<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
FORM 10-SB
GENERAL FORM FOR
REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
NBG RADIO NETWORK INC.
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Nevada, USA 88-0362102
---------------------- ---------------------------------
State of Incorporation (IRS Employer Identification No.)
520 S. W. 6th Avenue, Suite 75O, Portland, Oregon 97204
-------------------------------------------------------
(Address of principal executive offices)
Issuer's Telephone Number, (503) 802-4624
--------------
Securities to be registered pursuant to Section 12(b) of the Act:
-----------------------------------------------------------------
None
Securities to be registered pursuant to Section 12(g) of the Act:
-----------------------------------------------------------------
Common Shares, with par value of $0.001
---------------------------------------
(Common Stock)
--------------
Page 1 of 176
Index to Exhibits on Page 36
<PAGE> 2
NBG RADIO NETWORK INC.
FORM 10-SB
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Item 1. Description of Business........................................ 03
Item 2. Management's Discussion and Analysis or Plan of
Operation...................................................... 14
Item 3. Description of Property........................................ 22
Item 4. Security Ownership of Certain Beneficial Owners
and Management................................................. 22
Item 5. Directors, Executive Officers, Promoters
and Control Persons............................................ 24
Item 6. Executive Compensation......................................... 28
Item 7. Certain Relationships and Related Transactions................. 29
Item 8. Description of Securities...................................... 30
PART II
Item 1. Market Price Of And Dividends on the Registrant's
Common Equity and Other Shareholder Matters.................... 31
Item 2. Legal Proceedings.............................................. 31
Item 3. Changes in and Disagreements with Accountants.................. 32
Item 4. Recent Sales of Unregistered Securities........................ 33
Item 5. Indemnification of Directors and Officers...................... 34
PART F/S
Item 1. Financial Statements........................................... 35
PART III
Item 1. Index to Exhibits.............................................. 36
</TABLE>
2
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
INTRODUCTION
NBG Radio Network Inc. (hereinafter is also referred to as the "Company" and/or
the "Registrant") is involved in the acquisition, creation and syndication of
national radio programming and program production and distribution. The Company
is also engaged in the sale of advertising time on the radio. The Company's
original name was Nostalgia Broadcasting Corp. and the name was changed to NBG
Radio Network Inc. on January 15, 1998. The Company's approach to radio
syndication is to produce and/or acquire specialty audio shows and enroll radio
station affiliates to broadcast these programs.
The Company's head office is located at 520 S.W. 6th Avenue, Suite 750,
Portland, Oregon 97204. The contact person is John A. Holmes III, President,
Chief Executive Officer and Director. The telephone number is (503) 802-4624;
the facsimile number is (503) 802-4626. The e-mail address is:
[email protected].
The Company's authorized capital includes 25,000,000 shares of common stock with
a par value of $0.001; and, as of 10/3/98 there were 10,091,694 shares of common
stock were outstanding. (Effective 8/3/98, the Company effected a 3:1 stock
split. All references in this document to number of shares and share data are
post split.
The Company's common stock trades on the NASD Electronic Bulletin Board with the
symbol "NSBD-BB".
The information in this Registration Statement is current as of 10/3/98, unless
otherwise indicated.
HISTORICAL CORPORATE DEVELOPMENT
Incorporation
The Company was incorporated in Nevada, USA on 3/4/96.
The Company started business on 3/27/96 with initial shareholder contributions
of $180,000. Effective 5/4/96 the Company acquired ITEX Media Services, Inc.
("Itex") along with its contracts and certain inventories for $775,000. Itex
Media Services is not a company subsidiary and the Registrant has no
subsidiaries. The Company paid $175,000 down and Itex agreed to carry a note for
the balance with payment terms spread over five years. Included in the sale were
the following three nationally syndicated radio shows: 640 one hour programs
entitled "The Golden Age of Radio," hosted by Victor Ives, 93 two minute
programs entitled "Flashback - Moments in Time," also hosted by Victor Ives, and
62 two minute programs entitled "Sports Flashback," hosted by Joe DeNiro. In
addition, a music distribution contract for Michael Allen Harrison, and purchase
of The Image Audio Production Library were a part of the sales agreement. The
acquisition was accounted for using the
3
<PAGE> 4
purchase method of accounting with the entire purchase price being allocated to
music inventory.
Financings during Fiscal 1996, 1997 and 1998
In March 1996, the Company issued 475,000 shares of common stock for total
consideration of $180,000.
In November 1996, the Company completed a private placement in which 600,000
units were sold. Total consideration received by the Company was $300,000. Net
proceeds to the Company, after associated offering expenses, was $292,000. Each
unit consisted of one common share and one share purchase warrant. Each share
purchase warrant entitles the holder to purchase one additional share of common
stock for $1.00 during a six month period after the closing of the offering.
(The offering closed on 11/30/96.) The time frame during which the holders may
purchase an additional share of common stock for consideration of one share
purchase warrant and $1.00 may be extended upon appropriate notice given to
shareholders by the management. On August 15, 1997 the expiration date on the
warrants was extended to December 31, 1997. On November 30, 1997, the expiration
date on the warrants was extended to March 30, 1998. On February 27, 1998, the
expiration date on the warrants was extended to June 30, 1998. On May 22, 1998,
the expiration date on the warrants was extended to August 31, 1998. The warrant
price remained the same throughout this time frame and has never altered. The
extensions were made due to the delays in receiving the Bulletin Board Listing.
580,430 of these warrants were exercised between January 1998 and August 31,
1998. The proceeds of this private placement are being used for the construction
of a production studio in Portland, Oregon (completed in April 1998); to provide
additional capital for the development of new radio syndication products; and,
for the general working capital of the Company.
During March 1998, 600,000 share purchase options were exercised at a price of
$0.60 per option. Each option equaled one share of common stock subject to
restriction under SEC Rule 144. The Company realized $360,000 from the exercise
of these share purchase options. These options were not the warrants mentioned
in the preceding paragraph. The options were granted to employees and directors
of the Company on January 15, 1998 at an exercise price $0.60 per share.
On July 30, 1998, the Company completed a private placement whereby it sold
1,500,000 common units to a small group of sophisticated investors at a price of
$1.00 per unit. Each unit consisted of one common share subject to restriction
under SEC Rule 144 and one non-transferable share purchase warrant which allowed
the owner to purchase an additional share for $1.17 up to a period of one year.
BUSINESS
DESCRIPTION OF THE RADIO SYNDICATION AND RADIO ADVERTISING SALES INDUSTRY
There are currently approximately 10,000 commercial radio stations in the United
States.
A radio station selects a format to attract a target listening audience and
thereby attract commercial advertising directed at that audience.
The diversity in program formats has intensified competition among stations for
local advertising revenue. A radio station has two principal ways of effectively
competing for these revenues. First, it can differentiate itself in its local
market by selecting and successfully executing a format targeted at a particular
audience thus enabling advertisers to place their
4
<PAGE> 5
commercial messages on stations aimed at audiences with certain demographic
characteristics. A station can also broadcast special programming, syndicated
shows, sporting events or national news product, such as supplied by Nostalgia
Broadcasting Corp., not available to its competitors within its format. National
programming broadcast on an exclusive geographic basis can help differentiate a
station within its market, and thereby enable a station to increase its audience
and local advertising revenue.
Radio advertising time can be purchased on a local, regional or national basis.
Local purchases allow an advertiser to select specific radio stations in chosen
geographic markets for the broadcast of commercial messages. However, this
process can be expensive and inefficient. Local and regional purchases are
typically best suited for an advertiser whose business or ad campaign is in a
specific geographic area. Advertising purchased from a radio network is one
method by which an advertiser targets its commercial messages to a specific
demographic audience, achieving national coverage on a cost efficient basis. In
addition, an advertiser can choose to emphasize their message in a certain
market or markets by supplementing a national purchase with local and/or
regional purchases.
In recent years the increase in the number of program formats has led to more
demographically specific listening audiences, making radio an attractive,
alternative medium for national advertisers. In addition, nationally broadcast
news, concerts and special event programming have made radio an effective medium
of reach as well as frequency.
To verify audience delivery and demographic composition, specific measurement
information is available to national advertisers by independent rating services.
These rating services provide demographic information. Thus, national
advertisers can verify that their advertisements are being heard by their target
listening audience.
BUSINESS
Production, Syndication, Creation, Acquisition and Distribution of Radio
Programs:
The Company is in the business of producing and syndicating radio programs. The
Company's approach to radio syndication is to produce and/or acquire specialty
audio shows and to enroll radio station affiliates to broadcast these programs.
Nostalgia Broadcasting Corp. provides the programming needs of radio stations by
supplying them with programs that they may not
5
<PAGE> 6
be able to produce on their own. The Company offers the stations a selection of
regularly scheduled programming. Each program is offered for broadcast to one
station in a geographic market thus assisting the station in competing for
audience share in its local marketplace.
The Company has a number of people responsible for station relations and
marketing its programs to radio stations.
The Company controls most aspects of production of its programs so that it can
tailor them to respond to both current and changing listening preferences. Most
of the programs are produced at the Company's in-house facilities, located in
Portland, Oregon. The Company determines the content and style of a program
based on the target audience it wishes to reach. It assigns a producer, writer,
host and other personnel to record and produce the programs. Because the Company
controls the production process, it can refine the content of the programs to
respond to the needs of the stations and the advertisers. Also, it can alter
program content in response to current and anticipated audience demand.
Nostalgia Broadcasting Corp. produces both short-form and long-form programs
which fall into one of the following four categories: sports, finance,
nostalgia, and general entertainment.
Talent currently signed as syndicated program hosts include: Peter Jacobsen
(current PGA Tour player), Rick Barry (former player in the National Basketball
Association and a member of the National Basketball Association's Hall of Fame),
Dick Versace (current coach of the Milwaukee Bucks - National Basketball
Association team), Steve Jones (current NBC-TV analyst for the National
Basketball Association), and Mychal Thompson (former member of the Portland
Trail Blazers National Association Basketball team).
The contract terms with these hosts are all very similar. The contracts are one
year in length. The compensation to the host is 10% of the net revenues of the
program (net revenues = gross revenue minus agency commissions, usually 15%),
and some shares of common stock of the Company. The number of shares of stock
ranges from 500 to 2500 shares depending on the host. Contracts currently in
effect are included as exhibits (see Exhibit # 14., Other Material Documents.)
The Company currently produces and syndicates sixteen programs which reach
approximately 1500 radio stations on a weekly basis. These programs include:
1. CELEBRITY TALK, a daily two minute show featuring interviews
with Hollywood celebrities;
2. COLOR OF SUCCESS, a daily two minute program detailing the
success stories of all colors and backgrounds;
3. DOLLARS AND CENTS, A daily two minute vignette offering
information and advice on investment opportunities and other
aspects of the world of finance;
6
<PAGE> 7
4. THE FLIP SIDE, A daily two or three minute program highlighting
the "A" and "B" sides of the old rock and roll 45's of the
50's and 60's;
5. MODERN ROCK MINUTE, A daily two minute show giving listeners an
inside look at the bands and musicians on the modern rock and
alternative music scene;
6. TEEN TIPS, A daily two minute show providing insights to teens
on everything from fashion and music to school and
relationships;
7. TRAVEL NOTES, A daily two minute vignette offering tips for all
kinds of travelers such as: where to go, what to see; and, how
to get there;
8. FASTBREAK, A daily two and one half minute show focusing on
what's happening in the world of basketball with an emphasis on
the NBA season;
9. OUTDOOR TIPS, A daily two minute program providing helpful hints
on anything that people might want to explore in the great
outdoors;
10. SPORTS MEMORIES, Basketball Hall of Fame player Rick Barry
personally interviews the world's top former athletes
highlighting some of history's greatest sports memories in this
daily two and one half minute show;
11. TEEIN' IT UP, PGA tour player Peter Jacobsen explores the world
of golf with tips, stories, and interviews with golf celebrities
in this two and one half minute show;
12. DANCE MIX AMERICA, A three hour weekly program that features the
dance music of the 1970's;
13. BIG BAND CLASSICS, This one hour weekly program features the
music of the 1930's, 1940's and 1950's;
14. THE COUNTRY OLDIES SHOW, A two hour weekly country music oldies
show that features music popular from 1965 to 1985.;
15. TRIVIA COAST-TO-COAST, A live three hour Sunday evening call-in
program centered around entertainment. This program has been on
the air on radio station KMOX in St. Louis for the past fifteen
years; and,
16. THE GOLDEN AGE OF RADIO, A daily one hour program featuring old
time radio shows including Fibber McGee and Molly, X Minus One,
Edgar Bergen and Charlie McCarthy.
Radio stations are able to obtain quality programming from Nostalgia
Broadcasting Corp. to meet their objective of attracting larger listening
audiences and increasing local advertising revenue.
The Company does not require the radio stations which utilize its programs to
identify the Company as the supplier of the programs. This provides the stations
with a high degree of customization and flexibility, as each station has the
right to present the
7
<PAGE> 8
programs provided by the company as if the station had generated such programs
with its own resources.
8
<PAGE> 9
Future Program Plans:
Currently under development is a variety of programming designed to fit various
radio station formats. Projects currently underway include:
1. An additional 124 Flashback programs have been written and are
now ready for recording.
2. An agreement to purchase a radio show series entitled "Big Band
Classics", hosted by Warrent Durham is now in place. Multimedia
Access Company, the producer of this new show, has completed the
first fifty one hour productions and there are 225 additional
one hour shows under development.
3. A new radio Flashback series entitled "Entertainment Flashback"
is under construction and will be hosted by Steve Fisher.
4. Tentative agreements are now in place for a new one hour
nationally syndicated radio show produced with the endorsement
and permission of the USO to be known as "'The USO Hour."
5. Additional radio syndication pilots under consideration are:
a. "Taking It To Heart" hosted by Dr. Mark Tager
b. "Dollars & Senses" hosted by Dave Simons
c. "Great American Hero's" hosted by Robert
Pamplin Jr. and Gary Eisler
d. "Cue Tips", a billiards program for Brunswick,
AMF and the Billiards Congress
e. "Sports Talk" hosted by Joe Namath
f. "Tee Time Golf" to be sponsored by the PGA of
America
g. "Dave on Politics" hosted by David Neal
h. "The Microsoft Minute" hosted by Michael Gruen
Sales of Advertising Radio Time:
The Company's principal source of revenue is selling radio time to advertisers.
In a typical relationship for a one hour show provided by the Company, a radio
station agrees to provide the Company with one 60 second advertising spot each
time a show is broadcast. This spot is not contained within the program and it
is accruable for future use. This advertising spot credit is for broadcast
during requested day part periods, and is subject to availability.
In addition to the accruable credit earned as shows are broadcast, the Company
typically retains one half of the advertising spots within each program aired.
For example, "The
9
<PAGE> 10
Golden Age of Radio" (a program syndicated by the Company) is broadcast for one
hour a day on 188 stations, each of which represent a different geographic
market. The actual show is 55 minutes in length allowing for a news broadcast at
the top of the hour. Contained within this 55 minute show are ten 60 second, (or
twenty 30 second) advertising slots. Half of these advertising slots may be sold
by the local station to local advertisers, and the other half are owned by the
Company and are available for sale to national advertisers. The Company may also
sell the additional 60 second accrued spot it has acquired outside the program
for each one hour show. The company enables national advertisers to purchase
advertising time and to have their commercial messages broadcast on radio
stations throughout the United States, reaching demographically defined
listening audiences. The Company delivers both of the major demographic groups
targeted by national advertisers: the 25 to 54-year old adult market and the 12
to 34-year old youth market. The Company currently sells advertising time to
over 100 national advertisers.
Examples of current advertisers are: Johnson & Johnson, Dryers Ice Cream, JC
Penneys, Sears, America West, Holland America, Pet Smart, Sporting News, The
American Association of Retired Persons, TWA Airlines, Princess Cruise Lines,
Rice-A-Roni, Golf Digest, Kraft Salad Dressings, Country Time Lemonade, Cool
Whip, Bain De Solei, Passport Travel Guide, and Coastland Media.
As the Company's business has developed, the Company has sold increasing amounts
of its commercial advertising airtime inventory to regional/national
advertisers. For the fiscal year ended 11/30/96, total revenues from airtime
sales were $120,719 and for the fiscal year ended 11/30/97, total revenues from
airtime sales were $802,695.
COMPETITION
Nostalgia Broadcasting Corp. operates in an extremely competitive environment.
When it attempts to place its programs with radio stations, it competes directly
with radio networks, independent radio syndication organizations, producers and
distributors.
The Company also competes for advertising revenue with network television, cable
television, print and other forms of communications media. Management feels that
the quality of its programming and the strength of its industry relations and
advertising sales force enable it to compete effectively with other forms of
communication media. Nostalgia Broadcasting markets its programs to the radio
stations that it believes have the largest and most desirable listening audience
for each of its programs.
10
<PAGE> 11
The increase in the number of program formats has led to increased competition
among local radio stations for audience. As stations attempt to differentiate
themselves in an increasingly competitive environment, their demand for quality
programming available from outside programming sources increases. This demand
has been intensified by high operating and production costs at local radio
stations and increased competition for local advertising revenue.
GOVERNMENT REGULATION
Radio broadcasting and station ownership are regulated by the Federal
Communications Commission (FCC). Nostalgia Broadcasting Corp., as a producer and
distributor of radio programs, is generally not subject to regulation by the
FCC.
RISK FACTORS
1. COMPETITION WITHIN THE INDUSTRY. The success of the Company's business is
largely dependent on its ability to place and maintain contracts with radio
stations for its programs. The Company faces significant competition for these
radio stations from other providers of programming. The Company also faces
competition from individual radio stations and groups of radio stations that
provide their own programs. Some of the Company's current and potential
competitors may offer alternative types of programming and may have
substantially greater financial, technical, marketing and other resources that
the Company. There can be no assurance that the Company's business will not be
adversely affected by current or increased competition for the provision of
programs in the markets in which it operates.
2. DEPENDENCE ON ADVERTISING REVENUES. The success of the Company's business is
closely linked to the performance of the advertising industry. A decline in
national and regional advertising would have a negative effect on the Company's
revenues. There can be no assurance that such a decline will not occur, or that
the Company's business will not be materially adversely affected thereby.
3. COMPETITION FOR ADVERTISING SALES. The business of selling broadcast
advertising time is highly competitive. The Company competes for advertising
dollars with other media such as newspapers and magazines, outdoor advertising,
network radio advertising, yellow page directories and point of sale
advertising. There can be no assurance that the Company will not be adversely
affected by such competition in the future.
4. DEPENDENCE ON KEY PERSONNEL. The Company's continued success is dependent, to
a large degree, upon the efforts of its current
11
<PAGE> 12
executive officers. The loss or unavailability of any such person could have an
adverse effect on the Company. At the present time the Company does not maintain
key man life insurance policies for any of these individuals. Also, the
continued success and viability of the Company is dependent upon its ability to
attract and retain qualified personnel in all areas of its business, especially
management positions. In the event the Company is unable to attract and retain
qualified personnel, its business may be adversely affected. There are currently
no employment agreements in place. Management is, however, currently negotiating
agreements with the executive officers of the Company.
5. LIMITED OPERATING HISTORY. The Company has a limited history of providing
programs to radio stations and selling radio advertising time. The recent
success of increasing advertising sales may not be indicative of the results of
its efforts in the future.
6. MAINTENANCE OF OLD AND ESTABLISHMENT OF NEW RELATIONSHIPS. The Company's
continued growth is dependent, in part, on its ability to maintain and establish
new relations with radio stations to place its programs. There can be no
assurance that the Company will be able to establish new relations or to
maintain existing relations with radio stations in the future.
7. INCREASING CAPITAL REQUIREMENTS. The Company's expansion into new markets
will require significant additional capital expenditures. There can be no
assurance that the Company will be able to secure financing for such
expenditures when needed or on terms acceptable to it. Also, the Company's day
to day operations require the use of sophisticated equipment and technology. The
maintenance and replacement of such equipment requires significant expenditures.
There can be no assurance that the Company will be able to continue to finance
the maintenance and replacement of such equipment. Currently, the Company has
adequate cash for the next twelve months since it completed the most recent
private placement from which it netted $1.5 million. The Company's expected
capital requirements for the next twelve months is approximately $500 thousand.
8. RISKS IN THE RADIO SYNDICATION INDUSTRY. The success of any radio syndication
enterprise is largely dependent on public taste, which is both unpredictable and
susceptible to change without warning or explanation. Accordingly, it is
impossible for anyone to precisely and accurately predict the success of any
entertainment project.
9. FUTURE CLAIMS OF OWNERSHIP OF MUSIC. The material used in the Company's
production of vintage radio shows is generally from the 30's, 40's and 50's.
Various artists, producers, and writers may assert claims of ownership regarding
these materials. And, although the Company has completed extensive research
related to the materials it uses in its new production of old time radio shows,
it is likely that one or more artists, producers, or writers may assert
ownership rights.
12
<PAGE> 13
10. OBJECTIONABLE CONTENT OF PROGRAMMING. The Company is careful to screen old
time radio materials that may be overly objectionable to current ethnic,
religious, or political groups. However, there is risk that someone might find
various themes objectionable and may initiate litigation associated with such
matters.
11. CONTINUING USE OF MUSIC CONTAINED IN PRODUCTION LIBRARY. The music contained
in the Company's Image Audio Production Library was written and produced by a
number of musicians who have granted rights to the Company for the use of their
music. There is no guarantee that these musicians will continue to grant rights
for the use of their music.
12. LOSS OF ACCRUED ADVERTISING TIME. The Company typically retains one half of
the advertising spots within each program aired on each radio station. Radio
stations may change ownership, making these agreements with previous management
obsolete.
SIGNIFICANT CUSTOMERS AND/OR SUPPLIERS
The Company customers are located throughout the United States. Seven customers
account for approximately $624,074 or 78% of sales for the year ended November
30, 1997, and $211,714 or 99% of accounts receivable. Three customers account
for approximately $179,000 or 88% of sales for the period March 27 (date of
inception) through November 30, 1996, and $67,000 or 91% of accounts receivable.
EMPLOYEES
At 1/31/98 the Company operated with the services of its Directors, Executive
Officers, and eleven additional employees and consultants. There is no
collective bargaining agreement in place.
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
SELECTED FINANCIAL DATA
The selected financial data in Table No. 1 for Fiscal 1997 ended November 30 and
the period 3/27/96 (date of inception) to 11/30/96, was derived from the
financial statements of the Company which were audited by Andersen Andersen &
Strong L.C., independent Certified Public Accountants, as indicated in their
report which is included elsewhere in this Registration Statement.
The selected financial data for the six month period ended 5/31/98 is derived
from the unaudited financial statements of the Company, also included herein
and, in the opinion of the Company, present fairly the information set forth
herein.
The selected financial data was extracted from the more detailed financial
statements and related notes included herein and should be read in conjunction
with such financial statements and with the information appearing under the
heading, "Management's Discussion and Analysis of Financial Condition and
Results Of Operations".
Table No. 1
Selected Financial Data
($ in 000, except per share data)
<TABLE>
<CAPTION>
Year Ended The Period
11/30/97 3/27/96
(date of
inception)
to 11/30/96
------- -------
<S> <C> <C>
Revenue $ 803 $ 203
Net Income (Loss) $ (134) $ (77)
(Loss) per Share $ (0.12) $ (0.14)
Dividends per Share
Wtg. Avg. Shares (000) 1,110 563
Working Capital $ 584 $ 876
Long - Term Debt $ 388 $ 553
Shareholders' Equity $ 284 $ 417
Total Assets $1,1861 $ 1,213
</TABLE>
14
<PAGE> 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION
The following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the fiscal year ended
11/30/97 and for the period 3/27/96 (date of inception) to 11/30/96 should be
read in conjunction with the financial statements of the Company and related
notes included therein.
The Company was incorporated in Nevada, USA on 3/4/96.
The Company started business on 3/27/96 with initial shareholder contributions
of $180,000. Effective 5/4/96 the Company acquired ITEX Media Services, Inc.
("Itex") along with its contracts and certain inventories for $775,000. The
Company paid $175,000 down and Itex agreed to carry a note for the balance with
payment terms spread over five years. The acquisition was accounted for using
the purchase method of accounting with the entire purchase price being allocated
to music inventory.
In November 1996, the Company completed a private placement in which 600,000
units were sold. Total consideration received by the Company was $300,000. Net
proceeds to the Company, after associated offering expenses, was $292,000. Each
unit consisted of one common share and one share purchase warrant. Each share
purchase warrant entitles the holder to purchase one additional share of common
stock for $1.00 during a six month period after the closing of the offering.
(The offering closed on 11/30/96.) The time frame during which the holders may
purchase an additional share of common stock for consideration of one share
purchase warrant and $1.00 may be extended upon appropriate notice given to
shareholders by the management. The proceeds of this private placement are being
used for the construction of a production studio in Portland, Oregon (completed
in April 1998); to provide additional capital for the development of new radio
syndication products; and, for the general working capital of the Company.
During March 1998, 600,000 share purchase options were exercised at a price of
$0.60 per option. Each option equaled one share of common stock subject to
restriction under SEC Rule 144. The Company realized $360,000 from the exercise
of these share purchase options.
The Company anticipates having to raise additional funds by equity issuance in
the next several years, as the Company expects to grow at rates that will
require more funds than will be generated by profitable operations which the
Company expects to report during Fiscal 1998 and Fiscal 1999. The Company has
had preliminary discussions with various parties regarding the sale
15
<PAGE> 16
of equity capital; however, there are no definitive agreements and there can be
no assurance that additional equity capital sales can be completed.
The Company occasionally engages in barter trading for its own account and has a
blended cash - trade purchasing program in which it spends trade dollars and US
dollars.
The Company currently has agreements in place with ITEX Corporation,
International Barter Corporation and Illinois Trade Association. See Exhibit #s
14h. and 14i. for a copy of these exhibits. The terms of these agreements call
for selling radio time to these specific clients in exchange for barter dollars.
At each balance sheet date, in accordance with generally accepted accounting
principles, any positive trade balance of the Company would he evaluated for net
realizable value. The Company would adjust the carrying value of the trade
dollars if the fair market value of the trade dollars is less than the carrying
value or it is probable that not all trade dollars will be used.
At a meeting of the Board of Directors held on January 15, 1998 it was resolved
that the Company would appoint Neal & Associates, LLC to source and negotiate
barter transactions and contracts and that John A. Holmes must approve all
barter transactions submitted by Neal & Associates, LLC.
Stock-based compensation. The Company adopted FASB Statement No. 123,
"Accounting for Stock-Based Compensation" during fiscal 1997. Through 11/30/97,
the Company had no stock option plan or other compensation program that would
have resulted in any reportable data under Statement 123.
Statement 123 also applies to transactions in which a company issues its own
common stock to acquire goods/services from non-employees. Because the Statement
123 method of accounting has not been applied to common stock issued during
Fiscal 1997 for services, the resulting pro- forma compensation costs may not be
representative of that to be expected in future years. The implementation of
Statement 123 may have a material effect on the Company's financial statements
and the pro forma disclosures in the notes thereto in future periods; however,
the impact on future years is not known or reasonably estimable.
Business Concentration
The Company's customers are located throughout the United States. Seven
customers accounted for approximately $624,074 or 78% of sales for the year
ended November 30, 1997, and $211,714 or 93% of accounts receivable. Three
customers accounted for
16
<PAGE> 17
approximately $170,000 or 89% of sales for the period March 27 (date of
inception) through November 30, 1996, and $67,000 or 89% of accounts receivable.
Cash Balances
The Company maintains its major cash balances at one financial institution
located in Portland, Oregon. The balances are insured by the Federal Deposit
Insurance Corporation up to $100,000. At 4/1/98, there were no uninsured cash
balances.
Commitments and Contingencies
The Company leases its office facility in Portland, Oregon. The Company entered
into a five year lease in April, 1998. The lease payments for the first year are
$2792.17 per month and in the fifth year of the lease the payments are $3553.67
per month.
The Company has a note payable at $142,438 per year, including interest at 6%
per annum, collateralized by equipment and accounts receivable. The balance of
this note as of 11/30/97 was $480,000.
The Company has a second note payable at $378 per month, including interest at
10.5% per annum, collateralized by equipment. The balance of this note as of
11/30/97 was $5,307.
The Company also has a note payable to a shareholder at $711 per month,
including interest at 8.25% per annum, collateralized by equipment and accounts
receivable. The balance of this note as of 11/30/97 was $16,258.
The Company has a second note payable to a shareholder at $1,060 per month,
including interest at 8.25% per annum, collateralized by equipment and accounts
receivable. The balance of this note as of 11/30/97 was $24,243.
The Company has a third note payable to a shareholder at $588 per month,
including interest at 8.25% per annum, collateralized by equipment and accounts
receivable. The balance of this note as of 11/30/97 was $13,453.
The annual maturities of the above long-term debt is $251,433 for fiscal 1998
and $387,808 for fiscal 1999.
LIQUIDITY AND CAPITAL RESOURCES
Fiscal 1997 Ended 11/30/97 and the Period March 27, 1996 (Date of Inception) to
11/30/96
17
<PAGE> 18
Cash Used In 1997 Operating Activities totaled ($231,021), including the
($133,503) Net Loss; the primary adjusting items were ($45,823) in payment of
long-term debt and acquisition of inventories for media, $19,161 in
depreciation, $4,413 in deferred tax, ($140,421) in accounts receivable,
($63,580) in inventories, ($14,340) in other current assets, $61,724 in accounts
payable, and $81,348 in accrued expenses. Cash Used in, 1997 Investing
Activities totaled $6,918. Cash provided by 1997 Financing Activities totaled
$75,172.
Cash Used In 1996 Operating Activities totaled ($175,486), including the $77,237
Net Loss; the primary adjusting items were $9,473 of common stock issued for
services, $17,756 in depreciation, $1,200 in bad debt expenses, $5,446 in
deferred tax, ($74,664) in accounts receivable, ($162,788) in inventories,
$82,418 in accounts payable and $22,910 in accrued expenses. Cash provided from
1996 investing Activities totaled $451,536. Cash used by 1996 Financing
Activities totaled ($590).
RESULTS OF OPERATIONS
Fiscal 1997 Ended 11/30/97 and the Period March 27, 1996 (Date of Inception) to
11/30/96
The Company experienced significant revenue growth in fiscal 1997 as compared to
the Period March 27, 1996 (Date of Inception) to 11/30/96. Total revenues
increased by $599,538. ($802,765 as compared to $203,227)
This growth is primarily attributable to a $681,976 growth in advertising income
offset by a decrease of $61,485 in music and radio income and a decrease of
$20,953 in consulting income.
Gross profit margins continue to be high. For fiscal 1997 the gross profit of
$626,115 represented a margin of 78%. For the period 3/27/96 (Date of inception)
to 11/30/96, the gross profit of $165,062 represented a margin of 81%. The cost
of sales as a percentage of total revenues continue to remain in the 18% to 22%
range. For fiscal 1997 the cost of sales was $176,65O or 22% of total revenues
and for the period 3/27/96 (Date of inception) to 11/30/96, the cost of sales
was $38,165 or 18.7% of total revenues.
General and administrative expenses totaled $755,205 for fiscal 1997. These were
broken as follows: advertising expenses of $26,348; wages and employee benefits
of $295,587; rent of $47,206; interest of $26,075; depreciation of $19,161;
consulting and professional fees of $72,854; and, other expenses of $267,974.
Items in this category are comprised of: affiliate purchases, auto, bank fees,
contributions, dues and subscriptions, equipment rental, printing, repairs,
telephone, travel & entertainment, studio supplies, studio fees, talent fees,
satellite fees, sale of assets, and taxes. General and administrative expenses
were 94% of total revenues for
18
<PAGE> 19
fiscal 1997 as compared to 116.5% for the period 3/27/96 (Date of inception) to
11/30/96. The increase in these expenses is due to the expansion of the Company.
Future increases will be expected as will the future increases in revenue.
For fiscal 1997, the Company reported a loss before income taxes of ($129,090)
as compared to ($71,781) for the period 3/27/96 (Date of Inception) to 11/30/96.
The Company reported a net loss for fiscal 1997 of ($133,503) as compared to a
net loss of ($77,237) for the period 3/27/96 (Date of Incorporation) to
11/30/96. Fiscal 1997 loss per share was ($0.12) as compared with ($0.14) for
the period 3/27/96 (Date of Inception) to 11/30/96.
The Six Months ended May 31, 1998
General and administrative expenses for the six months ended May 31, 1998,
totaled $670,119. These costs were comprised of: advertising expenses of
$38,102; wages and employee benefits of $282,144; rent of $24,308; interest of
$4,979; depreciation of $8,678; consulting and professional fees of $34,695; and
other expenses of $277,213. Items in this category are comprised of: affiliate
purchases, auto, bank fees, contributions, dues and subscriptions, equipment
rental, printing, repairs, telephone, travel & entertainment, studio supplies,
studio fees, talent fees, satellite fees, sale of assets, and taxes.
The Company reported net income for the six months ended May 31, 1998, of
$353,546. Net income (loss) per share for the six months ended May 31, 1998 was
$0.18.
Inflation
The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a material impact on its operations
in the future.
Recent Developments
On August 6, 1998, the Company announced that it had completed a private
placement financing. On July 17, 1998, the Company's Board of Directors agreed
to sell by way of private placement a total of 500,000 common shares in the
capital stock of the Company at a price of $3.00 USD per share, to certain
placees (pre stock split -- see paragraph below). In consideration for such
subscription, the Company has also approved the granting to the placees,
nontransferable warrants for the right to subscribe for up to a further 500,000
common shares of the Company at $3.50 USD per share, for a term of one year.
On July 16, 1998, the Company announced that the Board of Directors had approved
a 3-for-1 stock split. The Board of Directors approved the split payable to
shareholders of record as of the close of business on July 31, 1998.
Certificates representing additional shares as a result of the stock split were
distributed on August 3, 1998. The Board of Directors is of the opinion that the
stock split will improve trading liquidity and broaden ownership of the
Company's common shares. After the stock split the Company had 10,091,694 common
shares outstanding.
FORWARD-LOOKING STATEMENTS
From time-to-time, the Company or its representatives may have made or may make
forward-looking statements, orally or in writing. Such forward-looking
statements may be included in, but not limited to, press releases, oral
statements made with the approval of an authorized executive officer or in
various filing made by the Company with the Securities and Exchange Commission
or other regulatory agencies. Words or phrases "will likely result", "are
expected to", "will continue", is anticipated", "estimate", "Project or
projected", or similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). The Reform Act does not apply to initial
registration statements, including this filing by the Company. The Company
wishes to ensure that such statements are accompanied by meaningful cautionary
statements, so as to maximize to the fullest extent possible the protections of
the safe harbor established in the Reform Act. Accordingly, such statements are
qualified in their entirety by reference to and are accompanied by the following
discussion of certain important factors that could cause actual results to
differ materially from such forward-looking statements.
Management is currently unaware of any trends or conditions that could have a
material adverse effect on the Company's financial position, future results of
operations, or liquidity.
However, investors should also be aware of factors that could have a negative
impact on the Company's prospects and the consistency of progress in the areas
of revenue generation, liquidity, and generation of capital resources. These
include: (i) variations in the mix of corporate trade and trade exchange
19
<PAGE> 20
revenue; (ii) possible inability of the Company to attract investors for its
equity securities or otherwise raise adequate funds from any source, (iii)
increased governmental regulation of the barter business, (iv) a decrease in
the cash fees and commission realized by the Company based on a material
decrease in corporate or retail barter transactions and (v) the inability of the
Company to acquire additional barter exchanges in a timely manner and the
inability to integrate these acquisitions in a profitable manner.
The risks identified here are not inclusive. Furthermore, reference is also made
to other sections of this Registration Statement that include additional factors
that could adversely impact the Company's business and financial performance.
Also, the Company operates in a very competitive and rapidly changing
environment New risk factors emerge from time to time and it is not possible for
management to predict all such risk factors, not can it access the impact of all
such risk factors on the Company's business or the extent to which any factor or
combination of factors may cause actual results to differ significantly from
those contained in any forward-looking statements. Accordingly, forward-looking
statements should not be relied upon as a prediction of actual results.
20
<PAGE> 21
ITEM 3. DESCRIPTION OF PROPERTY
The Company rents approximately 3,046 square feet of space at 520 SW 6th Avenue,
Suite 750, Portland, Oregon 97204 for administrative and sales efforts and for
recording and producing radio programs. The Company considers the facility
adequate for current purposes.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Registrant is a publicly-owned corporation, the shares of which are owned by
United States residents and Canadian residents. The Registrant is not controlled
directly or indirectly by another corporation or any foreign government.
Table No. 2 lists as of 10/1/98 all persons/companies the Registrant is aware of
as being the beneficial owner of more than five percent (5%) of the common stock
of the Registrant.
Table No. 2
5% Shareholders
<TABLE>
<CAPTION>
Title Amount and Nature Percent
of of Beneficial of
Class Name of Beneficial Owner Ownership Class #
- ----- ------------------------ ----------------- -------
<S> <C> <C> <C>
Common Exchange Bank & Trust 525,000 5.2%
Common Allied Hansard Capital (1) 1,089,999 10.8%
Common Gary Henin (2) 801,000 7.9%
Common Sovereign Securities 659,880 6.5%
Common John A. Homes III (3) 705,000 6.9%
TOTAL 3,780,879 37.5%
</TABLE>
# Based on 10,091,694 shares outstanding as of 10/1/98 and currently exercisable
share purchase options.
(1) 300,000 of these shares are represented by currently exercisable share
purchase warrants.
(2) 231,000 of these shares are represented by currently exercisable share
purchase warrants.
(3) 480,000 of these shares are represented by currently exercisable share
purchase options.
21
<PAGE> 22
Table No. 3 lists as of 10/1/98 all Directors and Executive Officers who
beneficially own the Registrant's voting securities and the amount of the
Registrant's voting securities owned by the Directors and Executive Officers as
a group.
Table No. 3
Shareholdings of Directors and Executive Officers
<TABLE>
<CAPTION>
Title Amount and Nature Percent
of of Beneficial of
Class Name of Beneficial Owner Ownership Class #
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Common John Holmes, President & Director (1) 705,000 6.9%
Common John J. Brumfield, Vice President (2) 391,105 3.8%
Common Steven A. Sears, Director (3) 341,350 3.3%
Common Dino R. Givoni, Vice President (4) 320,001 3.1%
Common Oliver J. Holmes (5) 204,501 2.0%
Common Peter Jacobsen, Director (6) 147,000 1.4%
Common Dick Versace, Director (7) 102,000 1.0%
Common Lee Morgan, Secretary (8) 84,999 0.8%
Common Jim Schilling (9) 73,500 0.7%
TOTAL 2,369,456 22.8%
</TABLE>
# Based on 10,091,694 shares outstanding as of 10/1/98 and currently exercisable
share purchase options and share purchase warrants.
(1) 480,000 of these shares are represented by currently exercisable share
purchase options.
(2) 30,000 of these shares are represented by currently exercisable share
purchase warrants and 150,000 are represented by currently exercisable
share purchase options.
(3) 18,000 of these shares are represented by currently exercisable share
purchase warrants and 90,000 are represented by currently exercisable
share purchase options.
(4) 30,000 of these shares are represented by currently exercisable share
purchase warrants and 180,000 are represented by currently exercisable
share purchase options.
(5) 150,000 of these shares are represented by currently exercisable share
purchase options.
(6) 60,000 of these shares are represented by currently exercisable share
purchase options.
(7) 60,000 of these shares are represented by currently exercisable share
purchase options.
(8) 60,000 of these shares are represented by currently exercisable share
purchase options.
(9) 60,000 of these shares are represented by currently exercisable share
purchase options.
22
<PAGE> 23
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Table No. 4 lists as of 10/1/98 the names of the Directors of the Company. The
Directors have served in their respective capacities since their election and/or
appointment and will serve until the next Annual Shareholders' Meeting or until
a successor is duly elected, unless the office is vacated in accordance with the
Articles/By-Laws of the Company. All Directors are residents and citizens of the
United States.
Table No. 4
Directors
<TABLE>
<CAPTION>
Date First
Elected
Name Age or Appointed
- ------------------------------------------------------------------
<S> <C> <C>
John A. Holmes (1) 27 1/30/98
Peter Jacobsen 45 1/30/98
Dick Versace 44 1/30/98
Steve Sears 30 1/30/98
Jim Schilling 42 1/30/98
</TABLE>
(1) Member of Audit Committee.
Table No. 5 lists, as of 10/1/98, the names of the Executive Officers of the
Company. The Executive Officers serve at the pleasure of the Board of Directors.
All Executive Officers are residents/citizens of the United States.
Table No. 5
Executive Officers
<TABLE>
<CAPTION>
Name Position Date of Board Approval
- ------------------------------------------------------------------
<S> <C> <C>
John Holmes President 1/30/98
John J. Brumfield Vice President/Controller 1/30/98
Lee A. Morgan Secretary 1/30/98
Dino R. Givoni Vice President x/xx/98
Oliver J. Holmes Vice President x/xx/98
</TABLE>
Business Experience
JOHN HOLMES. Mr. Holmes is President, Chief Executive Officer and a Director of
the Company. He has been employed by the Company since May 1996. His
responsibilities include coordinating strategy, planning, programming,
promotions and station clearance. Before joining the Company, he worked for ITEX
Media Services in radio syndication. He worked for ITEX Media Services from
August 1993 until May 1996. Previously he worked for KMOV-CBS TV as a sports
producer, and Radio Personalities, Inc., where he was Executive Producer for the
following short form radio programs, "Offsides with Dan Dierdorf" and "Talking
Football with Dick Vitale." He worked for KMOV -- CBS TV from January 1991
through May 1993 and for Radio Personalities Inc. from June 1990 until
December 1990. Mr. Holmes attended St. Louis
23
<PAGE> 24
University where he received a Bachelor of Science Degree and played on the
varsity golf team.
JOHN J. BRUMFIELD. Mr. Brumfield is a Vice President and the Controller for the
Company. He has been employed by the Company since December 1996. He received
his Bachelor of Science degree in Accounting from Portland State University.
Prior to joining the Company he was the staff account for ITEX Corporation. He
was employed by ITEX from February 1996 until September 1996. Prior to joining
ITEX Corporation he was a professional golfer on the Canadian PGA Tour and prior
to that he worked as a staff accountant for Bogumil, Halzgang, & Associates of
Portland, Oregon. He competed on the Canadian PGA Tour from September 1994 until
February 1996 and he was employed by Bogumil, Halzgang, & Associates from July
1991 until September 1994.
LEE A. MORGAN. Mr. Morgan is the Corporate Secretary for the Company. He has
been associated with the Company since May 1995. He received his Bachelor of
Arts Degree from the University of Utah in 1988. He has been employed by Neal
and Associates, a business consulting firm, for the past three years as the
general manager. Prior to that, he was employed Itex Corporation as the
company's National Recruitment Director. He was employed by ITEX Corporation
from May 1995 until January 1, 1996 when he joined Neal and Associates.
PETER JACOBSEN. Mr. Jacobsen is a Director of the Company. He is currently the
host of one of the Company's short form features, "Teein' It Up". This show is
heard on over 350 radio stations each day. Jacobsen, a multiple PGA Tour winner
and two time Ryder Cup participant, is also known as the host of the Portland,
Oregon Fred Meyer Challenge, a tournament that brings many of the world's best
golfers to play in the Pacific Northwest. He has had experience on ABC and ESPN
as an on-course commentator, and is a world renowned golf course designer. He
has been playing professional golf and the PGA Tour for the past five years.
DICK VERSACE. Mr. Versace is a Director of the Company. He has served on the
Board of Directors since 1997. He has coached basketball all levels and is
currently a coach on the staff of the NBA's Milwaukee Bucks. Before accepting
the Bucks job during the 1977 season, he participated in what had been for him
an avocation - television and radio broadcasting. He is also a popular speaker
in the United States and Europe, and has given numerous motivational talks to
major corporations and associations over the past fifteen years.
STEVE SEARS. Mr. Sears has been a Director of the Company since January 1998. He
is originally from Long Beach, California where he was President of the family
owned construction business - Sears Roofing Service, Incorporated. He was
involved with Sears Roofing Service, Inc. from April 1992 through May 1995. He
also served as Vice President for Robert Kerr & Associates, a real estate and
construction company in Portland. He was employed by Robert Kerr & Associates
from June 1995 until April 1997.
Dino R. Gavoni
Oliver J. Holmes
24
<PAGE> 25
Involvement in Certain Legal Proceedings
There have been no events during the last five years that are material to an
evaluation of the ability or integrity of any director, person nominated to
become a director, executive officer, promoter or control person including:
a) any bankruptcy petition filed by or against any business of which such person
was a general partner or executive officer either at the time of the bankruptcy
or within two years prior to that time;
b) any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);
c) being subject to any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
enjoining, barring, suspending or otherwise limiting his/her involvement in any
type of business, securities or banking activities; and
d) being found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
Family Relationships
There are no family relationships between any of the officers and/or directors.
Other Relationships/Arrangements
There are no arrangements or understandings between any two or more Directors or
Executive Officers, pursuant to which he/she was selected as a Director or
Executive Officer. There are no material arrangements or understandings between
any two or more Directors or Executive officers.
25
<PAGE> 26
ITEM 6. EXECUTIVE COMPENSATION
The Company has no formal plan for compensating its Directors for their service
in their capacity as Directors. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of the Board of Directors. The Board of Directors may
award special remuneration to any Director undertaking any special services on
behalf of the Company other than services ordinarily required of a Director.
During Fiscal 1997, no Director received and/or accrued any compensation for his
services as a Director, including committee participation and/or special
assignments.
The Company has no material bonus or profit sharing plans pursuant to which cash
or non-cash compensation is or may be paid to the Company's Directors or
Executive Officers. The Company has no stock option or other long-term
compensation programs
During 1997, no funds were set aside or accrued by the Company to provide
pension, retirement or similar benefits for Directors or Executive Officers.
The Company has no plans or arrangements in respect of remuneration received or
that may be received by Executive officers of the Company in Fiscal 1998 to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities
following a change of control, where the value of such compensation exceeds
$60,000 per Executive Officer.
The Company has no written employment agreements.
Table No. 6 details compensation paid during Fiscal 1997 to the Chief Executive
Officer and the next four highly paid Executive Officers, to the extent they
were compensated in excess of $60,000. The table also lists compensation paid to
all Executive Officers to the extent they were not compensated in excess of
$60,000 and to all Executive Officers.
26
<PAGE> 27
Table No. 6
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Name and --------------------------------------------------
Principal Fiscal Other Annual Other
Position Year Salary Bonus Compensation Compensation
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John A. Holmes, III Pres 1997 $40,320 $00,000 $00,000 $00,000
1996 $40,320 $00,000 $00,000 $00,000
John J. Brumfield V.P 1997 $33,350 $00,000 $00,000 $00,000
1996 $33,350 $00,000 $00,000 $00,000
</TABLE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September of 1996 the company purchased recording studio equipment from
Joseph Mancuso, Salvatore Mancuso and Peter Knobbe. Joseph Mancuso was an
employee of the Company and a shareholder. Salvatore Mancuso is the brother of
Joseph Mancuso and a shareholder of the Company. Peter Knobbe is a current
shareholder of the Company. The Company paid for the recording studio equipment
by the issuance of a note payable to each of these individuals.
The note payable to Joseph Mancuso is payable at $711 per month, including
interest at 8.25% per annum. It is collateralized by equipment and accounts
receivable. At the end of the period 3/27/96 (Date of Inception) to 11/30/96,
the balance owing on this note was $22,600 and at the end of fiscal 1997 the
balance owing was $16,258.
The note payable to Salvatore Mancuso is payable at $1,060 per month, including
interest at 8.25% per annu. It is collateralized by equipment and accounts
payable. At the end of the period 3/27/96 (Date of Inception) to 11/30/96, the
balance owing on this note was $33,700 and at the end of fiscal 1997 the balance
owing was $24,243.
The note payable to Peter Knobbe is payable at $588 per month, including
interest at 8.25% per annum. It is collateralized by equipment and accounts
payable. At the end of the period 3/27/96 (Date of Inception) to 11/30/96, the
balance owing on this note was $18,700 and at the end of fiscal 1997 the balance
owing was $13,453.
Other than discussed above, there have been no transactions since 3/27/96 (Date
of Inception), or proposed transactions, which have materially affected or will
materially affect the Company in which any Director, Executive Officer, or
beneficial holder of
27
<PAGE> 28
more that 10% of the outstanding common stock, or any of their respective
relatives, spouses, associates or affiliates has had or will have any direct or
material indirect interest.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital of the Registrant is 25,000,000 shares of common stock
with par value of $0.001 of which were issued and outstanding at 11/30/97, the
end of the most recent fiscal year. At 10/1/98, there were 10,091,694 shares of
common stock outstanding.
All of the authorized common stock of the Registrant are of the same class and,
once issued, rank equally as to dividends, voting powers, and participation in
assets. Holders of common stock are entitled to one vote for each share held of
record on all matters to be acted upon by the shareholders.
Holders of common stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors, in its discretion, out of
funds legally available therefore.
Upon liquidation, dissolution or winding up of the Registrant, holders of common
stock are entitled to receive pro rata the assets of the Registrant, if any,
remaining after payments of all debts and liabilities. No shares have been
issued subject to call or assessment. There are no pre-emptive or conversion
rights and no provisions for redemption or purchase for cancellation, surrender,
or sinking or purchase funds.
There are no restrictions on the repurchase or redemption of shares of the
Registrant while there is any arrearage in the payment of dividends or sinking
fund installments.
Debt Securities to be Registered. Not applicable.
American Depository Receipts. Not applicable.
Other Securities to be Registered. Not applicable.
28
<PAGE> 29
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
The Company's common stock trades on the NASD Electronic Bulletin Board in the
United States, having the trading symbol "NSBD-BB" and CUSIP# 669746109. The
common stock commenced public trading on 1/23/98. Trading volume and
high/low/closing prices for the months of January 1998 through September 1998
are disclosed in the following table: (Figures are adjusted for stock split.)
Table No. 7
NASBD Stock Trading Activity
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
MONTH HIGH LOW CLOSE VOLUME
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
January $1.00 $0.46 $0.75 341,400
- ------------------------------------------------------------------------------------------------
February $0.83 $0.50 $o.50 151,500
- ------------------------------------------------------------------------------------------------
March $0.71 $0.50 $0.62 81,600
- ------------------------------------------------------------------------------------------------
April $0.77 $0.53 $0.73 123,900
- ------------------------------------------------------------------------------------------------
May $0.77 $0.67 $0.68 110,700
- ------------------------------------------------------------------------------------------------
June $1.00 $0.37 $1.00 81,900
- ------------------------------------------------------------------------------------------------
July $2.57 $0.66 $1.57 598,700
- ------------------------------------------------------------------------------------------------
August $1.80 $0.44 $0.98 611,611
- ------------------------------------------------------------------------------------------------
September $1.10 $0.56 $1.01 200,600
- ------------------------------------------------------------------------------------------------
</TABLE>
ITEM 2. LEGAL PROCEEDINGS
Other than discussed below, the Company knows of no material, active or pending
legal proceedings against them; nor is the Company involved as a plaintiff in
any material proceeding or pending litigation.
Other than discussed below, the Company knows of no active or pending
proceedings against anyone that might materially adversely affect an interest of
the Company.
The Company is currently in arbitration with an employment agency to settle an
amount owed to the agency for supplying it with an employee. The employee was
terminated prior to the end of the full probation period and the Company has
offered the employment agency an amount less than the original agreed upon
amount.
The Company's common stock is issued in registered form. Atlas Stock Transfer
(located in Salt Lake City, Utah) is the registrar and transfer agent for the
common stock.
On 8/14/98, the shareholders' list for the Company's common shares showed
registered shareholders and 1,981,610 [update numbers] shares outstanding,
including 94 registered holders in the United States holding 1,132,317 shares
and 14 registered holders outside the United States holding 849,293 shares.
The Company has not declared any dividends since incorporation and does not
anticipate that it will do so in the foreseeable future. The present policy of
the Company is to retain future earnings for use in its operations and expansion
of its business.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
29
<PAGE> 30
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
In March 1996, the Company issued 475,000 shares of common stock to a
sophisticated investor for total consideration of $180,000. The shares were
issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933.
In November 1996, the Company completed pursuant to a private placement in the
United States under Section 504 of Regulation D, in which 600,000 units were
sold. Each unit consisted of one common share and one share purchase warrant.
Each share purchase warrant entitled the holder to purchase one additional share
of common stock for $1.00 during the six month period after the closing of the
offering which was 11/30/96. The time frame during which the holders could
purchase an additional share of common stock for consideration of one share
purchase warrant and $1.00 could be extended upon appropriate notice given to
shareholders by the management.
In January 1998, the Company issued 59,250 common shares, pursuant to an
exemption from registration under Section 4(2) of the Securities Act of 1933,
subject to restriction under SEC Rule 144, as a bonus to individuals and/or
corporations affiliated with the Company. The number of shares allocated to each
of the people/corporations was based on a price of $0.60 per common share.
In January 1998, the Company issued 65,000 common shares pursuant to an
exemption from registration under Section 4(2) of the Securities Act of 1933,
subject to restriction under SEC Rule 144, to an individual in exchange for
printing services in the amount of $50,000.
In March 1998, certain individuals and employees exercised share purchase
options where each option equaled one common share of stock subject to
restriction under SEC Rule 144. The option strike price was $0.60 per share. A
total of 600, 000 common shares subject to restriction under SEC Rule 144 were
issued.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's By-Laws address indemnification under Article 12.
No director or officer of the Corporation shall be personally liable to the
Corporation or any of its stockholders for damages for breach of fiduciary duty
as a director or officer involving any act or omission of any such director of
officer; provided however, that the foregoing provision shall not eliminate or
limit the liability of a director of officer (i for acts or omissions which
involve intentional misconduct, fraud or a knowing violation of law, or (ii) the
payment of dividends in violation of Section 78.300 of the Nevada Revised
Statues. Any repeal or modification of this Article by the stockholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director or officer of the Corporation
for acts or omissions prior to such repeal or modification.
30
<PAGE> 31
PART F/S
ITEM 1. FINANCIAL STATEMENTS
The financial statements and notes thereto as required under ITEM #13 are
attached hereto and found immediately following the text of this Registration
Statement. The audit report of Andersen Andersen & Strong LC, independent
Certified Public Accountants, is included herein immediately preceding the
financial statements.
Audited Financial Statements for Fiscal 1997 and the period 3/27/96 (Date of
Inception) to 11/30/96.
(A-1) Audited Financial Statements: Fiscal 1997 and the period 3/27/96 (date of
inception) to 11/30/96
Auditor's Report, dated 3/26/98
Consolidated Balance Sheets at 11/30/97 and 11/30/96
Consolidated Statements of Operations for the fiscal year ended 11/30/97 and the
Period 3/27/96 (Date of Inception) to 11/30/96
Consolidated Statements of Stockholders' Equity for the Period 3/27/96 (Date of
Inception) to 11/30/97
Consolidated Statements of Cash Flows for the Year ended 11/30/97 and the Period
3/27/96 (Date of Inception) to 11/30/96
Notes to Financial Statements
Unaudited Interim Financial Statements for the Six Months ended May 31, 1998
33
<PAGE> 32
PART III
ITEM 1. INDEX TO EXHIBITS:
1. Articles of Incorporation/By-Laws of the Company 54
2. Instruments Defining Rights of Security Holders. - Refer
to Exhibit No. 3. -
3. Opinion re: Discount on Capital Shares. Not Applicable
Opinion re: Liquidation Preference. Not Applicable
4. Voting Trust Agreements. Not Applicable
5. Material Contracts:
a. Letter Outlining Terms of Itex Media Services
Purchase and Promissory Note Copy 63
6. Statement re: Computation of EPS. Not Applicable
7. Statement re: Computation of Ratios. Not Applicable
8. Material Foreign Patents. Not Applicable
9. Letter re: Change of Accountant. Not Applicable
10. Subsidiaries of the Registrant. Not Applicable
11. Power of Attorney. Not Applicable
12. Financial Data Schedule: Not Applicable
13. Information from Reports Furnished to State Insurance
Regulatory Authorities. Not Applicable
14. Other Material Documents:
a. Information Statement regarding 600,000 unit
private placement, dated 9/10/96 70
b. Final Form D regarding 600,000 unit private placement, dated
9/6/96 84
c. Final NY Form M-11 regarding 600,000 unit private placement 89
d. Notice/Agenda/Minutes regarding
Annual Meeting of Shareholders held 1/30/98 92
e. Minutes of Board of Directors Meeting on 1/15/98 95
f. Certificate of Name Change 100
g. Certificate of Existence 102
h. IBC Membership Application and Agreement 103
i. Illinois Trade Association, Trade Agreement 105
j. Letter of Intent re: transaction between the Company and Steve
Coryell 106
k. Services Agreements between the Company and
the following: 112
Kerri Strug, effective: 1/1/98
Ollie Holmes, effective: 12/5/97
Warren Durham, effective: 9/15/97
Rich Barry, effective: 7/16/97
Peter Jacobsen, Enterprises, effective: 4/4/97
Daryl Svardh, effective: 3/26/97
Al Dardis & Associates, effective: 1/21/97
Mychal Thompson, effective: 9/26/96
Daniel G. Chambers, effective: 7/24/96
Dave Simons, effective: 7/14/96
SIGNATURE PAGE 176
35
<PAGE> 33
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
November 30, 1997 and 1996
<PAGE> 34
[ANDERSEN ANDERSEN & STRONG, L.C. LETTERHEAD]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders and Board of Directors of
Nostalgia Broadcasting Corporation
Portland, Oregon
We have audited the accompanying consolidated balance sheets of Nostalgia
Broadcasting Corporation and subsidiary as of November 30, 1997 and 1996, and
the related consolidated statements of operations, stockholders' equity and cash
flows for the year ended November 30, 1997 and the period March 27, 1996 (date
of inception) to November 30, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Nostalgia
Broadcasting Corporation and subsidiary as of November 30, 1997 and 1996, and
the results of their operations and cash flows for the year ended November 30,
1997 and the period March 27, 1996 (date of inception) to November 30, 1996, in
conformity with generally accepted accounting principles.
/s/ ANDERSEN ANDERSEN & STRONG, L.C.
March 26, 1998
Salt Lake City, Utah
<PAGE> 35
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
November 30, 1997 and 1996
================================================================================
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 112,693 $ 275,460
Accounts receivable, net of allowance
for doubtful accounts of $1,200 in 1997
and 1996 (Note 2) 213,885 73,464
Inventories (Note 2) 752,191 762,788
Other current assets 14,340 --
Deferred tax asset (Note 9) 468 468
----------- -----------
Total Current Assets 1,093,577 1,112,180
----------- -----------
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation (Notes 2 and 3) 92,278 100,367
----------- -----------
$ 1,185,855 $ 1,212,547
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 144,142 $ 82,418
Other current liabilities 108,412 22,910
Current portion of long-term debt (Note 4) 251,433 131,246
----------- -----------
Total Current Liabilities 503,987 236,574
----------- -----------
OTHER LIABILITIES
Long-term debt (Note 4) 387,808 552,823
Deferred income tax (Notes 2 and 9) 10,327 5,914
----------- -----------
Total Other Liabilities 398,135 558,737
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; authorized
20,000,000 shares; issued and outstanding
500,000 shares (Note 5) 500 500
Additional paid-in capital (Note 5) 188,973 188,973
Subscribed stock, 610,000 shares (Note 5) 305,000 305,000
Retained deficit (210,740) (77,237)
----------- -----------
Total Stockholders' Equity 283,733 417,236
----------- -----------
$ 1,185,855 $ 1,212,547
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 36
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1997 AND THE PERIOD MARCH 27, 1996
(DATE OF INCEPTION) TO NOVEMBER 30, 1996
================================================================================
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
Advertising income $ 802,695 $ 120,719
Consulting income 70 21,023
Music and radio income -- 61,485
----------- -----------
Total Revenues 802,765 203,227
COST OF SALES 176,650 38,165
----------- -----------
GROSS PROFIT 626,115 165,062
----------- -----------
GENERAL AND ADMINISTRATIVE EXPENSES
Advertising 26,348 25,820
Wages and employee benefits 295,587 68,856
Rent 47,206 13,184
Interest 26,075 25,264
Depreciation 19,161 17,756
Consulting and professional 72,854 35,693
Other 267,974 50,270
----------- -----------
Total General and Administrative Expenses 755,205 236,843
----------- -----------
Net Loss Before Income Taxes (129,090) (71,781)
Income tax expense (Note 9) 4,413 5,456
----------- -----------
Net Loss $ (133,502) $ (77,237)
-========== ===========
Net Loss Per Share (Note 2) $ (0.12) $ (0.14)
-========== ===========
Weighted average number of shares outstanding 1,110,000 563,125
-========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 37
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD MARCH 27, 1996 (DATE OF INCEPTION) TO NOVEMBER 30, 1997
================================================================================
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------------- PAID-IN SUBSCRIBED RETAINED
SHARES AMOUNT CAPITAL STOCK DEFICIT TOTAL
------ ------ ------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
Issuance of common shares
($0.38 per share) 475,000 $ 475 $ 179,525 $ -- $ -- $ 180,000
Issuance of common shares
for services ($0.38 per share) 25,000 25 9,448 -- -- 9,473
Subscription of common shares
for inventory ($0.50 per share) -- -- -- 5,000 -- 5,000
Private placement of subscribed
shares ($0.50 per share) -- -- -- 300,000 -- 300,000
Net loss for the period March 27,
1996 (date of inception) to
November 30, 1996 -- -- -- -- (77,237) (77,237)
------- --------- --------- ------- --------- ---------
BALANCE AT NOVEMBER 30, 1996 500,000 500 188,973 305,000 (77,237) 417,236
Net loss for the year ended
November 30, 1997 -- -- -- -- (133,503) (133,503)
------- --------- --------- ------- --------- ---------
BALANCE AT NOVEMBER 30, 1997 500,000 500 $ 188,973 305,000 $ 210,740) $283,733
======= ========= ========= ======= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 38
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended November 30, 1997 and the Period March 27, 1996
(Date of Inception) to November 30, 1996
================================================================================
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(133,503) $ (77,237)
Adjustments to reconcile net loss to cash provided
by operating activities:
Shares issued for services 9,473
Payment of long-term debt and acquisition of
inventories for media (45,823) --
Depreciation 19,161 17,756
Bad debt expense -- 1,200
Deferred tax 4,413 5,446
Changes in operating assets and liabilities:
Accounts receivable (140,421) (74,664)
Inventories (63,580) (162,788)
Other current assets (14,340) --
Accounts payable 61,724 82,418
Accrued expenses 81,348 22,910
--------- ---------
Net Cash Used by Operating Activities (231,021) (175,486)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Issuance of common stock -- 480,000
Acquisition of property and equipment - net (6,918) (28,464)
--------- ---------
Net Cash Provided (Used) by Investing Activities (6,918) 451,536
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 99,980 --
Payments on long-term debt (24,808) (590)
--------- ---------
Net Cash Provided (Used) in Financing Activities 75,172 (590)
--------- ---------
Net increase (decrease) in cash and cash equivalents (162,767) 275,460
Cash and cash equivalents at beginning of period 275,460 --
--------- ---------
Cash and Cash Equivalents at End of Period $ 112,693 $275,460
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 5,819 $ 2,663
========= =========
Cash paid for income taxes $ -- $ --
========= =========
</TABLE>
<PAGE> 39
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED NOVEMBER 30, 1997 AND THE PERIOD MARCH 27, 1996
(DATE OF INCEPTION) TO NOVEMBER 30, 1996
================================================================================
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Acquisition of fixed assets in exchange for 10,000 shares
of subscribed common stock and notes payable $ -- $ 89,659
Payment of long-term debt and acquisition of
inventories for media 194,177 --
Acquisition of inventory in exchange for notes
payable (See Note 8) -- 750,000
Acquisition of fixed assets for Trade Dollars 4,154 --
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 40
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1997 AND 1996
================================================================================
1. ORGANIZATION AND BUSINESS ACTIVITY
Nostalgia Broadcasting Corporation (the Company) was organized under the laws of
the State of Nevada on March 27, 1996. The Company is involved in the
acquisition, creation and syndication of national radio programming and music
production and distribution.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. Intercompany transactions have been eliminated.
Revenue Recognition
The Company recognizes revenue from the sale of advertising, music and radio
programs when the buyer has made an unconditional commitment to secure air time
on the network and the Company has completed the act of fulfilling the
advertising during the secured time.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with original
maturities of less than three months to be cash equivalents.
Inventories
Inventories consist of music and radio programs and are stated at the lower of
cost (first-in first-out basis) or market.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the bases of certain assets and
liabilities for financial and tax reporting. The deferred taxes represent the
future tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or settled.
Property and Equipment
Property and equipment are stated at cost. Depreciation is calculated on a
straight-line basis over the estimated useful lives of the assets ranging from 7
to 31 years. Maintenance and repairs are charged to operations when incurred.
Betterments and renewals are capitalized.
<PAGE> 41
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1997 AND 1996
================================================================================
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)-
Dividend Policy
The Company anticipates that for the foreseeable future, its earnings will be
retained for use in its business and no cash dividends will be paid. Declaration
and payment of dividends will remain within the discretion of the Company's
board of directors and will depend upon the Company's growth, profitability,
financial condition and other factors which the board of directors may deem
appropriate.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing the financial statements.
Loss Per Share
The computation of loss per common share is based on the weighted average number
of shares outstanding during the period.
Allowance for Doubtful Accounts
The Company provides an allowance for uncollectible accounts which are doubtful
of collection. The allowance is based upon management's periodic analysis of
receivables, evaluation of current economic conditions and other pertinent
factors. Ultimate losses may vary from current estimates and, as additions to
the allowance become necessary, they are charged against earnings in the period
they become known. Losses are charged and recoveries are credited to the
allowance.
Impairment of Long-Lived Assets
In the event that facts and circumstances indicate that the cost of long-lived
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset are compared to the asset's carrying amount to
determine if a write-down to market value is required. The Company intends to
annually assess the carrying value of its long-lived assets using the analysis
described above.
Marketing and Advertising Costs
All costs relating to marketing and advertising are expensed in the year
incurred. Amounts expensed for the years ended November 30, 1997 and 1996 were
approximately $26,000 and $26,000, respectively.
<PAGE> 42
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
November 30, 1997 AND 1996
================================================================================
3. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at November 30, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Office equipment $ 15,017 $ 7,936
Studio equipment 93,036 90,618
Office furniture 11,499 13,129
Leasehold improvements 8,866 6,440
--------- ---------
128,418 118,123
Less accumulated depreciation (36,140) (17,756)
--------- ---------
Total $ 92,278 $ 100,367
========= =========
</TABLE>
Depreciation expense for the year ended November 30, 1997, and the period March
27, 1996 (date of inception) to November 30, 1996, was $19,161 and $17,756,
respectively.
4. LONG-TERM DEBT
At November 30, 1997 and 1996, long-term debt consisted of the following:
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Note payable, due January 14, 1998,
including interest at 9% per annum,
convertible to common stock upon mutual
agreement, collateralized by
accounts receivable $ 49,980 $ --
Note payable, due January 14, 1998,
including interest at 9% per annum,
convertible to common stock upon mutual
agreement, collateralized by
accounts receivable 50,000 --
Note payable at $142,438 per year, including
interest at 6% per annum, collateralized by
equipment and accounts receivable 480,000 600,000
Note payable at $378 per month, including
interest at 10.5% per annum, collateralized
by equipment 5,307 9,069
Note payable to shareholder at $711 per
month, including interest at 8.25% per
annum, collateralized by equipment and
accounts receivable 16,258 22,600
</TABLE>
<PAGE> 43
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
November 30, 1997 and 1996
================================================================================
4. LONG-TERM DEBT (continued)-
<TABLE>
<S> <C> <C>
Note payable to shareholder at $1,060 per
month, including interest at 8.25% per
annum, collateralized by equipment and
accounts receivable $ 24,243 $ 33,700
Note payable to shareholder at $588 per
month, including interest at 8.25% per
annum, collateralized by equipment and
accounts receivable 13,453 18,700
--------- ---------
639,241 684,069
Less current portion (251,433) (131,246)
--------- ---------
Total $ 387,808 $ 552,823
-======== =========
</TABLE>
The annual maturities of long-term debt for the next five years are as follows:
<TABLE>
<CAPTION>
Year ending
November 30, Amount
------------ ------
<S> <C>
1998 $251,433
1999 387,808
2000 --
2001 --
2002 --
--------
Total $639,241
========
</TABLE>
5. COMMON STOCK
In March of 1996, 475,000 shares of common stock were issued for $180,000. In
September of 1996, 25,000 common shares were transferred to an officer of the
Company in exchange for services rendered valued at $9,473. Also, in September
of 1996, inventory was acquired in exchange for 10,000 subscribed common shares
at a value of $5,000. (See Note 8.)
In November of 1996, the Company completed a private placement in which 600,000
units were subscribed for $300,000. Each unit consists of one common share and
one warrant. The warrants were immediately exercisable and tradeable after the
closing of the offering. Each warrant entitled the holder to purchase one
additional share at a price of $1.00 per share during a 6 month period after the
closing of the offering. The warrants were extended to expire on June 30, 1998.
<PAGE> 44
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOVEMBER 30, 1997 AND 1996
================================================================================
6. LEASES
The Company currently leases office space on a month-to-month basis. The rental
payment is $2,678 per month and covers base rent plus a share of the operating
costs. The rent amount is a fixed rate through December 31, 1999. The Company
also rents a warehouse storage unit on a month-to-month basis for $168 per
month.
7. SARSEP SAVINGS PLAN
The Company maintains a SARSEP savings plan whereby, the employees may elect to
make contributions pursuant to a salary reduction agreement upon meeting age and
length of service requirements. The Company currently has no matching
contributions policy.
8. ACQUISITION
On May 4, 1996, the Company acquired ITEX Media Services, Inc. along with its
contracts and certain inventories for $775,000. The Company paid $150,000 down
and signed a promissory for $600,000 to be repaid over a 5-year period. (See
Note 4). The acquisition was accounted for using the purchase method of
accounting with the entire purchase price being allocated to music inventory.
9. INCOME TAXES
The provision for income taxes consisted of the following at November 30, 1997
and 1996:
<TABLE>
<CAPTION>
1997 1996
----- -----
<S> <C> <C>
Federal
Current $ -- $ --
Deferred 4,413 5,446
State -- 10
------ ------
Total income tax expense $4,413 $5,456
====== ======
</TABLE>
Deferred tax liabilities (assets) are comprised of the following at November 30,
1997 and 1996:
<TABLE>
<S> <C> <C>
Noncurrent deferred tax liabilities $ 10,327 $ 5,914
Current deferred tax assets (468) (468)
Valuation allowance -- --
-------- --------
Net deferred tax liability $ 9,859 $ 5,446
======== ========
</TABLE>
<PAGE> 45
NOSTALGIA BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
November 30, 1997 and 1996
================================================================================
9. INCOME TAXES (continued)-
A reconciliation of the consolidated income tax expense on income tax expense on
income per the U.S. Federal Statutory rate to the reported income tax follows:
<TABLE>
<S> <C> <C>
Taxes at U.S. Federal Statutory rate $4,413 $5,446
State income taxes -- 10
Other -- --
------ ------
$4,413 $5,456
====== ======
</TABLE>
10. BUSINESS AND CREDIT CONCENTRATIONS
The Company's customers are located throughout the United States. Seven
customers account for approximately $624,074 or 78% of sales for the year ended
November 30, 1997, and $211,714 or 93% of accounts receivable. Three customers
account for approximately $179,000 or 89% of sales for the period March 27 (date
of inception) through November 30, 1996, and $67,000 or 89% of accounts
receivable.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reflected in the consolidated balance sheets for cash,
accounts receivable, accounts payable and notes payable approximate the
respective values. The estimated fair values have been determined by the Company
using appropriate valuation methodologies and available market information.
Considerable judgment is necessarily required in interpreting market data to
develop the estimates of fair value, and, accordingly, the estimates are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange, a comparison of the carrying value of those financial
instruments, none of which are held for trading purposes, is as follows:
<TABLE>
<CAPTION>
Carrying Fair
Amount Value
-------- -------
<S> <C> <C>
Assets:
Cash $112,693 112,693
Accounts receivable 213,885 213,885
Liabilities:
Accounts payable and liabilities 188,288 188,288
Long-term debt 639,241 639,241
</TABLE>
Cash, accounts receivable and accounts payable. The carrying value of such items
approximates their fair value at December 31, 1997.
Long-term debt. Fair value of such debt is based on rates currently available to
the Company for debt of similar terms and remaining maturities. There are no
quoted prices for the debt or similar debt.
<PAGE> 46
ARTICLES OF INCORPORATION
OF
NOSTALGIA BROADCASTING CORP.
FIRST. The name of the corporation is:
NOSTALGIA BROADCASTING CORP.
SECOND. Its registered office in the State of Nevada is located at 2533
North Carson Street, Carson City, Nevada 89706 that this Corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said Corporation, and that this Corporation may conduct all
Corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which this Corporation is formed are: To engage
in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred
upon corporations by any existing law.
(B) May at any time exercise such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation is
organized.
1
<PAGE> 47
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and its affairs wound up
according to law.
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal
estate and to mortgage or lease any such real and personal estate with its
franchises. The power to hold real and personal estate shall include the power
to take the same by devise or bequest in the State of Nevada, or in any other
state, territory or country.
(G) Shall have power to appoint such officers and agents as the affairs
of the corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make By-Laws not inconsistent with the
constitution or laws of the United States, or of the State of Nevada, for the
management, regulation and government of its affairs and property, the transfer
of its stock, the transaction of its business, and the calling and holding of
meetings of its stockholders.
(I) Shall have power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter
the same at pleasure. The use of a seal or stamp by the corporation on any
corporate documents is not necessary. The corporation may use a seal or stamp,
if it desires, but such use or nonuse shall not in any way affect the legality
of the document.
(K) Shall have power to borrow money and contract debts when necessary
for the
2
<PAGE> 48
transaction of its business, or for the exercise of its corporate rights,
privileges or franchises, or for any other lawful purpose of its incorporation;
to issue bonds, promissory notes, bills of exchange, debentures, and other
obligations and evidences of indebtedness, payable at a specified time or
times, or payable upon the happening of a specified event or events, whether
secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or
in payment for property purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign,
transfer, mortgage, pledge or otherwise dispose of the shares of the capital
stock of, or any bonds, securities or evidences of the indebtedness created by,
any other corporation or corporations of the State of Nevada, or any other
state or government, and, while owners of such stock, bonds, securities or
evidences of indebtedness, to exercise all the rights, powers and privileges of
ownership, including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its
own capital stock, and use therefor its capital, capital surplus, surplus, or
other property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions and
dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and proper for
the accomplishments of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the corporation and, in general, to carry on any
lawful business necessary or incidental to the attainment of the
3
<PAGE> 49
objects of the corporation, whether or not such business is similar in nature
to the objects set forth in the certificate or articles of incorporation of the
corporation, or any amendment thereof.
(P) Shall have power to make donations for the public welfare or for
charitable, scientific or educational purposes.
(Q) Shall have power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities, as may be allowed by
law.
FOURTH. That the total number of common stock authorized that may be
issued by the Corporation is TWENTY-FIVE THOUSAND (25,000) shares of stock
without nominal or par value and no other class of stock shall be authorized.
Said shares may be issued by the corporation from time to time for such
considerations as may be fixed by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to
fewer than one (1).
The name and post office address of the first Board of Directors shall be
one (1) in number and listed as follows:
<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
---- -------------------
<S> <C>
Patrick McMullen 2533 North Carson Street
Carson City, Nevada 89706
</TABLE>
SIXTH. The capital stock, after the amount of the subscription price, or
par value, has been paid in, shall not be subject to assessment to pay the
debits of the corporation.
4
<PAGE> 50
SEVENTH. The name and post office address of the Incorporator signing the
Articles of Incorporation is as follows:
<TABLE>
<CAPTION>
NAME POST OFFICE ADDRESS
---- -------------------
<S> <C>
Patrick McMullen 2533 North Carson Street
Carson City, Nevada 89706
</TABLE>
EIGHTH. The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and the registered or statutory address of this
corporation in the state of Nevada, shall be:
2533 North Carson Street
Carson City, Nevada 89706
NINTH. The corporation is to have perpetual existence.
TENTH. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:
Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have
5
<PAGE> 51
and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation. Such committee, or committees, shall
have such name, or names, as may be stated in the By-Laws of the Corporation, or
as may be determined from time to time by resolution adopted by the Board of
Directors.
When and as authorized by the affirmative vote of the Stockholders
holding stock entitling them to exercise at least a majority of the voting power
given at a Stockholders meeting called for that purpose, or when authorized by
the written consent of the holders of at least a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property and assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH. No shareholder shall be entitled as a matter of right to
subscribe for or receive additional shares of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH. No director or officer of the Corporation shall be personally
liable to the Corporation or any of its stockholders for damages for breach of
fiduciary duty as a director or officer involving any act or omission of any
such director or officer; provided, however, that the foregoing provision shall
not eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud or a knowing
6
<PAGE> 52
violation of law, or (ii) the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this
Article by the stockholders of the Corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director or officer of the Corporation for acts or omissions prior to such
repeal or modification.
THIRTEENTH. This Corporation reserves the right to amend, alter,
change or repeal any provision contained in the Articles of Incorporation, in
the manner now or hereafter prescribed by statute, or by the Articles of
Incorporation, and all rights conferred upon Stockholders herein are granted
subject to this reservation.
7
<PAGE> 53
I. THE UNDERSIGNED, being the Incorporator hereinbefore named for the
purpose of forming a Corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly
have hereunto set my hand this 27th day of March, 1996.
/s/ PATRICK McMULLEN
--------------------------------
Patrick McMullen
STATE OF NEVADA )
) SS:
CARSON CITY )
On this 27th day of March, 1996, in Carson City, Nevada,
before me, the undersigned, a Notary Public in and for Carson City, State of
Nevada, personally appeared:
Patrick McMullen
Known to me to be the person whose name is subscribed to the foregoing
document and acknowledged to me that he executed the same.
/s/ DANIEL KRAMER [NOTARY SEAL]
-------------------------------
Notary Public
I, Laughlin Associates, Inc. hereby accept as Resident Agent for the previously
named Corporation.
3/27/96 /s/ PATRICK McMULLEN
- -------------------------------------------
Date Service Coordinator
8
<PAGE> 54
CERTIFICATE OF AMENDING ARTICLES OF INCORPORATION
OF
NOSTALGIA BROADCASTING CORP.
The undersigned being the President and Secretary of Nostalgia
Broadcasting Corp., a Nevada corporation, hereby certifies that by majority
vote of the board of directors and majority vote of the stockholders at a
meeting on August 30, 1996, it was agreed that this Certificate Amending
Articles of Incorporation.
The undersigned further certifies that the original Articles of
Incorporation of Nostalgia Broadcasting Corp. was filed with the Secretary of
State of Nevada on the 27th day of March, 1996. The undersigned further
certified that Article Fourth shall be amended to read as follows:
Article Fourth:
"Fourth: That the total number of shares of common stock authorized that
may be issued by the Corporation is TWENTY MILLION (20,000,000) shares of stock
with a par value of $.001 per share, and no other class of stock shall be
authorized. Said shares may be issued by the corporation from time to time for
such consideration as may be fixed by the Board of Directors."
The undersigned hereby certifies that he has on this 5th day of September,
1996, executed this Certificate Amending the original Articles of Incorporation
heretofore filed with the Secretary of State of Nevada.
/s/ STEVEN F. STUCKER
-----------------------------------
President
/s/ STEVEN F. STUCKER
-----------------------------------
Secretary
STATE OF NEVADA )
) SS:
COUNTY OF CARSON )
On this 5th day of September, 1996, before me, the undersigned, a Notary
Public in and for the County of Carson, State of Nevada, personally appeared
Steven F. Stucker, known to me to be the person whose name is subscribed to
the foregoing Certificate Amending Articles of Incorporation and acknowledged
to me that he executed the same.
/s/ CHERYL HILL
-----------------------------------
Notary Public
[NOTARY SEAL]
<PAGE> 55
[ITEX CORPORATION LETTERHEAD]
May 23, 1996
Steven F. Strucker
President and Chairman of the Board
Nostalgia Broadcasting Corporation
2533 North Carson Street
Carson City, NV 89706
Dear Mr. Strucker:
This Letter of Intent outlines the material terms of a proposed
transaction in which ITEX Corporation ("Seller"), would sell to Nostalgia
Broadcasting Corporation ("NBC") the following:
a. All of the Seller's right, title and interest in certain cassettes,
records and masters of radio programs and broadcasts (the "Programs") which are
more particularly described on Exhibit A hereto, all of which make up the
contents of a radio program marketed by Seller known as The Golden Age of Radio
("GAR").
b. All of the Seller's right, title and interest in certain compact discs
and the music rights associated with those discs of original music selections
(the "Music") which are more particularly described on Exhibit B hereto, all of
which make up the contents of a music program marketed by Seller known as Image
Audio ("Image").
C. All of the issued and outstanding shares of ITEX Media Services, Inc.,
a Nevada corporation ("IMS") which are owned by Seller.
These acquisitions would be consummated pursuant to one or more definitive,
mutually acceptable acquisition agreements encompassing substantially the
following terms and conditions as well as other material terms deemed reasonably
necessary by either party.
1. Purchase of GAR. NBC would purchase all of Seller's rights to the GAR
Programs listed on Exhibit A for the sum of Four Hundred Thousand Dollars
($400,000.00) payable One Hundred Thousand Dollars ($100,000.00) at closing and
the balance through a note bearing interest at 6% per annum and payable in five
(5) equal annual installments of principal and accrued interest.
2. Purchase of Image. NBC would purchase all of Seller's rights to the
Image Music listed on Exhibit B for the sum of Three Hundred Fifty Thousand
Dollars ($350,000.00) payable Fifty Thousand Dollars ($50,000.00) at closing and
the balance through a note bearing interest at 6% per annum and payable in five
(5) equal annual installments of principal and accrued interest.
<PAGE> 56
Mr. Steven F. Strucker
May 23, 1996
Page 2
3. Acquisition of Issued and Outstanding Shares of IMS. NBC would
purchase all of the issued and outstanding shares of IMS which are owned by
Seller for the sum of Twenty-Five Thousand Dollars ($25,000.00) payable at
closing.
4. Status of Existing Due Bills. All due bills, media credits and
station credit inventories earned by Seller prior to the effective date would
remain the property of ITEX Corporation. NBC would be credited with all revenues
earned on and after the effective date. In addition, NBC would guarantee
fulfillment on any due bills which may be outstanding and which were sold by
Seller prior to the effective date, that is, there would be no liability on the
part of ITEX Corporation on any due bills that may be outstanding on or before
the effective date.
5. Right of First Refusal. Over several years Seller has developed a
market and techniques for selling media time in trade transactions, that is,
transactions not involving cash. The price of the assets proposed to be sold by
Seller does not reflect the value of the expertise and market development for
this kind of trade. Therefore, the acquisition agreement(s) or a separate
agreement would provide for NBC to grant Seller a right of first refusal on any
trade transactions proposed to be entered into by NBC for media time acquired
through GAR, Image or the assets of IMS. This right of first refusal would
permit Seller, upon its election to participate, to purchase the media time
earned by NBC from NBC at 90% of the value of the trade transaction. The
transaction would then proceed with Seller as the provider of the media credits
for the transaction.
6. The Closing. The Closing of the transaction contemplated hereby
would take place as soon as practicable, but in no event later than June 30,
1996, unless extended by mutual agreement of the parties. If possible the
effective date of the acquisition agreement(s) will be May 4, 1996.
7. Conditions. This Letter and agreement(s) are and would be subject
to the following conditions:
a. The reasonable satisfaction of NBC and Seller with the
other's operations and financial condition as of the Closing.
This includes all information and documentation necessary to
satisfy NBC as to Seller's bona fide rights to the Program
and the Music. Without limiting the generality of the
foregoing, Sellers shall have obtained and documented to ITEX
all consents, approvals and assignments necessary to assign
to ITEX the rights, including distribution agreements for all
of the Programs listed on Exhibit A and the Music listed on
Exhibit B.
b. Approval of the form and substance of the Agreement by the
Board of Directors of NBC and Seller.
<PAGE> 57
Mr. Steven F. Strucker
May 23, 1996
Page 3
c. The consummation of the transaction contemplated by the Agreement
does not violate any law, regulation, order, writ, injunction, or
decree of any court or governmental body or result in the creation or
imposition of any mortgage, lien, charge, or encumbrance of any
nature upon any of the properties of either party, pursuant to any
mortgage, resolution, agreement, or instrument to which either NBC or
the Seller is a party.
d. Such other conditions as are usual and reasonable in acquisition
agreement(s) of the type contemplated hereby.
e. As an additional inducement to NBC, Seller would provide a zero
fee ITEX account to NBC for a period of five (5) years after closing.
8. Disclosure and Confidentiality. Each party agrees to treat as
confidential all information furnished or to be furnished by or on behalf of the
other party in accordance with the provisions of this Letter, excluding (a)
information already known by the party receiving the information (the
"Recipient") or generally known to the public; (b) information that has entered
or does enter the public domain through no fault of the recipient; or (c)
information made available to third parties upon the written authorization of a
duly authorized officer, employee or representative of the party providing such
information (collectively the "Information"). The Information will be used
solely for the purpose of evaluating the transaction contemplated hereby, and
will be kept confidential by the recipient and its representatives, agents and
advisors, provided that (i) any of such Information may be disclosed to the
recipient's representatives, agents and advisors who need to know such
Information for the purpose of evaluating the transactions described above; (ii)
any disclosure of such Information may be made if the party supplying the
information consents in writing; and (iii) such Information may be disclosed if
so required by law and upon the advice of counsel. If the transaction
contemplated hereby is not consummated, the recipient will return to the
disclosing party all material containing or reflecting the Information and will
not retain any copies, extracts or other reproductions thereof. The provisions
of this paragraph shall survive the termination of this Letter of Intent. Except
as required by law, neither party shall make any public announcements of public
disclosures with respect to the matters contemplated hereby without the written
consent of the other party, which consent shall not be unreasonably withheld.
9. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
10. Non-binding Effect. This Letter is not binding upon any party hereto
and, until the agreement(s) are signed, no party will have any legal obligation
to any other party.
<PAGE> 58
Mr. Steven F. Strucker
May 23, 1996
Page 4
This Letter outlines only certain of the major business terms of our
understanding. These terms, as well as customary and appropriate
representations, covenants, conditions, indemnities, and other provisions
remain to be negotiated with resolutions mutually satisfactory to all parties
in the agreement(s) to be prepared by ITEX. The parties agree to proceed
diligently with negotiations toward such agreement(s).
If you are in agreement with the terms of this Letter, please acknowledge
same by signing below and returning one copy of this Letter to me as promptly
as possible.
Yours truly,
ITEX Corporation
By /s/ MICHAEL NEAL
------------------------------------------------------
Michael Neal, Vice-President
AGREED AND ACCEPTED
Nostalgia Broadcasting Corporation
By /s/ STEVEN S. STUCKER
------------------------------------------------------
Steven F. Stucker, President and Chairman of the Board Date 5/24/96
---------
<PAGE> 59
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED the undersigned does hereby sell, assign and transfer,
to ITEX Corporation, a Nevada corporation whose address is 10300 S.W. Greenburg
Road, Suite 370, P.O. Box 2309, Portland, OR 97208-2309, two thousand five
hundred (2,500) shares of the Common Stock of ITEX Media Services, Inc., a
Nevada corporation, represented by Certificate No. _____ standing in the name of
the undersigned, who does hereby irrevocable constitute and appoint the said
ITEX Corporation, by its designated representative, as Attorney to transfer the
said stock on the books of the said ITEX Media Services, Inc., with full power
of substitution in the premises.
NOTE: The signature(s) to this assignment must correspond with the name(s) as
written upon the face of the certificate(s), in every particular, without
alteration or enlargement, or any change whatever.
/s/ STEVEN F. STUCKER
-------------------------------------------
NOSTALGIA BROADCASTING CORPORATION
By Steven F. Stucker, its President
SIGNATURE GUARANTEE STAMP:
-------------------------------------------
Name of Guarantor
-------------------------------------------
Authorized Signature
Date:
-----------------------
62
<PAGE> 60
[ITEX CORPORATION LETTERHEAD]
July 18, 1996
VIA FEDERAL EXPRESS
Steven F. Stucker, President
Nostalgia Broadcasting Corporation
400 West King Street, Suite 301
Carson City, NV 89703
Dear Mr. Stucker:
Michael Baer, President of ITEX Corporation, has directed me to send you
the enclosed duplicate originals of the Acquisition Agreement and Stock
Acquisition Agreement notwithstanding that it will be some short time before we
receive the documents requested in my letter of July 8. Specifically, we are
still waiting for basic documents which indicate the financial position of NBC
(such as an unaudited balance sheet) and the ability of NBC to service the debt
represented by the $600,000 promissory note to make up part of the purchase
price for the assets being bought.
In addition to the Agreements, I enclose a copy of a promissory note for
the $600,000 balance owing and a security agreement covering the collateral
pledged to secure the note. Please execute and return BOTH originals of each
Agreement and the Secured Promissory Note. I will then return a signed original
of the Agreements for your files.
Thank you for your attention to this matter.
Sincerely,
/s/ Donovan C. Snyder
- ----------------------------------
DONOVAN C. SNYDER
Corporate Counsel
enclosures
cc: Michael Baer
<PAGE> 61
SECURED PROMISSORY NOTE
$600,000.00 July 19, 1996
FOR VALUE RECEIVED, the undersigned ("Maker") hereby promises to pay to
ITEX Corporation, a Nevada corporation, or order, at 10300 S.W. Greenburg Road,
Suite 370, P.O. Box 2309, Portland, OR 97208-2309, the principal sum of Six
Hundred Thousand Dollars ($600,000.00), together with interest from May 5, 1996
at the rate of six percent (6%), per annum, payable in five (5) equal annual
payments, the first such payment due May 4, 1997 quarterly and each subsequent
payment due of the 4th day of May of each month thereafter until the entire
balance of principal and unpaid interest is paid in full.
Maker may prepay this Promissory Note at any time in full or in part
without any penalty.
Maker hereby agrees that in the event it fails to pay, when due, any
amount payable hereunder and such default continues for a period of 30 days
("Default"), all unpaid amounts hereunder may, at holder's discretion, be
declared due and payable, and interest shall accrue on all such amounts at the
highest legal rate per annum.
Should this Note be placed in the hands of an attorney for collection,
Maker agrees to pay, in addition to the unpaid balance of principal and all
accrued interest, all costs of collection including a reasonable attorney's fee.
To secure payment of this Note, Maker hereby grants to ITEX Corporation
a security interest in and to those assets described in a Security Agreement of
even date herewith and according to the terms and conditions of such Security
Agreement.
This Note may be assigned by the holder hereof at any time, and the
assignee hereof shall have all right, title and interest herein.
Maker hereby waives presentment, demand, notice of dishonor, protest and,
to the fullest extent permitted by applicable law, any and all notices,
advertisements, hearings or process of law in connection with the exercise by
the holder hereof of its rights and remedies upon Default. This Note shall be
governed by and construed in accordance with the laws of the State of Utah
without giving effect to the choice of law provisions thereof.
IN WITNESS WHEREOF, the Maker has executed this Promissory Note on the
date first above written.
NOSTALGIA BROADCASTING CORPORATION
a Nevada corporation
By /s/ STEVEN F. STUCKER
-------------------------------------
Steven F. Stucker, President
Attest:
- ----------------------------
Secretary
<PAGE> 62
INFORMATION STATEMENT
NOSTALGIA BROADCASTING CORP.
(A Nevada Corp.)
600,000 units
Offering price - $.50 PER UNIT
EACH UNIT CONSISTS OF 1 SHARE OF COMMON STOCK, PAR VALUE ($.001) OF NOSTALGIA
BROADCASTING CORP. (the "Company") AND ONE CLASS A WARRANT. ("Warrant") EACH
CLASS A WARRANT ENTITLES THE HOLDER TO PURCHASE AN ADDITIONAL SHARE OF COMMON
STOCK AT A PRICE OF $1.00 PER SHARE DURING A 6 MONTH PERIOD AFTER THE CLOSE OF
THE OFFERING.
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE DILUTION, AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO LOSE THEIR ENTIRE INVESTMENT. SEE "HIGH RISK FACTORS" FOR SPECIAL
FACTORS CONCERNING THE COMPANY.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FORGOING AUTHORITIES PASSED UPON THE ADEQUACY OF
THE DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
PAYMENT FOR THE UNITS SHOULD BE MADE BY CHECK OR MONEY ORDER PAYABLE TO
"Nostalgia Broadcasting, Corp".
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Underwriter's
Price to Commissions Proceeds to the
Investors and Discounts Company(2)
--------- ------------- ----------
<S> <C> <C> <C>
Per unit................. $ 0.50 $-O- $ 0.50
Maximum (600,000 units) $300,000.00 $-O- $ 300,000.00
</TABLE>
(see notes on following page)
Nostalgia Broadcasting Corp.
10300 S.W. Greenburg Road, Suite 390
Portland, Oregon 97223
(503)293-2601
The date of this Information Statement is September 10, 1996
<PAGE> 63
(FOOTNOTES FROM COVER PAGE)
(1) The Units are being offered on behalf of the Company by the Management
of the company (who will not be paid for such services), on a "best
efforts only" basis with respect to all 600,000 units. There can be no
assurance that any or all of the Units being offered will be sold.
Because this is a "best efforts only" offering, with no minimum required
to be sold, the proceeds may be released to the Company upon receipt
thereof, while the offering continues for the remaining unsold Units.
The offering expires November 10, 1996. Management can elect to extend
the offering to January 10, 1997.
(2) The proceeds to the Company set forth in the table to the cover page of
the Offering Document have been computed before deduction of expenses
that will be incurred in connection with this offering including filing,
printing, legal, accounting, transfer agent and other fees. It is
estimated that the expenses to be incurred by the company in connection
with this offering will be approximately $7,500. It is estimated that
the net proceeds to the Company after deducting all expenses in
connection with the offering will be approximately $292,500. (This
figure does not include any proceeds which would be realized upon the
exercise of any warrants.)
Prior to this offering there has been no market for the Units, the Common Stock
(the shares") or the Warrants of Nostalgia Broadcasting Corp. (the "Company").
There can be no assurance that any trading market in these securities will
develop hereafter, or that any trading if developed, will continue. The Company
is not subject to reporting requirements of section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange" Act), meaning that it is not
required to file annual or quarterly reports with the Securities and Exchange
Commission. The Company is conducting this offering pursuant to Rule 504 of
Regulation D promulgated under the Securities Act of 1933 (the "Act), which
exempts from registration with the Securities and Exchange Commission offerings
of up to $1,000,000 which comply with the requirements of the Rule.
(ii)
<PAGE> 64
BLUE SKY NOTICE
IT IS ANTICIPATED THAT THE UNITS DESCRIBED HEREIN WILL BE OFFERED FOR SALE ONLY
IN THE STATE OF NEW YORK. A DESCRIPTION OF THE RELEVANT CONDITIONS AND
RESTRICTIONS REQUIRED BY THE STATE OF NEW YORK IS SET FORTH BELOW.
NOTICE TO NEW YORK RESIDENTS.
THIS DOCUMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW
YORK HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL
THIS INFORMATION STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS INFORMATION
STATEMENT SHALL NOT UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE
HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE THEREOF.
THE UNITS ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE, ACCEPTANCE OF AN
OFFER TO PURCHASE, WITHDRAWAL OR CANCELLATION OF ANY OFFERING WITHOUT NOTICE.
THE COMPANY RESERVES THE RIGHT TO REJECT ANY ORDER, IN WHOLE OR PART, FOR THE
PURCHASE OF ANY OF THE UNITS OFFERED HEREBY.
(iii)
<PAGE> 65
TABLE OF CONTENTS
Page
SUMMARY...............................................................1
THE RADIO SYNDICATION INDUSTRY........................................1
MUSIC PRODUCTION LIBRARIES............................................1
BUSINESS OF THE COMPANY...............................................2
HIGH RISK FACTORS.....................................................4
USE OF PROCEEDS.......................................................6
LEGAL PROCEEDINGS.....................................................6
MANAGEMENT............................................................6
PRINCIPAL SHAREHOLDERS................................................8
CERTAIN TRANSACTIONS..................................................8
DESCRIPTION OF SECURITIES.............................................9
SUBSCRIPTION OFFER....................................................9
(iv)
<PAGE> 66
SUMMARY
The following is a summary of certain information contained in this Information
Statement and is qualified in its entirety by the more detailed information
appearing elsewhere in the Information Statement.
THE COMPANY
Nostalgia Broadcasting Corp. (the "company" or "NBC") was incorporated in the
State of Nevada on March 4, 1996. NBC is involved in the acquisition, creation
and syndication of national radio programming and music production and
distribution.
DESCRIPTION OF THE RADIO SYNDICATION INDUSTRY
Radio syndication is one of America's high growth industries. With the
deregulation Act of 1996, radio stations and radio syndicators are enjoying a
business boom. Recent public offerings by radio syndicators have done well. With
almost 10,000 radio stations licensed in America alone, there is a growing need
for radio programming. Although there are approximately 100 various radio
syndicators, perhaps only six produce and distribute more than five shows.
There are five public companies that specialize in radio syndication. These
include: Premiere Radio Network of Los Angeles, CA; Westwood One of New York;
Children's Radio AAHS of Los Angeles, CA; Metro Networks of Houston, Texas; and
SFX of Dallas, Texas.
The company's approach to radio syndication is to produce and/or acquire
specialty audio shows and enroll radio station affiliates to broadcast these
programs. In a typical relationship for a one hour show, a radio station agrees
to provide Nostalgia with one 60 second advertising spot each time a show is
broadcast. This spot is not contained within the program, and it is accruable
for future use. This advertising spot credit is for broadcast during requested
daypart periods, and subject to availability.
In addition to the accruable credit earned as shows are broadcast, the Company
typically retains one half of the advertising spots within each program aired.
For example, at the time of this writing, "The Golden Age of Radio" is broadcast
for one hour a day on 188 stations, each of which represent a different
geographic market. The actual show is 55 minutes in length allowing for a NEWS
broadcast at the top of the hour. Contained within this 55 minute show are ten
60 second, (or twenty 30 second) advertising slots. Half of these ad slots may
be sold by the local station to local advertisers; the other half are owned by
Nostalgia and are available for sale to national advertisers. Nostalgia may also
sell the additional 60 second accrued station spot it has acquired outside the
program for each one hour show.
MUSIC PRODUCTION LIBRARIES
Radio and television stations have, over the years, purchased music to use for
their clients and for station introductions and themes. Many of the currently
available music libraries are out-of-date and not produced according to today's
standards. There is a substantial market for music libraries that have been
produced using high technology. There are a number of production libraries that
allow a station to use music contained within their library on a royalty basis.
-1-
<PAGE> 67
In the mid 1980's a joint venture led by Corky Coreson formed a business to
produce a music library that would consist of 30 and 60 second music beds
designed for commercial ad production and as intros for television and radio
programming. A talented group of Portland area musicians was assembled to
produce the musical compositions. The initial library consisted of three compact
discs with approximately 244 separate music beds. In 1992 Jim Haydon, an expert
in the field of commercial music production, completed an additional three
hundred tracks to bring the library up to six volumes. A seventh CD was produced
in 1995 which includes longer themes and various sound effects. Music tracks are
varied and represent many different styles ranging from classical to rock,
country, jazz, etc. The music has been created and mastered digitally to make
the production library a state-of-the-art collection. Image Audio is a
significant asset to any television or radio production team.
The company acquired the Image Audio Production Library from ITEX Corporation as
part of the purchase of ITEX Media Services, Inc. in May, 1996. The sale of the
Image Audio Production Library to radio stations is done on a 100% barter basis.
Television and cable marketing has not yet begun. In payment for unlimited use
of the music contained within the Image Audio Library, radio stations provide
accruable advertising credit to NBC. Station credit is inventoried by station
call letters for future use and this time may be sold by Nostalgia in either
cash or barter sales; to national advertising clients. Local marketing of
station credit is also permitted, but may not be sold to existing clients of the
station or marketed in such a way as to undermine their normally advertised
station rates.
BUSINESS OF THE COMPANY
NBC started business in March, 1996 with initial shareholder contributions of
$180,000. Effective May 4,1996 the company acquired ITEX Media Services, Inc.
along with its contracts and certain inventories, from ITEX Corporation for
$775,000. The Company paid $175,000 down; ITEX Corp. agreed to carry a note for
the balance with payment terms spread over five years. Included in the sale were
three nationally syndicated radio shows as follows: 640 one hour programs
entitled "The Golden Age of Radio," hosted by Victor Ives, 93 two minute
programs entitled "Flashback -- Moments in Time," also hosted by Mr. Ives, and
62 two minute programs entitled "Sports Flashback," hosted by Joe DeNiro. In
addition, a music distribution contract for Michael Allen Harrison, and purchase
of The Image Audio Production Library were a part of the sales agreement.
CURRENT DEVELOPMENTS
The company is positioning itself to become a dominant force in radio
syndication. Currently under development is a wide variety of programming to fit
various radio station formats. Projects now under way include:
1 - An additional 124 Flashback programs have been written and are now ready for
recording.
2 - An agreement to purchase a radio show series entitled "Big Band Classics",
hosted by Warren Durham is now in place. Multimedia Access Company, the producer
of this new show has completed the first fifty one hour productions and there
are 225 additional one hour shows under development.
-2-
<PAGE> 68
3 - The Image Audio Music Production Library is being expanded by seven
additional CD's of commercial music and sound effects. Target date for
completion: December 30. 1996.
4 - A new radio Flashback series entitled "Entertainment Flashback" is under
construction and will be hosted by Steve Fisher.
5 - Tentative agreements are now in place for a new one hour nationally
syndicated radio show produced with the endorsement and permission of the USO to
be known as "The USO Hour." Committed advertisers include JC Penney's, British
Airways.
6 - Additional radio syndication pilots under consideration are:
"Taking It To Heart" hosted by Dr. Mark Tager
"Dollars & Senses" by Dave Simons
"Great American Heros" by Robert Pamplin Jr. and Gary Eisler
"Cue tips" (a billiards program for Brunswick, AMF, and the Billiards
Congress)
"Sports Talk with Joe Namath"
"Tee Time Golf" to be sponsored by the PGA of America
"Dave on Politics" hosted by David Neal
"The Microsoft Minute" hosted by Michael Gruen
7 - Construction of a new recording studio in Portland, Oregon is targeted for
completion by mid 1997 predicated on the successful completion of this offering.
Proposals are now working through the management of Cadillac, Sears, Norwegian
Cruise Lines, Microsoft, and the PGA. Proposals are pending with the American
Heart Association and several other nationally recognized institutions. Current
clients are JC Penney's, British Airways, Princess Cruise Lines, Johnson &
Johnson, and Pepcid AC. The company also has pending barter business.
NBC's new product development is market driven. Niche radio programming
important to specific national advertisers is target one. Although seeking
nationally recognized cash advertisers is the company's priority, the
development of accrued prepaid station credit to fund future barter marketing
projects is also a major focus of the company.
Negotiations are in progress for the Company to acquire additional product for
use in radio syndication. For example, a library consisting of 3,884 - 7 1/2"
IPS Full Track audio reel tapes containing old time radio shows is currently
available for purchase. Assuming this contemplated transaction takes place,
and/or any other plan of similar construction, the purchase price will be based
on a third party independent appraisal of the materials
-3-
<PAGE> 69
and new shares will be issued predicated on some formula related to the "then"
trading price of the company's common stock. New shares issued in this manner
would be restricted as to resale in accordance with the Securities Act of 1933
and as modified in 1934, Regulation D, Rule 144. However, any new issue of
shares would have the net effect of diluting the percentage of existing
shareholders and this plan on the part of management should be carefully
considered as a part of any investment decision.
HIGH RISK FACTORS
The Securities offered hereby involve a high degree of risk. Prospective
investors, prior to making an investment decision, should carefully consider,
along with matters referred to herein, the following risk factors:
1. ABSENCE OF SUBSTANTIAL OPERATING HISTORY. The operation of NBC are subject to
all the risks inherent in the establishment of a new business enterprise,
including the absence of a substantial operating history. As of August 30, 1996
NBC had working capital of $35,000. While NBC has generated revenues since
inception, the likelihood of success of NBC must be considered in light of the
problems, expenses, complications, and delays frequently encountered in
connection with the development of a new business and the competitive
environment in which NBC will operate.
2. RISKS IN THE RADIO SYNDICATION INDUSTRY. The success of any radio syndication
enterprise is largely dependent on public taste, which is both unpredictable and
susceptible to change without warning or explanation. Accordingly, it is
impossible for anyone to precisely and accurately predict the success of any
entertainment project.
3. FUTURE CLAIMS OF OWNERSHIP OF MUSIC. The material used in the company's
production of vintage radio shows is generally from the 30's, 40's, and 50's.
Various artists, producers, and writers may assert claims of ownership regarding
these materials. And, although the company has completed extensive research
related to the materials it uses in its new production of old time radio shows,
it is likely that one or more artists, producers, or writers may assert
ownership rights.
4. OBJECTIONABLE CONTENT OF PROGRAMMING. The company is careful to screen old
time radio materials that may be overly objectionable to current ethnic,
religious, or political groups. However, there is risk that someone might find
various themes objectionable and may initiate litigation associated with such
matters.
5. CONTINUING USE OF MUSIC CONTAINED IN PRODUCTION LIBRARY. The music contained
in the company's Image Audio Production Library was written and produced by a
number of musicians who have granted rights to the company for the use of their
music. There is no guarantee that these musicians will continue to grant rights
for the use of their music.
6. LOSS OF ACCRUED ADVERTISING TIME. NBC typically retains one half of the
advertising spots within each program aired on each radio station. Radio
stations may change ownership, making these agreements with previous management
obsolete.
7. DEPENDENCE UPON OFFERING; NO ALLOCATION OF USE OF WARRANTS IF EXERCISED. The
purpose of this offering is to permit the construction of a new recording studio
in Portland, Oregon. If any warrants are exercised the management has no
specific plan for the application of a majority of the proceeds from the
warrants. Accordingly, investors will rely on the judgment of management as to
the use of these funds.
-4-
<PAGE> 70
8. COMPETITION. NBC will attempt, without assurance, to find a niche in the
radio syndication industry. However, there are established entities in this
industry which have greater financial resources and experience than NBC.
Accordingly, NBC will encounter intense competition in its efforts to expand its
radio syndication business.
9. INEXPERIENCE OF MANAGEMENT. The management of NBC have limited experience
managing a company in the radio syndication business.
10. DILUTION. An investor who acquires Units pursuant to this offering will
incur immediate and substantial dilution.
11. LACK OF MARKET FOR SECURITIES. There is no established public trading market
for NBC's securities, and there is no assurance that a public market for the
Securities will ever develop or, if it develops, that it will continue.
Purchasers of the units in this offering, therefore, may incur substantial
difficulty in selling their Securities should they desire to do so.
12. ARBITRARY OFFERING PRICE AND EXERCISE PRICE. The offering price of the Units
and the per share exercise price of the warrants were established arbitrarily by
NBC. There is no direct relationship between the offering price and the net
tangible book value, shareholder's equity or net worth of the Company or any
other recognized criterion of value.
13. STOCK SALE RULE. Possible inability to sell the securities in the Secondary
Market. The securities offered hereby are not exempt from Rule 15(g)-9 under the
Securities Exchange Act of 1934 (the "34 Act"). Rule 15(g)-9 imposes additional
sales practice requirements on the brokers who sell non-exempt securities to
persons other than established customers. For transactions covered by the rule,
broker-dealers must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, this may affect the ability of purchasers in this offering
to sell their securities in the secondary market.
14. PENNY STOCK REFORM ACT; POSSIBLE INABILITY TO SELL IN THE SECONDARY MARKET.
In October 1990, Congress enacted the "Penny Stock Reform Act of 1990" (the "90
Act") to counter fraudulent practices common in penny stock transactions. Rule
3a51-1 of the Exchange Act defines a "penny stock" as an equity that is not,
among other things: a) a reported security; b) a security registered or approved
for registration and traded on a national securities exchange that meets certain
guidelines, where the trade is effected through the facilities of that national
exchange; c) a security listed on NASDAQ; d) a security of an issuer that meets
certain minimum financial requirements ("net tangible assets" in excess of
$2,000,000 or $5,000,000, respectively, depending upon whether the issuer has
been continuously operating for more or less than three years, or "average
revenue" of at least $6,000,000 for the last year); or e) a security with a
price of at least $5.00 per share in the transaction in question or that has a
bid quotation (as defined in the Rule) of at least $5.00 per Share. The Units
offered herein do fall within the definition of "Penny Stock" under Rule 3a5l-l.
Pursuant to the '90 Act, brokers and/or dealers, prior to effecting a
transaction in a penny stock, will be required to provide investors with written
disclosure documents containing information concerning various aspects involved
in the market for penny stocks as well as specific information about the penny
stock and the transaction involving the purchase and sale of that stock (e.g.,
price quotes and broker-dealer and associated person compensation). Subsequent
-5-
<PAGE> 71
to the transaction, the broker will be required to deliver monthly or quarterly
statements containing specific information about the penny stock. These added
disclosure requirements will most likely negatively affect the ability of the
purchasers herein to sell their securities in the secondary market.
USE OF PROCEEDS
If the entire offering is sold the net proceeds to be received by the Company,
after deducting the expenses of the offering, would total $292,500 if the
maximum is sold. Such proceeds are anticipated to be used for the construction
of a production studio in Portland, Oregon, to provide additional capital for
the development of new radio syndication products, and for the general working
capital of the company.
LEGAL PROCEEDINGS
NBC is not a party to any material legal proceedings. Management is aware of an
exchange of letters between ITEX Media and a Chicago-based firm regarding the
specific rights to one or more radio shows that could result in legal conflict.
Currently there is no action threatened or pending.
MANAGEMENT
STEVEN STUCKER. Mr. Stucker is President and the sole Director of Nostalgia
Broadcasting Corp. He earned his B.S. in accounting from UNLV, his law degree
from SMU, and has been an attorney in Nevada for 20 years. His experience
includes serving as Deputy Clerk of the 8th Judicial District Court, Las Vegas;
Chief Deputy City Attorney for N. Las Vegas; Deputy DA of Kootenai County,
Idaho; Deputy City Attorney in Sparks, Nevada; and Nevada Deputy Attorney
General. These experiences give Mr. Stucker a special insight into the world of
legal entanglements and potential pitfalls. Mr. Stucker also has extensive
corporate and accounting background.
JOHN HOLMES. Mr. Holmes is General Manager and Secretary for NBC and coordinates
strategy, planning, programming, promotions, and station clearance. Before
joining NBC, Mr. Holmes worked for ITEX Media Services in radio syndications.
Previously he worked for KMOV-CBS TV as a Sports Producer, and Radio
Personalities, Inc., where he was Executive Producer for the successful short
form radio programs, "Offsides with Dan Dierdorf" and "Talkin Roundball with
Dick Vitale." Mr. Holmes attended St. Louis University where he received a BS in
Marketing and played on the golf team.
DR. DEAN GAVONI Dr. Gavoni is in charge of affiliate relations for NBC and is
responsible for servicing the needs of station affiliates. He previously worked
for ITEX Media Services Inc. dealing with station accounts. Prior to that, Dr.
Gavoni worked for the State of Illinois Senate and House of Representatives as a
policy analyst and Media Relations Specialist. He was also employed in marketing
and sales for Anheuser-Busch. Dr. Gavoni earned his Doctorate in Public
Administration - Leadership and Management Theories from the University of
Illinois - Chicago.
JIM HAYDON. Mr. Haydon has provided approximately half of the music contained on
the Image Audio Production Library and is the Creative Director for NBC. Mr.
Haydon is well known for his work in national advertising campaigns with clients
such as United Airlines, Sunkist, State Farm, McDonald's, Michelob, Keebler,
Lowenbrau, and many other widely known advertisers. Mr. Haydon received his
Master's degree in History from the University of Chicago.
-6-
<PAGE> 72
BOARD OF ADVISORS
DR. GENE V. KELLENBERGER. Dr. Kellenberger earned his Ph.D. from Iowa State
University, his J.D. from the State University of Iowa. He was the President of
Nostalgia Broadcasting Corporation based in Iowa from 1974 through 1990. The
primary business of the company was vintage radio syndication. In 1990 he became
President of Radio Recorders, Inc., a world-wide radio program syndicator. Dr.
Kellenberger is currently a special consultant for broadcasting and syndication
of vintage radio and a professor at Iowa State University. From 1960 to 1985 he
practiced law.
J. WILLIAM SCHROEDER. Mr. Schroeder earned his degree from Washington State
University in Business before embarking on a career with The White House
communication team under Presidents Johnson and Nixon. For the past five years
he has held the position of President for both Tele Management Services and
Mediabanc Inc. which markets services for companies that are involved with
national media campaigns.
BERYL J. WOLK. Mr. Wolk is a graduate of the University of Pennsylvania Wharton
School of Business and a retired Commander of the Naval Reserve. Mr. Wolk has
spent his entire civilian life working in a family-founded business which is
presently comprised of 21 autonomous companies employing 1,250 per people in
four states. He currently provides clients, including 175 major national
corporations, with complete marketing programs. Mr. Wolk has also been a leader
in the cable industry, being a co-founder and co-owner of cable television's
largest circulation magazine with 6 million copies distributed monthly. He has
extensive background in radio, television, magazine, and newspaper advertising.
TALENT
VICTOR IVES. Mr. Ives is a 34 year veteran of the radio, television, and
advertising profession. He has worked in upper level management for two Fortune
500 Companies and consulted for a third. Mr. Ives has managed radio stations
from Detroit to San Francisco, and was a fourteen year employee and Vice
President of Gene Autry's Golden West Broadcasters. Mr. Ives is currently the
General Manager of Warner Brothers TV-32 in Portland, Oregon and host of NBC's
nationally syndicated radio program, "The Golden Acre of Radio," a one hour
program broadcast on 188 stations daily. In addition, Mr. Ives is host to NBC's
national short form radio show "Flashback.... Moments in Time," which is carried
by another 100+ stations daily.
JOE DENIRO. Mr. DeNiro has a vast background in radio and television and is
currently the afternoon drive air personality on WKBQ-FM in St. Louis, MO. Joe
is also the morning traffic director of KMOV-TV, the CBS affiliate in St. Louis.
Joe provides his vast insight on sports as he hosts "Sports Flashback.....
Moments in Time," a nationally syndicated short form radio program heard on over
100 station everyday.
STEVE FISHER. Recognized as one of the best young disc jockeys in America, Steve
graduated from Southern Illinois University Carbondale with a degree in Mass
Communications and made stops in St. Louis and San Antonio on the radio circuit
before landing back in his hometown of Chicago in 1993. Steve is also a member
of Second City's Improvisation Training Center, the same comedy school where
John Belushi, Dan Ackroyd, Chris Farley, and Bill Murray got their start. Steve
is developing a new short form radio show for Nostalaia known as "Entertainment
Flashback.......Moments in Time." This program is planned for national
distribution beginning January
-7-
<PAGE> 73
1997.
WARREN DURHAM. A native of Spokane, Washington, Warren started his radio career
in 1939 as a high school student announcer at three radio stations. Since that
time Warren has worked with CBS, ABC, NBC and other networks doing Big Band
remotes at the Palladium, Avalon, Biltmore, and many other national ballrooms.
Warren has recorded the first 50 one hour shows for Nostalgia Broadcasting
Corp.'s new program entitled "Big Band Classics" in preparation for national
distribution. National sponsors are already committed for this show, however,
prior to its release the company requires a minimum of 150 one hour shows to be
completed. Target release date is January, 1997.
DAVE SIMONS. Mr. Simons has wide ranging experience in media and finance in
addition to his work as a business consultant He received his BA in
Communications from the highly acclaimed journalism school at The University of
Missouri and quickly landed a job as Sports Anchor for CBS-TV in St. Louis, MO.
Mr. Simons was voted the "Most Popular" Sports Anchor in the St. Louis market
during 1992. He has published a book and now works as a financial consultant for
The Prudential Company and hosts a popular talk radio program on investment
opportunities which is carried by KSD-AM. NBC is now seeking one or more
national sponsors before launching Dave's investment talk show across the
country.
PRINCIPAL SHAREHOLDERS
The following table sets for the information, as to the date of this Prospectus,
with respect to the beneficial ownership of the outstanding NBC common stock by
each person known by NBC to be the beneficial owner of five percent or more of
the outstanding Common stock.
<TABLE>
<CAPTION>
Shares owned Percent of Class
Name and address of beneficially and Before after offering
beneficial owner of record Offering Half Maximum
- ---------------- --------- -------- ---- -------
<S> <C> <C> <C> <C>
Dennis McKay
256 Stevens Road 475,000 95% 59.4% 43.2%
Rural Route 7
Victoria, B.C. Canada
V8X 3X3
John Holmes 25,000 5% 3.1% 2.2%
17548 NW Springville Road
Portland, OR 97229
</TABLE>
CERTAIN TRANSACTIONS
The company was incorporated in the State of Nevada on March 4, 1996. Dennis
McKay contributed $180,000 in cash to the company. For consideration, the
company has issued 475,000 shares of stock to Mr. McKay. As of September 6, 1996
the company is issuing 25,000 shares of stock to John Holmes as an inducement to
join the company as general manager.
-8-
<PAGE> 74
DESCRIPTION OF SECURITIES
UNITS
Each unit consists of one Common Share and 1 Warrant. The terms of the Warrants
are described below under the caption "Warrants."
COMMON STOCK
The company is authorized to issue 20 million shares of Common Stock, $.001 par
value per share, of which 500,000 shares are issued and outstanding, excluding
Units to be issued in this offering. Each outstanding share of Common Stock is
entitled to one vote, either in person or by proxy, on all matters that may be
voted by the owners thereof at meetings of the shareholders.
The holders of Common Stock (i) have equal ratable rights to dividends from
funds legally available therefore, when, and if declared by the Board of
Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available For Distribution to holders of Common Stock upon
liquidation, dissolution or winding up of the affairs of the company; (iii) do
not have preemptive subscription or conversion rights, or redemption or sinking
fund provisions applicable thereto; and (iv) are entitled to one non-cumulative
vote per share on all matters on which stockholders may vote at all meetings of
stockholders.
All shares of Common stock which are the subject of this offering, when issued,
will be fully paid for and non-assessable, with no personal liability attaching
to the ownership thereof. The holders of shares of Common Stock of the company
do not have cumulative voting rights, which means that the holders of more than
50% of such outstanding shares, voting for the election of directors, can elect
all directors of the Company if they so choose and, in such event, the holders
of the remaining shares will not be able to elect any of the Company's
directors.
WARRANTS
The warrants are immediately exercisable and tradeable after the closing of the
offering. Each warrant entitles the holder to purchase one additional share at a
price of $1.00 per share during a 6 month period after the closing of the
offering. The warrants may be extended upon appropriate notice given to
shareholders by the management.
DIVIDEND POLICY
The payment by the Company of dividends, if any, in the future, rests within the
discretion of the Board of Directors. NBC has not paid any cash dividends and
management does not anticipate that cash dividends will be declared or paid on
its Common Stock in the foreseeable future.
SUBSCRIPTION OFFER
The Company hereby offers the right to subscribe at $.50 per Unit (each unit
consisting of 1 common share and 1 purchase warrant). The Company proposes to
offer the units directly. The offering will be conducted on behalf of the
Company under the direction
-9-
<PAGE> 75
of its officers and directors. No compensation is to be paid to the officers or
directors or any "associated person" of the Company (as that term is defined in
the Act) in connection with the offer and sale of the Units.
The Company's officers, directors and stockholders and their associates may
provide the company with the names of persons whom they believe may be
interested in purchasing the units. The Company may sell the Units to such
persons if they reside in a state in which the Company is permitted to sell the
Units.
METHOD OF SUBSCRIBING
Persons may subscribe by filling in and signing the subscription agreement and
delivering it, prior to the Expiration Date (as defined below), to the Company.
The subscription price of $.50 per Unit must be paid in cash or by check, bank
draft or postal express money order payable in United States dollars to the
order of Nostalgia Broadcasting Corp. Certificates for the shares and warrants
subscribed for will be issued as soon as practicable after subscriptions have
been accepted. Subscription may not be withdrawn once made.
EXPIRATION DATE
The subscription offer will expire at 5:00 P.M. New York time on November 10,
1996 (the "Expiration Date") unless extended by management to January 10, 1997.
RIGHT TO REJECT
The company reserves the right to reject any subscription in its sole discretion
for any reason whatsoever and to withdraw this offering at any time prior to
acceptance by the Company of the subscription received.
TRANSFER AGENT
The Transfer Agent for the units, the Common Stock and the Warrants of the
Company is Atlas Stock Transfer Company.
-10-
<PAGE> 76
FORM D --------------------------
UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION --------------------------
Washington, D.C. 20549 OMB Number: 3235-0076
Expires: December 31, 1996
FORM D Estimated average burden
hours per response...16.00
NOTICE OF SALE OF SECURITIES --------------------------
PURSUANT TO REGULATION D, --------------------------
SECTION 4(6), AND/OR SEC USE ONLY
UNIFORM LIMITED OFFERING EXEMPTION --------------------------
Prefix Serial
--------------------------
DATE RECEIVED
--------------------------
<TABLE>
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Name of Offering ([ ] check if this is an amendment and name has changed, and indicate change.)
Nostalgia Broadcasting Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Filing Under (Check box(es) that apply): [X] Rule 504 [ ] Rule 505 [ ] Rule 506 [ ] Section 4(6) [ ] ULOE
Type of Filing: [X] New Filing [ ] Amendment
- -----------------------------------------------------------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Enter the information requested about the issuer
- -----------------------------------------------------------------------------------------------------------------------------------
Name of Issuer ([ ] check if this is an amendment and name has changed, and indicate change.)
Nostalgia Broadcasting Corp.
- -----------------------------------------------------------------------------------------------------------------------------------
Address of Executive Offices (Number and Street, City, State, Zip Code) Telephone Number (Including Area Code)
10300 SW Greenburg Road #390, Portland, OR 97223 (503) 293-2601
- -----------------------------------------------------------------------------------------------------------------------------------
Address of Principal Business Operations (Number and Street, City, State, Zip Code) Telephone Number (Including Area Code)
(if different from Executive Offices)
- -----------------------------------------------------------------------------------------------------------------------------------
Brief Description of Business
Acquisition, creation and syndication of national radio programming and music production and distribution
- -----------------------------------------------------------------------------------------------------------------------------------
Type of Business Organization
[X] corporation [ ] limited partnership, already formed [ ] other (please specify):
[ ] business trust [ ] limited partnership, to be formed
- -----------------------------------------------------------------------------------------------------------------------------------
Month Year
-------- --------
Actual or Estimated Date of Incorporation or Organization: 03 96 [X] Actual [ ] Estimated
-------- --------
Jurisdiction of Incorporation or Organization: (Enter two-letter U.S. Postal Service abbreviation for State; --
CN for Canada; FN for other foreign jurisdiction) OR
--
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
GENERAL INSTRUCTIONS
FEDERAL:
Who Must File: All issuers making an offering of securities in reliance on an
exemption under Regulation D or Section 4(6), 17 CFR 230, 501 et seq. or 15
U.S.C. 77d(6).
When To File: A notice must be filed no later than 15 days after the first sale
of securities in the offering. A notice is deemed filed with the U.S. Securities
and Exchange Commission (SEC) on the earlier of the date it is received by the
SEC at the address given below or, if received at that address after the date on
which it is due, on the date it was mailed by United States registered or
certified mail to that address.
Where To File: U.S. Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
Copies Required: Five (5) copies of this notice must be filed with the SEC, one
of which must be manually signed. Any copies not manually signed must be
photocopies of the manually signed copy or bear typed or printed signatures.
Information Required: A new filing must contain all information requested.
Amendments need only report the name of the issuer and offering, any changes
thereto, the information requested in Part C, and any material changes from the
information previously supplied in Parts A and B. Part E and the Appendix need
not be filed with the SEC.
Filing Fee: There is no federal filing fee.
STATE:
This notice shall be used to indicate reliance on the Uniform Limited Offering
Exemption (ULOE) for sales of securities in those states that have adopted ULOE
and that have adopted this form. Issuers relying on ULOE must file a separate
notice with the Securities Administrator in each state where sales are to be,
or have been made. If a state requires the payment of a fee as a precondition
to the claim for the exemption, a fee in the proper amount shall accompany
this form. This notice shall be filed in the appropriate states in accordance
with state law. The Appendix to the notice constitutes a part of this notice
and must be completed.
- -------------------------------- ATTENTION ------------------------------------
FAILURE TO FILE NOTICE IN THE APPROPRIATE STATES WILL NOT RESULT IN A LOSS OF
THE FEDERAL EXEMPTION. CONVERSELY, FAILURE TO FILE THE APPROPRIATE FEDERAL
NOTICE WILL NOT RESULT IN A LOSS OF AN AVAILABLE STATE EXEMPTION UNLESS SUCH
EXEMPTION IS PREDICATED ON THE FILING OF A FEDERAL NOTICE.
- -------------------------------------------------------------------------------
<PAGE> 77
- --------------------------------------------------------------------------------
A. BASIC IDENTIFICATION DATA
- --------------------------------------------------------------------------------
Enter the information requested for the following:
o Each promoter of the issuer, if the issuer has been organized within the past
five years:
o Each beneficial owner having the power to vote or dispose, or direct the vote
or disposition of, 10% or more of a class of equity securities of the issuer;
o Each executive officer and director of corporate issuers and of corporate
general and managing partners of partnership issuers; and
o Each general and managing partner of partnership issuers.
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [X] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
McKay, Dennis
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
56 Stevens Road, Rural Route 7, Victoria BC V8X 3X3 Canada
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [X] Beneficial Owner
[X] Executive Officer [ ] Director [X] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
Holmes, John
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
7548 NW Springville Road, Portland, OR 97229
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
Check Box(es) that Apply: [ ] Promoter [ ] Beneficial Owner
[ ] Executive Officer [ ] Director [ ] General and/or Managing Partner
- --------------------------------------------------------------------------------
Name (Last name first, if individual)
- --------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as necessary)
<PAGE> 78
- -------------------------------------------------------------------------------
B. INFORMATION ABOUT OFFERING
- -------------------------------------------------------------------------------
1. Has the issuer sold, or does the issuer intend to sell, to Yes No
non-accredited investors in this offering?...................... [X] [ ]
Answer also in Appendix, Column 2, if filing under ULOE.
2. What is the minimum investment that will be accepted form any
individual?..................................................... $ 100
---------
Yes No
3. Does the offering permit joint ownership of a single unit?...... [ ] [X]
4. Enter the information requested for each person who has been or
will be paid or given, directly or indirectly, any commission or
similar remuneration for solicitation of purchasers in
connection with sales of securities in the offering. If a person
to be listed is an associated person or agent of a broker or
dealer registered with the SEC and/or with a state or states,
list the name of the broker of dealer. If more than five (5)
persons to be listed are associated persons of such a broker or
dealer, you may set forth the information for that broker or
dealer only.
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
None
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States)................. [ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States)................. [ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
Full Name (Last name first, if individual)
- -------------------------------------------------------------------------------
Business or Residence Address (Number and Street, City, State, Zip Code)
- -------------------------------------------------------------------------------
Name of Associated Broker or Dealer
- -------------------------------------------------------------------------------
States in Which Person Listed Has Solicited or Intends to Solicit Purchasers
(Check "All States" or check individual States)................. [ ] All States
[AL] [AK] [AZ] [AR] [CA] [CO] [CT] [DE] [DC] [FL] [GA] [HI] [ID]
[IL] [IN] [IA] [KS] [KY] [LA] [ME] [MD] [MA] [MI] [MN] [MS] [MO]
[MT] [NE] [NV] [NH] [NJ] [NM] [NY] [NC] [ND] [OH] [OK] [OR] [PA]
[RI] [SC] [SD] [TN] [TX] [UT] [VT] [VA] [WA] [WV] [WI] [WY] [PR]
- -------------------------------------------------------------------------------
(Use blank sheet, or copy and use additional copies of this sheet, as necessary)
<PAGE> 79
- --------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- --------------------------------------------------------------------------------
Enter the aggregate offering price of securities included in this offering and
the total amount already sold. Enter "0" if answer is "none" or "zero." If the
transaction is an exchange offering, check this box [ ] and indicate in the
columns below the amounts of the securities offered for exchange and already
exchanged.
<TABLE>
<CAPTION>
Aggregate Amount Already
Offering Price Sold
-------------- --------------
<S> <C> <C>
Type of Security
Debt ...................................................................................... $ $
-------- --------
Equity .................................................................................... $300,000 $ 0
-------- --------
X Common Preferred
--- ---
Convertible Securities (including warrants) ............................................... $ $
-------- --------
Partnership Interests ..................................................................... $ $
-------- --------
Other (Specify ________________________________) .......................................... $ $
-------- --------
Total ................................................................................ $300,000 $ 0
-------- --------
</TABLE>
Answer also in Appendix, Column 3, if filing under ULOE.
Enter the number of accredited and non-accredited investors who have purchased
securities in this offering and the aggregate dollar amounts of their purchases.
For offerings under Rule 504, indicate the number of persons who have purchased
securities and the aggregate dollar amount of their purchases on the total
lines. Enter "0" if the answer is "none" or "zero."
<TABLE>
<CAPTION>
Aggregate
Number Dollar Amount
Investors of Purchases
-------------- --------------
<S> <C> <C>
Accredited Investors ...................................................................... 0 $
-------- --------
Non-accredited Investors .................................................................. 0 $
-------- --------
Total (for filings under Rule 504 only) .............................................. 0 $
-------- --------
</TABLE>
Answer also in Appendix, Column 4, if filing under ULOE.
If this filing is for an offering under Rule 504 or 505, enter the information
requested for all securities sold by the issuer, to date, in offerings of the
types indicated, in the twelve (12) months prior to the first sale of securities
in this offering. Classify securities by type listed in Part C - Question 1.
<TABLE>
<CAPTION>
Type of Dollar Amount
Security Sold
-------- -------------
<S> <C> <C>
Type of offering
Rule 505 ................................................................................ NA $ 0
-------- --------
Regulation A............................................................................. NA $ 0
-------- --------
Rule 504 ................................................................................ NA $ 0
-------- --------
Total ..............................................................................
-------- --------
</TABLE>
a. Furnish a statement of all expenses in connection with the issuance and
distribution of the securities in this offering. Exclude amounts relating solely
to organization expenses of the issuer. The information may be given as subject
to future contingencies. If the amount of an expenditure is not known, furnish
an estimate and check the box to the left of the estimate.
<TABLE>
<S> <C> <C>
Transfer Agent's Fees......................................................................................... [ ] $ 0
--------
Printing and Engraving Costs.................................................................................. [ ] $ 1,500
--------
Legal Fees ................................................................................................... [ ] $ 4,000
--------
Accounting Fees .............................................................................................. [ ] $ 1,000
--------
Engineering Fees ............................................................................................. [ ] $ 0
--------
Sales Commissions (specify finders' fees separately).......................................................... [ ] $ 0
--------
Other Expenses (identify) Miscellaneous ..................................................................... [ ] $ 1,000
--------------- --------
Total ................................................................................................... [ ] $ 7,500
--------
</TABLE>
<PAGE> 80
- --------------------------------------------------------------------------------
C. OFFERING PRICE, NUMBER OF INVESTORS, EXPENSES AND USE OF PROCEEDS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
b. Enter the difference between the aggregate offering price given in
response to Part C - Question 1 and total expenses furnished in response to
Part C - Question 4.a. This difference is the "adjusted gross proceeds to $292,500
the issuer." --------
5. Indicate below the amount of the adjusted gross proceeds to the issuer used
or proposed to be used for each of the purposes shown. If the amount for any
purpose is not known, furnish an estimate and check the box to the left of the
estimate. The total of the payments listed must equal the adjusted gross
proceeds to the issuer set forth in response to Part C - Question 4.b above.
Payments to
Officers,
Directors, & Payments to
Affiliates Others
Salaries and fees ................................................................ [ ] $ [ ] $
-------- --------
Purchase of real estate .......................................................... [ ] $ [ ] $
-------- --------
Purchase, rental or leasing and installation of machinery and equipment .......... [ ] $ [ ] $
-------- --------
Construction or leasing of plant buildings and facilities ........................ [ ] $ [X] $200,000
-------- --------
Acquisition of other businesses (including the value of securities involved in
this offering that may be used in exchange for the assets or securities of
another issuer pursuant to a merger) ............................................. [ ] $ [ ] $
-------- --------
Repayment of indebtedness ........................................................ [ ] $ [ ] $
-------- --------
Working capital .................................................................. [ ] $ [X] $ 92,500
-------- --------
Other (specify):
------------------------------------------------------------------ [ ] $ [ ] $
-------- --------
- ----------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------- [ ] $ [ ] $
-------- --------
Column Totals .................................................................... [ ] $ [X] $292,500
-------- --------
Total Payments Listed (column totals added) ...................................... [X] $292,500
--------
</TABLE>
- --------------------------------------------------------------------------------
D. FEDERAL SIGNATURE
- --------------------------------------------------------------------------------
The issuer has duly caused this notice to be signed by the undesigned duly
authorized person. If this notice is filed under Rule 505, the following
signature constitutes an undertaking by the issuer to furnish to the U.S.
Securities and Exchange Commission, upon written request of its staff, the
information furnished by the issuer to any non-accredited investor pursuant to
paragraph (b)(2) of Rule 502.
- --------------------------------------------------------------------------------
Issuer (Print or Type) Signature Date
Nostalgia Broadcasting Corp. /s/ JOHN HOLMES 9/6/96
- --------------------------------------------------------------------------------
Name of Signer (Print or Type) Title of Signer (Print or Type)
John Holmes General Manager and Secretary
- --------------------------------------------------------------------------------
- ---------------------------------- ATTENTION -----------------------------------
Intentional misstatements or omissions of fact constitute
federal criminal violations. (See 18 U.S.C. 1001.)
- --------------------------------------------------------------------------------
<PAGE> 81
N.Y. Form M-11 ** File No.______
(Rev. 5/90) (for renewals only)
STATE OF NEW YORK
DEPARTMENT OF LAW
ISSUER STATEMENT
(Section 359-e Gen. Bus. Law)
Name of Principal
Issuer Nostalgia Broadcasting Corp. Office 10300 S.W. Greenburg Road,
Suite 390
Portland, OR 97223
-------------------------------
Street Address City State Zip
Telephone Number 503-293-2601
This form is not to be used by issuers engaged in any aspect of real estate or
mortgage financing unless they also obtain a letter upon written application
pursuant to Section 352e or g. Theatrical Syndication must comply with Article
23 of the Arts and Cultural Affairs Law.
1. Issuer is [X] an existing; [ ] a proposed; [X] corporation;
[ ] general partnership; [ ] limited partnership; [ ] other (specify)
_____________________organized under the laws of Nevada on 3/4/96.
The entire offering is [X] intrastate, [ ] interstate
2. The business of the issuer is (described briefly) Acquisition, Creation and
Syndication of national radio programming, music production and distribution
3. Issuer proposes to offer [X] stock; [ ] bonds; [ ] notes; [ ] partnership
interests; [ ] other (specify)____________________________
4. The securities will be sold [X] by the officers and directors of the issuer;
[ ] N.Y. registered broker [ ] by an underwriter; [ ] by salesmen employed
by issuer. The securities will be sold on a [X] best efforts basis; [ ] firm
commitment. If by an underwriter or broker, indicate the names of
underwriters or syndicate manager____________________________________.
5. Total amount of offering $300,000 Anticipated offering expenses total $7,500
consisting of: Selling: $0 Other: $7,500.
6. State use of the net proceeds to be obtained: Construction of a production
studio in Portland, Oregon; additional capital for development of radio
syndication products and working capital.
** Found on the fee receipt you received for your original filing.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Filing is incomplete without a copy of offering literature. If not available,
please explain. Indicate to whom you wish the fee receipt sent.
( ) Attorney ( ) Issuer
Personal checks not accepted. Attorney's check, certified check, bank check,
money order only, payable to the N.Y.S. Department of Law
Filing Fee Enclosed as Follows:
Total amount of offering under $500,000..........................$200
over $500,000..........................$800
Send remittance to:
Bureau of Investor Protection and Securities
N.Y. Department of Law
120 Broadway
New York, NY 10271
<PAGE> 82
7. If the securities are being offered partly or entirely for the account
of selling holders, please check [ ]. Indicate the details of the
secondary offering below for each seller.
<TABLE>
<CAPTION>
Anticipated
Name of Seller Address Dollar Amount Offered
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
8. Has registrant, any officer, director or principal or partner ever
A. been suspended or expelled from membership in any securities or
commodities exchange, association of securities or commodities
dealers or Investment advisors?...................................... yes [ ] No [X]
B. had a license or registration as a dealer, broker, investment
advisor or salesman, futures commission merchant, associated
person, commodity pool operator, or commodity trading advisor
denied, suspended or revoked?........................................ Yes [ ] No [X]
C. been enjoined or restrained by any court or government agency
from:
1. the issuance, sale or offer for sale of securities or
commodities?................................................. Yes [ ] No [X]
2. rendering securities or commodities advice?.................. Yes [ ] No [X]
3. handling or managing trading accounts?....................... Yes [ ] No [X]
4. continuing any practices in connection with securities
or commodities?............................................... Yes [ ] No [X]
D. been convicted of any crime (other than minor traffic)?............... Yes [ ] No [X]
E. used or been known by any other name?................................. Yes [ ] No [X]
F. been the subject of any professional disciplinary proceeding?......... Yes [ ] No [X]
G. been adjudged a bankrupt or made a general assignment for
benefit of creditors; or been an officer, director or principal
of any entity which was reorganized in bankruptcy, adjudged a
bankrupt or made a general assignment for benefit of creditors?....... Yes [ ] No [X]
H. had an offering of securities within the last three years or
been an officer, director, principal or partner of any entity
which had an offering of securities within the last three years....... Yes [ ] No [X]
I. If the answer to any of the above is "YES", attach a statement
of full particulars.
9. Are there any outstanding judgments (not including judgments involving
domestic relations) against the issuer or any officer, director,
principal or partner thereof? If yes, attach statement of full particulars.... Yes [ ] No [X]
</TABLE>
10. List names and residence addresses of all employees (officers and
directors not included) of Issuer who are selling in N.Y.S., N.Y. Form
M-2 must be filed for each person listed.
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
11. Limited Partnerships are required to submit a list of all limited
partners as soon as the offering is completed. This may be done in
letter form.
12. If the Issuer is a limited partnership list all of the general partners:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
<PAGE> 83
13. The information set forth below should be provided for each officer,
director, principal or partner. In the case of a corporate general partner
information must be provided for all officers. If not enough space is
provided use continuation sheets. Do not refer to prospectus or offering
literature. SEC biographies can be substituted for employment history only.
a. Name: Steve Stucker Title: President and Director and Treasurer
------------------ ------------------------------------
Home Address: Phone: (702) 884-1979
------------------------ ---------------------
Place of Birth: Falls City, Nebraska Date of Birth: 3/23/45
---------------------- -------------
Social Security #: ###-##-####
-------------------
Prior home addresses for past five years: 4142 Quinn, Carson City,
--------------------------
Nevada 89701
--------------------------------------------------------------------
--------------------------------------------------------------------
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
9/94 Present Self employed - Full time legal practice President
- ------------------------------------------------------------------------------------------------------
1989 9/94 Laughlin & Associates, Carson City, Nevada General Counsel
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>
b. Name: John Holmes Title: Secretary and General Manager
------------------ ------------------------------------
Home Address: 17618 NW Springville, Portland 97229 Phone:
------------------------------------
Place of Birth: Granite City, IL Date of Birth: 12/23/70
---------------------- -------------
Social Security #: ###-##-####
-------------------
Prior home addresses for past five years: 19000 NW Evergreen
--------------------------
Parkway, Hillsboro OR 97138
--------------------------------------------------------------------
711 West Barr, Jerseyville, IL 62052
--------------------------------------------------------------------
Following is my complete employment and business affiliation record
for the past five years: (Indicate periods of self-employment and
unemployment. Include all corporations or other entities where you
hold or held a substantial equity or controlling interest.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
From To Employer or Business Affiliation Position Held and
Mo. Yr. Mo. Yr. Name Address Type of Business
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5/96 Present Nostalgia Broadcasting Corp. Portland, OR General Manager & Secretary
- ------------------------------------------------------------------------------------------------------
8/93 5/96 ITEX Media Services Inc. St. Louis, MO Media Services Director
- ------------------------------------------------------------------------------------------------------
8/92 8/93 ITEX St. Louis St. Louis, MO Trade Broker
- ------------------------------------------------------------------------------------------------------
1/90 8/92 KMOV-TV St. Louis, MO Assistant Sports Producer
- ------------------------------------------------------------------------------------------------------
1/90 8/92 Radio Personalities St. Louis, MO VP of Operations
- ------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 84
MINUTES OF ANNUAL SHAREHOLDERS' MEETING
OF
NOSTALGIA BROADCASTING CORP.
A Nevada Corporation
The annual meeting of shareholders of Nostalgia Broadcasting Corp. for the
year ending 1997-98 was held on:
DATE: January 30, 1998
TIME: 1:00 PM
PLACE: Nostalgia Broadcasting Corp.
One Lincoln Center
Portland, Oregon
John A. Holmes III, Acting President and Chairman of the Board of
Director, assumed control of the meeting, and appointed Lee E. Morgan,
Secretary for the Shareholders Meeting. Mr. Holmes called the Meeting to order
and made a formal roll call and request for proxies.
Mr. John J. Brumfield, Vice President, Director and Controller of the
company, tallied the number of shares present, in person or by proxy, and
certified that there were 778,230 shares present. Mr. Brumfield further
reported that the total shares issued and outstanding of the Company were
1,110,000 shares. The Secretary reported that a quorum was present and that 71%
of the stock entitled to vote was present, in person or by proxy.
Page 1
<PAGE> 85
The Secretary then presented an Affidavit of Mailing to verify that
adequate notice had been given, consistent with the Bylaws of the Corporation
regarding the Shareholder's Meeting (see attached). The Secretary read the
Minutes from the previous Shareholder's Meeting of 28 March, 1997 (see
attached). A proposal was presented and seconded to accept the Minutes as read,
upon motion duly made and seconded the following resolution was unanimously
adopted:
RESOLVED THAT, the 28 March, 1997 minutes be accepted as presented.
The Vote was unanimous.
The Shareholder Meeting Agenda was reviewed in its entirety and a call for
additions to the Agenda were made. None were submitted.
The following items were submitted to a vote of the Shareholders:
1. The selection of Andersen, Andersen & Strong as independent auditors for
the current fiscal year.
The voting was 776,230 for, 2000 against and 0 abstentions. The motion passed.
2. To amend the Articles of Incorporation to change the name of Nostalgia
Broadcasting Corp. to NBG Radio Network, Inc.
The voting was 778,230 for, 0 against and 0 abstentions. The motion passed.
3. To elect the following as directors of the corporation:
For Against Abstain
--- ------- -------
John A. Holmes III 778,230 0 0
Peter Jacobsen 776,230 0 2,000
Dick Versace 766,230 10,000 2,000
Steve R. Sears 776,230 0 2,000
Dennis McKay 776,230 0 2,000
Page 2
<PAGE> 86
4. To elect the following as officers:
<TABLE>
<CAPTION>
For Against Abstain
------- ------- -------
<S> <C> <C> <C>
John A. Holmes III, President 778,230 0 0
John J. Brumfield, Vice President/Controller 778,230 0 0
Lee E. Morgan, Corporate Secretary 778,230 0 0
</TABLE>
All motions were passed and approved by the shareholders.
Controller, John J. Brumfield provided an overview of the companies
financial statement. Mr. Brumfield indicated the company was growing at a
better than expected pace. Mr. Brumfield answered questions from the floor
pertaining to the company's financial health. All shareholders seemed to be
pleased with the company's proposed direction and current performance.
John A. Holmes III then presented an in-depth overview of the company's
business plan for the upcoming year. Mr. Holmes handled questions from the
floor, with virtually all shareholders present participating in the general
discussion. Shareholders seemed excited and upbeat about the companies proposed
business plans.
Mr. Holmes then made announcements about the companies proposed relocation
of the Corporate Office and the commencement of trading of the companies stock
on the NASD Bulletin Board.
<PAGE> 87
MINUTES OF BOARD OF DIRECTORS' MEETING
NOSTALGIA BROADCASTING CORP.
A NEVADA CORPORATION
A meeting of the Board of Directors of Nostalgia Broadcasting Corp.
was held on January 15, 1998, at the offices of Nostalgia Broadcasting Corp.,
10300 SW Greenburg Road, Suite 390, Portland, Oregon at 1:00pm PST.
The following participated in the meeting:
John A. Holmes III - Director
Steven R. Sears - Director
Lee E. Morgan - Corporate Secretary
* Director, Steve Stucker was unavailable for the meeting.
First order of business was to appoint as Chairman of the meeting,
John Holmes, General Manager of the Corporation.
The Chairman announced that a quorum of the Directors was present, and
that the meeting, having been convened, was ready to proceed with its business.
It was pointed out that the Board has informally been in contact with
Officers of the Company through weekly and sometimes daily reports written
through the Internet. Minutes were not kept on these reports, as they were
informal meetings of the Board.
The minutes of the regular meeting of the Directors held on March 27,
1996, were read and approved. Upon motion duly made, seconded, and unanimously
carried, the following resolutions were adopted:
<PAGE> 88
RESOLVED, that the Corporation accept the resignation of Steve Stucker
as President of the Corporation and Director and appointed John A. Holmes as
acting President.
RESOLVED, John Holmes, General Manager of the Corporation, shall
conduct the upcoming Annual Shareholder's Meeting to be held January 30, 1998.
RESOLVED, all Board meeting minutes and discussions are to be kept
confidential.
After a discussion of the merits of issuing options to employees,
board members, and other parties instrumental in the development of the Company
it was unanimously agreed:
RESOLVED, that the following individuals receive stock options where
each option equals 1 common share subject to restriction under SEC Rule 144. The
option strike price is $.60 per common share and expire on March 15, 1998. Stock
options issued equal 600,000 common shares.
<TABLE>
<CAPTION>
NAME OPTIONS
---- -------
<S> <C>
Nevada Financial Resources, Inc. 83,333
Allied Hansard Capital, LTD 83,333
Entertainment & Media Resources, Inc. 83,333
John J. Brumfield 56,235
John A. Holmes 50,000
Steven. R. Sears 46,666
Joe Mancuso 30,684
Peter Jacobsen 25,000
Mark Eklund 21,666
Larry Kotan 20,000
Michael Palmer 19,750
Barbara Oshiro 18,333
Ollie Holmes 16,667
Dean Gavoni 16,667
Dick Versace 10,000
Julie Fitterer 10,000
Lee Morgan 8,333
</TABLE>
<PAGE> 89
RESOLVED, that the following people will receive a bonus paid in
common shares subject to restriction under SEC Rule 144. The number of shares
allocated to each of the following people/corporations was based on a price of
$.60 per common share.
<TABLE>
<CAPTION>
NAME SHARES
---- ------
<S> <C>
James Haydon 15,000
Steve Sears 10,000
Keri Strug 5,000
Rick Barry 4,000
Dick Versace 4,000
Peter Jacobsen 4,000
Steve Jones 2,500
Angeline Holmes 2,000
Steven Allen 2,000
Danny Chambers 1,000
Daryl Summers 1,000
Mychal Thompson 1,000
Julie McKeehan 1,000
Harry Hamm 1,000
Troy Roberts 1,000
Fred Woods 750
Kevin Covington 500
MOR Media 500
Al Dardis & Associates 500
Joe Mancuso 500
Ollie Holmes 500
Mark Eklund 500
Joesph Ridgway 500
Darren Emile 500
</TABLE>
RESOLVED, the Company shall exchange 65,000 common shares, Restriction
under SEC Rule 144, to Gary Henin in exchange for printing services in the
amount of $50,000.
RESOLVED, the appointment of A.B. Korelin and Associates for
preparation of Form 10, which is to be submitted to the Securities and Exchange
Commission so the Corporation can qualify as a fully reporting company. Terms of
the contract are as follows:
A non-refundable fee of $13,500.00. $7500.00 is payable in cash, and
$6000.00 is payable in common shares of the Corporation. The cash
portion shall be payable as follows: $3750.00 upon execution of an
agreement, $2000.00 payable before 3/31/98 or upon filing of the
Registration Statement with the SEC whichever comes first; and the
<PAGE> 90
final payment of $1750.00 upon effectiveness of the Registration
Statement. The stock portion shall be payable as follows: Common
shares subject to restriction under SEC Rule 144 with price of each
share being set at the average trading price of the Corporation's
stock during the 30 day period of April 1998. If for any reason the
trading ceases during that time period, then the price will be set on
the first continuous 30 day period thereafter. The Rule 144
restriction date begins with the signing of the agreement with A.B.
Korelin and Associates.
RESOLVED, the appointment of West Coast Consulting and Hamilton Martin
Group to handle investor relations for the Corporation on a 90-day contract.
Terms of the contract are as follows:
4500 common shares to West Coast Consulting and 4500 common shares to
Hamilton Martin Group. Common shares subject to restriction under SEC Rule 144.
RESOLVED, John Holmes is empowered to sign a new office space lease on
behalf of the Company.
RESOLVED, that the Corporation will put to a vote of the shareholders
the amendment of Article I. of the Companies Articles of Incorporation to change
the Corporations name to NBG Radio Network, Inc. at the upcoming Annual
Shareholder's Meeting.
RESOLVED, that the next meeting of the Directors is scheduled for
Tuesday, March 24, 1998 at 1:00pm PST. Location: One Lincoln Center - Portland,
Oregon.
RESOLVED, that the Corporation will appoint Neal & Associates, LLC to
source and negotiate barter transactions and contracts. John A. Holmes must
approve all barter transactions submitted by Neal & Associates, LLC.
Upon motion duly made, seconded, and carried, all of the Resolutions
adopted by the Directors in the previous year were ordered to be filed with the
Secretary and attached to these minutes and are thereby made a part thereof.
<PAGE> 91
There being no other business to be transacted, upon motion duly made,
seconded, and unanimously carried, the meeting was adjourned.
- ---------------------------------------------
Secretary
ATTEST:
/s/ JOHN A. HOLMES III
- ---------------------------------------------
Director
- ---------------------------------------------
Director
<PAGE> 92
CERTIFICATE OF AMENDMENT OF INCORPORATION
(After Issuance of Stock)
NOSTALGIA BROADCASTING CORP,
We the undersigned, John A. Holmes III, President, and Lee E. Morgan,
Corporate Secretary, of NOSTALGIA BROADCASTING CORP. do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 15th day of January, 1998, adopted a resolution to amend
the original articles as follows:
Article I is hereby amended to read as follows:
1. The name of the corporation is:
NBG RADIO NETWORK, INC
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 1,110,000; that the said change(s)
and amendment have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/ JOHN A. HOLMES III
-----------------------------
President
/s/ LEE E. MORGAN
-----------------------------
Secretary
State of Oregon )
)ss.
County of Washington )
On February 4, 1998, personally appeared before me, a Notary Public,
John A Holmes III, and Lee E. Morgan who acknowledged that they executed the
above instrument.
/s/ JOHN J. BRUMFIELD
-----------------------------
Signature of Notary
[NOTARY SEAL]
<PAGE> 93
RECEIPT NO. FY800045306
NOSTALGIA BROADCASTING CORP
02/12/1998 75.00
REC'D By SSH
RECEIPT NO. FY9800045307
NOSTALGIA BROADCASTING CORP
02/12/1998 50.00
REC'D BY SSH
CERTIFICATE OF AMENDMENT OF INCORPORATION
(After Issuance of Stock)
NOSTALGIA BROADCASTING CORP.
We the undersigned, John A. Holmes III, President, and Lee E. Morgan,
Corporate Secretary, of NOSTALGIA BROADCASTING CORP. do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 15th day of January, 1998, adopted a resolution to amend
the original articles as follows:
Article I is hereby amended to read as follows:
1. The name of the corporation is:
NBG RADIO NETWORK, INC.
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 1,110,000; that the said
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.
/s/ JOHN A. HOLMES III
-----------------------------
President
/s/ LEE E. MORGAN
-----------------------------
Secretary
State of Oregon )
) ss.
County of Washington )
On February 4, 1998, personally appeared before me, a Notary Public,
John A Holmes III, and Lee E. Morgan who acknowledged that they executed the
above instrument.
/s/ JOHN J. BRUMFIELD
-----------------------------
Signature of Notary
[NOTARY SEAL]
<PAGE> 94
SECRETARY OF STATE
[STATE SEAL]
CERTIFICATE OF EXISTENCE
WITH STATUS IN GOOD STANDING
1, DEAN HELLER, the duly elected and qualified Nevada Secretary of State, do
hereby certify that I am, by the laws of said State, the custodian of the
records relating to filings by corporations, limited-liability companies,
limited partnerships, and limited-liability partnerships pursuant to Title 7 of
the Nevada Revised Statutes which are either presently in a status of good
standing or were in good standing for a time period subsequent of 1976 and am
the proper officer to execute this certificate,
I further certify that the records of the Nevada Secretary of State, at the date
of this certificate, evidence, NBG RADIO NETWORK, INC., as a corporation duly
organized under the laws of Nevada and existing under and by virtue of the laws
of the State of Nevada since March 27, 1996, and is in good standing in this
state.
IN WITNESS WHEREOF, I have hereunto set my hand
and affixed the Great Seal of State, at my office,
in Carson City, Nevada, on February 23, 1998.
/s/ DEAN HELLER
Secretary of State
By [SIG]
Certification Clerk
[STATE SEAL]
<PAGE> 95
[IBC INTERNATIONAL BARTER CORP. LOGO] Acct #
Approved By:
CL:
Corporate Use Only
MEMBERSHIP APPLICATION
Firm's Name NBG RADIO NETWORK Years in Business 2
---------------------------------------- --------
Business Address 10300 SW Greenburg Road Ste. 390 Tel: 503-293-2601
----------------------------------- ---------------------
Portland, OR Zip 97223 Fax: 503-244-9956
----------------------------------- ---------------------
Home Address Tel:
----------------------------------- ---------------------
Zip Fax:
----------------------------------- ---------------------
Sole Owner [ ] Partnership [ ] Corporation [X]
Name of President/Owner Steve Stucker
-------------------------------------------------------
Social Security Number or Employer ID Number 88-0362102
-------------------- -------------
Bank Name Wells Fargo Branch Referred by
------------------- ---------------- -------------
IBC Cards to be issued to (3 max.) John Holmes, JJ Brumfield, Lawrence Kotan
-------------------------------------------
Please understand that your company
is liable for all charges incurred
by the use of additional cards.
MEMBERSHIP AGREEMENT
WE AGREE TO:
1. Sell products and/or services to IBC clients at 100% trade dollars at
the prevailing price and with the same priority given cash customers.
2. A one-time membership fee of $495.00 in cash which is non refundable
after 30 days from date application is executed by the member.
3. Monthly dues of $15.00 cash $15.00 trade (the latter debited to your
account)
4. To pay a 12% cash service and accounting fee on trade purchases made
from IBC clients (10% for Auto Pay clients).
5. Pay 1 1/2% or $10.00 cash (whichever is greater) on all cash fees not
received by the end of month billing. $25 cash charge on all NSF
checks.
6. A 1% per month (12% APR) charge in trade on accounts in a debit.
(trade dollar loans)
REGULATIONS AND PROCEDURES
1. Member/Client agrees to treat fellow IBC members/clients with the
same consideration, courtesy and attention as cash customers.
2. No sale may be made unless the buyer has the proper identification
issued by IBC and seller phones for authorization on amounts over
$100.000.
3. Service fees must be paid in full with cash and are due upon receipt
of monthly statement. Member/Client will be prohibited from spending
if cash or trade service fees are past due from any previous
transactions.
4. IBC's sole responsibility is as a third party record keeper of trade
transactions.
5. Member/Client will not hold IBC responsible for disputes arising from
trade transactions. Disputes shall be settled by those parties
involved.
6. Direct trading between members/clients to avoid service fees is
prohibited and is reason for termination from IBC.
7. Members/Clients must pay all sales tax in cash and are responsible
for including trade sales as part of their gross sales in the
determination of taxable income reported to state or federal
agencies. IBC reports all trade sales to the Internal Revenue Service
annually on form 1099-B.
8. Member/Client has a right to cancel membership at any time with 30
days written notice. The account must be balanced with trade and/or
cash. Cancelling member/client will pay all service fees on trade
balance left in advance and will continue to pay monthly dues until
trade dollars are spent.
9. Membership/Client has the option to become inactive in sales whenever
trade dollars exceed purchases by $10,000.
10. If member/client is declaring reserve status, member/client agrees to
give IBC a minimum of twenty (20) days written notice; this enables
IBC to give other IBC members/clients proper notice. Monthly dues will
continue to be assessed.
11. Trade dollars shall not be considered legal tender, securities or
commodities. Trade dollars are not redeemable for cash, except in the
event IBC must resort to collections on a trade debt when the
member/client is unwilling, unable or refuses to accept trade
business.
12. IBC has the right to cancel membership upon breach of this agreement
or any failure to comply with the existing rules and regulations. If
cash fees are unpaid for 90 days or more member/client will forfeit
any positive trade balance.
13. IBC may terminate any membership if member/client has clearly
overcharged another member/client for any product or service.
14. IBC may, in its sole discretion, change the terms of this agreement
from time to time by giving member/clients thirty (30) days written
notice.
15. In the event of a breach of this agreement, member/client agrees to
pay reasonable cumulative costs, litigation costs, attorney fees,
court costs, collection costs and/or interest. Member/Client further
agrees to be personally responsible for any indebtedness to IBC.
16. Taxes, tips or gratuities shall be paid in cash at point of purchase
by purchaser.
Applicant's Approval John A. Holmes Title GM Date of Application 10/2/97
---------------- ---- ---------
Area Office Representative Area Office Approval
--------------- -----------------
<PAGE> 96
Form W-9 Give form to the
requester. Do NOT
(Rev. March 1994) send to the IRS.
Department of the Treasury
Internal Revenue Service
Request for Taxpayer
Identification Number and Certification
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPE
Name (if joint names, list first and circle the name of the person or entity
whose number you enter in Part I below. See Instructions on page 2 if your name
has changed.)
NBG RADIO NETWORK
- -------------------------------------------------------------------------------
Business name (Sole proprietors see instructions on page 2.)
- -------------------------------------------------------------------------------
Please check appropriate box: / / Individual/Sole proprietor /x/ Corporation
/ / Partnership / / Other_______________________
- -------------------------------------------------------------------------------
Address (number, street and apt. or suite no.)
10300 S.W. Greenburg Rd., Suite 390
- -------------------------------------------------------------------------------
City, state and ZIP code
Portland, OR 97223
- -------------------------------------------------------------------------------
Requester's name and address (optional)
- -------------------------------------------------------------------------------
List account number(s) here (optional)
- -------------------------------------------------------------------------------
PART I Taxpayer Identification Number (TIN)
- -------------------------------------------------------------------------------
Enter your TIN in the appropriate box. For individuals, this is your social
security number (SSN). For sole proprietors, see the instructions on page 2.
For other entities, it is your employer identification number (EIN). If you do
not have a number, see How To Get a TIN below.
Note: If the account is in more than one name, see the chart on page 2 for
guidelines on whose number to enter.
Social security number - -
----------------------
Employer identification number 88-03-62102
-----------------------
- -------------------------------------------------------------------------------
PART II For Payees Exempt From Backup
Withholding (See Part II Instructions on page 2)
- -------------------------------------------------------------------------------
PART III Certification
- -------------------------------------------------------------------------------
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (c) the IRS has notified
me that I am no longer subject to backup withholding.
Certification Instructions.--You must cross out Item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding
because of underreporting interest or dividends on your tax return. For real
estate transactions, Item 2 does not apply. For mortgage interest paid, the
acquisition or abandonment of secured property, cancellation of debt,
contributions to an individual retirement arrangement (IRA), and generally
payments other than interest and dividends, you are not required to sign the
Certification, but you must provide your correct TIN. (Also see Part III
Instructions on page 2.)
- -------------------------------------------------------------------------------
Sign
Here Signature /s/ John J. Brumfield Date 10/2/97
- -------------------------------------------------------------------------------
Section references are to the Internal Revenue Code.
Purpose of Form.--A person who is required to file an information return with
the IRS must get your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, cancellation of debt, or contributions you made to an IRA.
Use Form W-9 to give your correct TIN to the requester (the person requesting
your TIN) and, when applicable, (1) to certify the TIN you are giving is
correct (or you are waiting for a number to be issued, (2) to certify you are
not subject to backup withholding or (3) to claim exemption from backup
withholding if you are an exempt payee. Giving your correct TIN and making the
appropriate certifications will prevent certain payments from being subject to
backup withholding.
Note: If a requester gives you a form other than a W-9 to request your TIN, you
must use the requester's form if it is substantially similar to this Form W-9.
What is Backup Withholding?--Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions. This
is called "backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.
If you give the requester your correct TIN, make the proper
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS tells the requester that you furnished an incorrect TIN, or
3. The IRS tells you that you are subject to backup withholding because
you did not report all your interest and dividends on your tax return (for
reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to
backup withholding under 3 above (for reportable interest and dividend accounts
opened after 1983 only), or
5. You do not certify your TIN. See the Part III Instructions for
exceptions.
Certain payees and payments are exempt from backup withholding and
information reporting. See the Part II Instructions and the separate
Instructions for the Requestor of Form W-9.
How to Get a TIN.--If you do not have a TIN, apply for one immediately. To
apply, get Form SS5, Application for a Social Security Number Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
If you do not a have a TIN, write "Applied For" in the space for the TIN in
Part I, sign and date the form, and give it to the requester. Generally, you
will then have 60 days to get a TIN and give it to the requester. If the
requester does not receive your TIN within 60 days, backup withholding, if
applicable, will begin and continue until you furnish your TIN.
- -------------------------------------------------------------------------------
Cal No. 1023 Form W-9
<PAGE> 97
TRADE AGREEMENT
The National Trade Association, Inc. D.B.A. Illinois Trade Association
(hereinafter referred to as the Association) and _____________________________
__________________________________________________________ (hereinafter referred
to as the Client) hereby agree as follows:
1. The Association agrees to grant the Client a line of credit in the amount of
- -NA- which the Client can use to obtain goods and services through the
Association.
2. The Client agrees to make his goods and services, in an amount equal to any
deficit created through the use of his credit line, available to the Association
or to the other clients of the Association for 100% trade.
3. The Client agrees to pay a one-time set-up fee of Waived which will entitle
the Client to trade through the Association. In addition, the Client agrees to
trade with the Association at a ratio of 1.5 to 1 in favor of the Association as
sole satisfaction for the Association's cost in administering trades for the
Client. Should any products or services be purchased by the Client on a
part-cash and part-trade basis, the ratio is limited to only the trade portion
of the purchase.
4. The Client acknowledges that the Association functions only as a broker and
that the Association assumes no responsibility or liability for the quality,
timely delivery, or warranties, expressed or implied, with respect to the goods
and services delivered or rendered by the other clients of the Association. The
Client's sole recourse for any damages will be with the person or business who
was the source of the products or services.
5. The Client further acknowledges that the Association acts as a broker for
both the Client who is party to this Agreement and for other clients who are
solicited by the Association in order to obtain goods and services requested by
the Client. In the event that the Client shall enter into negotiations and trade
directly with another client of the Association regarding the procurement of
goods and services, the Association will still be entitled to its commission as
set forth in paragraph three (3) above.
6. This Agreement may be terminated upon thirty (30) days written notice by
either party. In the event that the Client's account is in a deficit position at
the time of cancellation, the Client agrees to satisfy that deficit within
ninety (90) days after the termination of this agreement. The deficit may be
satisfied with products or services at their regular prevailing prices for 100%
trade or, if there are no products or services acceptable to the Association,
the deficit must be paid in cash.
7. Should the Client's deficit not be satisfied within a ninety (90) day period
after the termination of this Agreement, the Client hereby authorizes,
irrevocably, any attorney or any court of record to appear for the Client in
such court, in term time or vacation, at any time after the ninety (90) day
period herein specified, and confess judgment without process in favor of the
Association for such amount as remains unpaid, together with reasonable costs of
collection, including reasonable attorney's fees, and to waive and release all
errors which may intervene in any such proceedings, and consent to immediate
execution upon such judgment, hereby ratifying and confirming all that said
attorney may do by virtue hereof.
8. The Client agrees to abide by the Trading Rules and Regulations as currently
published by the Association and as may be amended or adopted by the Association
in the future and by signing this Agreement acknowledges that he has read and
understands them.
9. This Agreement shall be subject to and governed by the laws of the State of
Illinois.
10. The Client warrants and covenants that he is duly authorized to execute and
deliver this Agreement and to perform its obligations as itemized above.
AMENDMENTS, IF ANY: No monthly maint. fees.
<TABLE>
<S> <C>
/s/ JOE A. HOLMES
- ------------------------------------------------- ------------------------------------------------------------------
Client's Signature National Trade Association, Inc. D.B.A. Illinois Trade Association
NBG Radio Network GM
- ------------------------------------------------- ------------------------------------------------------------------
Business Name Title
10300 SW Greenburg Rd. #390 9/11/97
- ------------------------------------------------- ------------------------------------------------------------------
Address Date
Portland, OR 97223
- -------------------------------------------------
City State Zip Code
</TABLE>
<PAGE> 98
FAX Date 11-17-96
Number of pages including cover sheet 6
TO: JOHN HOLMES FROM: Steve Coryell
GENERAL MANAGER
NOSTALGIA
BROADCASTING
Phone (817) 478-9302
Fax Phone (817) 483-2216
Phone
Fax Phone
CC:
REMARKS: [ ] Urgent [X] For your review [ ] Reply ASAP [ ] Please Comment
John...
Call me when you get a chance. There are some issues in the letter I want to
talk about.
106
<PAGE> 99
STEVE CORYELL
6414 KELLY-ELLIOTT ROAD ARLINGTON TX 76001
TEL 817-478-9302
FAX 817-483-2216
November 17, 1996
John A. Holmes, General Manager
Nostalgia Broadcasting Corp
10300 SW Greenburg Road
Suite 390
Portland OR 97223
DELIVERED VIA FAX
- -----------------
Dear John,
I have a few questions about some of the items outlined in the letter of intent.
Call me at your convenience and we can discuss them. I'm confident however we
will be able to reach a full agreement very soon.
I can tell you that we are already in the process of producing the program. To
date I believe one or two months worth of features are produced and ready to
send as soon as we formalize our deal.
I am faxing you this material today. A hard copy version of everything here is
in the mail.
I look forward to working with you folks.
Sincerely,
/s/ STEVE CORYELL
- -----------------
STEVE CORYELL
<PAGE> 100
[NOSTALGIA BROADCASTING CORP. LETTERHEAD LOGO]
November 7, 1996
Mr. Steve Coryell,
RE: "Travel In The 90's"
Dear Steve,
This Letter of Intent outlines the terms of a proposed transaction in which
Nostalgia Broadcasting Corp. ("Nostalgia"), or its designee, would own and
syndicate the above-named radio show (the "Program") which will be hosted by
Steve Coryell ("Steve"). Nostalgia is in the business of producing radio
syndication programming ("Programming") to be furnished to and broadcasted by
radio stations ("Stations") in the United States and Canada. Nostalgia also
packages products from materials used in radio syndication to sell to retail
outlets.
1. The Program. The Program will be a two-minute thirty-second vignette
show with content based around Traveling In the 90's. Steve will provide all
services as are ordinarily rendered by the host of a radio show similar to the
Program. Steve shall host (260) broadcasts of the Program. Steve shall supply
all writing services and sound bites, if used, from their collection to be used
for the Program.
<PAGE> 101
2. Term. It is understood that Steve will provide the (260) finished
Programs within 1 year of signing the Agreement. Nostalgia will provide
appropriate studio time to post edit each raw show compiled by Steve. A
recording schedule will be coordinated between Steve and Nostalgia as soon as
an agreement is signed.
3. Compensation. Nostalgia will pay Steve for the services Steve renders
as host of the Program in the following manner: 15% net commission on all
advertising dollars generated from the syndication of the Program.
(a) Remotes & Special Programs. From time to time, Nostalgia may
determine that a special live program or remote is necessary for the Program.
If both parties, Nostalgia and Steve, agree to a remote or special program,
then Nostalgia will market the remote for cash and Steve is entitled to 25% of
the net profits for each special Program performed.
4. Production. Nostalgia agrees to furnish program Masters on Digital
Audio Tape ("DAT") cassettes. Nostalgia shall retain the rights and ownership
of the DAT Masters.
(a) Each Program shall contain 90 seconds of content, with 1 minute of
blank spots for appropriate commercial insertion.
5. Similar Program. Steve agrees that he will not approach another radio
syndicator or business and use this formatted material that is used in the
Program without the involvement of the Company.
6. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Steve is subject to approval by Steve prior to any use thereof.
7. Regulatory Compliance. Steve hereby represents and warrants that the
Program will, at all times, comply with any and all state and federal laws,
rules and regulations applicable to radio shows of this type. Steve shall have
no liability or responsibility in connection therewith.
<PAGE> 102
8. Confidentiality. Each party hereby agrees that the terms hereof
are confidential and shall not be revealed or disclosed to any third party.
9. Litigation Fees and Costs. The prevailing party in any litigation
between the parties for any alleged breach of this agreement shall be entitled
to receive from the non-prevailing party, in addition to costs and
disbursements reasonably incurred, such reasonable attorneys' fees as shall be
set by the court in which the litigation is tried, heard, or decided, or, in
the event of any appeal, by the appellate court.
10. Controlling Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oregon, and any dispute
arising hereunder shall be adjudicated solely within the Oregon courts. The
parties hereby consent to the personal jurisdiction of the Oregon courts.
11. Brokers. Each party represents that there are no brokers or
finders involved in the contemplated transaction.
12. Press Releases. Up to closing and for a period two months
thereafter, Steve shall have the right to review and approve any press releases
proposed to be issued by Nostalgia disclosing the fact and terms of this
agreement prior to issuance of any such press release.
13. Notices. All notices pursuant to this Agreement shall be deemed
valid if sent via U.S. mail, certified return receipt requested, by Federal
Express or other overnight courier service, by hand delivery or by facsimile
transmission, address as follows
To Steve: Steve Coryell
6414 Kelly-Elliott Rd.
Arlington, TX 76001
To Nostalgia: Nostalgia Broadcasting Corp.
10300 SW Greenburg Road
Suite 390
Portland, OR 97223
<PAGE> 103
This Letter outlines only certain of the major business terms of our
understanding. These terms, as well as customary and appropriate
representations, covenants, conditions, indemnities, and other provisions
remain to be negotiated with resolutions mutually satisfactory to all parties
in the Agreement to be prepared by Nostalgia. The parties agree to proceed
diligently with negotiations toward such Agreement.
Would you kindly confirm this Letter of Intent as set forth above by
signing and returning the enclosed copy of this letter.
Best regards,
/s/ John A. Holmes
- ------------------
John A. Holmes
General Manager
JAH/elk
cc: Dr. Dean Gavoni
Mr. JJ Brumfield
AGREED TO AND ACCEPTED BY:
/s/ Steve Coryell 11-17-96
- ------------------ --------------
Steve Coryell Date
<PAGE> 104
MOUTHPIECE SPORTS & ENTERTAINMENT
SPORTS REPRESENTATION & MARKETING
9200 SUNSET BOULEVARD, PENTHOUSE 2
LOS ANGELES, CALIFORNIA 90069
TELEPHONE: 310-288-0551
FACSIMILE: 310-288-0557
TELECOPY COVER SHEET
DATE: 1-30-98
TO: John Holmes
FROM: Lee Kolligian
TELECOPY NO. CALLED: (503) 244-9956
TOTAL # OF PAGES: 8 (including cover sheet)
- -------------------------------------------------------------------------------
If you do not receive all of the pages of this telecopy, please call
310-288-0551.
- -------------------------------------------------------------------------------
MESSAGE:
- -------------------------------------------------------------------------------
This message is intended only for the use of the individual or entity to which
it is addressed and may contain information that is privileged, confidential
and exempt from disclosure. If you receive this communication in error,
please notify us immediately by telephone and return the original message to
the above address.
<PAGE> 105
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 1st day of
January 1, 1998 by and between Nostalgia Broadcasting Corp (aka NBG Radio
Network), a Nevada Corporation with principal offices at One Lincoln Center,
10300 SW Greenburg Road, Suite 390, Portland, OR 97223 ("NBG") and Kerri Strug
("Provider") with offices for purposes of this Agreement at 9200 Sunset Blvd.
Penthouse 2, Los Angeles, CA 90069.
PREMISES
WHEREAS, NBG wishes to obtain the services of Provider in hosting a daily
2-minute vignette show to be named later (the "Services"); and
WHEREAS, Provider is in the business of providing the Services required by
NBG;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, NBG and Provider agree
as follows:
SECTION 1 - ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT
A. NBG retains Provider to perform the Services to the standards
hereafter set forth and to perform such other services as are
reasonably requested by NBG in the form of station promos and
identifications.
B. The term of this Agreement ("Term") shall be one (1) year from the
date the Services are initiated (i.e., March 1, 1998 -- the date of
the first recording) (the "Commencement Date"). The Term hereof shall
be automatically renewed for successive one (1) year periods unless
earlier terminated pursuant to the provisions hereof. As used herein,
"Term" shall include the original Term and any extensions or renewals
thereof.
SECTION 2 - THE PROGRAM AND COMPENSATION
A. The Program will consist of a radio show lasting two (2) minutes per
show. Provider will be the sole host of the Program (unless otherwise
agreed to by Provider) and Provider will host two hundred and sixty
(260) episodes per year for each year during the Term hereof, unless
Provider is unable to do so due to illness or emergency. The content
of the Program will be sports, health, and fitness. The Program will
be produced out of a studio provided by NBG, all costs of which shall
be the responsibility of NBG.
1
<PAGE> 106
B. NBG shall compensate Provider for the services of Provider in the
following manner:
(1) NBG shall pay Provider the sum of Five Hundred Dollars ($500.00) in
cash for each recording session of the Program hosted by Provider. NBG
shall pay Provider amounts due from recording sessions on the 15th days of
each month. Each recording session shall last approximately 1 hour.
(2) Within thirty (30) days after the end of each calendar quarter (i.e.
thirty (30) days after each March 31, June 30, September 30 and December
31) or any portion of a calendar quarter (in the event this Agreement
expires or is terminated on a date other than the end of a calendar
quarter) during the Term hereof, NBG shall pay Provider an amount equal
to ten percent (10.0%) of the Net Revenues generated by the Program (for
the preceding quarter) hereinafter "the Standard Revenue Share"),
accompanied by a true and accurate accounting, set forth in sufficient
detail. In the event income generated by Program is a direct result of a
lead/contact supplied to NBG by Provider, the percentage shall be fifteen
(15.0%) with respect to such income.
(3) Within ninety (90) days of receipt of a trading symbol from the
National Association of Security Dealers, Inc., Provider shall be issued
five thousand (5,000) shares of NBG Rule 144 stock. The specific terms
of such issuance shall be governed by a separate agreement the terms of
which are mutually agreeable to the parties hereto.
(4) In the event that NBG and Provider agree to a remote or special
program ("Remote Program"), then NBG will market the Remote Program for
cash and Provider is entitled to and shall be paid ten percent (10.0%) of
the Net Revenues for each Remote Program performed, which shall be payable
to Provider within thirty (30) days of such performance and such payment
shall be delivered to Provider with a true and accurate accounting, set
forth in sufficient detail.
(5) In the event that NBG and Provider agree that a "Sports Weekend", a
"Sports Cruise", or similar special event (in any case, "Special Event")
utilizing the Program or for which the format of the Program is
appropriate, Provider shall be paid (a) ten percent (10.0%) of the Net
Revenues generated by such Special Event, with a guaranteed minimum of
Five Thousand Five Hundred Dollars ($5,500.00) plus (b) the travel and
other expenses incurred by Provider in connection with such Special Event
for himself and spouse ("Provider and Family"), including but not limited
to (i) the cost of travel for Provider and Family to the sites of the
Special Event, and in the event of a cruise, to the point of embarkation
and from the point of disembarkation; (ii) all reasonable lodging
accommodations for Provider and Family; and (iii) in the event of a
cruise, Provider and Family will be provided (at no cost to Provider and
Family) with accommodations consisting of, at a minimum, an outside suite.
2
<PAGE> 107
C. As used in this Section 2, "Net Revenues" shall mean the total of all
revenues with respect to the Program including, without limitation,
all revenue from (i) national advertising (minus any agency
commissions, not to exceed fifteen percent (15.0%)); (ii) any
merchandising with respect to the Program (minus direct costs of
merchandise), (iii) any rebroadcasting or retransmission of the
Program (whether by radio, internet, or otherwise), (iv) any
electronic versions or audio reproductions of the Program, and (v)
any printing, publishing or licensing of any written or electronic
form of the Programs or portions or combinations thereof, including,
but not limited to, all forms of electronic, magnetic, digital,
optical and laser-based information storage and retrieval systems,
floppy diskette based software, CD-ROM, interactive software and
compact discs, floptical disks, silicon chip, on-line electronic or
satellite-based data transmission and other such systems, and any
other device or medium for electronic reproduction, publication,
distribution or transmission, whether now or hereafter known or
developed.
D. Provider shall have the right, upon reasonable notice and not more
frequently than once per each year of the Term hereof, to audit or
cause an audit of the books of NBG to be made so that Provider can
verify all amounts due Provider. In the event NBG has an independent
accountant review or audit the financial statements of NBG during the
Term hereof, Provider shall be provided true and accurate copies of
the same.
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and requests
given by the NBG employees or other representatives designated by NBG
and such instructions or requests shall be binding on NBG. NBG
represents and warrants that all material furnished to Provider for
use in any of the Programs or for promotional purposes relating
thereto will be original to NBG or in the public domain so that
Provider's use of the material will not infringe upon or violate the
rights of any person or entity.
C. Unless otherwise agreed in writing, NBG shall be the sole owner of
all materials which are prepared by the Provider on behalf of NBG. It
is acknowledged and agreed that unless otherwise agreed in writing,
all materials produced by Provider are "works made for hire" and the
copyright and all other proprietary rights thereto are the property
of NBG only.
3
<PAGE> 108
SECTION 4 - PROVIDER NOT AN AGENCY OR EMPLOYEE OF NBG
A. Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of NBG or otherwise represent or bind NBG. For the
purposes of this Agreement, Provider is an independent contractor.
SECTION 5 - MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been duly
authorized by all requisite corporate action of NBG. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under this Agreement are
cumulative and not exclusive of any other rights and remedies provided by
law and/or equity. No delay or failure on the part of either party in the
exercise of any right or remedy arising from a breach of this Agreement
shall operate as a waiver of any subsequent right or remedy arising from a
subsequent breach of this Agreement. The consent of any party where required
hereunder to any act or occurrence shall not be deemed to be a consent to
any other act or occurrence.
D. Assignment/Binding Obligation.
(i) Neither this Agreement nor any right created by it shall be
assignable by either party without the prior written consent of the
other;
(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties hereto and their
successors, any rights or remedies under or by reason of this
Agreement, unless this Agreement specifically states such intent;
(iii) This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail, postage
prepaid, or when deposited with a public telegraph company for transmittal
or when sent by facsimile transmission, charges prepaid, provided that the
communication is addressed as follows:
4
<PAGE> 109
(i) In the case of Provider to:
Ms. Kerri Strug
c/o Mr. Lee Kolligian
9200 Sunset Blvd, Penthouse 2
Los Angeles, CA 90069
(ii) In the case of NBG to:
NBG Radio Network
Attn: General Counsel
10300 SW Greenburg Road, Suite 390
Portland, OR 97223
or to such other person or address designated in writing by NBG or Provider
to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any number
of counterparts but the aggregate of the counterparts together constitute
only one and the same instrument.
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if it never contained
any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, and any dispute arising hereunder shall be adjudicated in any
federal or state court sitting in Washington County Oregon.
J. Attorney's Fees. If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover actual
attorney's fees, court costs, and other costs incurred in proceeding with
the action from the other party. The attorney's fees, court costs or other
costs, may be ordered
5
<PAGE> 110
by the court in its decision of any action described in this paragraph or
may be enforced in a separate action brought for determining attorney's
fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. NBG and Provider agree to indemnify, defend and hold each
other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs, and expenses, including without limitation,
interest, penalties, court fees, and attorneys' fees and expenses
("Losses") asserted against or imposed or incurred by either party by
reason of or resulting from a breach of any representation, warranty,
covenant condition or agreement of the other party to this Agreement, or by
any Losses arising out of or with respect to any act, omission or failure
to act of or by the other party hereto.
O. Facsimile Counterparts. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party, the party
who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
P. Similar Program. Provider agrees that he will not approach another radio
syndicator or business and use this formatted material that is used in the
Program without the involvement of NBG.
Q. Name, Photograph, Advertiser & Likeness Approval. The use of Provider's
name, biography, photograph, portrait, picture, caricature, or likeness is
subject to approval by Provider prior to any use thereof. Provider also has
the right to refuse any advertiser associated with the Program.
R. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third party,
except as may be agreed to in writing by the parties hereto.
S. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
6
<PAGE> 111
T. Force Majeure. If production of the Program is prevented or
canceled because of Act of God, inevitable accident, fire,
strike, lockout or other labor dispute, riot or other civil
commotion, act of public enemy, enactment, rule, order or act of
any government or governmental instrumentality (federal, state
or local), failure of production facilities, failure or delay or
transportation facilities, or other cause of a similar or
different nature not within NBG's control, then the Term shall
be extended by the period of interruption.
U. Termination. This Agreement may only be terminated: (i) by
Provider upon ninety (90) days prior written notice to NBG; or
(ii) by NBG upon ninety (90) days prior written notice to
Provider solely upon the occurrence of any of the following
events:
(a) Upon the death, disability or incapacity of Provider so that
Provider is no longer able to materially perform his services
hereunder; or
(b) Any malfeasance, non-feasance or other material failure of
Provider to materially perform his services hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.
<TABLE>
<S> <C>
NBG RADIO NETWORK "PROVIDER"
By: /s/ JOHN A. HOLMES - GM /s/ KERRI A. STRUG
------------------------------ ---------------------
Name & Title Kerri Strug
</TABLE>
7
<PAGE> 112
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 5th day of
December, 1997 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Ollie Holmes ("Provider") with
offices for purposes of this Agreement at 14755 SW Osprey, #1031, Beaverton, OR
97007.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in writing a
series of short form entertainment vignettes to be named later (the
"Services"); and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 -- ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia and to perform such other
services as are reasonably requested by Nostalgia.
B. The term of this Agreement ("Term") shall be so long as required to
accomplish the project more particularly described on Exhibit "A" hereto
which is incorporated herein by this reference.
SECTION 2 -- PAYMENT FOR THE SERVICES
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia, 5% net commission on all
advertising/product dollars generated from the syndication of the
Program. The 5% net commission to be paid Provider will become effective
beginning with all advertisements which air(ed) in the Program after
July 1, 1997. All spots that aired in the Program before July 1, 1997
will not have any commissions paid to Provider by Nostalgia.
* NET IS TOTAL ADVERTISING DOLLARS MINUS ANY AGENCY COMMISSIONS
<PAGE> 113
SECTION 3 -- MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request given
by the Nostalgia employees or other representatives designated by
Nostalgia and such instructions or requests shall be binding on
Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner of
all materials which are prepared by the Provider on behalf of Nostalgia.
It is acknowledged and agreed that unless otherwise agreed in writing,
all materials produced by Provider are "works made for hire" and the
copyright and all other proprietary rights thereto are the property of
Nostalgia only.
SECTION 4 -- PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia. For
the purposes of this Agreement, Provider is an independent contractor.
SECTION 5 -- MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the parties
hereto.
C. Waiver. All the rights and remedies of either party under this Agreement
are cumulative and not exclusive of any other rights and remedies
provided by law and/or equity. No delay or failure on the part of either
party in the exercise of any right or remedy arising from a breach of
this Agreement shall operate as a waiver of any subsequent right or
remedy arising from a subsequent breach of this Agreement. The consent
of any party where required hereunder to any act or occurrence shall not
be deemed to be a consent to any other act or occurrence.
<PAGE> 114
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be
assignable by either party without the prior written consent of
the other;
(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their
successors, any rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal or when sent by facsimile
transmission, charges prepared provided that the communication is
addressed:
(i) In the case of Provider:
Ollie Holmes
14755 SW Osprey, #1031
Beaverton, OR 97007
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia
or Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely
for convenience. If a conflict exists between any heading and the text
of this Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
122
<PAGE> 115
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover actual
attorney's fees, court costs, and other costs incurred in proceeding with
the action from the other party. The attorney's fees, court costs or other
costs, may be ordered by the court in its decision of any action described
in this paragraph or may be enforced in a separate action brought for
determining attorney's fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and hold
each other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs, and expenses, including without limitation,
interest, penalties, court fees, and attorneys' fees and expenses asserted
against or imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant condition or
agreement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason of
this Agreement, unless this Agreement specifically states such intent.
<PAGE> 116
P. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic
facsimile as a signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another
radio syndicator or business and use this formatted material that is
used in the Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may
determine that a special live program or remote is necessary for the
Program. If both parties, Nostalgia and Provider, agree to a remote
or special program, then Nostalgia will market the remote for cash
and Provider is entitled to 10% of the net profits for each special
Program performed. All costs for such a remote to be mutually agreed
upon.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any
use thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third
party, other than their attorney or spouses.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES/GM
---------------------------------
Name and Title
"PROVIDER"
By: /s/ OLLIE HOLMES
---------------------------------
Name and Title
<PAGE> 117
EXHIBIT "A"
Description of Services:
All writing services necessary to produce 260 shows of 1-2 minutes each for
show named "Celebrity Talk".
<PAGE> 118
FAX COVER SHEET
NBG Radio Network
10300 SW Greenburg Road
Suite 390
Portland, Oregon 97223
USA
(503) 293-2601
Fax: (503) 244-9956
- --------------------------------------------------------------------------------
SENT TO
Company name From
John Holmes
- --------------------------------------------------------------------------------
Attention Date
WARREN DURHAM
-------------------------------------------------------------------------------
Office location Office location
West Coast Division
- --------------------------------------------------------------------------------
Fax number Phone number
(503) 293-2601 ext. 770
- --------------------------------------------------------------------------------
URGENT URGENT URGENT URGENT URGENT
Total pages, including cover: 6
-----
- --------------------------------------------------------------------------------
COMMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
<PAGE> 119
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 15 day of
Sept., 1997 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Warren Durham ("Provider")
with offices for purposes of this Agreement at 901 W. Rolland Avenue, Spokane,
WA 99218.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting a
long-form Big Band show known as "Big Band Classics" (the "Services"); and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 - ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the services to the standards
hereafter set forth as directed by Nostalgia and to perform such other
services as are reasonably requested by Nostalgia in the form of
station promos and identifications.
B. The term of this Agreement ("Term") shall be one (1) year from the
signing of this Agreement by both parties.
SECTION 2 - THE PROGRAM AND COMPENSATION
A. The Program will consist of a radio show lasting 1 hour per show, and
Provider will host 165 episodes. The content of the Program will be
Big Band music. The Program will be produced out of a studio provided
by Nostalgia.
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia 1 sixty-second commercial spot
within the Network commercial availability inside the Program.
Nostalgia must approve all advertisers and advertising content
submitted by Provider prior to transmission to affiliates, which
approval shall not be unreasonably withheld. Provider shall submit
<PAGE> 120
all advertising copy to Nostalgia, with an identification of the
advertisers, to Nostalgia no later than the 15th of each month prior
to scheduled transmission which typically takes place the last day on
the month. Company will supply Warren proofs of performance
(transmission to Stations) as often as may be reasonably requested by
Provider, but not more than once per month.
B. In the event that Nostalgia and Provider agree to a remote or special
program ("Remote Program"), then Nostalgia will market the Remote
Program for cash and Provider is entitled to and shall be paid ten
percent (10.0%) of the Net Revenues for each Remote Program performed,
which shall be payable to Provider within thirty (30) days of such
performance and such payment shall be delivered to Provider with a
true and accurate accounting, set forth in sufficient detail.
C. In the event that Nostalgia packages the Program in respect to
merchandising, rebroadcasting or retransmission of the Program, any
electronic, magnetic, digital, optical, or interactive software, and
this marketing effort involves cash, then Provider is entitled to ten
percent (10.0%) of these net revenues.
Net revenues shall mean the total of all revenues minus agency
commissions or product development costs as outlined in Section 2.
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request
given by the Nostalgia employees or other representatives designated
by Nostalgia and such instructions or requests shall be binding on
Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner
of all materials which are prepared by the Provider on behalf of
Nostalgia. It is acknowledged and agreed that unless otherwise agreed
in writing, all materials produced by Provider are "works made for
hire" and the copyright and all other proprietary rights thereto are
the property of Nostalgia only.
SECTION 4 - PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia.
For the purposes of this Agreement, Provider is an independent contractor.
<PAGE> 121
A. All previous agreements between Nostalgia or MultiMedia Access and
Provider are considered void including the agreement dated April 3,
1996.
SECTION 5 -- MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the
parties hereto.
C. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided by law and/or equity. No delay or failure on the
part of either party in the exercise of any right or remedy arising
from a breach of this Agreement shall operate as a waiver of any
subsequent right or remedy arising from a subsequent breach of this
Agreement. The consent of any party where required hereunder to any
act or occurrence shall not be deemed to be a consent to any other
act or occurrence.
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be
assignable by either party without the prior written consent of
the other;
(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their
successors, any rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal or when sent by facsimile
transmission, charges prepared provided that the communication is
addressed:
(i) In the case of Provider to:
Warren Durham
901 W. Rolland Avenue
Spokane, WA 99218
<PAGE> 122
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia
or Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely
for convenience. If a conflict exists between any heading and the
text of this Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
H. Effect of Partial Invalidity. In the event that any one or more of
the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, but this Agreement shall be constructed
as if it never contained any such invalid, illegal, or unenforceable
provisions.
I. Controlling Law. The validity, interpretation, and performance of
this Agreement shall be controlled by and construed under the laws of
the State of Oregon, the state in which this Agreement is being
executed.
J. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled
to recover actual attorney's fees, court costs, and other costs
incurred in proceeding with the action from the other party. The
attorney's fees, court costs or other costs, may be ordered by the
court in its decision of any action described in this paragraph or
may be enforced in a separate action brought for determining
attorney's fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
<PAGE> 123
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and hold
each other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs, and expenses, including without limitation,
interest, penalties, court fees, and attorneys' fees and expenses asserted
against or imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant condition or
agrement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason of
this Agreement, unless this Agreement specifically states such intent.
P. Facsimile Counterparts. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party, the party
who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another radio
syndicator or business and use this formatted material that is used in the
Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine
that a special live program or remote is necessary for the Program. If
both parties, Nostalgia and Provider, agree to a remote or special
program, then Nostalgia will market the remote for cash and Provider is
entitled to 50% of the net profits for each special Program performed.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any use
thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third party.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
<PAGE> 124
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES GM 9/15/97
-------------------------------
Name and Title
"PROVIDER"
By: /s/ WARREN DURHAM
-------------------------------
Name and Title
<PAGE> 125
Vignettes/No. 2
Revised: 6/10/97
SERVICES AGREEMENT
(THE "SPORTS MEMORIES" SHORT VIGNETTES)
This Services Agreement ("Agreement") is made effective this 16th day of July,
1997 by and between Nostalgia Broadcasting Corporation (a.k.a. NBG Radio
Network), with its principal office at One Lincoln Center, 10300 S.W. Greenburg
Road, Suite 390, Portland, OR 97223 ("Nostalgia") and Rich Barry, with his
office for purposes of this Agreement located at 5240 Broadmoor Bluffs Drive,
Colorado Springs, CO 80906 ("Barry").
WHEREAS, Nostalgia wishes to retain the services of Barry in hosting a
series of short form radio sports vignettes to be named "Sports Memories" (the
"Program"); and
WHEREAS, Barry desires to provide the services required by Nostalgia to
produce the Program according to the terms of this Agreement;
NOW THEREFORE, in consideration of the mutual promises, covenants, and
agreements contained herein, and for other good and valuable considerations,
the receipt and adequacy of which is expressly acknowledged, Nostalgia and
Barry Agree as follows:
SECTION I - ENGAGEMENT OF BARRY AND TERM OF AGREEMENT.
1. Nostalgia retains Barry to host the Program as produced by Nostalgia and to
perform such other services as are reasonably incidental to that
responsibility.
2. The term of this Agreement shall be for one (1) year from the earlier of
the following two dates (the "Commencement Date"): (a) the date the Program
is initiated (i.e. the date of the first show); or (b) June 15, 1997. If
the first show has not been aired on or before June 15, 1997, Barry shall
have the right to extend the commencement date until July 15, 1997 or.
alternatively, to terminate this Agreement without further obligations or
liabilities by one party to the other.
SECTION II - THE PROGRAM AND COMPENSATION.
1. The Program. The Program will consist of a radio show lasting 1 to 3
minutes per show, and Barry will host 260 episodes. Barry will provide all
services which are ordinarily rendered by the host of a radio show similar
to the Program (the "Host Services"), and Nostalgia will supply those
services ordinarily provided by a producer/director/sponsor of programming
similar to the Program (the "Producer Services"), including but not limited
to the following: (a) all production services, equipment and facilities;
(b) normal assistance to the host regarding content and scripts, (c) all
writing services, and (d) sound bites, if and when appropriate, from
Nostalgia's collection.
The shows shall be pre-recorded by Nostalgia at Nostalgia's sole expenses
in a reasonable number of "bunches" so that Barry does not have to spend
excessive time or effort on the
1
<PAGE> 126
Program. The parties estimate that a "bunch" of 75 vignettes should take no
more than one full day to record. Approximately 55 vignettes have already
been pre-recorded
3. Compensation. Nostalgia shall compensate Barry in the following manner:
Upon execution of this Agreement, Barry shall receive from Nostalgia
$1,000.00 (One Thousand and 00/100 Dollars). Within 15 days after the end
of each calendar quarter (assuming for contractual purposes that the first
quarter ends on 9/30/97), Barry shall also receive ten percent (10%) of the
net profits generated by the Program (for the preceding quarter)
accompanied by a reasonably detailed accounting, unless the advertising
dollars generated are a direct result of a lead/contact supplied to
Nostalgia by Barry in which instance the percentage will be fifteen percent
(15%). Barry shall also receive Four Thousand (4,000) shares of Rule 144
stock in Nostalgia which will be outlined in a separate agreement. Net
profits is total advertising dollars and other revenues generated by
Program minus any advertising agency commissions. Barry is hereby
guaranteed revenues of $7,500 total as part of his 10% net profit.
5. Location, Remotes & Special Programs. The Program will originate in
Portland, Oregon or at such other locations as are agreed to by the
parties. From time to time, Nostalgia may determine that a special live
program or remote is necessary for the Program. If both parties, Nostalgia
and Barry, agree to a remote or special program, then Nostalgia will market
the remote from that location.
6. Noncompete. Barry agrees that during the term of this Agreement, Barry
shall not provide substantially similar sports vignette broadcasting
services to any other radio syndication or business without the prior
written consent of Nostalgia; provided, however, that Barry shall be free
during the term of this Agreement to engage in other business, personal, or
compensated activities which do not interfere with the Host Services
provided to Nostalgia, including without limitation providing television
and radio game-day commentary on basketball and other sports competitions,
providing non-regular and special radio and/or television interviews,
attending celebrity event, endorsing products or companies, etc.
7. Name, photograph, & Likeness Approval. The use of any photograph or
likeness of Barry or any other promotional use of Barry's name is subject
to approval by Barry prior to any use thereof. In that connection, Barry
hereby consents to Nostalgia's use hereof in connection with reasonable
efforts the Company deems appropriate for marketing the Program; provided,
however, that Barry shall have the right to review and approve any press
releases proposed to be issued by Nostalgia disclosing the fact and terms
of this agreement prior to issuance of any such press release.
8. Regulatory Compliance. Barry agrees to use best efforts during the
terms of this Agreement to comply with any and all state and federal laws,
rules and regulations applicable to the Program and to radio shows of this
type. Nostalgia will provide Barry with the applicable rules in that
regard.
9. Brokers. Nostalgia represents that there are no brokers or finders
involved in the contemplated transaction. Barry has an agent who will be
compensated by Barry.
2
<PAGE> 127
SECTION III - MANNER OF WORK
1. Barry and Nostalgia each agrees to perform the ordinary and necessary
host (or producer) services for the Program in good faith and in a
professional and workmanlike manner, consistent with the customs, practices
and standards in the industry.
2. Barry shall be entitled to rely upon the instructions given by
designated Nostalgia employees, agents and representatives, and such
instructions shall be binding on Nostalgia.
3. Unless otherwise agreed in writing, Nostalgia shall be the sole owner
of all materials which are prepared by Barry for the Program. It is
acknowledged and agreed that, unless otherwise agreed in writing, all
materials produced by Barry are "works made for hire" and the copyright and
all other proprietary rights thereto are solely the property of Nostalgia.
SECTION IV - BARRY NOT AN AGENT OF NOSTALGIA
Barry shall not be deemed an employee of Nostalgia, but instead shall be
an independent contractor. In no event shall Barry be considered an agent or
representative of Nostalgia for purposes of committing Nostalgia to third
parties, and no act or omission by Barry shall bind Nostalgia in any way.
SECTION V. MISCELLANEOUS
1. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
2. Headings and Captions. The headings of paragraph are included solely
for convenience. If a conflict exists between any heading and the text of
this Agreement, the text shall control.
3. Entire Agreement. This instrument and any exhibits to this instrument
contain the entire Agreement between the parties. It may be executed in any
number of counterparts, but the aggregate of the counterparts together
constitute only one and the same instrument. If any general term or
provision conflicts with a specific term or provision, the specific
provision shall prevail.
4. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such defect shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if it never contained any such invalid, illegal, or
unenforceable provision.
5. Amendment. This Agreement may be amended or modified at any time, but
such amendment or modification shall be made only by an express writing
executed by the parties hereto.
6. Waiver. The rights and remedies of either party to this Agreement are
cumulative and not exclusive of any other rights and remedies provided by law
and/or equity. No delay or failure on the part of either party in the exercise
of any right or remedy arising from a breach of this
3
<PAGE> 128
Agreement shall operate as a waiver of any subsequent right or remedy arising
from a subsequent breach of this Agreement. The consent of any party where
required hereunder to any act or occurrence shall not be deemed to be a consent
to any other act or occurrence.
7. Assignment. Neither this Agreement, nor any right created by it, shall be
assignable by either party without the prior written consent of the other;
8. Confidentiality. Each party hereby agrees that the terms of this Agreement
shall remain confidential and shall not be revealed or disclosed to any person,
other than their attorney and spouse, unless mandated by law or required by a
legal proceeding.
9. Mediation and/or Arbitration of Disputes. Any dispute as to the terms or
performance of the Agreement shall first be mediated in good faith and if not
resolved shall be subject to mandatory binding arbitration pursuant to the
Portland (Oregon) Arbitration Associated and Multnomah County Arbitration Rules.
10. Litigation, Fees and Costs. The prevailing party in any litigation between
the parties for any alleged breach of this Agreement shall be entitled to
receive from the non-prevailing party, in addition to costs and disbursements
reasonably incurred, such reasonable attorney fees as shall be set by the court
or presiding arbitrator in which the litigation is tried, heard or decided.
11. Controlling Law. This Agreement shall be governed by and construed in
accordance with laws of the State of Oregon, and any dispute arising hereunder
shall be adjudicated solely within the Oregon courts. The parties hereby
consent to the personal jurisdiction of the Oregon courts.
12. Notices. Any notice or communication required or permitted must be in
writing and shall be deemed to be properly given when delivered in person; when
deposited in the United States mail for transmittal by certified or registered
mail, postage prepaid; when deposited with a public telegraph company for
transmittal; or when sent by facsimile transmission, charges pre-paid. Any
written notice or communication shall be deemed sufficient if delivered or
addressed as follows:
(a) In the case of Barry to: Rick Barry
5240 Broadmoor Bluffs Drive
Colorado Springs, CO 80906
With a copy to: Leland Faust
Career Sports International
One Montgomery Street
Telesis Tower, Ste. 2525
San Francisco, CA 94104
or to any other authorized agent or representative of Barry as designated in
writing by Barry.
4
<PAGE> 129
(b) In the case of Nostalgia: Nostalgia Broadcasting Corp.
Attention: John A. Holmes
10300 SW Greenburg Road, Ste. 390
Portland, OR 97223
or to any other authorized agent or representative of Nostalgia as designated
in writing by Nostalgia.
13. Time is of the Essence. Time is of the essence as to this Agreement and of
each and every provision hereof.
14. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute each other and further
documents and take such other and further actions as may be necessary of
convenient to effect the transactions described herein.
15. Further Actions. From time to time, each party agrees at their expense, to
take actions and to execute and deliver documents as may be reasonably
necessary to effectuate the purposes of this Agreement.
16. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon an person, other than the parties hereto
and their successors, any rights or remedies under this Agreement.
17. Facsimile Counterparts. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party, the party who
receives the transmission may rely upon the electronic facsimile as a signed
original of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date herein
above written.
Nostalgia Broadcasting Corporation:
By: /s/ JOHN A. HOLMES G.M.
-------------------------
John A. Holmes, G.M.
Authorized Representative of Nostalgia
/s/ RICK BARRY
--------------------------
Rick Barry
5
<PAGE> 130
Approved as to form:
- ------------------------------------
Wendi Weiss, Attorney for Nostalgia
/s/ STEPHEN E. CLARK
- ------------------------------------
Stephen E. Clark, Attorney for Barry
6
<PAGE> 131
Approved as to form:
/s/ [SIG]
- ------------------------------------
Wendi Weiss, Attorney for Nostalgia
/s/ STEPHEN E. CLARK
- ------------------------------------
Stephen E. Clark, Attorney for Barry
6
<PAGE> 132
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 4 day of April
1997 by and between Nostalgia Broadcasting Corp, a Nevada Corporation with
principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite 390,
Portland, OR 97223 ("NOSTALGIA") and Peter Jacobsen Enterprises ("Provider")
with offices for purposes of this Agreement at 8700 SW Nimbus Ave., Ste. B,
Beaverton, OR 97008.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting a
series of short form vignettes named, "Tour Talk with Peter Jacobsen" (the
"Services") or ("the Program"); and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 - ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia.
B. The term of this Agreement ("Term") shall be so long as required to
accomplish the project more particularly described on Exhibit "A"
hereto which is incorporated herein by this reference. It is
anticipated that one recording session per month for a period of 12
months should accomplish the project. Average recording session length
- 1 hr.
SECTION 2 - PAYMENT FOR THE SERVICES
Nostalgia shall compensate Provider in the following manner:
A. On a quarterly basis Provider shall receive from Nostalgia, 10% net
commission on all advertising dollars generated from the syndication
of the Program, both during and subsequent to the term of this
Agreement, and 15% net commission on all advertising dollars generated
from the syndication of the Program, both during and subsequent to the
term of this Agreement, if the advertising dollars were generated from
a lead/contact supplied to Nostalgia by Provider. Provider will
receive $500 cash at/and for each recording session in conjunction
with the Program.
Provider shall also receive 4000 shares of Rule 144 stock in Nostalgia
Broadcasting Corp. which will be outlined in a separate agreement.
Provider will receive stock certificate within 90 days of Company
receiving their trading symbol.
*NET IS TOTAL ADVERTISING DOLLARS MINUS ANY AGENCY COMMISSIONS.
<PAGE> 133
B. Provider and his representatives shall be entitled to inspect and copy all
financial records of Nostalgia relating to the advertising dollars
generated from syndication of the Program. Nostalgia shall provide Provider
with quarterly financial reports setting forth the results generated by
syndication of the Program.
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry. Scheduling shall
be mutually agreed upon by Nostalgia and Provider.
B. Provider shall be entitled to rely on the instructions and request given by
the Nostalgia employees or other representatives designated by Nostalgia
and such instructions or requests shall be binding on Nostalgia. Provider
shall have the right to approve content of all Programs.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner of
all materials which are prepared by the Provider on behalf of Nostalgia. It
is acknowledged and agreed that unless otherwise agreed in writing, all
materials produced by Provider are "works made for hire" and the copyright
and all other proprietary rights thereto are the property of Nostalgia
only.
SECTION 4 - PROVIDER NOT AN AGENT OF EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia. For
the purposes of this Agreement, Provider is an independent contractor.
SECTION 5 - MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been duly
authorized by all requisite corporate action. This Agreement constitutes a
valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under this Agreement
are cumulative and not exclusive of any other rights and remedies provided
by law and/or equity. No delay or failure on the part of either party in
the exercise of any right or remedy arising from a breach of this
Agreement shall operate as a waiver of any subsequent right or remedy
arising from a subsequent breach of this Agreement. The consent of any
party where required hereunder to any act or occurrence shall not be
deemed to be a consent to any other act or occurrence.
<PAGE> 134
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be
assignable by either party without the prior written consent of the
other;
(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their successors,
any rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in
the United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company for
transmittal or when sent by facsimile transmission, charges prepared
provided that the communication is addressed:
(i) In the case of Provider to:
Peter Jacobsen Enterprises, Inc.
c/o Ed Ellis
8700 SW Nimbus Ave. Ste. B
Beaverton, OR 97008
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia or
Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
<PAGE> 135
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an action
for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover
actual attorney's fees, court costs, and other costs incurred in
proceeding with the action from the other party. The attorney's fees,
court costs or other costs, may be ordered by the court in its decision of
any action described in this paragraph or may be enforced in a separate
action brought for determining attorney's fees, court costs, or other
costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend, and
hold each other harmless from and against all demands, claims, actions,
losses, damages, liabilities, costs, and expenses, including without
limitation, interest, penalties, court fees, and attorneys' fees and
expenses asserted against or imposed or incurred by either party by reason
of or resulting from a breach of any representation, warranty, covenant
condition or agreement of the other party to this Agreement.
N1. Indemnification. Nostalgia agrees to indemnify, defend and hold Provider
harmless from and against all demands, claims, actions, losses, damages,
liabilities, costs, and expenses, including without limitation, interest,
penalties, court fees, and attorneys' fees and expenses asserted against
or imposed or incurred by any party by reason of or resulting from content
of the Program.
<PAGE> 136
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason of
this Agreement, unless this Agreement specifically states such intent.
P. Facsimile Counterparts. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party, the party
who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another radio
syndicator or business and use this formatted material that is used in the
Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine that
a special live program or remote is necessary for the Program. If both
parties, Nostalgia and Provider, agree to a remote or special program, then
Nostalgia will market the remote for cash and Provider is entitled to 50%
of the net profits for each special Program performed. All costs for such a
remote to be mutually agreed upon and paid for by Nostalgia.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any use
thereof. It is understood that the use of said photograph/likeness of
Provider is granted only to Nostalgia in promotion of Program.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third party,
other than their attorney or spouses.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES / GM
------------------------------
Name and Title
"PROVIDER"
By: /s/ PETER JACOBSEN / By [ILLEGIBLE] 4-1-97
-------------------------------------------------
Name and Title
<PAGE> 137
EXHIBIT "A"
Description of Services:
All hosting services necessary to produce 260 shows of 1 minute each for the
program "Tour Talk with Peter Jacobsen". The hosting services shall not exceed
a period of one year starting from the signing of the Agreement.
<PAGE> 138
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 26 day of
March, 1997 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Daryl Svardh ("Provider") with
offices for purposes of this Agreement at 1023 SE 14th, Portland, OR 97214.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting a
series of short form vignettes to be named "The Modern Rock Minute" (the
"Services") or (the "Program"); and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 - ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia.
B. The term of this Agreement ("Term") shall be so long as required to
accomplish the project more particularly described on Exhibit "A"
hereto which is incorporated herein by this reference.
Section 2 - PAYMENT FOR THE SERVICES
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia $25.00 cash per hour of recording
time and other studio time relating to the recording (for which Nostalgia
will provide her with a desk, computer, the music and telephone), 10% net
commission on all advertising dollars generated from syndication of the
program, both during and subsequent to the term of this Agreement, and 15%
net commission on all advertising dollars generated from the syndication of
the program, both during and subsequent to the term of this Agreement, if
the advertising dollars were generated from a lead/contact supplied to
Nostalgia by Provider.*
* NET IS TOTAL ADVERTISING DOLLARS MINUS ANY AGENCY COMMISSIONS
<PAGE> 139
B. Provider shall be entitled to inspect and copy all financial records of
Nostalgia relating to the advertising dollars generated from syndication of the
program.
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request given by
the Nostalgia employees or other representatives designated by Nostalgia and
such instructions or requests shall be binding on Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner of all
materials which are prepared by the Provider on behalf of Nostalgia. It is
acknowledged and agreed that unless otherwise agreed in writing, all
materials produced by Provider are "works made for hire" and the copyright
and all other proprietary rights thereto are the property of Nostalgia only.
SECTION 4 - PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia. For
the purposes of this Agreement, Provider is an independent contractor. Provider
shall be identified as the Executive Producer of the Program.
SECTION 5 - MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been duly
authorized by all requisite corporate action. This Agreement constitutes a
valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under this Agreement are
cumulative and not exclusive of any other rights and remedies provided by
law and/or equity. No delay or failure on the part of either party in the
exercise of any right or remedy arising from a breach of this Agreement
shall operate as a waiver of any subsequent right or remedy arising from a
subsequent breach of this Agreement. The consent of any party where
required hereunder to any act or occurrence shall not be deemed to be a
consent to any other act or occurrence.
<PAGE> 140
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be assignable
by either party without the prior written consent of the other;
(ii) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any
rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to a officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company for
transmittal or when sent by facsimile transmission, charges prepared
provided that the communication is addressed:
(i) In the case of Provider to:
Daryl K. Svardh
1023 SE 14th
Portland, OR 97214
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia or
Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
<PAGE> 141
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an action
for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover
actual attorney's fees, court costs, and other costs incurred in
proceeding with the action from the other party. The attorney's fees,
court costs or other costs, may be ordered by the court in its decision of
any action described in this paragraph or may be enforced in a separate
action brought for determining attorney's fees, court costs, or other
costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and
hold each other harmless from and against all demands, claims, actions,
losses, damages, liabilities, costs, and expenses, including without
limitation, interest, penalties, court fees, and attorneys' fees and
expenses asserted against or imposed or incurred by either party by reason
of or resulting from a breach of any representation, warranty, covenant
condition or agreement of the other party to this Agreement. Nostalgia
agrees to indemnify Provider and to defend and hold Provider harmless from
and against all demands, claims, actions, losses, damages, liabilities,
cost, and expenses, including without limitation, interest, penalties,
court fees, and attorneys fees and expenses, which may be sought against
her from the syndication or broadcast of the Program.
<PAGE> 142
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason
of this Agreement, unless this Agreement specifically states such
intent.
P. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic
facsimile as a signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another
radio syndicator or business and use this formatted material that is
used in the Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine
that a special live program or remote is necessary for the Program. If
both parties, Nostalgia and Provider, agree to a remote or special
program, then Nostalgia will market the remote for cash and Provider
is entitled to 50% of the net profits for each special Program
performed. All costs for such a remote to be mutually agreed upon.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any
use thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third
party, other than their attorney or spouses.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A HOLMES - GM
- ----------------------------
Name and Title
"PROVIDER"
By: /s/ [SIG]
- ----------------------------
Name and Title
150
<PAGE> 143
EXHIBIT "A"
Description of Services:
All hosting services necessary to produce 260 shows of 1-2 minutes each for
"The Modern Rock Minute".
<PAGE> 144
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 21st day of
January, 1997 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Al Dardis & Associates ("Provider")
with offices for purposes of this Agreement at 320 SW Stark, Suite 415,
Portland, OR 97204.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting a
series of short form vignettes named, "The Flip Side" (the "Services"); and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 -- ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia and to perform such other
services as are reasonably requested by Nostalgia.
B. The term of this Agreement ("Term") shall be so long as required to
accomplish the project more particularly described on Exhibit "A" hereto
which is incorporated herein by this reference.
SECTION 2 -- PAYMENT FOR THE SERVICES.
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia, 10% net commission on all
advertising dollars generated from the syndication of the Program, and
15% net commission on all advertising dollars generated from the
syndication of the Program if the advertising dollars were generated
from a lead/contact supplied to Nostalgia by Provider.
* NET IS TOTAL ADVERTISING DOLLARS MINUS ANY AGENCY COMMISSIONS
<PAGE> 145
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request given
by the Nostalgia employees or other representatives designated by
Nostalgia and such instructions or requests shall be binding on
Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner of
all materials which are prepared by the Provider on behalf of Nostalgia.
It is acknowledged and agreed that unless otherwise agreed in writing,
all materials produced by Provider are "works made for hire" and the
copyright and all other proprietary rights thereto are the property of
Nostalgia only.
SECTION 4 - PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia. For the
purposes of this Agreement, Provider is an independent contractor.
SECTION 5 - MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the parties
hereto.
C. Waiver. All the rights and remedies of either party under this Agreement
are cumulative and not exclusive of any other rights and remedies
provided by law and/or equity. No delay or failure on the part of either
party in the exercise of any right or remedy arising from a breach of
this Agreement shall operate as a waiver of any subsequent right or
remedy arising from a subsequent breach of this Agreement. The consent
of any party where required hereunder to any act or occurrence shall not
be deemed to be a consent to any other act or occurrence.
<PAGE> 146
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be assignable
by either party without the prior written consent of the other;
(ii) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any
rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company for
transmittal or when sent by facsimile transmission, charges prepared
provided that the communication is addressed:
(i) In the case of Provider to:
Al Dardis & Associates
320 SW Stark, Suite 415
Portland, Oregon 97204
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia or
Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
<PAGE> 147
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be constructed as if it never contained
any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover actual
attorney's fees, court costs, and other costs incurred in proceeding with
the action from the other party. The attorney's fees, court costs or other
costs, may be ordered by the court in its decision of any action described
in this paragraph or may be enforced in a separate action brought for
determining attorney's fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of each
and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and hold
each other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs, and expenses, including without limitation,
interest, penalties, court fees, and attorneys' fees and expenses asserted
against or imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant condition or
agreement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or implied,
is intended to confer upon any person, other than the parties hereto and
their successors, any rights or remedies under or by reason of this
Agreement, unless this Agreement specifically states such intent.
<PAGE> 148
P. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic
facsimile as a signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another
radio syndicator or business and use this formatted material that is
used in the Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine
that a special live program or remote is necessary for the Program. If
both parties, Nostalgia and Provider, agree to a remote or special
program, then Nostalgia will market the remote for cash and Provider
is entitled to 50% of the net profits for each special Program
performed. All costs for such a remote to be mutually agreed upon.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any
use thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third
party, other than their attorney or spouses.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES, GM
- --------------------------
Name and Title
"PROVIDER"
By: /s/ ALAN DARDIS, PRESIDENT
- ------------------------------
Name and Title
<PAGE> 149
EXHIBIT "A"
Description of Services:
All hosting services necessary to produce 260 shows of 2-3 minutes each for the
program "The Flip Side".
<PAGE> 150
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 26 day of
Sept., 1996 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Mychal Thompson ("Provider") with
offices for purposes of this Agreement at 11745 Riverwood Road, Portland,
Oregon 97219.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting a
series of short form vignettes named, "The Color Of Success" (the "Services")
or ("the Program"); and
WHEREAS, Provider is in the business of providing the services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 - ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia.
B. The term of this Agreement ("Term") shall be so long as required to
accomplish the project more particularly described on Exhibit "A"
hereto which is incorporated herein by this reference. It is
anticipated that one recording session per month for a period of 12
months should accomplish the project.
SECTION 2 - PAYMENT FOR THE SERVICES
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia, 10% net commission on all
advertising dollars generated from the syndication of the Program,
both during and subsequent to the term of this Agreement, and 15% net
commission on all advertising dollars generated from the syndication
of the Program, both during and subsequent to the term of this
Agreement, if the advertising dollars were generated from a
lead/contact supplied to Nostalgia by Provider.
Provider shall also receive 1000 shares of Rule 144 stock in Nostalgia
Broadcasting Corp. which will be outlined in a separate agreement.
* NET IS TOTAL ADVERTISING DOLLARS MINUS ANY AGENCY COMMISSIONS
<PAGE> 151
B. Provider shall be entitled to inspect and copy all financial records of
Nostalgia relating to the advertising dollars generated from syndication
of the Program. Nostalgia shall provide Provider with quarterly financial
reports setting forth the results generated by syndication of the Program.
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request given
by the Nostalgia employees or other representatives designated by
Nostalgia and such instructions or requests shall be binding on Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner of
all materials which are prepared by the Provider on behalf of Nostalgia.
It is acknowledged and agreed that unless otherwise agreed in writing, all
materials produced by Provider are "works made for hire" and the copyright
and all other proprietary rights thereto are the property of Nostalgia
only.
SECTION 4 - PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia. For the
purposes of this Agreement, Provider is an independent contractor.
SECTION 5 - MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been duly
authorized by all requisite corporate action. This Agreement constitutes a
valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the parties hereto.
C. Waiver. All the rights and remedies of either party under this Agreement
are cumulative and not exclusive of any other rights and remedies provided
by law and/or equity. No delay or failure on the part of either party in
the exercise of any right or remedy arising from a breach of this
Agreement shall operate as a waiver of any subsequent right or remedy
arising from a subsequent breach of this Agreement. The consent of any
party where required hereunder to any act or occurrence shall not be
deemed to be a consent to any other act or occurrence.
<PAGE> 152
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be assignable
by either party without the prior written consent of the other;
(ii) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any
rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company for
transmittal or when sent by facsimile transmission, charges prepared
provided that the communication is addressed:
(i) In the case of Provider to:
Mychal Thompson
11745 Riverwood Rd.
Portland, Oregon 97219
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia or
Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
<PAGE> 153
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the
provisions of this Agreement, the prevailing party shall be entitled to
recover actual attorney's fees, court costs, and other costs incurred in
proceeding with the action from the other party. The attorney's fees, court
costs or other costs, may be ordered by the court in its decision of any
action described in this paragraph or may be enforced in a separate action
brought for determining attorney's fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and
of each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and
hold each other harmless from and against all demands, claims, actions,
losses, damages, liabilities, costs, and expenses, including without
limitation, interest, penalties, court fees, and attorneys' fees and
expenses asserted against or imposed or incurred by either party by reason
of or resulting from a breach of any representation, warranty, covenant
condition or agreement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed or
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason of
this Agreement, unless this Agreement specifically states such intent.
<PAGE> 154
P. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the party
who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another
radio syndicator or business and use this formatted material that is used
in the Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine
that a special live program or remote is necessary for the Program. If both
parties, Nostalgia and Provider, agree to a remote or special program, then
Nostalgia will market the remote for cash and Provider is entitled to 50%
of the net profits for each special Program performed. All costs for such a
remote to be mutually agreed upon.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any use
thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third party,
other than their attorney or spouses.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES - G.M.
----------------------------
Name and Title
"PROVIDER"
By: /s/ MYCHAL THOMPSON
----------------------------
Name and Title
<PAGE> 155
EXHIBIT "A"
Description of Services:
All hosting services necessary to produce 260 shows of 2-3 minutes each for
the program "The Color of Success".
<PAGE> 156
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 24 day of
July, 1996 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Daniel G. Chambers ("Chambers") with
offices for purposes of this Agreement at 5225 Blakeslee Ave, #223, North
Hollywood, CA 91601.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting a
series of celebrity vignettes known as "Celebrity Talk" (the "Services"); and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 -- ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia and to perform such
other services as are reasonably requested by Nostalgia.
B. The term of this Agreement ("Term") shall be so long as required to
accomplish the project more particularly described on Exhibit "A"
hereto which is incorporated herein by this reference.
SECTION 2 -- PAYMENT FOR THE SERVICES
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia $150.00 cash per 6 hour day,
10% net commission on all advertising dollars generated from the
syndication of the Program, and 15% net commission on all advertising
dollars generated from the syndication of the Program if the
advertising dollars were generated from a lead/contract supplied to
Nostalgia by Provider. Chambers will also be issued 1000 shares of
Rule 144 stock in Nostalgia Broadcasting with terms being described
under a separate Agreement.
<PAGE> 157
SECTION 3 -- MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request
given by the Nostalgia employees or other representatives designated
by Nostalgia and such instructions or requests shall be binding on
Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner
of all materials which are prepared by the Provider on behalf of
Nostalgia. It is acknowledged and agreed that unless otherwise agreed
in writing, all materials produced by Provider are "works made for
hire" and the copyright and all other proprietary rights thereto are
the property of Nostalgia only.
SECTION 4 -- PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia.
For the purposes of this Agreement, Provider is an independent contractor.
SECTION 5 -- MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the
parties hereto.
C. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided by law and/or equity. No delay or failure on the
part of either party in the exercise of any right or remedy arising
from a breach of this Agreement shall operate as a waiver of any
subsequent right or remedy arising from a subsequent breach of this
Agreement. The consent of any party where required hereunder to any
act or occurrence shall not be deemed to be a consent to any other
act or occurrence.
<PAGE> 158
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be assignable
by either party without the prior written consent of the other;
(ii) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any
rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company for
transmittal or when sent by facsimile transmission, charges prepared
provided that the communication is addressed:
(i) In the case of Provider to:
Daniel G. Chambers
5225 Blakeslee Ave. #223
North Hollywood, CA 91601
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia or
Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
<PAGE> 159
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover actual
attorney's fees, court costs, and other costs incurred in proceeding with
the action from the other party. The attorney's fees, court costs or other
costs, may be ordered by the court in its decision of any action described
in this paragraph or may be enforced in a separate action brought for
determining attorney's fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and hold
each other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs, and expenses, including without limitation,
interest, penalties, court fees and attorneys' fees and expenses asserted
against or imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant condition or
agreement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed of
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason of
this Agreement, unless this Agreement specifically states such intent.
<PAGE> 160
P. Facsimile Counterparts. If a party signs this Agreement and transmits an
electronic facsimile of the signature page to the other party, the party
who receives the transmission may rely upon the electronic facsimile as a
signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another radio
syndicator or business and use this formatted material that is used in the
Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine that
a special live program or remote is necessary for the Program. If both
parties, Nostalgia and Provider, agree to a remote or special program, then
Nostalgia will market the remote for cash and Provider is entitled to 50%
of the net profits for each special Program performed.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any use
thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third party.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES -- GM
---------------------------------------
Name and Title
"PROVIDER"
By: /s/ DANIEL G. CHAMBERS
---------------------------------------
Name and Title
<PAGE> 161
EXHIBIT "A"
Description of Services:
All hosting services necessary to produce 300 shows of 1-2 minutes each for
"Celebrity Talk" with Danny Chambers
<PAGE> 162
SERVICES AGREEMENT
This Services Agreement ("Agreement") is made effective this 14 day of
July, 1996 by and between Nostalgia Broadcasting Corp, a Nevada Corporation
with principal offices at One Lincoln Center, 10300 SW Greenburg Road, Suite
390, Portland, OR 97223 ("NOSTALGIA") and Dave Simons ("Provider") with offices
for purposes of this Agreement at 14 Carriage Creek Court, Ballwin, MO 63201.
PREMISES
WHEREAS, Nostalgia wishes to obtain the services of Provider in hosting
the series "Dollars & Cents", (the "Services") which is currently aired on
WIBV-AM Radio; and
WHEREAS, Provider is in the business of providing the Services required by
Nostalgia;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which is expressly acknowledged, Nostalgia and Provider
agree as follows:
SECTION 1 - ENGAGEMENT OF PROVIDER AND TERM OF AGREEMENT.
A. Nostalgia retains Provider to perform the Services to the standards
hereafter set forth as directed by Nostalgia and to perform such
other services as are reasonably requested by Nostalgia.
B. The term of this Agreement ("Term") shall be one year and more
particularly described in Exhibit "A" hereto which is incorporated
herein by this reference.
SECTION 2 - PAYMENT FOR THE SERVICES
Nostalgia shall compensate Provider in the following manner:
A. Provider shall receive from Nostalgia, 10% net commission on all
advertising dollars generated from the syndication of the Program,
and 15% net commission on all advertising dollars generated from the
syndication of the Program if the advertising dollars were generated
from a lead/contact supplied to Nostalgia by Provider. Provider shall
also receive 1000 shares of Rule 144 stock in Nostalgia Broadcasting
Corp. which will be outlined in a separate agreement.
* NET IS TOTAL ADVERTISING DOLLARS MINUS ANY AGENCY COMMISSIONS
<PAGE> 163
SECTION 3 - MANNER OF WORK
A. Provider agrees to perform the work in a good and workmanlike manner
consistent with the customs and practices of the industry.
B. Provider shall be entitled to rely on the instructions and request
given by the Nostalgia employees or other representatives designated
by Nostalgia and such instructions or requests shall be binding on
Nostalgia.
C. Unless otherwise agreed in writing, Nostalgia shall be the sole owner
of all materials which are prepared by the Provider on behalf of
Nostalgia. It is acknowledged and agreed that unless otherwise agreed
in writing, all materials produced by Provider are "works made for
hire" and the copyright and all other proprietary rights thereto are
the property of Nostalgia only.
SECTION 4 - PROVIDER NOT AN AGENT OR EMPLOYEE OF NOSTALGIA
Provider's obligations under this Agreement consist solely of the Services
described herein. In no event shall Provider be considered to act as the
employee or agent of Nostalgia or otherwise represent or bind Nostalgia. For
the purposes of this Agreement, Provider is an independent contractor.
SECTION 5 - MISCELLANEOUS
A. Authority. The execution and performance of this Agreement have been
duly authorized by all requisite corporate action. This Agreement
constitutes a valid and binding obligation of the parties hereto.
B. Amendment. This Agreement may be amended or modified at any time and
in any manner only by an instrument in writing executed by the
parties hereto.
C. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and
remedies provided by law and/or equity. No delay or failure on the
part of either party in the exercise of any right or remedy arising
from a breach of this Agreement shall operate as a waiver of any
subsequent right or remedy arising from a subsequent breach of this
Agreement. The consent of any party where required hereunder to any
act or occurrence shall not be deemed to be a consent to any other
act or occurrence.
<PAGE> 164
D. Assignment.
(i) Neither this Agreement nor any right created by it shall be
assignable by either party without the prior written consent of the
other;
(ii) Nothing in this Agreement, expressed or implied, is intended to
confer upon any person, other than the parties and their successors,
any rights or remedies under this Agreement.
E. Notices. Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company or
transmittal or when sent by facsimile transmission, charges prepared
provided that the communication is addressed:
(i) In the case of Provider to:
Dave Simons
14 Carriage Creek Court
Ballwin, MO 63201
(ii) In the case of Nostalgia
Nostalgia Broadcasting Corp.
Attn: Corporate Counsel
10300 SW Greenburg Road Ste. 390
Portland, OR 97223
or to such other person or address designated in writing by Nostalgia or
Provider to receive notice.
F. Headings and Captions. The headings of paragraphs are included solely for
convenience. If a conflict exists between any heading and the text of this
Agreement, the text shall control.
G. Entire Agreement. This instrument and the exhibits to this instrument
contain the entire Agreement between the parties with respect to the
transactions contemplated by the Agreement. It may be executed in any
number of counterparts but the aggregate of the counterparts together
constitute only one and the same instrument.
<PAGE> 165
H. Effect of Partial Invalidity. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Agreement, but his Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
I. Controlling Law. The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the laws of the State
of Oregon, the state in which this Agreement is being executed.
J. Attorney's Fees. If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover actual
attorney's fees, court costs, and other costs incurred in proceeding with
the action from the other party. The attorney's fees, court costs or other
costs, may be ordered by the court in its decision of any action described
in this paragraph or may be enforced in a separate action brought for
determining attorney's fees, court costs, or other costs.
K. Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
L. Mutual Cooperation. The parties hereto shall cooperate with each other to
achieve the purpose of this Agreement, and shall execute such other and
further documents and take such other and further actions as may be
necessary or convenient to effect the transactions described herein.
M. Further Actions. From time to time, each party agrees, at its or their
expense, to take actions and to execute and deliver documents as may be
reasonably necessary to effectuate the purposes of this Agreement.
N. Indemnification. Nostalgia and Provider agree to indemnify, defend and hold
each other harmless from and against all demands, claims, actions, losses,
damages, liabilities, costs, and expenses, including without limitation,
interest, penalties, court fees, and attorneys' fees and expenses asserted
against or imposed or incurred by either party by reason of or resulting
from a breach of any representation, warranty, covenant condition or
agreement of the other party to this Agreement.
O. No Third Party Beneficiary. Nothing in this Agreement, expressed of
implied, is intended to confer upon any person, other than the parties
hereto and their successors, any rights or remedies under or by reason of
this Agreement, unless this Agreement specifically states such intent.
<PAGE> 166
P. Facsimile Counterparts. If a party signs this Agreement and transmits
an electronic facsimile of the signature page to the other party, the
party who receives the transmission may rely upon the electronic
facsimile as a signed original of this Agreement.
Q. Similar Program. Provider agrees that he will not approach another
radio syndicator or business and use this formatted material that is
used in the Program without the involvement of Nostalgia.
R. Remotes & Special Programs. From time to time, Nostalgia may determine
that a special live program or remote is necessary for the Program. If
both parties, Nostalgia and Provider, agree to a remote or special
program, then Nostalgia will market the remote for cash and Provider
is entitled to 50% of the net profits for each special Program
performed. All costs for such a remote to be mutually agreed upon.
S. Name, Photograph, & Likeness Approval. The use of any photograph or
likeness of Provider is subject to approval by Provider prior to any
use thereof.
T. Confidentiality. Each party hereby agrees that the terms hereof are
confidential and shall not be revealed or disclosed to any third
party, other than their attorney or spouses.
U. Brokers. Each party represents that there are no brokers or finders
involved in the contemplated transaction.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
herein above written.
"NOSTALGIA BROADCASTING CORP"
By: /s/ JOHN A. HOLMES - GM
---------------------------
Name and Title
"PROVIDER"
By: /s/ DAVE SIMONS Host - "Dollars and Cents"
-------------------------------------------
Name and Title
<PAGE> 167
EXHIBIT "A"
Description of Services:
All hosting services necessary to produce 52 shows of 2 hours each for the
program "Dollars & Cents" which is flagshipped from WIBV AM Radio.
<PAGE> 168
SIGNATURE PAGE
Pursuant to the requirements of Section 12g of the Securities Exchange Act of
1934, the Registrant certifies that it meets all of the requirements for filing
of Form 10 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
NBG Radio Network, Inc.
Registrant
October 7, 1998 By: /s/ John A. Holmes III
- ----------------- ----------------------------
Date John A. Holmes III
President/CEO/Director