5:00 P.M. Pacific Standard Time on the date due, payable
in lawful money of the United States.
4. VOLUNTARY PREPAYMENT.
Maker may, at any time, prepay the unpaid Amount
Advanced evidenced by this Promissory Note, or any interest due hereunder, in
whole or in part, without penalty or premium, by paying to Lender, in cash or
by wire transfer or immediately available federal funds, the amount of such
prepayment. If any such prepayment is less than a full repayment, then such
2
<PAGE> 2
prepayment shall be applied first to the payment of accrued interest and the
remaining balance shall be applied to the payment of principal.
5. COMMON STOCK; ANTI-DILUTION RIGHTS; PIGGY-BACK REGISTRATION
RIGHTS.
In consideration thereof, AIN will issue to Lender five
thousand (5,000) shares of Common Stock.
5.1 Anti-Dilution Rights. All shares of Common Stock issued
to Lender pursuant to Section 3 of this Agreement, shall include anti-dilution
rights through the date immediately preceding the Company's initial public
offering.
5.2 Piggy-Back Registration Rights. All shares of Common
Stock issued to Lender, pursuant to Section 3 of this Agreement, shall include
unlimited piggy-back registration rights.
6. USURY MATTERS.
It is expressly stipulated and agreed to be the intent of Maker
and Lender to comply with, at all times, the applicable state law governing the
maximum rate or amount of interest payable on the Note (or applicable federal
law to the extent that it permits the Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable state
law). In the event the applicable law is judicially interpreted so as to render
usurious any amount called for under the Note or contracted for, charged,
taken, reserved or received with respect to such indebtedness, or if Lender's
exercise of his, her or its option to accelerate the maturity of the Note, or
if any prepayment by Maker results in Maker having paid any interest in excess
of that permitted by applicable law, then it is the express intent of both
Maker and Lender that all excess amounts theretofore collected by Lender be
credited to the principal balance of the Note (or, if this Note has been or
would thereby be paid in full, refunded to Maker). In the event such judicial
interpretation is applied to this Note, the provisions of this Note shall
immediately be deemed amended and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new, or amendment to any
existing, document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount legally permitted.
7. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself and its
legal representatives, successors, and assigns, expressly waives presentment,
protest, demand, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, notice of intent to accelerate, notice of acceleration,
presentment for the purpose of accelerating maturity, and diligence in
collection.
3
<PAGE> 3
more than ten (10) days after the due date. Maker agrees that this charge is a
reasonable estimate of extra expenses the Lender will incur, and is not a
penalty.
10. ACCELERATION; ATTORNEY'S FEES.
At the option of the Lender, and without demand or notice, all
principal and any unpaid interest shall become immediately due and payable upon
an event of default as set forth in Section 8 hereinabove. Any reasonable
attorneys fees and other expenses incurred by the Lender in enforcing any of
its rights hereunder or from a bankruptcy filing relating to the Maker, or any
of the other events described in Section 8 and 9 hereinabove, shall be deemed
additional indebtedness of the Maker and added to the principal amount of the
Note, irrespective of whether Lender files suit against Maker.
11. SECURITY INTERESTS.
It is further understood that this Notes is secured by the
security interests granted to Lender pursuant to the Bridge Loan and Security
Agreement between the Parties.
12. SECTION HEADINGS.
Headings and numbers have been set forth for convenience only.
Unless the contrary is compelled by the context, the language set forth in each
paragraph applies equally to the entire Note.
13. AMENDMENTS IN WRITING.
This Note may only be changed, modified or amended in writing
signed by the Parties.
14. CHOICE OF LAW.
The Notes and all transactions hereunder and evidenced hereby
shall be governed by, construed under, and enforced in accordance with the
laws of the State of California.
15. WAIVER OF TRIAL BY JURY.
For separate and legal consideration received, Maker hereby
waives, to the extent permitted under applicable law, any right to trial by
jury in any action or proceeding relating to the Note.
5
<PAGE> 1
EXHIBIT 6.18
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT FOR THE HOLDER'S OWN
ACCOUNT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION
OF SECURITIES. THE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") OR UNDER ANY STATE
SECURITIES LAWS ("BLUE SKY LAWS"). AN OFFER TO SELL OR TRANSFER OR THE SALE OR
TRANSFER OF THESE SECURITIES IS UNLAWFUL UNLESS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PERMIT, AS APPLICABLE, UNDER THE SECURITIES ACT OR
APPLICABLE BLUE SKY LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION AND/OR
QUALIFICATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS IS
AVAILABLE OR AN OPINION OF COUNSEL, OR OTHER EVIDENCE REASONABLY SATISFACTORY
TO THE COMPANY, IS PROVIDED TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION
OR QUALIFICATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE BLUE
SKY LAWS.
<PAGE> 2
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount: $100,000 Dated: ____________, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network, Inc.,
a Delaware corporation ("Maker"), promises to pay to the order of Frank J.
Lyons, ("Lender"), the principal sum of One Hundred Thousand Dollars ($100,000)
(the "Amount Advanced") on or before the end of the ninety (90) day term set
forth below.
1. INTEREST AND MATURITY DATE.
The principal under this Promissory Note (the "Note")
shall bear interest at a flat rate of $10,000, payable at maturity, with a term
of ninety (90) days from the date of issuance (the "Maturity Date").
2. COMPUTATION.
Interest not paid when due shall be added to the unpaid
principal balance and shall thereafter bear interest at the same rate as
principal. All payments (including prepayments) hereunder are to be applied to
the payment of principal. Accrued interest shall be computed on the basis of a
360 day year, based on the actual number of days elapsed.
3. PAYMENT.
Except as otherwise set forth herein, the unpaid principal
under this Note, plus all accrued but unpaid interest thereon, shall be due and
payable at the Maturity Date. All principal and interest payments are due at
5:00 P.M. Pacific Standard Time on the date due, payable in lawful money of the
United States.
4. VOLUNTARY PREPAYMENT.
Maker may, at any time, prepay the unpaid Amount Advanced
evidenced by this Promissory Note, or any interest due hereunder, in whole or in
part, without penalty or premium, by paying to Lender, in cash or by wire
transfer or immediately available federal funds, the amount of such prepayment.
If any such prepayment is less than a full repayment, then such
2
<PAGE> 3
prepayment shall be applied first to the payment of accrued interest and the
remaining balance shall be applied to the payment of principal.
5. COMMON STOCK; ANTI-DILUTION RIGHTS; PIGGY-BACK REGISTRATION
RIGHTS.
In consideration thereof, AIN will issue to Lender twenty
thousand (20,000) shares of Common Stock.
5.1 Anti-Dilution Rights. All shares of Common Stock
issued to Lender, pursuant to Section 3 of this Agreement, shall include
anti-dilution rights through the date immediately preceding the Company's
initial public offering.
5.2 Piggy-Back Registration Rights. All shares of Common
Stock issued to Lender, pursuant to Section 3 of this Agreement, shall include
unlimited piggy-back registration rights.
6. USURY MATTERS.
It is expressly stipulated and agreed to be the intent of Maker
and Lender to comply with, at all times, the applicable state law governing the
maximum rate or amount of interest payable on the Note (or applicable federal
law to the extent that it permits the Lender to contract for, charge, take,
reserve or receive a greater amount of interest than under applicable state
law). In the event the applicable law is judicially interpreted so as to render
usurious any amount called for under the Note or contracted for, charged,
taken, reserved or received with respect to such indebtedness, or if Lender's
exercise of his, her or its option to accelerate the maturity of the Note, or
if any prepayment by Maker results in Maker having paid any interest in excess
of that permitted by applicable law, then it is the express intent of both
Maker and Lender that all excess amounts theretofore collected by Lender be
credited to the principal balance of the Note (or, if this Note has been or
would thereby be paid in full, refunded to Maker). In the event such judicial
interpretation is applied to this Note, the provisions of this Note shall
immediately be deemed amended and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new, or amendment to any
existing, document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount legally permitted.
7. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself and its
legal representatives, successors, and assigns, expressly waives presentment,
protest, demand, notice of dishonor, notice of nonpayment, notice of maturity,
notice of protest, notice of intent to accelerate, notice of acceleration,
presentment for the purpose of accelerating maturity, and diligence in
collection.
3
<PAGE> 4
8. DEFAULT.
Maker shall be deemed in default if any of the following events
occur: (a) Maker fails to make any payments hereunder when due and fails to
make such payment within twenty (20) days of such due date; (b) the entry of a
decree or order by a court having appropriate jurisdiction adjudging Maker a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of Maker under the Federal Bankruptcy Act or any
other applicable federal or state law, or appointing a receiver, liquidator,
assignee or trustee over any substantial portion of Maker's property, or
ordering the winding up or liquidation of Maker's affairs, and the continuance
of any such decree or order unstayed and in effect for a period of sixty (60)
consecutive days; (c) the institution of Maker of proceedings to be adjudicated
a bankrupt or insolvent, or the consent by it to the institution of bankruptcy
or insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under the Federal Bankruptcy
Act or any other applicable federal or state law, or the consent by it to the
filing of any such petition or to the appointment of a receiver, liquidator,
assignee or trustee of Maker; (d) default in the obligation of Maker for
borrowed money, other than this Note, which shall continue for a period of sixty
(60) days, or any event that results in acceleration of the maturity of any
indebtedness of Maker under any note, indenture, contract, or agreement; (e)
Maker fails to comply with any material term, obligation, covenant, or
condition contained in the certain Bridge Loan and Security Agreement, by and
between the Parties relating to this Note, within twenty (20) days after
receipt of written notice from Lender demanding such compliance; (f) any
representation or statement made or furnished to Lender by Maker or on Maker's
behalf is false or misleading in any material respect; (g) any levy, seizure,
attachment, lien, or encumbrance of or on Maker's property, other than those
existing as of the date hereof, which is not discharged by Maker within twenty
(20) days; and (h) any sale, transfer, or disposition of a material amount of
Maker's property, other than in the ordinary course of business, without the
written consent of the Lender.
8.1 CURE.
Maker shall be provided a period of thirty (30) days
from the date of an event of default, as defined in Section 8 hereinabove, to
cure a default. In the event Maker fails to cure any default within such time
period, including the payment of all costs and expenses provided for this Note
and under the Bridge Loan and Security Agreement by and among Maker and Lender,
Lender may immediately enforce any and all rights provided to him under this
Note and the Bridge Loan and Security Agreement.
9. LATE PAYMENT FEES.
It would be impracticable to fix the amount of Lender's extra
expense involved in handling a delinquent payment if any amounts due under this
Note are not paid when due. Accordingly, Maker agrees to pay to Lender a late
payment charge equal to three percent (3%) of the amount due on any payment
required under this Note which is received by Lender
4
<PAGE> 5
more than ten (10) days after the due date. Maker agrees that this charge is a
reasonable estimate of extra expenses the Lender will incur, and is not a
penalty.
10. ACCELERATION ATTORNEY'S FEES.
At the option of the Lender, and without demand or notice, all
principal and any unpaid interest shall become immediately due and payable upon
an event of default as set forth in Section 8 hereinabove. Any reasonable
attorney's fees and other expenses incurred by the Lender in enforcing any of
its rights hereunder or from a bankruptcy filing relating to the Maker, or any
of the other events described in Section 8 and 9 hereinabove, shall be deemed
additional indebtedness of the Maker and added to the principal amount of the
Note, irrespective of whether Lender files suit against Maker.
11. SECURITY INTERESTS.
It is further understood that this Note is secured by the
security interests granted to Lender pursuant to the Bridge Loan and Security
Agreement between the Parties.
12. SECTION HEADINGS.
Headings and numbers have been set forth for convenience only.
Unless the contrary is compelled by the context, the language set forth in each
paragraph applies equally to the entire Note.
13. AMENDMENTS IN WRITING.
This Note may only be changed, modified or amended in writing
signed by the Parties.
14. CHOICE OF LAW.
The Note and all transactions hereunder and evidenced hereby
shall be governed by, construed under, and enforced in accordance with the laws
of the State of California.
15. WAIVER OF TRIAL BY JURY.
For separate and legal consideration received, Maker hereby
waives, to the extent permitted under applicable law, any right to trial by
jury in any action or proceeding relating to the Note.
5
<PAGE> 6
Made and Executed at
Haltom City, Texas
American Independent Network, Inc.
a Delaware Corporation
/s/ RANDY MOSELEY
- -------------------------------------
Randy Moseley
President, Chief Financial Officer
6
<PAGE> 1
EXHIBIT 6.19
LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
AMERICAN INDEPENDENT NETWORK, INC. ("AIN"),
A DELAWARE CORPORATION
AND
MIDAS FUND
This Loan and Security Agreement (the "Agreement") is entered into as of
this _________ day of ____________, 1997, by and between American Independent
Network, Inc., a Delaware corporation ("Debtor"), and Midas Fund ("Secured
Party"). Debtor and Secured Party may be independently referred to hereinafter
as "Party" or collectively as the "Parties."
RECITALS
WHEREAS, the Debtor is offering (the "Offering"), for sale a Promissory
Note, with a face value of $100,000, bearing interest at the flat rate of
$10,000, payable $5,000 at ninety (90) days and $5,000 at maturity, with a term
of one hundred eighty (180) days from the date of issuance (the "Maturity
Date").
WHEREAS, all Notes issued by Debtor under the Offering are secured by
the assets of the Company and other items set forth in Section 6 herein.
WHEREAS, Secured Party has purchased Notes in the amount set forth in
Section 1 herein.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this agreement, the receipt and
sufficiency of which is hereby mutually acknowledged, the Parties agree as
follows:
1. LOAN AMOUNT; TERMS OF NOTE
<PAGE> 2
BRIDGE LOAN AND SECURITY AGREEMENT
Page 2 of 17
- ----------------------------------
1.1 Pursuant to the Promissory Note attached hereto as Exhibit 1 (the
"Note"), Secured Party has agreed to loan AIN the aggregate principal amount of
One Hundred Thousand Dollars ($100,000) (the "Loan").
1.2 In consideration thereof, AIN will issue, cause to be executed and
deliver to Secured Party, concurrent with its execution hereof, a Note equal to
the amount of the Loan, upon the terms and conditions specified therein, and in
the form attached hereto as Exhibit 1.
2. SINKING FUND.
AIN shall open an account and place on deposit $16,666.66 each month for
six (6) months to function as a Sinking Fund for payment of principal at term on
the Notes.
Furthermore, AIN shall provide Midas Fund with a quarterly Net Asset
Value which will include accrued interest on the Notes.
3. COMMON STOCK.
AIN will issue to Lender twenty thousand (20,000) shares of AIN Common
Stock in addition to the interest payments set forth in Section 1.1.
4. DEFAULT PROVISIONS.
The occurrence of one or more of the following events shall constitute
an event of default of this entire Agreement:
4.1 The nonpayment of any principal or interest by AIN on the Loan when
the same becomes due and payable which is not cured within twenty (20) days of
the due date.
4.2 The entry of a decree or order by a court having appropriate
jurisdiction adjudging AIN a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization or liquidation of AIN under the Federal
Bankruptcy Act or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee or trustee over any substantial portion of the
Debtor's property or Collateral, as defined in Section 6, or ordering the
winding up or liquidation of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of sixty (60) consecutive days.
4.3 The institution by AIN of proceedings to be adjudicated a bankrupt
or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the Federal Bankruptcy Act or
any other applicable federal or state law, or consent by it to the filing of any
<PAGE> 3
BRIDGE LOAN AND SECURITY AGREEMENT
Page 3 of 17
- ----------------------------------
such petition or to the appointment of a receiver, liquidator, assignee or
trustee of the Debtor, or of any substantial part of its property, or if the
Collateral, as defined in Section 6, shall become subject to the jurisdiction of
a federal bankruptcy court or similar state court, or if AIN shall make an
assignment for the benefit of its creditors, or if there is an attachment,
receivership, execution or other judicial seizure, or if there is an admission
in writing by AIN of its inability to pay its debts generally as they become
due, or the taking of corporate action by AIN in furtherance of any such action.
4.4 Default in the obligation of AIN for borrowed money, other than this
Loan, which shall continue for a period of sixty (60) days, or any event that
results in acceleration of the maturity of any indebtedness of AIN under any
note, indenture, contract, or agreement.
4.5 AIN's failure to comply with any material term, obligation,
covenant, or condition contained in this Agreement, within twenty (20) days
after receipt of written notice from the Secured Party demanding such
compliance.
4.6 Any warranty, covenant, or representation made to Secured Party by
AIN under this Agreement, or any related agreement executed in connection with
this Offering, proves to have been false in any material respect when made or
furnished.
4.7 Any levy, seizure, attachment, lien, or encumbrance of or on the
Collateral, as defined in Section 6.2, other than those existing as of the date
hereof, which is not discharged by AIN within ten (10) days.
4.8 Any sale, transfer, or disposition of any interest in the
Collateral, other than in the ordinary course of business, without the prior
written consent of Secured Party.
4.9 Any other default under the terms of the Note.
5. ACCELERATION.
At the option of Secured Party, and without demand or notice, all
principal and any unpaid interest shall become immediately due and payable upon
an event of default as set forth in Section 4 above, subject to the Secured
Party's right to cure any default within thirty (30) of occurrence. Any
reasonable attorneys' fees and other expenses incurred by Secured Party in
connection with enforcing any of its rights hereunder or from a bankruptcy
filing relating to AIN, whether a lawsuit is filed or not, shall be additional
indebtedness of AIN secured by this Agreement, and shall not be deemed a
penalty.
5.1 CURE
<PAGE> 4
BRIDGE LOAN AND SECURITY AGREEMENT
Page 4 of 17
- ----------------------------------
Debtor shall be provided a period of thirty (30) days from the
date of an event of default, as defined in Section 4 hereinabove, to cure a
default. In the event Debtor fails to cure any default within such time period,
including the payment of all costs and expenses provided for in this Agreement
and the Note, Secured Party may immediately enforce any and all rights provided
to him under this Agreement and the Note.
6. SECURITY AGREEMENT.
6.1 GRANT OF SECURITY INTEREST.
AIN, in consideration of the loan described in this Agreement,
hereby grants, conveys, and assigns to Secured Party, as security, all of AIN's
existing and future right, title and interest in the property listed in Section
6.2 of this Agreement. This security interest is granted to Secured Party to
secure the following: (a) the payment of the indebtedness evidenced by the Note
attached hereto as Exhibit 1, including all renewals, extensions, and
modification thereof; (b) the payment, performance and observance of all
warranties, obligations, covenants and agreements to be paid, performed or
observed by under this Agreement; and (c) the payment of all other sums, with
interest thereon, advanced or otherwise due or payable under the terms of this
Agreement.
6.2 PROPERTY.
The property subject to the security interest (the "Collateral")
is as follows:
6.2.1 EQUIPMENT.
All equipment of AIN.
6.2.2 ACCOUNTS RECEIVABLE.
All account receivable accounts, chattel paper, contract
rights, commissions, warehouse receipts, bills of lading, delivery orders,
drafts, acceptances, notes, securities and other instruments, documents, all
other forms of receivables, and all guaranties and securities therefor of AIN.
6.2.3 INVENTORY AND OTHER TANGIBLE PERSONAL PROPERTY.
All inventory of AIN, including all goods, merchandise,
materials, raw materials, work in progress, finished goods, now owned or
hereafter acquired and held for sale or lease or furnished or to be furnished
under contracts or service agreements or to be used or consumed in AIN's
business and all other tangible personal property of AIN.
<PAGE> 5
BRIDGE LOAN AND SECURITY AGREEMENT
Page 5 of 17
- ----------------------------------
6.2.4 ALL GENERAL INTANGIBLES.
All general intangibles now owned by AIN or hereafter
acquired by AIN.
6.2.5 AFTER-ACQUIRED PROPERTY.
All property of the types described in Sections 6.2.1 -
6.2.4, or similar thereto, that at any time hereafter may be acquired by AIN,
including but not limited to all accessions, parts, additions, and replacements.
6.2.6 PROCEEDS.
All proceeds, in any type or form arising from the sale
or other disposition of any of the Collateral described or referred to in
Sections 6.2.1 - 6.2.5.
6.2.7 TECHNOLOGY.
All technology assigned or otherwise transferred by any
subsidiary, whether a corporation or other entity, of AIN, wherever domiciled,
evidencing such entities' ownership of the technology utilized by AIN.
6.3. COVENANTS OF AIN.
AIN agrees and covenants, and acknowledges that Secured Party is
reasonably relying upon these agreements and covenants, as follows:
6.3.1 PAYMENT OF PRINCIPAL AND INTEREST.
AIN shall promptly pay when due the principal and interest
evidenced by the Note, any prepayment and late charges provided in the Note, and
all other sums secured by this Agreement and the Note.
6.3.2 CORPORATE EXISTENCE.
AIN is a corporation duly organized and existing under the
laws of the State of Delaware and is duly qualified in every other state in
which it must qualify to do business.
6.3.3 CORPORATE AUTHORITY.
<PAGE> 6
BRIDGE LOAN AND SECURITY AGREEMENT
Page 6 of 17
- ----------------------------------
The execution, delivery, and performance of this
Agreement, and the execution and payment of the Note is within the corporate
powers of AIN, has been duly authorized, is not in contravention of law or the
terms of the AIN articles of incorporation and bylaws, or of any indenture,
agreement, or undertaking to which AIN is a party or by which it is bound.
6.3.4 OWNERSHIP OF COLLATERAL.
AIN is the sole owner of the Collateral and will defend
the Collateral against the claims and demands of all other persons at any time
claiming the same or any interest therein.
6.3.5 ISSUANCE OF SHARES OF COMMON STOCK.
The shares of Common Stock of AIN contemplated to be
issued by Secured Party are duly authorized and, when issued, will be fully paid
and non-assessable.
6.4 ATTORNEY CERTIFICATION.
Within ten (10) days of receipt of written request therefor, AIN
agrees to deliver to Secured Party an opinion, from counsel competent to provide
such opinion, that provides substantially as described in Section 6.3.2 - 6.3.5
above.
6.5 REMOVAL OF COLLATERAL PROHIBITED.
AIN shall not remove the Collateral from its premises, or
otherwise dispose of it, other than utilizing it in the ordinary course of
business, without the prior written consent of Secured Party.
6.6 TAXES AND ASSESSMENTS.
AIN will pay or cause to be paid promptly when due all taxes and
assessments on the Collateral. AIN may, however, withhold payment of any tax
assessment or claim if a good faith dispute exists as to the obligation to pay
so long as funds sufficient to pay the taxes and assessments are set aside for
such purpose either in cash or by surety bond issued in form of the appropriate
taxing authority.
6.7 INSURANCE.
AIN shall have and maintain, or cause to be maintained, insurance
at all times with respect to all Collateral except accounts receivable, against
such risks, and in such form, for such
<PAGE> 7
BRIDGE LOAN AND SECURITY AGREEMENT
Page 7 of 17
- ----------------------------------
periods, and written by such companies as are satisfactory to Secured Party. All
policies of insurance shall have endorsed a loss payable clause evidencing the
Secured Party and shall be acceptable to the Secured Party. AIN will promptly
provide Secured Party, if requested in writing, with the original policies or
certificates of such insurance. AIN shall promptly notify Secured Party of any
loss or damage that may occur to the Collateral. Secured Party is hereby
authorized to make proof of loss if it is not made promptly by AIN. All proceeds
of any insurance on the Collateral shall be held by Secured Party as a part of
the Collateral. Such proceeds shall be paid out from time to time upon order of
AIN for the purpose of paying the reasonable cost of repairing or restoring the
property damaged. Any proceeds that have not been so paid out within 120 days
following their receipt by Secured Party shall be applied to the prepayment of
principal on the Notes according to the terms set forth herein. In the event of
failure to provide insurance as provided herein, Secured Party may, at its
option, provide such insurance at AIN's expense.
6.8 PROTECTION OF SECURED PARTY'S SECURITY.
If AIN fails to perform the covenants and agreements contained or
incorporated in this Agreement, or if any action or proceeding is commenced
which affects the Collateral or title thereto or the interest of Secured Party
therein, including, but not limited to, eminent domain, insolvency, code
enforcement, or arrangements or proceedings involving a bankrupt or decedent,
then Secured Party may make such appearance, disburse such sums, and take such
action as Secured Party deems necessary, in its sole discretion, to protect
Secured Party's interest, including, but not limited to the following: (i)
disbursement of attorneys' fees; (ii) entry upon AIN's property to make repairs
to the Collateral; and (iii) procurement of satisfactory insurance. Any amounts
disbursed by Secured Party pursuant to this Section 6.8, with interest thereon,
shall become additional indebtedness of AIN secured by this Agreement. Unless
AIN and Secured Party agree to other terms of payment, such amounts shall be
immediately due and payable and shall bear interest from the date of
disbursement at the default rate stated in the Note unless collection from AIN
of interest at such rate would be contrary to applicable law, in which event
such amounts shall bear interest at the highest rate which may be collected from
AIN under applicable law. Nothing contained in this Section 6.8 shall require
Secured Party to incur any expense or take any action.
6.9 INSPECTION.
Secured Party may make or cause to be made reasonable entries
upon and inspections of AIN's premises to inspect the Collateral, and AIN shall
cooperate with Secured Party to accommodate such reasonable entries.
6.10 LIEN NOT RELEASED.
<PAGE> 8
BRIDGE LOAN AND SECURITY AGREEMENT
Page 8 of 17
- ----------------------------------
From time to time, Secured Party may, at Secured Party's option,
without giving notice to or obtaining the consent of AIN or its successors or
assigns or of any other lienholders, without liability on Secured Party's part,
and notwithstanding a breach by AIN of any covenant or agreement set forth in
this Agreement, extend the time for payment of said indebtedness or any part
thereof, reduce the payments thereon, release anyone liable on any of said
indebtedness, accept a renewal note or notes therefor, modify the terms and the
time of payment of said indebtedness, release from the lien of this Agreement
any part of the Collateral, take or release other or additional security,
reconvey any part of the Collateral, consent to any map or plan of the
Collateral, consent to the granting of any easement, join in any extension or
subordination agreement, and agree in writing with AIN to modify the rate of
interest or period of amortization of the Note or change the amount of any
installments payable thereunder. Any actions taken by Secured Party pursuant to
the terms of this Section shall be in writing, shall not affect the obligation
of AIN or its successors or assigns to pay the sums secured by this Agreement
and to observe the covenants of AIN contained herein, shall not affect the
guaranty of any person, corporation, partnership, or other entity for payment of
the indebtedness secured hereby, and shall not affect the lien or priority of
lien hereof on the Collateral. AIN shall pay Secured Party a reasonable service
charge, together with such title insurance premiums and attorneys' fees as may
be incurred, at Secured Party's option, to secured Party for any such action
taken at the request of or consent of AIN.
6.11 FORBEARANCE BY SECURED PARTY NOT A WAIVER.
Any forbearance by Secured Party in exercising any right or
remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver
of, or preclude the exercise of, any right or remedy. The acceptance by Secured
Party of payment of any sum secured by this Agreement after the due date of such
payment shall not be a waiver of Secured Party's right to either require prompt
payment when due of all other sums so secured or to declare a default for
failure to make prompt payment. The procurement of insurance or the payment of
taxes, rents or other liens or charges by Secured Party shall not be a waiver of
Secured Party's right to accelerate the maturity of the indebtedness secured by
this Agreement, nor shall Secured Party's receipt of any awards, proceeds or
damages as provided in this Agreement operate to cure or waive any default by
AIN in payment of sums secured by this Agreement.
6.12 UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.
This Agreement is intended to be a security agreement pursuant to
the Uniform Commercial Code for each of the items specified in Section 6.2 as
Collateral. AIN hereby grants Secured Party a security interest in said items.
AIN agrees to execute and file financing statements, as well as extensions,
renewals and amendments thereof, and reproductions of this Agreement, and do
whatever may be necessary under the applicable Uniform Commercial Code in the
state where the Collateral is located, to perfect and continue Secured Party
interest in the
<PAGE> 9
BRIDGE LOAN AND SECURITY AGREEMENT
Page 9 of 17
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Collateral, all at the expense of AIN. The Parties agree that such financing
statements will be filed in the name of Secured Party. AIN shall pay all costs
of filing such financing statements and any extensions, renewals, amendments,
and releases thereof, and shall pay all reasonable costs and expenses of any
record searches for financing statements requested by Secured Party. Without the
prior written consent of Secured Party, AIN shall not create or allow to be
created, pursuant to the Uniform Commercial Code, any other security interest in
the Collateral, including replacements and additions thereto. Upon the
occurrence of an event of default, Secured Party shall have the remedies of a
secured party under the Uniform Commercial Code and, at Secured Party's option,
may also invoke any other remedy provided for in this Agreement. In exercising
any of said remedies, Secured Party may, at its sole option, utilize an agent
and may proceed against any part of the Collateral separately or together and in
any order whatsoever, without in any way affecting the availability of Secured
Party's remedies under the Uniform Commercial Code, or of Secured Party's other
remedies provided in this Agreement.
6.13 ACCELERATION IN CASE OF DEBTOR'S INSOLVENCY.
If the Debtor shall voluntarily file a petition under the Federal
Bankruptcy Act, or under any similar or successor federal statute relating to
bankruptcy, insolvency, arrangements or reorganizations, or under any state
bankruptcy or insolvency act, or file an answer in an involuntary proceeding
admitting insolvency or inability to pay debts, or if the Debtor shall be
adjudged a bankrupt, or if a trustee or receiver shall be appointed for the
Debtor's property, or if the Collateral shall become subject to the jurisdiction
of a federal bankruptcy court or similar state court, or if the Debtor shall
make an assignment for the benefit of its creditors, or if there is an
attachment, receivership, execution or other judicial seizure, then Secured
Party may, at Secured Party's option, declare all of the sums secured by this
Agreement immediately due and payable without prior notice to the Debtor, and
Secured Party may invoke any remedies permitted by this Agreement and/or the
Note. Any reasonable attorneys' fees and other expenses incurred by Secured
Party in connection with the Debtor's bankruptcy or any of the other events
described in this Section shall be additional indebtedness of the Debtor secured
by this Agreement, and shall not be deemed a penalty.
6.14 RIGHTS OF SECURED PARTY.
6.14.1 Upon default, Secured Party may require AIN to assemble
the Collateral and make it available to Secured Party at the place to be
designated by Secured Party which is reasonably convenient to the Parties.
Secured Party may sell all or any part of the Collateral, as reasonably
necessary to satisfy the obligations of AIN hereunder to Secured Party, as a
whole or in parcels either by public auction, private sale, or any other
reasonable method of disposition. Nothing in this Section 6.14.1 shall be
construed to limit any of Secured Party's rights in connection with any of the
Collateral as provided herein. Secured Party may bid at any public sale on all
or any portion of the Collateral. Unless the Collateral is perishable or
threatens
<PAGE> 10
BRIDGE LOAN AND SECURITY AGREEMENT
Page 10 of 17
- ----------------------------------
to rapidly decline in value or is of the type customarily sold on a recognized
market, Secured Party shall give AIN reasonable notice of the time and place of
any public sale, or of the time after which any private sale or other
disposition of the Collateral is to be made. Notice must be provided at least
ten (10) days prior to the time of the sale or other disposition. A public sale
in the following fashion shall be conclusively presumed to be reasonable:
6.14.2 Notice shall be given at least ten (10) days before the
date of sale by publication, at least once, in a newspaper of general
circulation published in the county in which the sale is to be held;
6.14.3 The sale shall be held in a county in which the
Collateral or any part is located or in a county in which AIN has a place of
business;
6.14.4 Payment shall be in cash or by certified check
immediately following the close of the sale;
6.14.5 The sale shall be by auction, but it need not be by a
professional auctioneer;
6.14.6 The Collateral may be sold as is and without any
preparation for sale.
6.15 OBLIGATION TO SELL COLLATERAL.
Notwithstanding any provision of this Agreement, Secured Party
shall be under no obligation to offer to sell the Collateral. In the event any
Secured Party offers to sell the Collateral, there will be no obligation to
consummate a sale of the Collateral if, in Secured Party's reasonable business
judgment, none of the offers received by it reasonably approximate the fair
value of the Collateral. In the event Secured Party elects not to sell the
Collateral, Secured Party may elect to follow the procedures set forth in the
Uniform Commercial Code for retaining the Collateral in satisfaction of the
obligation of AIN, subject to the rights of AIN under such procedures.
6.16 RECEIVER.
In addition to the rights under this Agreement, upon the
occurrence of an event of default, Secured Party shall be entitled to the
appointment of a receiver for the Collateral as a matter of right whether or not
the apparent value of the Collateral exceeds the outstanding principal amount of
the Note, and AIN agrees to entry of an order therefor by any court in the State
of California upon petition therefor.
<PAGE> 11
BRIDGE LOAN AND SECURITY AGREEMENT
Page 11 of 17
- ----------------------------------
6.17 WAIVER OF MARSHALLING.
Notwithstanding the existence of any other security interest in
the Collateral held by Secured Party or by any other party, Secured Party shall
have the right to determine the order in which any or all of the Collateral
shall be subjected to the remedies provided by this Agreement. Secured Party
shall have the right to determine the order in which any or all portions of the
indebtedness secured by this Agreement are satisfied from the proceeds realized
upon the exercise of the remedies provided in this Agreement. AIN, any party who
consents to this Agreement, and any party who now or hereafter acquires a
security interest in the Collateral and who has actual or constructive notice of
this Agreement, hereby waive any and all rights to require the marshalling of
assets in connection with the exercise of any of the remedies permitted by
applicable law or by this Agreement.
6.18 PROVISIONS OF AGREEMENT.
AIN agrees to comply with the covenants and conditions of this
Agreement. All sums disbursed by Secured Party to protect the security of this
Agreement up to the principal amount of the Note shall be treated as
disbursements pursuant to such Agreements. All such sums shall bear interest
from the date of disbursement at the rate stated in the Note, unless collection
from AIN of interest at such rate would be contrary to applicable law in which
event such amount shall bear interest at the highest rate which may be collected
from AIN under applicable law. In case of a breach by AIN of the covenants and
conditions of the Agreement, Secured Party (i) may invoke any of the rights or
remedies provided in the Agreement, (ii) may accelerate the sums secured by this
Agreement and invoke the remedies provided in this Agreement, or (iii) may do
both.
7. REMEDIES CUMULATIVE.
Each remedy provided in this Agreement is distinct and cumulative to all
other rights or remedies under this Agreement or afforded by law or equity, and
may be exercised concurrently, independently, or successively, in any order.
8. WAIVER OF STATUTE OF LIMITATIONS.
AIN hereby waives the right to assert any statute of limitations as a
bar to the enforcement of this Agreement or to any action brought to enforce the
Note or any other obligation secured by this Agreement.
9. NOTICES AND DELIVERY.
<PAGE> 12
BRIDGE LOAN AND SECURITY AGREEMENT
Page 12 of 17
- ----------------------------------
Any notices permitted or required under this Agreement shall be deemed
given upon the date of personal delivery or forty eight (48) hours after deposit
in the United States mail, postage fully prepaid, return receipt requested,
addressed as follows:
if to Debtor:
Randy Moseley
President, CFO
American Independent Network, Inc.
6125 Airport Freeway, Suite 200
Haltom City, TX 76117
if to Secured Party:
Midas Fund
Bank of Butterfield International
Cayman LTD
P.O. Box 705
Grand Cayman
Cayman Islands, B.W.I.
Fax # (809) 949-7004
with a copy to:
Gregory L. Hrncir, Esq.
Knapp, Petersen & Clarke, a professional law corporation
500 N. Brand Blvd., 20th Floor
Glendale, CA 91203
or at any other address as any party may, from time to time, designate by notice
given in compliance with this Section. Any deliveries required under this
Agreement must be made by personal delivery at the applicable address listed
above.
10. INDEMNIFICATION.
10.1 GENERAL.
<PAGE> 13
BRIDGE LOAN AND SECURITY AGREEMENT
Page 13 of 17
- ----------------------------------
AIN agrees to indemnify, reimburse, and hold harmless Secured
Party, or any agent of the Secured Party (Secured Party is referred to as the
"Indemnitee" throughout Section 10) from and against all claims, damages,
losses, liabilities, demands, suits, judgments, causes of action, civil and
criminal proceedings, penalties, fines, and other sanctions, and any attorney
fees and other reasonable costs and expenses, arising out of the Debtor's
negligence or under the doctrine of strict liability (collectively "Claims"), or
relating to or arising in any manner out of:
10.1.1 this Agreement or the breach of any representation,
warranty, or covenant made by AIN under this Agreement;
10.1.2 any issuance, offering, or sale of securities of AIN;
10.1.3 any transaction, approval, or document contemplated by
the Agreement.
The parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly provided for by statute, including
but not limited to, any indemnification provided by the AIN articles of
incorporation, its bylaws, a vote of its shareholders or disinterested
directors, or applicable law.
10.2 DEFINITIONS
10.2.1 EXPENSES.
For purposes of Section 10, the term "expenses" shall mean (i)
any expense, liability, or loss, including attorney fees, judgments, fines,
ERISA excise taxes and penalties, and amounts paid or to be paid in settlement;
(ii) any interest, assessments, or other charges imposed on any of the items in
part (i) of this subsection; and (iii) any federal, state, local, or foreign
taxes imposed as a result of the actual or deemed receipt of any payments under
this Agreement paid or incurred in connection with investigating, defending,
being a witness in, participating in (including on appeal), or preparing for any
of the foregoing in any proceeding relating to any indemnifiable event.
10.3 PARTIAL INDEMNIFICATION.
If the Indemnitee is entitled under any provision of this
Agreement to indemnification by AIN for a portion of expenses, but not for the
total amount of expenses, AIN shall indemnify the Indemnitee for the portion to
which the Indemnitee is entitled.
10.4 INDEMNIFICATION PAYMENT.
<PAGE> 14
BRIDGE LOAN AND SECURITY AGREEMENT
Page 14 of 17
- ----------------------------------
The Indemnitee shall receive indemnification of expenses from AIN
in accordance with this Agreement as soon as practicable after the Indemnitee
has made written demand on AIN for indemnification. If the Indemnitee has not
received full indemnification within thirty (30) days after making a demand in
accordance with the terms hereof, the Indemnitee shall have the right to enforce
its indemnification rights under this Agreement by commencing litigation in any
court in the State of California seeking an initial determination by the court.
AIN hereby consents to service of process and to appear in any such proceeding.
The remedy provided for in this Section shall be in addition to any other
remedies available to the Indemnitee in law or in equity. If requested by
Indemnitee, AIN shall, within 10 business days after such request, advance to
the Indemnitee such expenses as are incurred by the Indemnitee in connection
with any claim asserted against or action brought by the Indemnitee for:
10.4.1 Indemnification of expenses or advances of expenses by AIN
under this Agreement, or any other agreement, or under applicable law, or under
the AIN articles of incorporation or bylaws now or hereafter in effect relating
to indemnification for indemnifiable events.
10.5 SETTLEMENT.
AIN shall not settle any proceeding in any manner that would
impose any penalty or limitation on the Indemnitee without the express written
consent of Indemnitee. Neither AIN nor the Indemnitee will unreasonably withhold
their consent to any proposed settlement. AIN shall not be liable to indemnify
the Indemnitee under this Agreement with regard to any judicial award if AIN was
not given a reasonable and timely opportunity, at its expense, to participate in
the defense of such action; provided, however, the liability of AIN under this
Agreement shall not be excused if participation in the proceeding by AIN was
barred by this Agreement.
10.6 TENDER BY SECURED PARTY.
In the event of any controversy or claim arising out of this
Agreement or the breach of the Agreement, Secured Party may tender a defense to
AIN, who hereby agrees to promptly accept Secured Party's tender, so long as
Secured Party notifies AIN within thirty (30) days of Secured Party's receipt of
any written instrument or pleading relating to any controversy or claim arising
out of this Agreement or the breach of this Agreement. If timely acceptance of
tender is not forthcoming, Secured Party may, at the expense of AIN, retain its
own counsel. AIN hereby agrees to advance any and all costs and expenses to
Secured Party in connection with Secured Party's retention of counsel. In the
event that AIN fails to advance the necessary costs and expenses, AIN shall not
be released of its obligations to otherwise indemnify Secured Party.
11. ENTIRE AGREEMENT.
<PAGE> 15
BRIDGE LOAN AND SECURITY AGREEMENT
Page 15 of 17
- ----------------------------------
This Agreement, the Note, all exhibits and attachments hereto and other
related agreements, contain the entire understanding between and among the
Parties and supersedes any prior understandings and agreements among them
respecting the subject matter of this Agreement.
12. AGREEMENT BINDING.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the Parties hereto.
13. AMENDMENT AND MODIFICATION.
Subject to applicable law, this Agreement may be amended, modified, or
supplemented only by a written agreement signed by the Parties.
14. ATTORNEYS' FEES.
In the event arbitration, suit or action is brought by any party under
this Agreement to enforce any of its terms, and in any appeal therefrom, it is
agreed that the prevailing party shall be entitled to reasonable attorneys; fees
to be fixed by the arbitrator, trial court, or appellate court.
15. ARBITRATION.
Any controversy or claim between or among the parties, including but not
limited to those arising out of or relating to this Agreement or any agreements
or instruments relating hereto or delivered in connection herewith and based on
or arising in contract or in tort, shall, at the request of any party be
determined by arbitration. The arbitration shall be conducted in Los Angeles,
California, United States of America, in accordance with the United States
Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"), not later than 60 days after appointment of an
arbitrator. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). The arbitrator shall have not the authority to
award punitive damages. Judgement upon the arbitration award may be entered in
any court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
16. LAW GOVERNING.
<PAGE> 16
BRIDGE LOAN AND SECURITY AGREEMENT
Page 16 of 17
- ----------------------------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
17. SAVINGS CLAUSE.
If any provision of this Agreement, or the application of such provision
to any person or circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.
18. TITLES AND CAPTIONS.
All section titles or captions contained in this Agreement are for
convenience only and shall not be deemed part of the context nor effect the
interpretation of this Agreement.
19. FURTHER ACTION.
The Parties hereto shall execute and deliver all documents, provide all
information and take or forbear from all such action as may be necessary or
appropriate to achieve the purposes of the Agreement, including, but not limited
to, executing such financing statements, as the Secured party may deem necessary
and appropriate to protect its interests.
20. COUNTERPARTS.
The terms of the Agreement are contractual and not merely recital. The
Agreement may be signed in one or more counterparts, each of which shall be
deemed an original. Furthermore, facsimile copies shall be deemed the same as
originals. The Agreement shall be deemed fully executed and effective when all
Parties have executed at least one of the counterparts, even though no single
counterpart bears all such signatures.
[The remainder of this page is intentionally left blank.]
<PAGE> 17
BRIDGE LOAN AND SECURITY AGREEMENT
Page 17 of 17
- ----------------------------------
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
"SECURED PARTY"
Midas Fund
By: _________________________________
(Signature)
_____________________________________
(Print Name)
Title: ______________________________
"DEBTOR"
American Independent Network, Inc.,
a Delaware corporation
_____________________________________
Randy Moseley
President, Chief Financial Officer
<PAGE> 18
EXHIBIT 1
PROMISSORY NOTE
<PAGE> 19
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT FOR THE HOLDER'S OWN
ACCOUNT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION
OF SECURITIES. THE SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") OR UNDER ANY STATE
SECURITIES LAWS ("BLUE SKY LAWS"). AN OFFER TO SELL OR TRANSFER OR THE SALE OR
TRANSFER OF THESE SECURITIES IS UNLAWFUL UNLESS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR PERMIT, AS APPLICABLE, UNDER THE SECURITIES ACT OR
APPLICABLE BLUE SKY LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION AND/OR
QUALIFICATION UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY LAWS IS AVAILABLE
OR AN OPINION OF COUNSEL, OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE
COMPANY, IS PROVIDED TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED UNDER THE SECURITIES ACT AND APPLICABLE BLUE SKY
LAWS.
<PAGE> 20
AMERICAN INDEPENDENT NETWORK, INC.
PROMISSORY NOTE
Amount:$100,000 Dated: ______________, 1997
FOR VALUE RECEIVED, the undersigned, American Independent Network, Inc.,
a Delaware corporation ("Maker"), promises to pay to the order of Midas Fund
("Lender"), the principal sum of One Hundred Thousand Dollars ($100,000) (the
"Amount Advanced") on or before one hundred eighty (180) days from the date set
forth above (the "Maturity Date").
1. INTEREST RATE AND TERM.
The unpaid principal under this Promissory Note (the
"Note") shall bear interest at the flat rate of $10,000, payable $5,000 at
ninety (90) days and $5,000 at the Maturity Date.
2. COMPUTATION.
Interest not paid when due shall be added to the unpaid
principal balance and shall thereafter bear interest at the same rate as
principal. All payments (including prepayments) hereunder are to be applied
first to the payment of accrued interest and the remaining balance shall be
applied to the payment of principal. Accrued interest shall be computed on the
basis of a three hundred sixty (360) day year, based on the actual number of
days elapsed.
3. PAYMENTS.
Interest payments are due and payable to Lender, at
Lender's address of record, at ninety (90) and one hundred eighty (180) days
from the date of this Note. Except as otherwise set forth herein, the unpaid
principal under this Note, plus all accrued but unpaid interest thereon, shall
be due and payable at the Maturity Date. All principal and interest payments are
due at 5:00 P.M. Pacific Standard Time on the date due, payable in lawful money
of the United States.
4. VOLUNTARY PREPAYMENT.
Maker may, at any time, prepay the unpaid Amount Advanced
evidenced by this Promissory Note, or any interest due hereunder, in whole or in
part, without penalty or premium, by paying to Lender, in cash or by wire
transfer or immediately available federal funds, the amount of such prepayment.
If any such prepayment is less than a full repayment, then such
1
<PAGE> 21
prepayment shall be applied first to the payment of accrued interest and the
remaining balance shall be applied to the payment of principal.
5. USURY MATTERS
It is expressly stipulated and agreed to be the intent of
Maker and Lender to comply with, at all times, the applicable state law
governing the maximum rate or amount of interest payable on the Note (or
applicable federal law to the extent that it permits the Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under
applicable state law). In the event the applicable law is judicially interpreted
so as to render usurious any amount called for under the Note or contracted for,
charged, taken, reserved or received with respect to such indebtedness, or if
Lender's exercise of his, her or its option to accelerate the maturity of the
Note, or if any prepayment by Maker results in Maker having paid any interest in
excess of that permitted by applicable law, then it is the express intent of
both Maker and Lender that all excess amounts theretofore collected by Lender be
credited to the principal balance of the Note (or, if this Note has been or
would thereby be paid in full, refunded to Maker). In the event such judicial
interpretation is applied to this Note, the provisions of this Note shall
immediately be deemed amended and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new, or amendment to any
existing, document, so as to comply with the applicable law, but so as to permit
the recovery of the fullest amount legally permitted.
6. WAIVERS.
Except as set forth elsewhere herein, Maker, for itself
and its legal representatives, successors, and assigns, expressly waives
presentment, protest, demand, notice of dishonor, notice of nonpayment, notice
of maturity, notice of protest, notice of intent to accelerate, notice of
acceleration, presentment for the purpose of accelerating maturity, and
diligence in collection.
7. DEFAULT.
Maker shall be deemed in default if any of the following
events occur: (a) Maker fails to make any payments hereunder when due and fails
to make such payment within twenty (20) days of such due date; (b) the entry of
a decree or order by a court having appropriate jurisdiction adjudging Maker a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of Maker under the Federal Bankruptcy Act or any
other applicable federal or state law, or appointing a receiver, liquidator,
assignee or trustee over any substantial portion of Maker's property, or
ordering the winding up or liquidation of Maker's affairs, and the continuance
of any such decree or order unstayed and in effect for a period of sixty (60)
consecutive days; (c) the institution by Maker of proceedings to be adjudicated
a bankrupt or insolvent, or the consent by it to the institution of bankruptcy
or insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under the Federal Bankruptcy
Act or any other applicable federal or state law, or the consent by it to the
filing of any such petition or to the appointment of a receiver, liquidator,
assignee or trustee of
2
<PAGE> 22
Maker; (d) default in the obligation of Maker for borrowed money, other than
this Note, which shall continue for a period of sixty (60) days, or any event
that results in acceleration of the maturity of any indebtedness of Maker under
any note, indenture, contract, or agreement; (e) Maker fails to comply with any
material term, obligation, covenant, or condition contained in that certain Loan
and Security Agreement, by and between the Parties relating to this Note, within
twenty (20) days after receipt of written notice from Lender demanding such
compliance; (f) any representation or statement made or furnished to Lender by
Maker or on Maker's behalf is false or misleading in any material respect; (g)
any levy, seizure, attachment, lien, or encumbrance of or on Maker's property,
other than those existing as of the date hereof, which is not discharged by
Maker within twenty (20) days; and (h) any sale, transfer, or disposition of a
material amount of Maker's property, other than in the ordinary course of
business, without the written consent of the Lender.
7.1 CURE
Maker shall be provided a period of thirty (30)
days from the date of an event of default, as defined in Section 7 hereinabove,
to cure a default. In the event Maker fails to cure any default within such time
period, including the payment of all costs and expenses provided for in this
Note and under the Loan and Security Agreement by and among Maker and Lender,
Lender may immediately enforce any and all rights provided to him under this
Note and the Loan and Security Agreement.
8. LATE PAYMENT FEES.
It would be impracticable to fix the amount of Lender's
extra expense involved in handling a delinquent payment if any amounts due under
this Note are not paid when due. Accordingly, Maker agrees to pay to Lender a
late payment charge equal to three percent (3%) of the amount due on any payment
required under this Note which is received by Lender more than ten (10) days
after the due date. Maker agrees that this charge is a reasonable estimate of
extra expenses the Lender will incur, and is not a penalty.
9. ACCELERATION; ATTORNEYS' FEES.
At the option of the Lender, and without demand or notice,
all principal and any unpaid interest shall become immediately due and payable
upon an event of default as set forth in Section 8 hereinabove. Any reasonable
attorneys fees and other expenses incurred by the Lender in enforcing any of its
rights hereunder or from a bankruptcy filing relating to the Maker, or any of
the other events described in Section 7 and 8 hereinabove, shall be deemed
additional indebtedness of the Maker and added to the principal amount of the
Note, irrespective of whether Lender files suit against Maker.
10. SECURITY INTERESTS.
3
<PAGE> 23
It is further understood that this Note is secured by the
security interests granted to Lender pursuant to the Loan and Security Agreement
between the Parties.
11. SECTION HEADINGS.
Headings and numbers have been set forth for convenience
only. Unless the contrary is compelled by the context, the language set forth in
each paragraph applies equally to the entire Note.
12. AMENDMENTS IN WRITING.
This Note may only be changed, modified or amended in
writing signed by the Parties.
13. CHOICE OF LAW.
The Note and all transactions hereunder and evidenced
hereby shall be governed by, construed under, and enforced in accordance with
the laws of the State of California.
14. WAIVER OF TRIAL BY JURY.
For separate and legal consideration received, Maker
hereby waives, to the extent permitted under applicable law, any right to trial
by jury in any action or proceeding relating to the Note.
Made and Executed at
Haltom City, TX
- -----------------------------------
American Independent Network, Inc.,
a Delaware Corporation
- -----------------------------------
Randy Moseley
President, Chief Financial Officer
4
<PAGE> 1
EXHIBIT 6.20
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
-----------------------------------------
RADIO STATION AUTHORIZATION
-----------------------------------------
(page 1)
CALL SIGN: E970315
FILE NO. 1035-DSE-P/L-97
NAME: AMERICAN INDEPENDENT NETWORK, INC.
CONSTRUCTION PERMIT AND LICENSE
DATE OF GRANT: JULY 18, 1997
EXPIRATION DATE: JULY 18, 2007
NATURE OF SERVICE: DOMESTIC FIXED SATELLITE SERVICE
CLASS OF STATION: FIXED EARTH STATION
LATITUDE LONGITUDE
LOCATION OF STATION: 32 47 26.0 N 97 15 12.0 W
STATION ADDRESS: 6125 AIRPORT FREEWAY
HALTOM CITY (TARRANT County), TEXAS
SUBJECT TO THE PROVISIONS OF THE COMMUNICATIONS ACT OF 1934, THE COMMUNICATIONS
SATELLITE ACT OF 1962, SUBSEQUENT ACTS AND TREATIES, AND ALL PRESENT AND FUTURE
REGULATIONS MADE BY THIS COMMISSION, AND FURTHER SUBJECT TO THE CONDITIONS AND
REQUIREMENTS SET FORTH IN THIS PERMIT AND LICENSE, THE GRANTEE IS AUTHORIZED TO
CONSTRUCT, USE AND OPERATE THE RADIO FACILITIES DESCRIBED BELOW FOR RADIO
COMMUNICATIONS FOR THE TERM BEGINNING JULY 18, 1997 (3 A.M. EASTERN STANDARD
TIME) AND ENDING JULY 18, 2007 (3 A.M. EASTERN STANDARD TIME). THE REQUIRED DATE
OF COMPLETION OF CONSTRUCTION IS JULY 18, 1998. GRANTEE MUST FILE WITH THE
COMMISSION A CERTIFICATION UPON COMPLETION OF CONSTRUCTION.
1. PARTICULARS OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C> <C>
EIRP
DENSITY SPECIAL PROVISIONS
FREQUENCIES (MHz) EIRP (dBW/ ASSOCIATED (REFER TO FCC
AND POLARIZATION EMISSION (dBW) 4kHz) ANTENNA (S) FORM 488-A)
----------------------- -------- ----- ------- ----------- ------------------
1. 5925.000 - 6425.000 H,V 24MOG7F 67.70 30.70 1900
2. 3700.000 - 4200.000 H,V 24MOG7F - - - - - - 1010
</TABLE>
2. FREQUENCY COORDINATION LIMITS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Satellite Arc Elevation Azimuth Max. EIRP
(Deg. Long.) (Degrees) (Degrees) Density to
Frequency Limits East West East West East West Horizon Associated
(MHz) Limit Limit Limit Limit Limit Limit (dBW/4kHz) Antenna (s)
------------------ -------------- -------------- ------------- ----------- -----------
1. 5925.000- 6425.000 60.0W - 143.0W 34.9 - 28.3 125.5 - 242.2 -19.0
2. 3700.000- 4200.000 60.0W - 143.0W 34.9 - 28.3 125.5 - 242.2 - - -
</TABLE>
RECEIVING SYSTEM NOISE TEMPERATURE:
ANTENNA NO. 1: 105 KELVIN AT 28.3 DEGREES ELEVATION AND [ILLEGIBLE]
3. POINTS OF COMMUNICATIONS -- THE FOLLOWING SPACE STATIONS LOCATION IN
[ILLEGIBLE] STATIONARY SATELLITE ORBIT CONSISTENT WITH SECTIONS 1 AND 2 OF
THIS LICENSE:
a. ALL AUTHORIZED U.S. DOMESTIC (ALSAT) satellite(s)
[SEAL]
<PAGE> 2
UNITED STATES OF AMERICA
FEDERAL COMMUNICATIONS COMMISSION
---------------------------
RADIO STATION AUTHORIZATION
---------------------------
(page 2)
CALL SIGN: E970315
FILE NO.: 1035-DSE-P/L-97
4. TRANSMITTING EQUIPMENT
OUTPUT
UNITS MANUFACTURER MODEL NUMBER POWER-WATTS
1. 1 POWER TECHNOLOGIES MODEL 30-710020-002 3000.0
5. ANTENNA FACILITIES SITE ELEVATION: 153.9 METERS AMSL
DIAMETER MAX. ANT. HT.
UNITS (Meters) FEED MANUFACTURER MODEL NUMBER (Meters)
1. 1 3.70 PRIM MIRALITE 3.7 158.5 AMSL
MAX. GAIN(S): 41.5 dBi at 4.000 GHZ 45.4 dBi at 6.000 GHz 4.6 AGL
6. REMOTE CONTROL POINT: NONE
7. ANTENNA STRUCTURE MARKING AND LIGHTING REQUIREMENTS: NONE
ATTACHED FCC FORMS 488-A AND 488-B (STANDARD PROVISIONS) ARE INCORPORATED INTO
THIS AUTHORIZATION. SPECIAL PROVISION REFERENCE NUMBERS ARE LISTED IN SECTION 1
ABOVE; GENERAL PROVISION REFERENCE NUMBERS ARE AS FOLLOWS:
(1): 2010 (2): 2810 (3): 2916 (4) 2938 (5): 5208
[FCC SEAL]
<PAGE> 3
SPECIAL AND GENERAL PROVISIONS
FOR RADIO STATION AUTHORIZATION
The radio station authorization granted on FCC Form 488 for File No.
1035-DSE-P/L-97, CALL SIGN: E970315 is subject to additional terms and
conditions specified by code numbers on that form. The text of these special
and general provisions is given below:
1010 - Receive frequency band. Emission designator indicates the maximum
bandwidth or transmission received at this station. Maximum E.I.R.P. and
maximum E.I.R.P. density are not applicable to receive operations.
1900 - Authority is granted to transmit any number of r.f. carriers with the
specified parameters on any discrete frequencies within this band in
accordance with the other terms and conditions of this authorization,
subject to any additional limitations that may be required to avoid
unacceptable levels of inter-satellite interference.
2010 - This authorization is issued pursuant to the Commission's Second Report
and Order adopted June 16, 1972 (35 FCC 2d 844) and Memorandum, Opinion
and Order adopted December 21, 1972 (38 FCC 2d 665) in Docket No. 16495
and is subject to the policies adopted in that proceeding.
2810 - The grantee shall maintain on file with the Commission a current list or
plan of the precise frequencies in actual use at this station, specifying
for each such frequency: the r.f. center frequency, polarization,
emission designator, EIRP (dBW), EIRP density (dBW/4 kHz), and receiving
earth station(s). This list or plan may be submitted either on a
station-by-station basis or on a system-wide basis, and shall be updated
within seven days of any changes in frequency usage at this station.
Temporary usage of frequencies for periods of less than seven days need
not be notified to the Commission if accurate station records are
maintained of the times and particulars of such temporary frequency
usage.
2916 - The transmitter(s) must be turned off during antenna maintenance so that
the FCC-specified safety guidelines for human exposure to radiofrequency
radiation are complied with in the region between the feed and the
reflector. Appropriate measures must also be taken to restrict access to
other regions in which the earth station's power flux density levels
exceed the specified guidelines.
2938 - Upon completion of construction, each licensee must file with the
Commission a certification including the following information: name of
the licensee, file number of the application, call sign of the antenna,
date of the license and certification that the facility as authorized has
been completed, that each antenna facility has been tested and is
FCC Form 488-A
Page 1
<PAGE> 4
FILE NUMBER: 1035-DSE-P/L-97 CALL SIGN: E970315
within 2 dB of the pattern specified in Section 25.209 and that the
station is operational including the date of commencement of service and
will remain operational during the license period unless the license is
submitted for cancellation.
5208 - The licensee shall take extraordinary measures to ensure that the antenna
does not create a potential for harmful non-ionizing radiation to persons
who may be within the immediate vicinity since this earth station exceeds
the radiation hazard level of 5 mW/cm2. This shall include but not be
limited to roping off an area or establishing a physical barrier within a
radius of at least 20 feet surrounding the antenna or the trailer on
which it is mounted. During actual transmissions, warning signs shall be
posted informing all persons to keep outside the roped off area. The
bottom of the satellite dish shall not be less than 6 feet above ground
level.
FCC Form 488-A
Page 2
<PAGE> 5
COMMUNICATIONS SATELLITE EARTH STATION STANDARD PROVISIONS
THIS AUTHORIZATION IS SUBJECT TO THE FOLLOWING CONDITIONS:
This authorization is issued on the grantee's representation that the
statements contained in the application are true and that the undertakings
described will be carried out in good faith.
This authorization shall not be construed in any manner as a finding by the
Commission on the question of marking or lighting of the antenna system should
future conditions require. The grantee expressly agrees to install such marking
or lighting as the Commission may require under the provisions of Section
303(q) of the Communications Act. 47 U.S.C. Section 303(q).
Neither this authorization nor the right granted by this authorization shall be
assigned or otherwise transferred to any person, firm, company or corporation
without the written consent of the Commission. This authorization is subject to
the right of use or control by the government of the United States conferred by
Section 706 of the Communications Act. 47 U.S.C. Section 706. Operation of this
station is governed by Part 25 of the Commission's rules. 47 C.F.R. Part 25.
This authorization shall not vest in the licensee any right to operate this
station nor any right in the use of the designated frequencies beyond the term
of this license, nor in any other manner than authorized herein.
This authorization is issued on the grantee's representation that the station
is in compliance with environmental requirements set forth in Section 1.1307 of
the Commission's Rules. 47 C.F.R. Section 1.1307.
This authorization is issued on the grantee's representation that the station
is in compliance with the Federal Aviation Administration (FAA) requirements as
set forth in Section 17.4 of the Commission's Rules. 47 C.F.R. Section 17.4.
The following condition applies when this authorization permits construction
of or modifies the construction permit of a radio station:
This authorization shall be automatically forfeited if the station is
not ready for operation by the required date of completion of
construction unless an application for modification of construction
permit for additional time to complete construction is filed by that
date, together with a showing that failure to complete construction by
the required date was due to factors not under control of the grantee.
FCC Form 488-B
<PAGE> 1
EXHIBIT 6.21
ADDENDUM #1 TO THE BRIDGE LOAN AND CONSULTING
AGREEMENT ENTERED INTO ON _______________, 1995
BY AND BETWEEN PACIFIC ACQUISITION GROUP, INC.
AND AMERICAN INDEPENDENT NETWORK, INC.
This Addendum (the "Addendum") to the Bridge Loan and Consulting
Agreement (the "Agreement") is entered into by and between Pacific Acquisition
Group, Inc. ("PAG"), a Colorado corporation, and American Independent Network,
Inc. ("AIN"), a Delaware corporation, as of this ____ day of ___________, 1996.
("PAG" and "AIN" collectively referred to hereinafter as the "Parties").
RECITALS
WHEREAS, it is the intent of both PAG and AIN to modify the terms of the
Bridge Loan and Consulting Agreement (the "Agreement") executed by the Parties
on ___________, 1995;
WHEREAS, AIN is seeking to raise an additional Two Million Dollars
($2,000,000) in capital through the issuance of equity securities (the
"Shares"), pursuant to a Private Offering in the same amount scheduled to
commence in June/July, 1996;
WHEREAS, PAG is willing to provide introductions to both Broker-Dealers
and suitable investors in connection with the placement of $2,000,000 of Shares;
THEREFORE, AIN hereby engages the services of PAG for the purpose set
forth above, and in consideration of the mutual promises contained herein, the
Parties agree as follows:
1. Within ten days of terminating the Two Million Dollar
($2,000,000) private equity offering, AIN shall issue to PAG a Common Stock
Certificate evidencing ownership of 2% of the issued and outstanding Capital
Stock of AIN. Such stock issuance shall be exclusive of the issuance to PAG of
4.9% of AIN Capital Stock as provided in the Agreement; and
2. In the event less than Two Million Dollars ($2,000,000)
is raised, the 2% distribution of Common Stock referred to above shall be
reduced based on the following formula:
a. The actual amount raised in the Two Million Dollar
($2,000,000) Private Offering divided by $2,000,000. For example, if $1,000,000
is raised, PAG would receive Common Stock equal to 1% of the issued and
outstanding Capital Stock of AIN.
<PAGE> 2
For the purposes of this Addendum, the term "Capital Stock" shall have
the same meaning as set forth in the Agreement.
IN WITNESS WHEREOF, this Addendum has been executed as of the date first
set forth above.
AMERICAN INDEPENDENT NETWORK, INC.
By: _______________________________
Its: ______________________________
PACIFIC ACQUISITION GROUP, INC.
By: _______________________________
James E. Hock, Jr.
President
<PAGE> 1
EXHIBIT 6.22
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into this 24th day of
June, 1995 by and between American Independent Network, Inc., a Delaware
corporation ("Corporation"), and James E. Hock, Jr., a California resident
("Consultant"). Corporation and Consultant are collectively referred to
hereinafter as the "Parties."
RECITALS
WHEREAS the Corporation desires to retain the services of Consultant to assist
it, by providing expertise and advise as to its proposed merger with a publicly
trading shell corporation; and
WHEREAS the Consultant is both qualified to perform and wishes to undertake such
activities, on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises of the parties and other
good and valuable consideration, the parties hereby agree as follows:
Section 1. Engagement.
1.1 Scope of Services. Corporation shall engage Consultant to provide
his expertise and advise to Corporation, including reviewing, evaluating and
analyzing all potential public shell candidates, undertaking a comprehensive due
diligence investigation on such candidates, furnish advice and counsel to the
Corporation regarding such opportunities, including the potential risks and
benefits to the Corporation, and provide general supervisory assistance in
structuring the merger transaction and financing arrangements which may arise
from such transaction, including, but not limited to, an initial public
offering.
In accepting this engagement, the Consultant acknowledges that the
performance of such services shall require it to undertake a thorough review of
all relevant and related documentation pertaining to the prospective
transaction, to attend any and all meetings pertaining to such opportunities at
which the Corporation shall require Consultant's presence, and to take all other
steps reasonably necessary to effectively and adequately provide the defined
services. Consultant understands that it shall be under a duty to take such
actions, and a failure to do so shall constitute an immediate and material
breach of this Agreement.
1.2 Access. Pursuant to the performance by Consultant of the services
described in Paragraph 1.1, the Corporation agrees to provide to Consultant full
access to all documents and materials which Consultant shall require to
adequately provide the contemplated services, and shall not unreasonably
withhold from Consultant the right to access to any such materials.
<PAGE> 2
Section 2. Duration.
2.1 Starting Date. It is contemplated that this Agreement shall become
effective, and have as a starting date, the date of execution by both parties
below.
2.2 Termination. Unless automatically terminated earlier by agreement of
the parties, or by incapacity or bankruptcy of either party, or by either
party's failure to timely or properly perform the services or make payments, the
Agreement extends until December 31, 1996. This Agreement may be terminated by
either party for any reason without liability after first giving thirty (30)
days prior written notice to the other party.
Section 3. Compensation
3.1 Rate. The parties agree that Consultant shall be $5,000 per month
for his services. Payment shall be made to Consultant by no later than the fifth
day of each month during the term of this Agreement.
3.2 Travel Time. From time to time, the Consultant may be required to
travel to different locations for the benefit of the Company. Under no
circumstances shall the Consultant make any travel plans or incur any travel
expenses in connection with his role as Consultant without receiving prior
approval from the Company, authorizing the Consultant to undertake the travel
and to incur the travel expenses; provided, however, that such approval shall
not be unreasonably withheld, and such approval shall not be required for
ordinary local travel undertaken for the benefit of the Company which results in
expenses of under $20 for any one trip. For all travel approved by the Company
and for ordinary local travel, the Company shall reimburse the Consultant for
all travel time at the agreed upon rate, but Consultant may bill for a maximum
of eight hours of travel time in any given 24-hour period.
3.3 Expenses. From time to time, the Consultant may also be required to
incur expenses, in addition to the travel expenses provided for in Section 3.2.
Under no circumstances shall the Consultant incur expenses in connection with
his role as Consultant without receiving prior approval from the Company,
authorizing the Consultant to incur such expenses; provided, however, that such
approval shall not be unreasonably withheld. The Company shall reimburse
Consultant for all reasonable and necessary expenses incurred in performing his
services, including, but not limited to, meals, telephone, facsimile, postage,
secretarial services and bonding, if required.
Section 4. Relationship of the Parties.
The parties intend that the relationship between them created under this
Agreement is that of an independent contractor only. Consultant is not to be
considered an agent or employee of Corporation for any purpose, and Corporation
is interested only in the results obtained under this Agreement; the manner and
means of performing the services are subject to Consultant's sole
<PAGE> 3
control. Consultant shall be responsible for all state, federal, and local
taxes, including estimated taxes, and employment reporting for Consultant or any
employees or agents of Consultant.
Section 4. Confidentiality.
Consultant shall maintain in confidence (1) the subject matter of this
Agreement, (2) the consulting work carried out hereunder, (3) any ideas
conceived hereunder, and (4) any business or technical information of
Corporation acquired by Consultant as a result of the consulting work carried
out pursuant to this Agreement, and Consultant shall not, without Corporation's
prior authorization, directly or indirectly use, publish, or disclose to others
any information, data, designs, results, or opinions resulting from the
consulting work carried out pursuant to this Agreement.
The obligations of secrecy shall continue throughout the duration of this
Agreement.
Section 5. Records.
Consultant shall keep full and accurate records of all consulting work
performed under this Agreement. All records, computations, charts, reports, and
other documentation made in the course of the consulting work performed
hereunder, or in anticipation of the consulting work to be performed in regard
to this Agreement, shall at all times be and remain the sole property of
Corporation. Consultant shall turn over to Corporation all copies of such
documentation on request by Corporation.
Section 6. Notices.
All notices and other communications required or permitted under this
Agreement shall be validly given, made, or served if in writing and delivered
personally or sent by registered mail, to the Consultant at the following
address:
addressed to the Corporation at:
American Independent Network, Inc.
6125 Airport Freeway
Haltom City, CA 76117
if to the Consultant:
James E. Hock, Jr.
21800 Burbank Blvd., Suite 100
Woodland Hills, CA 91367
<PAGE> 4
with a copy to:
Gregory L. Hrncir, Esq.
350 W. Colorado Blvd., Suite 210
Pasadena, CA 91105
Section 7. Arbitration.
If at any time during the term of this Agreement any dispute,
difference, or disagreement shall arise upon or in respect of the Agreement, and
the meaning and construction hereof, every such dispute, difference, and
disagreement shall be referred to a single arbiter agreed upon by the parties,
or if no single arbiter can be agreed upon, an arbiter or arbiters shall be
selected in accordance with the rules of the American Arbitration Association
and such dispute, difference, or disagreement shall be settled by arbitration in
accordance with the then prevailing commercial rules of the American Arbitration
Association, and judgment upon the award rendered by the arbiter may be entered
in any court having jurisdiction thereof.
Section 8. Law Governing.
This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
Section 9. Agreement Binding.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.
Section 10. Counterparts.
This Agreement may be executed in several counterparts and all so
executed shall constitute one Agreement, binding on all the parties hereto even
though all the parties are not signatories to the original or the same
counterpart.
Section 11. Savings Clause.
If any provision of this Agreement, or the application of such provision
to any person or circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is held invalid, shall not be affected thereby.
IN WITNESS WHEREOF, the Parties enter into this Agreement as of the date
first written above.
<PAGE> 5
CORPORATION
American Independent Network, Inc.,
a Delaware corporation
- ------------------------------------
Randy Moseley
President, CFO
CONSULTANT
- ------------------------------------
James E. Hock, Jr.,
a California resident
<PAGE> 6
AMENDMENT #1 TO
CONSULTING AGREEMENT
This Amendment #1 to the Consulting Agreement (the "Amendment") is
entered into this 1st day of January, 1997 by and between American Independent
Network, Inc., a Delaware corporation ("Corporation"), and James E. Hock, Jr.,
an individual ("Consultant") (Corporation and Consultant are collectively
referred to hereinafter as the Parties).
RECITALS
WHEREAS, on June 24, 1995, the Parties entered into that certain
Consulting Agreement (the "Agreement") which provided for Consultant to provide
advice and expertise regarding a proposed merger with a public shell
corporation;
WHEREAS, the Agreement expired on December 31, 1996;
WHEREAS, the Corporation desires to continue to retain the services of
Consultant to provide expertise and advise as to private and public offerings of
securities of the Corporation; and
WHEREAS, the Consultant is both qualified to perform and wishes to
undertake such activities, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises of the parties
and other good and valuable consideration, the Parties hereby agree as follows:
1. Section 2.2 of the Agreement is amended to state the following:
2.2 Termination. Unless automatically terminated earlier by
agreement of the parties, or by incapacity or bankruptcy of either party, or by
either party's failure to timely or properly perform the services or make
payments, the Agreement extends until December 31, 1997.
2. This Amendment may be executed in several counterparts and all so
executed shall constitute one and the same Amendment, binding on all the Parties
hereto even though all the Parties are not signatories to the original or the
same counterpart.
<PAGE> 7
IN WITNESS WHEREOF, the Parties enter this Amendment as of the date
first written above.
CORPORATION
American Independent Network, Inc.,
a Delaware corporation
- ------------------------------------
Randy Moseley
President, CFO
CONSULTANT
- ------------------------------------
James E. Hock, Jr.,
a California resident
<PAGE> 1
EXHIBIT 6.23
March 5, 1997
Don Shelton, CEO
Randy Moseley, President
American Independent Network, Inc.
6125 Airport Freeway, Suite 200
Haltom City, Texas 76117
Re: Engagement of Equity Communications
Dear Messrs. Shelton and Moseley:
This letter will confirm the following agreement and understanding between
American Independent Network, Inc. ("AIN") and Ira Weingarten d.b.a. Equity
Communications ("EC") with respect to the following:
1.) AIN agrees to retain EC, and EC agrees to be retained by AIN as its
Financial Public Relations Advisor, for a period of one year beginning March 1,
1997, for a total professional fee of $60,000, payable at the rate of $5,000 per
month.
2.) This letter agreement (the "Agreement") may be terminated as of June 1,
1997, by either party upon presentation of thirty days written notice. If this
Agreement is not terminated after the first 3 months, it shall automatically be
extended until the one year contractual period is completed on March 1, 1998.
2A.) If this Agreement is not terminated by either party on March 1,
1998, it shall automatically be extended on a month to month basis
thereafter.
3.) In addition to the monthly fee compensation, AIN agrees to issue to Ira
Weingarten, and/or his assigns, within thirty (30) days of the date of execution
of this Agreement, one percent (1%) of the issued and outstanding common shares
of AIN on a fully diluted basis, which AIN and EC anticipate being 50,000 common
shares on a post-split basis. The issuance of the foregoing shares of common
stock is contingent upon the following: (a) EC procures an underwriter for a
firm underwriting of a minimum of $2,000,000 of AIN Common Stock; (b) AIN Common
Stock is trading on NASDAQ SmallCap by July 1, 1997; and (c) EC introduces five
(5) experienced market makers to market AIN Common Stock in the aftermarket. In
the event EC fails to meet any one of the three preceding contingencies, AIN
shall have the option of canceling the certificate representing the 50,000
shares to be issued to EC. To exercise this option, AIN must notify EC in
writing between July 1 and July 7, 1997, but in no event later than July 7,
1997.
3B.) AIN Common Stock to be issued to EC shall include registration
rights consisting of two (2) piggy-back rights. AIN shall provide EC with thirty
(30) day notice of its intention to file a registration statement. EC shall have
fifteen (15) days from date of receipt of such notice to submit a written
registration request relating to some or all of the shares to be issued to EC.
The registration rights granted hereunder shall be subject to the discretion of
the underwriter. In
<PAGE> 2
any event, the registration rights granted to EC hereunder shall not be deemed
extinguished unless all shares requested to be registered have in fact been
registered.
4.) The first month professional fee of $5,000 is due and payable upon the
execution of this Agreement. Monthly fees thereafter will be billed on the first
day of the month, and are due and payable on or before the fifteenth day of that
month.
5.) AIN agrees to reimburse EC for expenses incurred in the Company's behalf. EC
agrees to spend no more than $700 on any one project without the personal
approval of an authorized officer of AIN.
5A.) The following items will be routinely rebilled to AIN: long
distance telephone charges, travel, postage, fax, photocopying,
messenger and courier services, and editorial meals. The following
items, which would require EC to utilize outside venders and/or
supervise the work of others, (which AIN does not at the present time
expect to need) would, if required, be rebilled to the Company only as
authorized, and include a standard service fee of 17.64% printing,
production, package distribution, mailing list development and
maintenance, art work, consultants, photography, and visual
presentations.
6. Where possible, transportation arrangements involving service for AIN will be
made by a travel agent designated by the Company, and such transportation will
be billed directly to AIN by the agent. In the event Mr. Weingarten must fly
cross-country utilizing red-eye service, he shall be entitled to fly business
class, or first class if business class is not available using the least
possible airfare, such as frequent flyer upgrades, etc.
7. EC, in consideration of the remuneration stated above, agrees to provide
comprehensive planning and financial public relation services for AIN, to
include introductions to various security dealers, investment advisors,
analysts, and members of the financial community, organization of and
participation in meetings with prospective investment bankers and others who may
assist the company in becoming a publicly traded entity, assistance as needed in
the negotiation and implementation of a satisfactory investment banking
agreement, editorial assistance in the development of discussion materials, and
preparation and distribution of press releases. Cooperation by both parties to
insure uninterrupted communications is presumed.
8.) Representations and Procedures:
8A.) Each person executing this Agreement has the full right, power, and
authority to enter into this Agreement on behalf of the party for whom they have
executed this Agreement, and the full right, power, and authority to execute any
and all necessary instruments in connection with this Agreement, and to fully
bind such party to the terms and conditions and obligations of this Agreement.
8B.) This Agreement shall constitute the entire agreement between the
parties with respect to the subject matter hereof and discussions between or
among any of them. The parties hereto acknowledge and agree that there are no
conditions, covenants, agreements and understandings
<PAGE> 3
between or among any of them except as set forth in this Agreement. This
Agreement may be amended only by a further writing signed by all parties hereto.
8C.) Venue in the event of litigation shall be in the State of
California, County of Santa Barbara. The losing party agrees to pay all
reasonable legal costs of the prevailing party, including attorney's fees.
8D.) This Agreement may be executed either as a single document or in
one or more counterparts, each of which shall be deemed an original and all of
which, taken together, shall constitute one and the same instrument. Execution
of this Agreement by facsimile signature shall be acceptable, and each party
agrees to provide the original executed pages to the other party within 10 days.
8E.) Any notice required to be given pursuant to this Agreement shall be
deemed given and served when such notice is deposited in the United States Mail,
first class, certified or registered, and addressed to the principal offices of
the parties as they appear on this Agreement, unless a written change of address
notification has been sent and received.
Sincerely yours,
Ira Weingarten
President
Accepted by:
AMERICAN INDEPENDENT NETWORK, INC., Dated: _______________, 1997
a Delaware corporation
- ------------------------------------
Randy Moseley
President, CFO
<PAGE> 1
EXHIBIT 10.1
Consent of Inclusion
I, Jack F. Burke, Jr., hereby consent to the inclusion of the financial
statements of American Independent Network, Inc. (the "Company") for year ended
December 31, 1995 and December 31, 1996 for the Company's Form 10-SB to be filed
with the Securities and Exchange Commission.
/s/ JACK F. BURKE JR.
--------------------------------------
By: Jack F. Burke, Jr., CPA
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
UNAUDITED FINANCIAL STATEMENTS FOR 6 MONTHS ENDED JUNE 30, 1997 AND THE AUDITED
FINANCIAL STATEMENTS FOR 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH (B) FORM 10-SB
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> APR-01-1997 JAN-01-1996
<PERIOD-END> JUN-30-1997 DEC-31-1996
<CASH> 27,389 59,846
<SECURITIES> 0 0
<RECEIVABLES> 452,503 10,730
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 641,216 213,312
<PP&E> 767,483 715,995
<DEPRECIATION> 102,700 52,700
<TOTAL-ASSETS> 4,822,417 4,317,645
<CURRENT-LIABILITIES> 2,298,184 2,141,559
<BONDS> 0 0
0 0
286,624 107,546
<COMMON> 148,108 140,453
<OTHER-SE> 1,880,584 1,676,470
<TOTAL-LIABILITY-AND-EQUITY> 4,822,417 4,317,645
<SALES> 723,194 1,092,399
<TOTAL-REVENUES> 723,194 1,092,399
<CGS> 0 0
<TOTAL-COSTS> 770,457 1,470,573
<OTHER-EXPENSES> 403,198 603,995
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 190,789 204,757
<INCOME-PRETAX> (450,461) (982,169)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (351,461) (786,169)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (351,461) (786,169)
<EPS-PRIMARY> 0 (0.08)
<EPS-DILUTED> 0 0
</TABLE>
