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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-KSB
[ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 000-27053
USARadio.com, Inc.
(formerly known as Ansel Project, Inc.)
(Name of small business issuer in its charter)
Colorado 84-1493151
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2290 Springlake Road, Suite 107
Dallas, Texas 75234
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 972.484.3900
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Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, no par value
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
The issuer's revenues for its most recent fiscal year were
$3,692,244.
The issuer's common stock is not listed on any exchange or
automated quotation system, nor is the issuer aware of any
private transaction occurring in its shares of common stock
during the preceding sixty (60) days. Accordingly, the issuer is
unable to indicate a market value of common equity held by non-
affiliates as of a specified date within such period.
At March 20, 2000, 13,516,720 shares of common stock were
outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement to be delivered to
stockholders in connection with the 2000 Annual Meeting of
Stockholders to be filed with the Commission during the 120 days
following the end of the fiscal year covered by this Report are
incorporated by reference into Part III.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [X]
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USARadio.com, Inc.
FORM 10-KSB
For the Fiscal Year Ended December 31, 1999
Table of Contents
Page
----
PART I.
Item 1. Description of Business....................... 1
Item 2. Description of Property....................... 9
Item 3. Legal Proceedings............................. 10
Item 4. Submission of Matters to a Vote of
Security Holders............................ 10
PART II.
Item 5. Market for Common Equity and
Related Stockholder Matters................. 10
Item 6. Management's Discussion and Analysis
or Plan of Operation........................ 12
Item 7. Financial Statements.......................... 20
Item 8. Changes In and Disagreements With
Accountants on Accounting and
Financial Disclosure........................ 20
PART III.
Item 9. Directors, Executive Officers,
Promoters and Control Persons;
Compliance With Section 16(a) of
the Exchange Act............................. 20
Item 10. Executive Compensation........................ 21
Item 11. Security Ownership of Certain
Beneficial Owners and Management............ 21
Item 12. Certain Relationships and Related
Transactions................................ 21
Item 13. Exhibits and Reports on Form 8-K.............. 21
Signatures.............................................. 22
<PAGE>
PART I
ITEM 1. BUSINESS
THE FOLLOWING DISCUSSION OF OUR BUSINESS CONTAINS FORWARD-
LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE
FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH BELOW UNDER
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS -
BUSINESS RISKS" AS WELL AS ELSEWHERE IN THIS FORM 10-KSB.
General Background
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The company was incorporated on April 9, 1998 under the name
Ansel Project, Inc. in the state of Colorado. Prior to the
merger with USARadio.com described below, we engaged solely in
the business of attempting to locate and negotiate with another
business entity for the merger of that entity into the company.
During the fiscal year ended December 31, 1999, the company
was involved in two transactions involving USARadio.com, Inc., a
Texas corporation organized on March 4, 1985. Specifically, (i)
on November 5, 1999, Corporate Management Services, Inc., the
company's controlling stockholder, sold a majority of the
outstanding shares of our common stock to the USA Radio Network
Trust, the sole stockholder of USARadio.com, and (ii) on
December 21, 1999 we merged with USARadio.com in a statutory
merger pursuant to which we were the surviving corporation. In
connection with the merger, we changed our name to USARadio.com,
Inc.
As a result of these transactions, the controlling
stockholder of USARadio.com became the controlling stockholder of
the company and the principal business operations, assets and
liabilities of USARadio.com became the principal and historical
business operations, assets and liabilities of the company. The
merger was treated as a recapitalization of USARadio.com for
accounting purposes with the company adopting the fiscal year of
USARadio.com. Accordingly, the company now has a December 31 year
end.
Pursuant to the agreement, USARadio Network Trust acquired
850,000 of the 1,230,000 shares of our issued and outstanding
common stock on November 5, 1999. On the same date, the boards
of directors and stockholders of USARadio.com and Ansel Project
approved an Agreement and Plan of Merger, whereby the two
companies would merge, and Ansel Project would continue as the
surviving corporation operating the business previously conducted
by USARadio.com. Pursuant to the terms of the merger, each
outstanding share of the Texas corporation was converted into
4.2368 shares of Ansel Project. As a result, USA Radio Network
Trust, the sole stockholder of the pre-merger USARadio.com,
became the holder of approximately 97.2% of our common stock.
On December 5, 1999, the previous sole officer and director
of the company (namely, George Andrews) resigned and the
stockholders elected Robert Marlin Maddoux and Mark Maddoux as
the new board of directors of USARadio.com, Inc. On that same
date, Marlin Maddoux was elected as our Chief Executive Officer
and President and Mark Maddoux, Marlin Maddoux's son, was elected
our Vice President and Chief Financial Officer.
Business Operations
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USARadio.com, Inc. (also known as USA Radio Network) is a
satellite-delivered radio broadcast network that offers a broad
line of programming content to independent radio stations. Our
programming includes news, sports, music, and general interest
talk programs. Our target market consists of independent radio
stations, both AM and FM, that choose not to become affiliated
with the 3 major radio networks (ABC Radio, NBC, and CBS Radio
Network). As of March 15, 2000, our network was comprised of
approximately 1,200 affiliated radio stations across the nation,
including affiliates in 49 of the top 50 Dominant Market Areas
(DMAs). Our network includes affiliates in markets that represent
approximately 95% of the U.S. population. We simultaneously
broadcast select programming over the Internet.
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We generally offer our radio news and programming to
independent radio stations on a barter basis; that is, in
exchange for advertising time on the station. We then resell the
advertising time to national advertisers and advertising
agencies. We price our advertising time based upon a variety of
factors including the time of day the advertisement will air, the
size of the potential listening audience, the length of the ad
and the number of times the advertisement will run.
Our programs enable independent radio stations to compete
with the major networks by providing them with national quality
programming. The cost to a radio station to produce national
quality news service, talk shows and other programming is
significant, typically beyond the capabilities of most
independent stations. An independent radio station can carry our
news service, talk shows and other programming without incurring
the significant costs of producing such programming.
Our principal executive offices and broadcast center are
located at 2290 Springlake Road, Suite 107, Dallas, Texas 75234
and our telephone number is 972.484.3900. Our website is located
at www.usaradio.com.
Programming
We offer a broad line of programming content to our
affiliates including news and sports and general interest talk
programming. All of our programming is intended for a broader
audience and is free of content likely to be deemed
objectionable.
News and Sports. We offer award-winning top-of-the-hour
newscasts that are provided nationally 24 hours per day, 365 days
per year on our network. Our newscasts are also carried worldwide
on the Armed Forces Radio Service. These five-minute newscasts are
anchored by highly qualified, seasoned broadcasters. We also offer
Newsbreak, a one-minute newscast featuring the top news stories at
the bottom of each hour. Sportscast is a three minute sports update
that is carried at 45 minutes past the hour. Sportscast features
the latest scores, sports gossip, featured personalities and
sports news updates of interest to the sports fan.
In addition, we provide our affiliates with business reports
and coverage of major events and fast-breaking news stories. All
of our news and sports programming is produced by our
professional team of news writers, producers, engineers, and
anchors who operate out of our broadcast center in Dallas, Texas.
We maintain professional news correspondents in Washington D.C.
that cover, among other news sources, the White House, the State
Department, the Pentagon and the Supreme Court. We use
independent correspondents in 45 countries of the world as well
as every state in the U.S.
Long Form and Talk Programming. All of our long form and
talk programming is intended to be provocative, informative and
entertaining. All of our long form and talk programming is
provided to our affiliates live for immediate broadcast. However,
we permit certain of our affiliates to record our long form and
talk programs for rebroadcast at different times.
Our line up of long form and talk programming includes:
* Daybreak USA(TM) is a fast paced and fun-filled morning
magazine show that is designed to attract and maintain
listeners across a broad demographic; however, its
focus is on the key 25-54 market segment. Airing from 4
to 9 a.m. EST, this five-hour program allows us to
serve both the east and west coast stations. Anchored
by Al Lerner and Richard Stevens, Daybreak USA provides
"first hand" coverage of the day's most important news
stories. The show also includes human-interest stories,
interviews with nationally known personalities,
entertainment reports, and other special features.
Because the program is scheduled in "modules,"
affiliate stations are provided the opportunity to
break away to cover local stories, including local
traffic and weather, and then rejoin the network. Since
its launch in 1998, the number of affiliates
broadcasting Daybreak USA has grown from 70 to over
200.
* Point of View(TM) is a daily two-hour call-in talk
program that has been broadcasting nationally for more
than 25 years. Hosted by Marlin Maddoux, our founder,
CEO and President, the program features
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in-depth interviews with outstanding personalities and
newsmakers in the field of politics, entertainment,
religion, finance, education and family issues. Mr.
Maddoux is the President of International Christian
Media and has appeared on such shows as CBS Morning
News, ABC's Nightline, NBC News and CNN. He is the
author of eleven books. Point of View is carried on 250
radio stations and is aired on our network Monday
through Friday, 2 to 4 p.m. EST.
* Your Health Matters is a call-in talk program focused
on a broad variety of health topics, including
allergies, food related disorders, herbal approach to
healing, vitamins, and taking control of your health.
Your Health Matters is hosted by Doug Kaufman, an
author, lecturer and nutritional expert with more than
23 years experience in the diversified health care
industry. This program is available Monday through
Friday, 8 to 11 a.m. EST.
* People to People is a live in-depth counseling program
dealing with people's personal problems, marriage
problems, rearing children, and other counseling needs.
The show features interaction between the hosts and the
callers. Hosted by Bob George and Bob Davis, this
program is available Monday through Friday, 7 to 9 p.m.
EST.
* SportsTalk USAT is a Sunday sports magazine show
designed to provide a positive blend of scores, sports
celebrity guests and a comprehensive wrap-up of all
college and pro sports. SportsTalk USA also goes on
location with remotes from the World Series, Super
Bowl, Final Four and other premiere sporting events.
This program is hosted by David Ross and is available
on Sunday from 10 p.m. to 1 a.m. EST.
* Golden Age of Radio Theater enables listeners to relive
the golden years of radio broadcasting. This program
rebroadcasts such shows as Jack Benny, Dragnet, Fibber
McGee & Molly and X Minus One. Golden Age of Radio
Theater is available Monday through Saturday at 9 p.m.
EST.
* Confident Living is an in-depth program designed to
address the issues relevant to those entering their
middle and later years. The talk show format considers
such topics as caring for aging parents, mentoring
children and grandchildren and financial planning for
the future. Confident Living is co-hosted by veteran
broadcasters Don Hawkins and Eunice Grant. The program
is available on Saturday from 9 to 11 a.m. EST.
* Celebration USA features gospel and country Christian
music, interviews with the artists and "live" concert
segments. This program is hosted by Jack Davis, an
award winning DJ, and is available Sunday at 4 p.m. EST.
* Christian Music America is hosted by Ron Taylor and
provides a popular contemporary music format with songs
from today's top Christian Music artists. Listeners
will hear behind-the-scenes interviews with the
artists, CD and music reviews, a Christian comedy
segment called "The Lighter Side" and other Christian-
music based features. Christian Music America is
available Saturday and Sunday at 11 p.m. and 11 a.m.
EST.
* Contend for Truth is a provocative look at today's
religions, cults and world views as examined against
the views of Christianity. This program gives in-depth
insight into world religions other than Christianity
through a lively one-hour confrontation of views. The
program is co-hosted by Clay Jones and Steve Huddleston
and is available Sunday at 3 p.m.
* America's Greatest Heroes promotes an accurate image of
our founding fathers and others who have helped shape
America in a positive way. This broadcast is intended
to entertain listeners while informing them on
important events and personality traits surrounding
America's greatest heroes, including George Washington,
Benjamin Franklin and others. America's Greatest Heroes
is available Saturday and Sunday at 8 a.m. EST.
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* Bible's Greatest Heroes provides programming to bring
biblical stories and Bible characters to life. This
broadcast is designed to inspire listeners of all
demographics by acting out and dramatizing key Biblical
stories. Bible's Greatest Heroes is available at
Saturday and Sunday at 7 a.m. EST.
USA Internet Radio
In addition to broadcasting on satellite, we presently
broadcast select news and programming simultaneously on the
Internet via streaming audio. "Streaming audio" is the ability to
transmit live audio signals through the Internet. This technology
provides a continuous stream of data so that the audio feed is
constantly being downloaded, thereby allowing the user to listen
to live and uninterrupted broadcasts as they would on
conventional radio. At its present level, the streaming
technology allows users to receive audio in real time without
having to download a file. With the rapid technological
developments in audio streaming, the Internet is rapidly becoming
a stable platform for high-quality radio broadcasting.
A recent survey indicates that in the last quarter of 1998
and the first quarter of 1999, the percentage of Americans who
have listened to the radio over the Internet has more than
doubled. In July 1998, when the study originally took place, the
study found that 6% of all Americans had listened to the radio
over the Internet. The study found that in February 1999 that
number had increased to 13% of all Americans. The fact
that Arbitron Research Company is measuring the percentage of
Americans that listen to radio over the Internet is significant
because advertising rates are based in part upon audience ratings
as determined by Arbitron. Currently, advertising rates are not
based upon Internet listening. Management believes that in the
future, Internet listening will be included in determining
advertising rates.
We are committed to providing our programming content to our
affiliates using the latest in technological advancements.
Accordingly, we have elected to " stream" our audio signals in
the following formats:
* Real Network's Real Audio and Real Video technologies.
* Microsoft Windows Media Player; and
* MPEG (Motion Picture's Engineering Group) or MP3.
Using these three formats we are able to supply audio to the
majority of the computer platforms and most of the Internet
listening audience.
It is management's opinion that the Internet presents USA
Radio Network with a significant opportunity. If we can capture a
larger share of the burgeoning Internet radio audience, as
described above, we believe we will be well-positioned to increase
the rate for which we charge for advertising time. We have
formulated short and long-term plans to expand our Internet
presence. In keeping with those plans, we intend to grow our
programming through the acquisition of Internet broadcasting
companies and syndicated radio programming, building content,
putting in place infrastructure, increasing listenership,
securing advertising dollars and continuing to develop a viable
broadcast model. No assurances can be made that we will be able
to successfully capitalize on this opportunity.
Our affiliates may also broadcast our news and programming
on their own Internet sites. We do not restrict or control our
affiliates' broadcasting on their Internet site. Management
believes that our affiliates do not and will not in the future
object to our Internet broadcasting of our programming because
they may broadcast our programming over their own Internet site.
Broadcast Facilities
We deliver our programming content to our affiliates "live"
via two satellites, SatCom C-5 and GEIII.
The originating point of our programming is our state of the
art broadcast facility located in Dallas, Texas, which employs
the latest in news gathering, digital audio editing, digital
audio production and Internet broadcasting
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technologies. We control four channels on Satellite GEIII. Each
channel is supplied with programming content completely
independent of the other channels and is controlled and operated
from a central point within our broadcast facility. Our on air
and production studios terminate in our broadcast facility where
final processing and leveling is performed prior to delivery to
the affiliate. Our broadcast facility also houses our satellite
receiver command and control system. This system enables us to
authorize or deauthorize satellite receivers located at the
affiliated radio stations. This system also gives us the ability
to remotely operate onboard relays which in turn the affiliate
will use to operate their own in-house automation systems.
All channel downlinks from Satellite GEIII are also
monitored from our broadcast facility. These downlink systems are
a duplicate of what one of our affiliated radio stations would
have at its facility. This duplication gives us the ability to
help troubleshoot problems that an affiliate may be experiencing
with their downlink system.
We control one audio channel on Satellite SatCom C5. The
programming content on SatCom C5 is a simulcast of one of the
channels on GEIII, strictly for purposes of redundancy.
From the broadcast center, our programming is beamed via a
terrestrial microwave transmission system to the Dallas Fort
Worth International Teleport were a low powered satellite uplink
is used as the sole means of delivering our programming to the
Chicago International Teleport located in Chicago, Illinois. This
is the primary uplink facility used to deliver our programming to
our affiliated radio stations. Both international teleports and
our facilities are equipped with fully operational redundant
systems as well as back up electrical power independent of the
local commercial power companies.
We lease our satellite space segments under various
agreements that expire at various times through March 2005. Total
rent expense for these leases was $416,209 and $423,397 for 1999
and 1998, respectively. Minimum rentals due under these
agreements are approximately $290,000 in 2000, decreasing to
approximately $166,000 in fiscal 2004.
Growth Strategy
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We believe that the key factors that determine the
attractiveness of our programs are the following:
* High Quality Programming Content. We believe that our
broad base of quality programming provides our
affiliates with a competitive solution to developing
content in-house. Limited financial and creative
resources, among other matters, typically prevent most
independent radio stations from producing their own
national quality programming. Additionally, the
demonstrated size of our listening audience provides
access to hosts, concerts, interviews and other content
not readily available to smaller or independent stations.
We emphasize content that is fresh, positive,
entertaining and provides a high probability of focused
demographic appeal.
* Network Coverage. We believe that we have a
competitive advantage over certain of our competitors
due to the geographic breadth of our network and our
positive image in the broadcasting industry. We
continuously leverage the substantial coverage of our
network to maximize the value of ad campaigns for both
advertisers and advertising agencies.
* Price. Although we do not sell our programming content
to commercial radio stations, we believe that we must
price our programming (in terms of the commercial
airtime received in exchange) on a competitive basis.
Because radio stations have a low-cost basis in the
airtime exchanged, however, we believe that our
programming content provides an attractive alternative
to purchasing content for cash.
* Reliability. Our affiliates enjoy substantially trouble-
free, highly reliable programming.
We intend to aggressively expand our operations over the
next twelve months by leveraging these factors for the benefit of
our affiliated stations. In this regard, we intend to continue to
provide national quality programming to our affiliates in an
attempt to enhance their ratings. We are also actively engaged in
internally
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developing additional programming that may be added to our
product offerings in the future. We believe that if we can
successfully deliver attractive programming content to our
existing affiliates, our affiliate base will increase, thereby
allowing us to increase our fees for commercial airtime.
Industry Background and Revenue Model
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Radio serves primarily as a medium for local advertising and
is considered an efficient means of reaching specifically
identified demographic groups. Stations are typically classified
by their on-air format, such as country, adult contemporary,
oldies or news/talk. A station's format and style of presentation
enable it to target certain demographic and psychographic groups.
Radio stations generate the majority of their revenue from
the sale of advertising time to local and national advertisers
and advertising agencies. A station is able to market its
broadcasting time to advertisers seeking to reach a specific
audience by capturing a share of that audience in a particular
market area. Advertisers and stations utilize data published by
audience measuring services to estimate how many people within
particular geographical markets and demographic groups listen to
specific stations. We believe that many radio stations not
affiliated with the three major radio networks do not have the
creative and financial resources to produce nationally accepted
programming. As a result, these stations look to syndicators,
such as the USA Radio Network, to enhance their local
programming.
The local stations independently determine the number of
advertisements broadcast hourly that will maximize available
revenue dollars without jeopardizing listening levels. Although
the number of advertisements broadcast during a given time period
may vary, the total number of advertisements broadcast on a
particular station generally do not vary significantly from year
to year.
We do not derive a significant portion of our revenues from
the sale of our programs to affiliate stations. Instead, we
barter with our affiliated radio stations for commercial airtime
which is exchanged for our programming content. This commercial
airtime is then resold to advertisers with whom we have
relationships. Although most of the commercial airtime resold by
us represents "spots" within our programs, occasionally, we will
obtain commercial airtime outside of our program as inventory. We
derive additional income, although to a much lesser extent, from
the sale of our programming to non-commercial radio stations that
do not carry advertising and the rental of time on our channels.
Management believes that the company receives certain strategic
and marketing benefits from providing its programming to the
Armed Forces Radio Network and, as such, does not derive any
revenue therefrom.
Many variables determine commercial airtime pricing
including the time of day the advertisement will air, the size of
the potential listening audience, the length of the ad and the
number of times the advertisement will be run. The "prime spots"
on our programming typically run from 6 a.m. to 7 p.m., Monday
through Friday. These time slots command the largest advertising
dollar per minute or half-minute, with the remaining commercial
time bringing a somewhat lower price. Commercial spot time can
vary from a low of $75 per minute during overnight segments to a
high of $1,200 during peak broadcast times. In general, one-time,
one minute advertisements running during peak times and reaching
a large audience will cost more than half-minute advertisements
running off peak, targeting a small listener base, with contracts
for multiple broadcasts.
Stated below is a representative list of advertising
agencies and advertisers, listed alphabetically, that purchased
commercial airtime from us in 1998 or 1999. Some of these
advertising agencies and advertisers represented less than one
percent of our total revenues in such years.
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Advertising Agencies
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* Auritt Communications
* The Domain Group
* Ellentuck & Springer
* Goldberg-Marchesano
* Grizzard
* The Jordan Group
* Karlin Advertising
* KEF Media
* KMA
* KSL Media
* McGlothlin and Associates
* Medert Creative Services
* Morning Star Communications
* Multi Media Services
* John F. Murray
* Newton Media
* Ocean Media
Advertisers
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* 1-800-Flowers.com
* Advil Pain Reliever
* American Express
* Arts & Enertainment Network
* Cheerios
* Crosswalk.com
* Dimetapp
* Greyhound Bus Lines
* The History Channel
* John Deer
* Motel 6
* Oreck Vacuum Cleaners
* Priceline.com
* Transamerica
For the years ended December 31, 1999 and 1998, we did not
have any single client or group of related clients that
contributed to 10% or more of our revenues for those periods.
Marketing and Advertising
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Our primary marketing objectives are to increase the number
of radio stations affiliated with us and to sell commercial
airtime, acquired by barter from affiliated radio stations, to
advertisers and advertising agencies. Management believes that
the addition of radio stations as affiliates in desirable U.S.
radio markets will increase our reach. An increased audience
reach will allow us to increase fees for our commercial airtime
on our programming, thus enhancing revenue.
We believe that advertiser awareness of the USA Radio
Network is critical to our success. As a result, we continually
communicate with advertisers and advertising agencies through:
* trade publication advertisements;
* public relations;
* direct mail;
* ongoing customer communications programs;
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* promotional activities;
* trade shows; and
* advertisements and announcements over our network.
As of December 31, 1999, we had an internal sales
organization consisting of 4 professionals with an average of
more than 10 years of sales experience. We also use the
advertising agencies that purchase commercial airtime from us to
supplement our sales force.
Competition
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The markets for quality radio programming and commercial
airtime are intensely competitive and we expect competition to
increase.
Radio Programming
The radio broadcasting industry is highly competitive. Our
programming competes for listeners and advertising revenue
directly with other broadcasters. Radio stations compete for
listeners primarily based on program content that appeals to a
particular demographic group. By building a strong listener base
consisting of a specific demographic group in each of our
markets, we are able to attract advertisers seeking to reach
those listeners.
Commercial Airtime
Competition for radio advertising is very intense. We
compete for radio airtime revenues with:
* radio stations;
* ownership groups, which own blocks of radio stations
across the industry;
* program syndicators, like USA Radio Network, that offer
content to radio stations; and
* independent producers and distributors.
Several of our syndicating competitors are also associated
with major radio station group owners. Our largest competitors,
which are all associated with ownership groups, are AM/FM Radio
Networks, Premiere Radio Networks, CBS Radio Network, and ABC
Radio. We estimate that these competitors account for
approximately 80% of the network advertising revenues. We believe
that we are a leader of the syndication companies not associated
with an ownership group.
Many of our existing competitors, as well as a number of
potential new competitors, have longer operating histories,
greater name recognition, larger customer bases and significantly
greater financial, technical and marketing resources than we do.
Increased competition may result in reduced operating margins,
loss of market share and a diminished brand franchise. There can
be no assurance that we will be able to compete successfully
against current and future competitors, and competitive pressures
faced by us may have a material adverse effect on our business,
prospects, financial condition and results of operations.
Further, as a strategic response to changes in the competitive
environment, we may from time to time make certain pricing,
service or marketing decisions that could have a material adverse
effect on our business, prospects, financial condition and
results of operations. New technologies and the expansion of
existing technologies may increase the competitive pressures on
us.
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Government Regulation
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As a producer and distributor of programming to be
transmitted to the public, we are not subject directly to the
extensive regulation that is imposed on the licensees of
broadcast stations by the Federal Communications Commission
("FCC") under the Communications Act of 1934, as amended. As a
practical matter, however, our affiliate stations that broadcast
programming produced by us may anticipate that certain rules and
policies of the FCC, including those related to program content
and political broadcasting, are being complied with by us.
Management is not aware of any allegations that our programming
has not complied with applicable regulations or laws or is
related to any complaints against any broadcast stations. The
Rules and Regulations of the FCC and applicable statutes are
subject to change from time to time. No assurance can be given
that changes to FCC rules, statutes or other regulations would
not have a material adverse impact on us.
Prior to the merger with Ansel Project, USARadio.com
(formerly known as USA Radio Network, Inc.) was granted a license
by the FCC to operate a private operational fixed microwave
system (the "microwave system") between its studios and the point
from which its programming is distributed. Pursuant to applicable
FCC regulations, the consent of the FCC should have been obtained
prior to the merger. An application has been filed with the FCC
seeking its consent to the assignment. Management believes that
the consent of the FCC to the assignment of the license will be
granted in due course, however, no assurances that the FCC will
consent to the assignment can be given. While it is possible
that the FCC might propose a civil forfeiture or other penalties
against us relating to this matter, we do not anticipate that any
such sanctions would have a material adverse effect on our
business or financial condition. Were the FCC to refuse to permit
us to continue to operate the microwave system, we would utilize
alternative arrangements that we have made to deliver our
programming to the distribution point from the broadcast studio.
Management does not anticipate, but cannot assure, that
operations would be significantly impacted were it necessary to
discontinue operation of the microwave system.
Proprietary Rights
- ------------------
USA Radio Network, the USA Radio Network logo, Daybreak USA
and USA@Nite are each registered with the U.S. Patent and
Trademark office as service marks of the Company. We are entitled
to exclusive nationwide use of these marks.
In addition to these federally registered marks, we also use
various trademarks or service marks in association with the
provision of radio programming that have not been federally
registered, but which would, based upon their distinctiveness and
in the absence of an earlier first use of a similar mark by
another party, accord us with ownership of these marks based on
common laws principles. Common law use, unlike federal
registration, entitles us to exclusive use of the mark, but only
in the specific geographical areas where the mark is being used.
Finally, we also claim copyright ownership in the original
designs and text included in printed materials produced in
conjunction with distributing our radio programming, as well
as the original copyrights in all radio programming produced,
published or otherwise distributed by us.
We cannot provide any assurance that our intellectual
property has not been, is not now, or will not be in the future,
infringed upon, diluted, or misappropriated in any way by third
parties, nor can we provide a guarantee that our intellectual
property, whether or not protected with formal federal
registrations, does not infringe upon or dilute the intellectual
property of a third party.
Employees
- ---------
As of February 29, 2000, we did not maintain any direct
employees. We obtain all of the personnel necessary to conduct
our operations from a third-party staffing corporation. At
February 29, 2000, we utilized the services of 61 full and part-
time persons of whom 27 were employed in the news department, 13
in the engineering department, 7 in programming, 4 in the sales
department and 10 in executive or administrative capacities. We
believe that our relationship with the third-party staffing
company and our independent contractors is good.
ITEM 2. DESCRIPTION OF PROPERTY
Our administrative offices and broadcast center are located
within approximately 22,400 square feet of commercial office
space located at 2290 Springlake Road, Suite 107, Dallas, Texas
75234. This lease has a net annual rental of approximately
$160,000 in the year 2000 and $91,000 in the year 2001. The
lease will expire in June 2001, unless terminated sooner.
Although management believes that these facilities will continue
to satisfy our space requirements for the foreseeable future, if
additional facilities are needed, we believe that suitable
expansion space is available.
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ITEM 3. LEGAL PROCEEDINGS
We are not a party to, nor are our properties the subject
of, any pending legal proceedings and no such proceedings are
known to us to be threatened or contemplated against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 10, 1999, a special meeting of the stockholders
of Ansel Project, Inc. (a predecessor to the company) was held
with regard to the issue of the proposed merger with
USARadio.com, Inc. Present at the meeting were stockholders
representing 850,000 of the 1,230,000 issued and outstanding
shares of Ansel Project common stock. After discussion, and upon
motion duly made, seconded and carried, it was resolved that the
Agreement and Plan of Merger presented to the stockholders by the
board of directors be adopted and executed by the President of
the company.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Prices, Record Holders and Dividends
- -------------------------------------------
Our stock is not listed on any exchange or automated
quotation system. Although we may seek to obtain the listing of
our shares on the OTC Bulletin Board at some point in the future,
no such determination has currently been made, nor can there be
any assurance that such a listing could be achieved. See
"Management's Discussion and Analysis or Plan of
Operation-Business Risks--There is no public market for our
stock."
At March 20, 2000, there were approximately 50 holders of
record of our common stock holding an aggregate of 13,516,720
shares.
We have not paid any cash dividends on our common stock and
we do not anticipate declaring dividends in the foreseeable
future. We intend to retain future earnings, if any, for
reinvestment in our business.
The Securities Enforcement and Penny Stock Reform Act of 1990
- -------------------------------------------------------------
The Securities Enforcement and Penny Stock Reform Act of
1990 requires additional disclosure, relating to the market for
penny stocks, in connection with trades in any stock defined as a
"penny stock." The Securities and Exchange Commission has adopted
regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share,
subject to certain exceptions. Such exceptions include any equity
security listed on The Nasdaq Stock Market and any equity
security issued by a corporation that has (i) net tangible assets
of at least $2,000,000, if such corporation has been in
continuous operation for three years, (ii) net tangible assets of
at least $5,000,000, if such corporation has been in continuous
operation for less than three years, or (iii) average annual
revenue of at least $6,000,000 if such corporation has been in
continuous operation for less than three years. Unless an
exception is available, the regulations require the delivery,
prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock market and the risks
associated therewith.
To the extent that we take action to obtain the listing of
our shares of common stock on the OTCBB, our securities may be
subject to rules adopted by the Commission regulating broker-
dealer practices in connection with transactions in "penny
stocks." Those disclosure rules applicable to penny stocks
require a broker-dealer, prior to a transaction in a penny stock
not otherwise exempt from the rules, to deliver a standardized
list disclosure document prepared by the Commission. That
disclosure document advises an investor that investments in penny
stocks can be very risky and that the investor's sales person or
broker is not an impartial advisor but rather paid to sell the
shares. It contains an explanation and disclosure of the bid and
offer prices of the security, any retail charges added by the
dealer to those prices ("markup" or "markdown"), and the amount
of compensation or profit to be paid or received by the sales
person in connection with the transaction. The disclosure
contains further admonitions for the investor
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to exercise caution in connection with an investment in penny
stocks, to independently investigate the security as well as the
sales person with whom the investor is working, and to understand
the risky nature of an investment in the security. Further, the
disclosure includes information regarding the market for penny
stocks, explanations regarding the influence that market makers
may have upon the market for penny stocks and the risks that one
or two dealers may exercise domination over the market for such
security and therefore control and set prices for the security
not based upon competitive forces. The broker-dealer must also
provide the customer with certain other information and then must
make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser's
written agreement to the transaction. Further, the rules require
that following the proposed transaction, the broker provide the
customer with monthly account statements containing market
information about the prices of the securities. These disclosure
requirements may have the effect of reducing the level of trading
activity in the secondary market for a stock that becomes subject
to the penny stock rules. Many brokers may be unwilling to engage
in transactions in our common stock because of the added
disclosure requirements, thereby making it more difficult for
security holders to dispose of their securities.
Recent Sales of Unregistered Securities
- ---------------------------------------
During the year ended December 31, 1999, the following
securities that were not registered under the Securities Act of
1933, as amended, were issued:
* On December 21, 1999, Ansel Project, Inc. issued
13,136,720 shares of its common stock to USA Radio
Network Trust, the sole stockholder of USARadio.com,
Inc., a Texas corporation, in connection with the
merger of USARadio.com with and into the company.
All transactions described above were deemed to be exempt
from registration under the Securities Act of 1933 in reliance on
Section 4(2) as transactions by an issuer not involving any
public offering. The recipients of securities in these
transactions represented their intentions to acquire the
securities for investment only and not with a view to or for sale
in connection with any distribution thereof and appropriate
legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access, through their
relationships with the company, to information about the company.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN
CONJUNCTION WITH ITEM 7. - "FINANCIAL STATEMENTS." EXCEPT FOR THE
HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION IN THIS
REPORT CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES, SUCH AS STATEMENTS OF OUR PLANS,
OBJECTIVES, EXPECTATIONS AND INTENTIONS. ACTUAL RESULTS COULD
DIFFER SIGNIFICANTLY FROM THOSE DISCUSSED HEREIN. FACTORS THAT
COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE
NOT LIMITED TO, THOSE DISCUSSED BELOW UNDER "BUSINESS RISK" AND
ELSEWHERE THROUGHOUT THIS DOCUMENT. OUR FORWARD-LOOKING
STATEMENTS ARE BASED ON THE CURRENT EXPECTATIONS OF MANAGEMENT,
AND WE ASSUME NO OBLIGATION TO UPDATE THIS INFORMATION. THE
CAUTIONARY STATEMENTS MADE IN THIS REPORT SHOULD BE READ AS BEING
APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER
THEY APPEAR IN THIS FORM 10-KSB.
USARadio.com, Inc. (also known as USA Radio Network) is a
satellite-delivered radio broadcast network that offers a broad
line of programming content to independent radio stations. Our
programming includes news, sports, music, and general interest
talk programs. Our target market consists of independent radio
stations, both AM and FM, that choose not to become affiliated
with the 3 major radio networks (ABC Radio, NBC, and CBS Radio
Networks). As of March 15, 2000, our network was comprised of
approximately 1,200 affiliated radio stations across the nation,
including affiliates in 49 of the top 50 Dominant Market Areas
(DMAs). Our network includes affiliates in markets that represent
approximately 95% of the U.S. population. We simultaneously
broadcast select programming over the Internet.
We do not derive revenues from the sale of our programs to
affiliate stations. Instead, we barter with our affiliated radio
stations for commercial airtime which is exchanged for our
programming content. This commercial airtime is then resold to
advertisers with whom we have relationships. We derive additional
revenue, although to a much lesser extent, from the sale of our
programming to non-commercial radio stations and the rental of
time on our channels. We price our advertising time based on a
variety of factors including the time of day the advertisement
will air, the size of the potential listening audience, the
length of the ad and the number of times the advertisement will
run. Our revenues are recognized in the accounting period which
corresponds with the broadcast of the advertisement. Amounts
received in advance of a broadcast are recorded as deferred
revenue until the broadcast is aired. Our advertisers and
advertising agencies are generally billed monthly.
For the year ended December 31, 1999, the following
percentage of our revenues were derived from the following
sources:
% of Revenues
Revenue Source During 1999
------------------------------- -------------
News and sports programming... 64%
Talk programming.............. 24%
Satellite time................ 5%
Other revenue................. 7%
-------------
TOTAL............... 100%
=============
Other revenue is derived from a fee charged to non-
commercial radio stations unable to air commercial advertising
and a fee charged for syndicating services of select network
programming.
Our expenses are comprised of:
* sales expenses, which consists primarily of
compensation and related expenses for our sales and
marketing group, together with commission expense,
including commissions payable to sales staff;
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* programming costs, which consists primarily of
compensation and related expenses for "on air"
personalities, production staff and related personnel
as well as the actual costs associated with developing
programming content;
* news services, which consists primarily of the variable
costs of independent reporters and operational expenses
including subscription fees to news services and
satellite time;
* administrative and engineering, which consists
primarily of compensation and related expenses for our
administrative, accounting and engineering staff,
occupancy costs and legal and consulting fees; and
* depreciation.
Implications of Merger with USARadio.com
- ----------------------------------------
Ansel Project, Inc., the original predecessor to the
company, was formed on April 9, 1998 under the laws of the State
of Colorado. Ansel Project was dormant until December 21, 1999,
at which time USARadio.com, Inc. was merged with and into Ansel
Project. USARadio.com, Inc. was a Texas corporation formed on
March 4, 1985 to provide news and programming content to radio
stations affiliated under the name USA Radio Network. As part of
the merger, Ansel Project changed its name to USARadio.com. The
merger with USARadio.com was treated as a recapitalization of
USARadio.com, resulting in the historical operations of the Texas
corporation being treated as the historical operations of the
company. Consequently, the historical financial information in
this Form 10-KSB (together with the accompanying management's
discussion and analysis) reflect the financial position, results
of operations, and cash flows of USARadio.com, for all years
presented.
Results of Operations
- ---------------------
The following table sets forth, for the period presented,
certain elements of the statements of operations of USARadio.com,
in thousands:
December 31,
----------------
1999 1998
------- -------
Revenues $3,692 $3,715
Operating expenses 3,968 3,905
Operating loss (276) (190)
Other expense (240) (3)
Income tax benefit 60 65
Net loss (456) (128)
We have made, or are in the process of making, several
changes which we anticipate will have a favorable effect on our
results of operations for the year ending December 31, 2000.
Specifically, during the third quarter of 1999, we increased the
rates at which we sell commercial airtime by approximately 20%.
Further, we have increased our available inventory of commercial
spots by adding new network programming. In addition, we
eliminated certain programs which, in the opinion of management,
were not profitable. Lastly, we have effected certain operational
changes, including steps designed to reduce our overall operating
expenses, which we expect to have a direct effect on our
operating performance. Please refer to "--Business Risks" for a
number of factors that could cause our results of operations to
not respond to these changes as expected.
Year Ended December 31, 1999 Compared With Year Ended
December 31, 1998
REVENUES. Our revenues remained flat between 1999 and 1998.
We recorded revenue of approximately $3.7 million in each year.
The loss of one significant news service client in 1999 was
substantially offset by an increase in spot sales and an increase
in the price at which we were selling commercial airtime. Spot
sales (which represented approximately 86% of total revenues for
1999) increased by approximately 10% in 1999. Revenues for
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1998 were negatively affected by a decrease in available spot
advertising resulting from spots that we provided to a former
sales representative firm in connection with a settlement between
the company and such firm.
OPERATING EXPENSES. Overall operating expenses increased
modestly (less than 2%) from 1998 to 1999, increasing by
approximately $63,000. This increase primarily relates to an
increase in administrative and engineering costs resulting from
the costs associated with upgrading our technology and increased
salaries for technical personnel, partially offset by a decrease
in certain other expenses.
NET LOSS. For the year ended December 31, 1999, our net
loss was approximately $456,000 compared with a net loss of
$128,000 for the year ended December 31, 1998. The majority of
this increase in loss was attributable to $185,000 of merger
related costs incurred in connection with the merger with Ansel
Project.
Liquidity and Capital Resources
- -------------------------------
Since inception, we have financed our operations principally
from operations. Such funds have historically been supplemented
with bank debt and stockholder loans. At December 31, 1999, we
had a working capital deficit of $124,000 as compared with
positive working capital of $62,000 at December 31, 1998. Net
cash used in operating activities for the year ended December 31,
1999 and 1998 was $30,000 and $3,000, respectively, representing
an increase of $27,000 in the 1999 period. The increase was
primarily due to legal and consulting fees.
As of December 31, 1999, certain of our vendors had granted
extended payment terms to us relating to an aggregate of
approximately $250,000 in payables. Although we expect that we
will be able to remain current with each of these vendors,
including with respect to those portions for which we have been
granted extended payment terms, no assurances can be made that we
will be able to fulfill our obligations under these terms.
Failure to repay our obligations to these vendors according to
the arranged terms could have a material adverse effect on our
business, prospects, financial condition or results of
operations. Management expects to be fully current with all of
its accounts payable by December 31, 2000.
During the year ended December 31, 1999, Marlin Maddoux, our
Chief Executive Officer and President, advanced $80,000 to us.
This advance bears interest at 10% per annum with a maturity date
of September 1, 2004. These funds were used by us to acquire
certain equipment and technology necessary in connection with the
upgrade of our command and control center. Specifically, this
equipment upgraded our satellite transmission technology from
analog to digital.
Mr. Marlin Maddoux also has advanced a total of $76,057 to
us as of December 31, 1999. This advance bears interest at 12%
per annum, with a maturity date of June 1, 2001. These funds were
used by us for operating and advertising expenses.
We maintain a note payable to Bank of America which, at
December 31, 1999, represented a debt of $21,178. This note was
used to develop new talk programming. This note bears interest at
the rate of 10% per annum and matures in September 2000. We have
secured repayment of this note by substantially all of our
assets. Further, Marlin Maddoux has personally guaranteed this
note on our behalf, although we did not provide Mr. Maddoux a
guarantee fee for doing so.
We also maintain a credit facility with Bank of America.
This credit line is payable upon demand and borrowings are
limited to $100,000. Borrowings under this facility bear
interest at prime plus 1%, which was 9.5% at December 31, 1999.
At December 31, 1999, our outstanding debt under the credit
facility was approximately $88,000. The borrowings under this
credit facility are collateralized by our assets. We intend to
pursue increasing our line of credit with Bank of America during
the year 2000.
In addition to the line of credit referenced above, we also
maintain an additional bank line with Bank of America. Borrowings
under this bank line are limited to $40,000 and bear interest at
prime plus 3.625% (which was approximately 10.875% at
December 31, 1999). Borrowings under this bank line are also
payable on demand. At December 31, 1999, our outstanding debt
under this facility was approximately $37,000.
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Management believes that its available cash, together with
operating revenues and other available funds, will be adequate to
meet its operating requirements for the immediate term.
During 2000, we intend to seek additional financing through
the issuance of debt, equity, other securities or a contribution
thereof. Although there can be no assurances that any additional
capital will be raised, any such financing which involves the
issuance of equity securities would result in dilution to
existing stockholders and the issuance of debt securities would
subject us to the risks associated therewith, including the risks
that interest rates may fluctuate and our cash flows may be
insufficient to pay interest and principal on such indebtedness.
There can be no assurances that we will be able to obtain
additional financing on terms which are acceptable to us. Our
inability to obtain additional acceptable financing could have a
significant negative impact on our operations or growth plans.
Other than the foregoing and the "Business Risks" discussed
below, management knows of no trends, demands, or uncertainties
that are reasonably likely to have a material impact on our short-
term liquidity or capital resources.
Inflation
- ---------
We do not believe that our operating results have been
materially affected by inflation during the preceding two years.
There can be no assurance, however, that our operating results
will not be affected by inflation in the future.
Net Operating Loss Carryforwards
- --------------------------------
At December 31, 1999, we had net operating loss
carryforwards of approximately $267,000 available to offset
future taxable income that expire at various dates through 2019.
Under the Tax Reform Act of 1986, the amounts of and the benefits
from net operating loss carryforwards are subject to certain
limitations in the amount of net operating losses that we may
utilize to offset future taxable income.
Business Risks
- --------------
WE HAVE A RECENT HISTORY OF LOSSES AND NEGATIVE CASH FLOW.
During the years ended December 31, 1998 and 1999, we
incurred operating losses of approximately $190,000 and $276,000,
respectively. During the year ended December 31, 1997, we
recorded modest operating income of approximately $160,000. Prior
years have also resulted in operating losses. As of December 31,
1999, we had an accumulated deficit of approximately $299,000.
Therefore, we have not achieved consistent profitability.
Further, we may incur operating losses in the future. We cannot
assure you that we will ever achieve or sustain consistent
profitability or that our operating losses will not increase in
the future. If we do not achieve consistent profitability, our
business, prospects, financial condition and results of
operations will suffer.
WE WILL NEED ADDITIONAL CAPITAL FINANCING WHICH COULD BE
UNAVAILABLE OR AVAILABLE ONLY ON UNFAVORABLE TERMS.
We will need to raise additional capital during 2000 to
fully implement our business plan. Further, because we have
incurred operating losses in recent periods, we may need to raise
additional capital to fund current operations. There can be no
assurance that adequate levels of additional financing through
additional equity financing, debt financing or other sources,
will be available, or will be available when needed or on terms
favorable to us. Additional financings could result in
significant dilution to existing stockholders. If adequate
capital is not available or is not available on acceptable terms,
we may be unable to expand our business model, (even on a smaller
scale), expand or maintain our existing affiliate base, develop
or enhance our programming content, take advantage of existing or
future opportunities, or respond to competitive pressures on a
timely basis. If we are unable to obtain additional financing as
needed, we may be required to reduce the scope of our growth
strategies or
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reduce the scope of current operations. Either such event could
have a material adverse effect on our business, prospects,
financial condition and results of operations.
A DOWNTURN IN RADIO ADVERTISING WOULD CAUSE OUR REVENUES TO
DECREASE.
Our business depends on the continued demand for radio
airtime by advertisers. Because the majority of our revenues are
generated from the sale of commercial airtime, a downturn in
radio advertising would have a material adverse effect on our
business, prospects, financial condition or results of
operations. Factors that could cause a downturn in radio
advertising include:
* the actual or perceived effectiveness of radio
advertising in relation to other forms of advertising
including television, print, outdoor and Internet-based
advertising;
* changes in fees charged by other forms of advertising;
and
* a substantial decline in the number of radio listeners.
Further, because our success is closely associated with the
performance of the advertising industry generally, a broad
decline in national advertising would also have a material
adverse effect on our business, prospects, financial condition or
results of operations. No assurances can be given that a downturn
in advertising generally or radio advertising in particular will
not occur.
IF WE FAIL TO MANAGE OUR AIRTIME INVENTORY, OUR
PROFITABILITY MAY BE ADVERSELY AFFECTED.
Our business depends on obtaining commercial airtime from
affiliate stations in exchange for programming content and
reselling such airtime to advertisers and advertising agencies.
Therefore, we maintain all of the "inventory risks" attendant to
holding commercial airtime, many of which are beyond our control.
These risks include:
* the risk that the commercial airtime will go unsold or
will not be sold until close to its airtime when the
value thereof has decreased substantially;
* the risk that our affiliate stations do not represent
an attractive demographic profile to our advertisers;
and
* technical risks, including the risk that our affiliate
stations will be unable to broadcast the commercial
spots purchased by our clients.
In addition, we have in the past sold certain commercial
airtime by guaranteeing favorable ratings and/or demographics. As
is typical in the industry, if the radio program on which the
commercial is broadcast does not achieve the guaranteed levels,
we may be obligated to offer the advertiser additional
advertising time. These "make goods" or "bonus spots" are the
principal method by which we satisfy our guarantee obligations to
advertisers. Alternatively, however, we could be required to
refund or credit a portion of the advertising revenue derived
from such sales. Historically, we have not refunded significant
amounts of revenue on this basis.
WE ARE SIGNIFICANTLY DEPENDENT ON THE CONTINUED POPULARITY
OF OUR PROGRAMS, PARTICULARLY "POINT OF VIEW."
The success of our business is largely dependent on the
subjective tastes of radio audiences. These tastes have
historically been unpredictable and susceptible to change without
warning or explanation. To the extent our programs do not meet
with widespread audience appeal, our business, prospects,
financial condition and results of operations will be harmed. No
assurances can be given that any of our current or future
programs will maintain a commercially viable level of audience
appeal.
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During the year ended December 31, 1999, sales of commercial
airtime received in exchange for our nationally syndicated
program known as Point of View represented 9% of net sales,
whereas sales of commercial airtime received in exchange for our
next most popular program represented only 4% of net sales.
Accordingly, if the popularity of Point of View among target
listeners were to substantially decrease, our business,
prospects, financial condition and results of operations would
likely be materially adversely effected.
The continued success of Point of View is dependent, to a
large degree, upon the efforts of its host, Marlin Maddoux.
Mr. Maddoux has hosted Point of View, since 1972. The popularity
of this program is generally attributed to the popularity of
Mr. Maddoux. The loss or unavailability of Mr. Maddoux would
adversely affect our business and prospects.
OUR SUCCESS DEPENDS ON OUR ABILITY TO MAINTAIN AND EXPAND
OUR AFFILIATE BASE.
Our success largely depends on our ability to maintain and
expand our affiliate base. Our revenues are primarily driven by
fees paid by advertisers and advertising agencies based on
commercial airtime received through barter from our affiliates.
If we are unable to induce existing and new affiliates to
exchange commercial airtime for our programming, our business,
prospects, financial condition and results of operations will be
harmed. There can be no assurance that we will be able to
establish new relationships or to maintain existing relationships
with radio stations in the future.
WE INTEND TO EXPAND OUR BUSINESS MODEL TO INCLUDE OTHER
SOURCES OF REVENUE.
Since incorporation, we have been focused on providing radio
programming content to our affiliate stations in exchange for
commercial airtime that could be sold to advertisers. However,
we believe that in order to maximize the value of our
relationships with these affiliate stations and respond to
competition, we will need to offer additional products or
services to our existing affiliates and/or expand our services to
advertisers. To do so, we intend to expand our business model,
potentially including increasing the number of affiliates,
expanding our internet radio presence and acquiring other
satellite networks and internet radio companies. To date, we have
not finalized this business model. We are unable to predict
whether our expanded model will prove to be viable, whether the
expanded model will jeopardize our current business and revenue
streams and/or whether the demand for any new products or
services will materialize. We expect that development of this
expanded business model will require significant additional
capital and will place significant strain on our managerial,
operational and financial resources and that, as such, our
business, prospects, financial condition and results of
operations could be materially adversely affected.
FUTURE GROWTH WILL STRAIN OUR RESOURCES.
Future growth will be required in order for us to realize
our business objectives. We expect that future growth, if any,
will place a significant strain on our managerial, operational
and financial resources. We must manage our growth, if any,
through appropriate systems and controls in each of these areas.
If we do not manage the growth of our business effectively, our
business, prospects, financial conditions or results of
operations would be materially adversely affected. Moreover, none
of our senior executive officers has ever been a senior executive
of a public company. Our management team may not be able to
manage future growth, if any, or the demands of successfully
operating a public company.
THE CONTENT OF OUR PROGRAMMING MAY SUBJECT US TO LITIGATION
AND RELATED COSTS.
Although all of our programming is intended for a broader
audience and is free of content likely to be deemed objectionable
to ethnic, religious or political groups, we may be subject to
claims for defamation, liable, or based on other theories
relating to the content contained in our programs. Defending
against any such claims could be costly and deter the attention
of management from the operations of our business.
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WE MAY MAKE ACQUISITIONS OR ENTER INTO JOINT VENTURES OR
STRATEGIC ALLIANCES, EACH OF WHICH IS ACCOMPANIED BY INHERENT
RISKS.
If appropriate opportunities present themselves, we may make
acquisitions or investments or enter into joint ventures or
strategic alliances with other companies. Risks commonly
encountered in such transactions include:
* the difficulty of assimilating the operations and
personnel of the combined companies;
* the risk that we may not be able to integrate the
acquired services, products or technologies with our
current services, products and technologies;
* the potential disruption of our ongoing business;
* the inability to retain key managerial personnel and/or
on-air personalities;
* the ability of management to maximize our financial and
strategic position through the successful integration
of acquired businesses;
* difficulty in maintaining controls, procedures and
policies; and
* the impairment of relationships with
employees/suppliers and customers as a result of any
integration.
THE PRE-MERGER STOCKHOLDER OF USARADIO.COM CONTROLS
APPROXIMATELY 97.2% OF OUR VOTING STOCK.
USA Radio Network Trust, the sole pre-merger stockholder of
USARadio.com, holds, as of March 20, 2000, 13,136,720 shares or
approximately 97.2% of the issued and outstanding shares of the
company. As a result, this stockholder, which is controlled by
Marlin Maddoux as the sole trustee, has the ability to control
all matters requiring stockholder approval, including the
election and removal of directors, the approval of significant
corporate transactions, such as any merger, consolidation or sale
of all or substantially all of the company's assets, and the
control of the management and affairs of USARadio.com.
THERE IS NO PUBLIC MARKET FOR OUR STOCK, NOR DO WE
ANTICIPATE THAT ANY PUBLIC MARKET WILL DEVELOP.
Currently, our common stock is not traded on a national
securities exchange or automated quotation system and, as such,
there is no public market for our securities. Although we may
seek to obtain the listing of our shares on the OTC Bulletin
Board at some point in the future, no such determination has
currently been made, nor can there be any assurance that such a
listing could be achieved. Consequently, we cannot be certain
that a regular trading market for our common stock will ever
develop. If a trading market does in fact develop for our common
stock, we cannot be certain that it will be sustained. Further,
our shares may be subject to the rules adopted by the Securities
and Exchange Commission regulating broker-dealer practices in
connection with transactions in "penny stocks." Accordingly, you
are likely to have difficulty in selling your shares of common
stock should you desire to do so. See "Market for Common Equity
and Related Stockholder Matters-The Securities Enforcement and
Penny Stock Reform Act of 1990."
YOU SHOULD EXERCISE EXTREME CAUTION WITH ALL FORWARD-LOOKING
STATEMENTS MADE IN THIS FORM 10-KSB.
As previously indicated, this Form 10-KSB contains "forward-
looking statements." These forward-looking statements are based
on the beliefs of our management as well as assumptions made by,
and information currently available to, our management. Forward-
looking statements reflect the current view of USARadio.com with
respect to future events and are subject to numerous risks,
uncertainties and assumptions, including, without limitation, the
factors identified in this section. Although we believe that the
expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will
prove to have been correct. Should any one or more of these or
other risks or uncertainties materialize or should any underlying
assumptions prove
-18-
<PAGE>
incorrect, actual results are likely to vary materially from
those described herein. We do not intend to update our forward-
looking statements.
OUR BUSINESS MAY FACE ADDITIONAL RISKS AND UNCERTAINTIES NOT
PRESENTLY KNOWN.
In addition to the risks specifically identified in this
"Business Risks" section of the Form 10-KSB, we may face
additional risks and uncertainties not presently known to us or
that we currently deem immaterial, which ultimately could impair
our business, prospects, results of operations and financial
condition.
-19-
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
The following financial statements and notes thereto are
filed herewith beginning at page F-1.
Page
----
Report of Independent Certified Public Accountants F-1
Independent Auditors' Report F-2
Balance Sheets as of December 31, 1999 and 1998 F-3
Statements of Operations for the Years
Ended December 31, 1999 and 1998 F-4
Statements of Stockholders' Equity (Deficit)
for the Years Ended December 31, 1999 and 1998 F-5
Statements of Cash Flows for the Years
Ended December 31, 1999 and 1998 F-6
Notes to Financial Statements F-7 - F-13
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
In December, 1999, our board of directors approved a change
in the company's independent auditors. Previously, the
independent auditing firm of Cordovano and Harvey, P.C. had
issued reports covering the period from inception (April 8, 1998)
to April 30, 1999 on Ansel Project. None of the reports of
Cordovano and Harvey, P.C. on the financial statements of Ansel
Project contained any adverse opinion or disclaimer of opinion,
or was qualified or modified as to uncertainty, audit scope or
accounting principles, nor have there been at any time,
disagreements between Ansel Project and Cordovano and Harvey,
P.C. on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure.
We retained the accounting firm or Grant Thornton LLP to
serve as our independent accountants to audit our financial
statements. This engagement was effective February 14, 2000.
Prior to its engagement as our independent auditors, Grant
Thornton LLP had not been consulted by us either with respect to
the application of accounting principles to a specific
transaction or the type of audit opinion that might be rendered
on our financial statements or on any other matter that was the
subject of any prior disagreement between us and our previous
certifying accountants.
PART III.
Certain information required by Part III is incorporated by
reference in this report from the definitive Proxy Statement for
the Company's 2000 Annual Meeting of Stockholders to be filed
with the Commission within 120 days following the end of the
fiscal year covered by this report pursuant to Regulation 14A
(the "Proxy Statement").
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT
The information required by this Item is incorporated by
reference from the Proxy Statement.
-20-
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The information required by this Item is incorporated by
reference from the Proxy Statement.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this Item is incorporated by
reference from the Proxy Statement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated by
reference from the Proxy Statement.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
--------
The exhibits listed on the accompanying Index to
Exhibits immediately following the signature page are
filed as part of, or incorporated by reference into,
this Annual Report on Form 10-KSB.
(b) Reports on Form 8-K.
-------------------
Ansel Project, Inc. filed a report on Form 8-K on
November 12, 1999 regarding the acquisition of 850,000
shares of Ansel Project stock by USARadio.com, Inc., a
Texas corporation.
The Company filed a report on Form 8-K on April 7, 2000
regarding (i) the acquisition, by merger, of the
operating assets and liabilities of USARadio.com, (ii)
the change in the company's accountants and (iii) the
change in the company's fiscal year to December 31.
-21-
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on April 11, 2000.
USARadio.com, Inc.,
a Colorado corporation
By: /s/ Marlin Maddoux
----------------------
Marlin Maddoux
Chief Executive Officer and President
In accordance with the Exchange Act, this report has been
signed on the 11th day of April, 2000, below by the following
persons on behalf of the registrant and in the capacities
indicated.
Signature Title
--------- -----
/s/ Marlin Maddoux Chief Executive Officer,
----------------------------- President and Director
Marlin Maddoux (Principal Executive Officer)
/s/ Mark Maddoux Vice President, Chief Financial
----------------------------- Officer and Director
Mark Maddoux (Principal Financial and
Accounting Officer)
-22-
<PAGE>
INDEX TO EXHIBITS
NO. EXHIBIT
--- -------
2.1 Agreement and Plan of Merger, dated November 3, 1999,
by and between Ansel Project, Inc., a Colorado
corporation and USARadio.com, Inc., a Texas
corporation (Exhibit 2.1)(1)
3.1 Articles of Incorporation of USARadio.com, Inc.
(Exhibit 3.1) (2)
3.2 Articles of Merger by and between Ansel Project, Inc.,
a Colorado corporation and USARadio.com, Inc., a Texas
corporation
3.3 Bylaws of USARadio.com, Inc. (Exhibit 3.2) (2)
10.1 Form of USA Radio Network Broadcast Agreement
10.2 Satellite Services and Space Segment Lease Agreement,
dated March 11, 1997, by and between SpaceCom Systems,
Inc. and USA Radio Network, Inc.
10.3 Satellite Services and Space Segment Lease Agreement,
dated March 15, 1999, by and between SpaceCom Systems,
Inc. and USA Radio Network, Inc.
10.4 Subscription Agreement, dated March 27, 1998, by and
between United Press International and USA Radio
Network
10.5 Demand Note, dated September 30, 1998, by and between
NationsBank, N.A. and USA Radio Network, Inc.
10.6 Third Amendment to Lease Agreement between Phoenix Home
Life Mutual Insurance Company and U.S.A. Radio Network,
dated June 7, 1994, Second Amendment to Lease Agreement
between Phoenix Mutual Life Insurance Company and
U.S.A. Radio Network, dated October 29, 1991, First
Amendment to Lease Agreement between Phoenix Mutual
Life Insurance Company and U.S.A. Radio Network, dated
October 7, 1989 and Lease Agreement between Phoenix
Mutual Life Insurance Company and U.S.A. Radio Network
dated May 3, 1989
10.7 Promissory Note, dated September 30, 1997, by and
between NationsBank of Texas, N.A. and U.S.A. Radio
Network, Inc.
10.8 Transmission Service Agreement, dated August 16, 1995,
by and between Equity Radio Network, Inc. and USA Radio
Network
10.9 Advantage Business Credit Line/Loan Agreement, dated
September 12, 1997, by and between Bank of America
Texas, N.A. and USA Radio Network, Inc.
10.10 Form of USA Radio Network Standard Affiliation
Agreement Terms and Conditions and Addendum to
Affiliation Agreement
16.1 Letter Re Change in Certifying Accountant (Exhibit
16.1)(1)
27.1 Financial Data Schedule
- ---------------
(1) Incorporated by reference to the exhibit shown in parenthesis
filed in our report on Form 8-K, filed April 7, 2000.
(2) Incorporated by reference to the exhibit shown in
parenthesis filed in our Registration Statement on Form
10-SB, filed August 16, 1999.
-23-
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors
USARadio.com, Inc.
We have audited the accompanying balance sheet of USARadio.com,
Inc. as of December 31, 1999, and the related statements of
operations, changes in stockholders' equity (deficit) and cash
flows for the year then ended. 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 audit in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of USARadio.com, Inc. as of December 31, 1999, and the results of
its operations and its cash flows for the year then ended, in
conformity with accounting principles generally accepted in the
United States.
GRANT THORNTON LLP
Dallas, Texas
March 1, 2000
F-1
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders
of USARadio.com, Inc.
Dallas, Texas
We have audited the accompanying balance sheet of USARadio.com,
Inc., formerly U.S.A. Radio Network, Inc., as of December 31,
1998, and the related statements of operations, stockholders'
equity (deficit) and cash flows for the year then ended. 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 audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of USARadio.com, Inc. as of December 31, 1998, and the results of
its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
BARRY MORGAN & COMPANY, P.C.
Dallas, Texas
January 29, 1999
F-2
<PAGE>
USARadio.com, Inc.
BALANCE SHEETS
December 31,
<TABLE>
<CAPTION>
ASSETS 1999 1998
------------ ------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 9,225 $ 30,226
Accounts receivable, net of allowance for doubtful
doubtful accounts of $11,909 in 1999 and 1998 488,621 435,577
Accounts receivable-related party 122,977 137,738
Prepaid expenses 45,639 43,800
------------ ------------
Total current assets 666,462 647,341
PROPERTY AND EQUIPMENT - AT COST
Equipment 580,749 487,854
Furniture and fixtures 8,902 6,904
Software 23,906 23,906
------------ ------------
613,557 518,664
Less accumulated depreciation (434,826) (375,784)
------------ ------------
178,731 142,880
------------ ------------
$ 845,193 $ 790,221
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current maturities of long-term debt $ 34,461 $ 38,798
Notes payable 125,000 137,057
Accounts payable 527,261 245,502
Accrued liabilities 104,016 104,469
Deferred income taxes - 59,500
------------ ------------
Total current liabilities 790,738 585,326
LONG-TERM DEBT, net of current maturities 139,651 19,209
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 2,673 29,000
Additional paid-in capital 211,327 -
Retained earnings (accumulated deficit) (299,196) 156,686
------------ ------------
Total stockholders' equity (deficit) (85,196) 185,686
----------- ------------
$ 845,193 $ 790,221
=========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
USARadio.com, Inc.
STATEMENTS OF OPERATIONS
Years ended December 31,
<TABLE>
<CAPTION>
1999 1998
------------- -------------
<S> <C> <C> <C>
REVENUE
Spot sales, net $ 3,174,050 $ 2,822,938
Satellite time 210,541 255,308
News services 127,653 456,508
Syndication 180,000 180,000
------------- -------------
3,692,244 3,714,754
OPERATING EXPENSES
Sales expenses 892,469 967,070
Programming and news services 1,300,227 1,358,545
Administrative and engineering 1,716,114 1,531,896
Depreciation 59,042 47,012
------------- -------------
3,967,852 3,904,523
------------- -------------
Operating loss (275,608) (189,769)
OTHER INCOME (EXPENSE)
Interest income - 110
Interest expense (54,774) (22,813)
Cost of merger (185,000) -
Gain on sale of assets - 19,814
------------- -------------
(239,774) (2,889)
------------- -------------
Loss before income taxes (515,382) (192,658)
INCOME TAXES
Income tax benefit 59,500 64,500
------------- -------------
59,500 64,500
------------- -------------
Net loss $ (455,882) $ (128,158)
============= =============
LOSS PER COMMON SHARE - BASIC AND DILUTED $(.03) $(.01)
WEIGHTED AVERAGE SHARES OUTSTANDING 13,516,720 13,516,720
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
USARadio.com, Inc.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Retained
Common stock earnings
----------------------- Additional (accumulated
Shares Amount paid-in capital deficit) Total
------------ -------- --------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1998 2,900,000 $ 29,000 $ - $ 284,844 $ 313,844
Net loss - - - (128,158) (128,158)
------------ -------- --------------- ------------ -----------
Balances at December 31, 1998 2,900,000 29,000 - 156,686 185,686
Contribution of capital - - 185,000 - 185,000
Merger with USARadio.com,
Inc. (a Texas corporation),
accounted for as a
recapitalization (Note A) 10,616,720 (26,327) 26,327 - -
Net loss - - - (455,882) (455,882)
------------- --------- -------------- ------------ -----------
Balances at December 31, 1999 13,516,720 $ 2,673 $ 211,327 $ (299,196) $ (85,196)
============= ========= ============== ============ ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
USARadio.com, Inc.
STATEMENTS OF CASH FLOWS
Years ended December 31,
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (455,882) $ (128,158)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation 59,042 47,012
Provision for doubtful accounts - (67,585)
Deferred income taxes (59,500) (64,500)
Gain on disposal of assets - (19,814)
Merger costs paid by stockholder 185,000 -
Changes in operating assets and liabilities
Accounts receivable (53,044) 130,062
Accounts receivable-related party 14,761 (18,442)
Federal income tax receivable - 2,400
Prepaid expenses (1,839) (15,221)
Accounts payable 281,759 100,730
Accrued liabilities (453) 30,364
---------- ----------
Net cash used in operating activities (30,156) (3,152)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment - 20,000
Purchases of property and equipment (14,893) (23,135)
---------- ----------
Net cash used in investing activities (14,893) (3,135)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable 64,000 109,000
Payments on notes payable (39,952) (89,018)
---------- ----------
Net cash provided by financing activities 24,048 19,982
---------- ----------
Net increase (decrease) in cash (21,001) 13,695
Cash at beginning of year 30,226 16,531
---------- ----------
Cash at end of year $ 9,225 $ 30,226
========== ==========
Supplemental cash flow information:
Interest paid $ 54,774 $ 22,813
========== ==========
Noncash investing and financing activities:
Acquisition of equipment financed by debt $ 80,000 $ -
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
USARadio.com, Inc.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
NOTE A - ORGANIZATION AND BASIS OF PRESENTATION
Nature of Business
------------------
USARadio.com, Inc. (the Company) is a radio broadcast network
that provides news and programming via satellite to radio
stations throughout the United States. The Company sells
national advertising to corporate brands and direct response
advertisers and programming to non-commercial radio stations
that do not carry the Company's advertising. The Company also
receives revenue for the rental of time on its satellite
channels.
Reorganization
--------------
On November 5, 1999, the Registrant, formerly known as Ansel
Project, Inc. (Ansel), entered into a merger agreement with
USARadio.com, Inc., formerly U.S.A. Radio Network, Inc. (Old
USA). Pursuant to the agreement, (i) the sole stockholder of
Old USA acquired 850,000 shares of Ansel's common stock for
$185,000 and (ii) Ansel issued 4.2368 shares of its common
stock in exchange for each of the 2,900,000 outstanding shares
of Old USA. At the conclusion of the merger, which was
effective December 21, 1999, the former stockholder of Old USA
owned 13,136,720 shares of the 13,516,720 total outstanding
shares of Ansel. Ansel then changed its name to USARadio.com,
Inc. Ansel had no operations and insignificant assets at the
date of merger.
The merger was accounted for as a recapitalization of Old USA.
Accordingly, the accompanying financial statements for periods
prior to December 21, 1999, are those of Old USA. The
consideration paid by the stockholder of Old USA in the amount
of $185,000 has been reflected in the accompanying financial
statements as contributed capital and has been charged to
expense as a cost of the recapitalization.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment
----------------------
Property and equipment are stated at cost. Depreciation is
provided using the straight-line method over expected useful
lives of five to seven years.
Revenue Recognition
-------------------
Spot sales revenue is recognized in the accounting period which
corresponds with the broadcast of the advertisement. Net
revenues represent gross spot sales less direct commissions
paid to independent advertising agencies. Amounts received as
advance payment of a broadcast are recorded as deferred revenue
until the broadcast is aired.
F-7
<PAGE>
USARadio.com, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999 and 1998
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
Credit Risk
-----------
The Company sells commercial airtime to advertisers and
advertising agencies and sells satellite time and syndication
services to radio stations located throughout the United
States. Credit is extended based on an evaluation of each
customers financial condition, credit standing and previous
history with the Company. Credit losses are provided for as
deemed necessary.
Income Taxes
------------
Deferred income taxes reflect the impact of temporary
differences between the amounts of assets and liabilities
recognized for financial reporting purposes and such amounts
recognized for tax purposes.
Loss Per Share
--------------
Basic and diluted loss per common share are based upon the
weighted average number of shares of common stock outstanding,
giving retroactive effect to the merger discussed in Note A.
Reclassifications
-----------------
Certain prior year amounts have been reclassified to conform to
the current year presentation.
NOTE C - RELATED PARTY TRANSACTIONS
The Company sells satellite time and syndication services to a
not-for-profit organization, International Christian Media
(ICM). From time to time, the Company and ICM incur expenses
on behalf of the other which are subsequently reimbursed by the
appropriate party. The Company's primary stockholder is a
trust with directors in common with the board of trustees of
ICM.
F-8
<PAGE>
USARadio.com, Inc.
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999 and 1998
NOTE C - RELATED PARTY TRANSACTIONS - Continued
A summary of the transactions with ICM is as follows:
Years ended
December 31,
--------------------
1999 1998
--------- ---------
Syndication fees and sale
of satellite time to ICM $ 234,000 $ 234,000
Net expenses paid by the Company
and billed to ICM 32,485 9,620
--------- ---------
$ 266,845 $ 243,620
========= =========
December 31,
--------------------
1999 1998
--------- ---------
Accounts receivable from ICM $ 122,977 $ 137,738
========= =========
NOTE D - NOTES PAYABLE AND LONG-TERM DEBT
Notes payable and long-term debt consist of the following:
December 31
--------------------
1999 1998
--------- ---------
Note payable to bank, interest at 10%,
payable in monthly installments of
$3,233 including interest, maturing in
September 2000; secured by
substantially all assets of the Company
and is guaranteed by a stockholder of
the Company and affiliates of the
stockholder. $ 21,178 $ 58,007
Line of credit of $100,000 to a bank,
interest at bank's prime rate plus 1%
(9.5% at December 31, 1999) payable
monthly, due upon demand; secured by
substantially all assets of the Company. 88,000 57,000
Line of credit of $40,000 to bank,
interest at bank's reference rate plus
3.625% (10.875% at December 31, 1999)
payable monthly, due upon demand. 37,000 32,000
F-9
<PAGE>
NOTE D - NOTES PAYABLE AND LONG-TERM DEBT - Continued
December
--------------------
1999 1998
--------- ---------
Advance from a related party, interest
at 10%, payable in monthly
installments of $1,703 through
September 2004; secured by equipment. $ 76,877 $ -
Advance from a related party, interest
at 12%, due June 2001. 76,057 48,057
--------- ---------
299,112 195,064
Less current maturities 159,461 175,855
--------- ---------
$ 139,651 $ 19,209
========= =========
Aggregate maturities of notes payable and long-term debt at
December 31, 1999 are as follows:
Year ending
December 31,
------------
2000 $159,461
2001 90,746
2002 16,242
2003 17,960
2004 14,703
--------
$299,112
========
NOTE E - COMMON STOCK
As discussed in Note A, the Company entered into a merger
agreement effective December 21, 1999. The merger has been
accounted for as a reverse acquisition. Common stock at
December 31, 1999 and 1998 was as follows:
1999 1998
------------------- --------------
USARadio.com,
USARadio.com, Inc., formerly
Inc., formerly U.S.A. Radio,
Ansel Project, Inc. Network, Inc.
------------------- --------------
Shares authorized 20,000,000 4,000,000
Par value per share no par $.01
Shares issued and
outstanding 13,516,720 2,900,000
Aggregate value $2,673 $29,000
F-10
<PAGE>
NOTE F - INCOME TAXES
The income tax benefit reconciled to the tax computed at the
statutory Federal rate is as follows:
Years ended
December 31,
-----------------------
1999 1998
--------- --------
Federal tax benefit
at statutory rate $(175,230) $(65,504)
Nondeductible expenses 63,292 1,004
Other (14,892)
Change in valuation allowance 37,546 -
--------- --------
$ (59,500) $(64,500)
========= ========
Deferred tax assets and liabilities consist of the following:
December 31,
--------------------
1999 1998
--------- ---------
Deferred tax assets
Net operating loss
carryforwards $ 90,905 $ 60,609
Accounts payable 214,634 121,594
Deferred tax liabilities
Accounts receivable (238,414) (225,255)
Prepaid expenses (15,517) -
Property and equipment (14,062) (16,448)
--------- ---------
37,546 (59,500)
Less valuation allowance (37,546) -
--------- ---------
Net deferred tax liability $ - $ (59,500)
========= =========
At December 31, 1999, the Company had net operating loss
carryforwards of approximately $267,000 available to offset
future taxable income which expire at various dates through
2019. Future tax benefits, such as net operating loss
carryforwards, are recognized to the extent that realization of
such benefits are more likely than not.
F-11
<PAGE>
NOTE G - COMMITMENTS
The Company leases office space under an operating lease that
expires in June 2001. The Company has subleased a portion of
these facilities to ICM and others. The net rent expense for
these facilities was $131,428 and $104,610 for 1999 and 1998,
respectively.
Future minimum rental payments and sublease rental income under
these facility lease agreements are as follows:
Years ending
December 31,
-------------------
2000 2001 Total
--------- -------- ---------
Minimum rentals $ 288,624 $144,312 $432,936
Less sublease
rental income (128,498) (53,112) (181,610)
--------- -------- ---------
Net rental expense $ 160,126 $ 91,200 $251,326
========= ======== =========
The Company also leases satellite audio transmission services
under various agreements which expire through March 2005. Total
rent expense for these leases was $416,209 and $423,397 for
1999 and 1998, respectively.
The following is a schedule of minimum rentals due under these
satellite agreements:
Year ending
December 31,
------------
2000 $ 289,041
2001 187,518
2002 169,055
2003 165,660
2004 165,660
Thereafter 27,610
----------
$1,004,544
==========
The Company also contracts for news and wire services under
short-term agreements.
NOTE H - FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair values of the Company's financial instruments are
based on carrying value for short-term items and, in the case
of notes payable and long-term debt, incremental borrowing
rates currently available on loans with similar terms and
maturities. The carrying amounts of the Company's cash,
accounts receivable, accounts payable, notes payable and long-
term debt approximate fair value.
F-12
<PAGE>
NOTE I - LIQUIDITY MATTERS
The Company had losses in 1998 and 1999, and current
liabilities exceeded current assets by $124,276 at December 31,
1999. To improve operations and liquidity, the Company has
implemented various measures, including cost reduction
programs. Although the effect of the measures is not assured,
the Company believes that its liquidity will be sufficient to
meet its operating requirements through December 31, 2000.
F-13
ARTICLES OF MERGER
------------------
I. Name of Each Corporation Party to the Merger
---------------------------------------------
The two corporations party to the merger are as follows:
A. Ansel Project, Inc., a Colorado corporation, charter
#19981066502C
B. USARadio.com, Inc., a Texas corporation, charter
#742120-00
II. Surviving Corporation
---------------------
The surviving corporation shall be Ansel Project, Inc., a
Colorado corporation, charter #19981066502C.
III. Approvals
---------
A. Ansel Project, Inc. - The Plan of Merger was adopted by
the Board of Directors on November 5, 1999, at a duly called
Special Meeting of the Board of Directors. The Plan of Merger
was approved by the Shareholders of the Corporation on
December 10, 1999, whereby eight hundred fifty thousand (850,000)
shares voted in favor of the merger, and zero (0) voted against
the merger.
B. USA Radio Network, Inc. - The Plan of Merger was
adopted by the Board of Directors on November 5, 1999, at a duly
called Special Meeting of the Board of Directors. The Plan of
Merger was approved by the Shareholders of the Corporation on
December 10, 1999, whereby two million nine hundred thousand
(2,900,000) shares voted in favor of the merger, and zero (0)
voted against the merger.
IV. Plan of Merger
--------------
The complete executed Plan of Merger is on file at the
registered office of USA Rado.com, which is at 2290 Springlake
Rd., Suite 107, Dallas, Texas 75234.
V. Amendment to Articles of Incorporation.
--------------------------------------
Article First of the Articles of Incorporation of Ansel
Project, Inc. shall be amended as follows:
"FIRST: The name of the corporation is USA Radio.com,
Inc."
VI. Payment of Fees and Franchise Taxes
-----------------------------------
Payment of all fees and/or franchise taxes incurred as a
result of this merger shall be the obligation of USA Radio.com, a
Colorado corporation, which is the surviving corporation.
<PAGE>
IN WITNESS WHEREOF, the President of each constituent
corporation hereby sets his hand this 15th day of December, 1999.
USA RADIO NETWORK, INC. ANSEL PROJECT, INC.
A Texas Corporation A Colorado Corporation
By: /s/ Marlin Maddoux By: /s/ Marlin Maddoux
------------------ ------------------
Marlin Maddoux, President Marlin Maddoux, President
This instrument was acknowledged before me on this 15th day of
December, 1999, by Marlin Maddoux.
/s/ James A. Ballard
---------------------------
(Notary Public Signature)
USA Radio Network 2290 Springlake Road, Suite 107
Broadcast Agreement Dallas, Texas 75234
(972) 484-3900 Fax: (972) 241-6826
Date:
Company:
Attention Advertiser::
Address Product::
Representative:
Phone: Billing Month: Order Number:
Fax: Week Starting: Week Ending:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C><C> <C> <C> <C> <C>
Program Start End Len Daypart M Tu W Th F Sa Su X Weeks Rate
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
Gross Investment by Broadcast
Calendar Month
- ----------------------------
January 2000
February 2000
March 2000
April 2000
May 2000
June 2000
July 2000
August 2000
September 2000
October 2000
November 2000
December 2000
Total
The Advertiser agrees to the terms and specifications
contained in this agreement. The Advertiser or its duly assigned
Agent shall be solely liable for payments to USA Radio Network or
its assignees. Receipt of signed Broadcast Agreement by
facsimile transmission shall be binding as a legal document in
lieu of original Broadcast Agreement. Terms are cash with order
unless prior credit approval is granted, then it is Net 15 Days.
Two weeks written notice is required for cancellation.
- -----------------------------------------------------------------
Advertiser Signature Date
- -----------------------------------------------------------------
USA Radio Network Representative Date
CONFIDENTIAL
March 11, 1997
----------------------------------
Satellite Services and
Space Segment Lease Agreement
for
USA Radio Network, Inc.
<PAGE>
TABLE OF CONTENTS
Page
-----
1. Superseding Agreement 1
2. Definitions 1
3. Term; Payment 1
4. Taxes 1
5. Customer's Use of SCPC Channel 1
6. Equipment, Maintenance, and Signal Delivery
Responsibilities 1
7. Transition Period 1
8. Risk of Loss and Insurance Requirements at CIT 2
9. Indemnity 2
10. Interruptions and Technical Failures 2
11. Force Majeure 2
12. SpaceCom Relocation Rights 2
13. Conditional Protected Services 3
14. Assignment 3
15. No Consequential or Incidental Damages 3
16. Notices 3
17. Confidentiality 3
18. Governing Law 3
19. Arbitration 4
20. Incorporation by Reference 4
21. Severability 4
22. Headings 4
23. Entire Agreement 4
Appendix One (Definitions) 5
Exhibit I (Payment Schedule) 6-7
Exhibit II (Technical Specifications) 8
Exhibit III (Operating Specifications) 9-10
Exhibit IV (Terms and Conditions Relating
to Protected Satellite Services) 11
-i-
<PAGE>
SATELLITE SERVICES AND SPACE SEGMENT LEASE AGREEMENT
----------------------------------------------------
THIS AGREEMENT is entered into by and SpaceCom Systems, Inc.
("SpaceCom"), a Delaware corporation, (a wholly owned subsidiary
of United Video Satellite Group, Inc.), with its principal
offices at One Technology Plaza, 7140 South Lewis Avenue, in
WHEREAS, SpaceCom has rights to certain specific satellite
transmission services, including SCPC (as defined herein) space
segment capacity on the Satcom C-5 Satellite (or replacement as
designated by SpaceCom); and
WHEREAS, SpaceCom has contracted with GE American
Communications, Inc. ("GE"), a "Satellite Service Provider" for
such space segment capacity; and
WHEREAS, Customer desires to contract with SpaceCom to use
certain services and space segment capacity.
NOW, THEREFORE, in consideration of the premises set forth
above and the following mutual covenants, the parties hereto
agree as follows:
1. SUPERSEDING AGREEMENT. This Agreement shall supersede
and replace all prior agreements and understandings between
SpaceCom and Customer relating to the subject matter of this
Agreement.
2. DEFINITIONS. See Appendix One attached to this
Agreement.
3. TERM; PAYMENT. The term of this Agreement shall
commence upon execution by both parties and shall continue in
effect through the end of the satellite life of the Satcom C-5
satellite (to be determined solely by SpaceCom), which is
currently projected to be June 30, 2001. The Service
Commencement Date of the SCPC Channel (as defined below) shall be
February 24, 1997. In no event, however, shall the term of this
Agreement exceed the term of SpaceCom's agreement with GE.
Payment for services provided under this Agreement shall be in
accordance with Exhibit I attached hereto. Payment for the SCPC
Channel (as defined herein) shall continue until the end of the
term of the Agreement regardless of whether Customer actually
uses the SCPC Channel.
4. TAXES. In addition to the monthly charges and other
payments set out in Exhibit 1, Customer shall be solely
responsible for any and all taxes or fees, including but not
limited to any sales, use, value added or other taxes (excluding
all forms of income tax) which are imposed by any local, state,
or United States governmental entity on the services or goods
provided by SpaceCom under this Agreement.
5. CUSTOMER'S USE OF SCPC CHANNEL. SpaceCom shall make
available to Customer and Customer accepts from SpaceCom the use
of and agrees to pay SpaceCom for hereunder one (1) 128 kb/s
digital audio QPSK Channel (the "SCPC Channel") located on
Transponder 3 (the "SCPC Transponder") of the Satcom C-5
Satellite for SCPC delivery of Customer's signal. The SCPC
Channel will have Technical Specifications as outlined in Exhibit
11 attached hereto.
6. EQUIPMENT, MAINTENANCE, AND SIGNAL DELIVERY
RESPONSIBILITIES.
a. Customer accepts sole responsibility for delivering its
signal to the CIT, including installation, operation and
maintenance of all equipment (whether at Customer's location or
CIT) required to effect delivery to the SCPC transmission
equipment at the CIT. In this regard, Customer agrees that it
shall provide redundant rack mountable equipment for use at the
CIT. SpaceCom shall have the right to approve (approval of which
will not be unreasonably withheld or delayed) the use, size, type
of equipment, and installation of any of Customer's equipment to
be installed at the CIT for purposes of delivering Customer's
signal to the CIT. Customer shall at all times comply with the
Operating Specifications set forth in Exhibit III to this
Agreement. The location of Customer's equipment shall be
determined by SpaceCom, and SpaceCom shall have the right to re-
locate Customer's equipment as needed.
b. SpaceCom shall at its cost provide, operate and
maintain all SCPC transmission equipment, including, Wegener's
QPSK modulators, required at the Chicago International Teleport
(the "CIT" as herein defined) to transmit Customer's digital
signal from the CIT to the SCPC Transponder.
c. Customer shall at its cost equip, install and maintain
all sites (or cause them to be equipped, installed and
maintained) with any downlink equipment required for reception of
Customer's SCPC Channel. SpaceCom shall have no liability due to
any failure of Customer's sites to receive Customer's signal due
to downlink equipment, installation, and/or maintenance provided
by others.
7. TRANSITION PERIOD. As stated elsewhere in this
Agreement, Customer is solely responsible for all aspects of
downlink equipment to receive Customer's SCPC Channel.
Customer's primary reason for use of the SCPC Channel is as a
backhaul channel to GE's Vernon Valley satellite uplink facility.
As a courtesy to Customer,
<PAGE>
SpaceCom is currently transmitting the SCPC Channel as a BPSK
channel, rather than the contracted QPSK channel, due to the lack
of a QPSK receiver at the Vernon Valley facility. Customer shall
make its arrangements to have a QPSK receiver in place at the
Vernon Valley facility as quickly as possible, and shall notify
SpaceCom in writing as soon as the QPSK receiver is in place and
available at the Vernon Valley facility, so that the transition
from the BPSK channel to the contracted QPSK channel can be made.
If, for any reason, the transition has not occurred by March 3 1,
1997, then beginning April 1, 1997, the monthly charge for the
SCPC Channel will be increased to $4,400.00 per month until such
time as the transition occurs.
8. RISK OF LOSS AND INSURANCE REQUIREMENTS AT CIT.
a. Customer shall bear all risk of loss to its equipment
or other property located at the CIT, regardless of the cause of
any such loss.
b. To cover its employees and/or agents performing work at
the CIT, and Customer's equipment or other property located at
the CIT, Customer shall carry and maintain at its own cost during
the term of this Agreement, with insurance companies having an
"A.M. Best's" rating of "A-" or better, the insurance indicated
below as a minimum requirement:
Type of Coverage Limits of Liability
- ---------------------------- ----------------------------
Workers' Compensation Statutory per State of Illinois
Employers Liability $500,000
Commercial General Liability $1,000,000
Occurrence Form
Broad Form Contractual
Liability
Customer shall furnish SpaceCom certificates evidencing such
coverage stating that SpaceCom be provided with 30 days prior
written notice of cancellation, non-renewal or reduction of
limits. All policies shall contain an endorsement waiving
subrogation rights of insurer against SpaceCom.
c. Customer shall not by any act of commission or omission
cause an increase in the rate of insurance or the cancellation of
any insurance policy carried by SpaceCom covering the CIT.
9. INDEMNITY. Customer shall indemnify, defend and hold
SpaceCom and the Satellite Service Provider, their parent and
affiliate corporations, officers, directors, employees agents,
successors and assigns, harness from and against any and all
losses, liabilities, claims, demands, costs, and expenses
(including, but not limited to, reasonable attorneys' fees and
costs of suit) arising out of or related directly or indirectly
to Customer's use of the SCPC Channel. Customer's
indemnification of SpaceCom and the Satellite Service Provider,
their parent and affiliate corporations, officers, directors,
employees agents, successors and assigns, shall include but not
be limited to claims for libel, slander, infringement of
copyright or patent, unauthorized use or infringement of
trademark, trade name or service mark, arising out of or related
to Customer's use of the SCPC Channel.
10. INTERRUPTIONS AND TECHNICAL FAILURES. SpaceCom shall
have no liability whatsoever for interruptions in satellite
service that are caused (1) by Customer or Customer-provided
facilities; (2) by sun transient outage; (3) by rain fade; or (4)
by downlink-specific conditions such as downlink malfunction.. In
the event of any interruption of satellite service or technical
failure for any reason other than these four reasons, the SOLE
AND EXCLUSIVE liability of SpaceCom shall be a pro rata refund of
the monthly fee (as such fee is specified in Exhibit I hereto)
paid by Customer for any period exceeding five (5) minutes in a
one (1) hour period during which service shall not have been
provided. No more than one full day's credit will be allowed for
any period of twenty-four (24) hours. The length of the
interruption shall be measured from the time Customer notifies
SpaceCom of the interruption. Such pro rata refund shall be
Customer's EXCLUSIVE REMEDY for such interruption of satellite
service or technical failure, and Customer shall have no other
remedy against SpaceCom or the Satellite Service Provider, their
parent and affiliate corporations, officers, directors, employees
agents, successors and assigns, with respect to any such
interruption.
11. FORCE MAJEURE. SpaceCom shall not be liable to
Customer hereunder nor shall it be considered to be in breach of
this Agreement due to SpaceCom's failure to perform its
obligations hereunder in a timely manner as a direct result of
any cause beyond its reasonable control, including but not
limited to any natural calamity, work stoppage by any
unaffiliated third party supplier, act of any public enemy or any
military, civil or regulatory authority, a material change in any
law or regulation governing the performance of the parties
hereunder, disruption or outage of communication equipment, loss
of electric power, damage or destruction to satellite equipment,
or loss of access to applicable satellite transponder capacity.
Page 2 of 11
<PAGE>
12. SPACECOM RELOCATION RIGHTS.
a. SpaceCom shall have the right to move the SCPC Channel
to another transponder and/or satellite other than Transponder 3
on the Satcom C-5 Satellite, provided, however, that SpaceCom
shall give Customer thirty (30) days' advance written notice of
any planned move, and provided further, that SpaceCom shall not
exercise this relocation right without good cause, such cause to
be determined solely by SpaceCom.
b. SpaceCom shall have the right to change the frequency
of Customer's SCPC Channel. SpaceCom will not exercise this
right without good cause, such cause to be determined solely by
SpaceCom, and SpaceCom will give Customer a minimum of ten (10)
days' advance written notice of the change of frequency.
c. SpaceCom shall have the right during the term of this
Agreement to relocate and/or reconfigure the CIT.
13. CONDITIONAL PROTECTED SERVICES. SpaceCom will provide
protected satellite service under this Agreement to Customer to
the same extent that SpaceCom receives protected service from the
Satellite Service Provider. SpaceCom has a current contract for
full time fully protected service with GE, and that current
service is summarized on Exhibit IV hereto.
14. ASSIGNMENT. Customer shall not assign or transfer its
rights, interest and obligations under this Agreement to any
other parties without SpaceCom's prior written consent, which
consent shall not be unreasonably withheld or delayed. Customer
agrees that SpaceCom may assign or transfer its rights, interests
and/or obligations under this Agreement.
15. NO CONSEQUENTIAL OR INCIDENTAL DAMAGES. Except for
Customer's indemnification obligations pursuant to Paragraph 9 of
this Agreement, in no event whatsoever shall either party have
any liability to the other or to any other party for
consequential or incidental damages.
16. NOTICES. Notices to be given either party shall be
sent by certified or registered mail, return receipt requested,
by delivery service, or by personal delivery to the following
parties at the following addresses:
If to SpaceCom: SpaceCom Systems, Inc.
One Technology Plaza
7140 South Lewis Avenue
Tulsa, Oklahoma 74136-5422
Attn: Vice President/General Manager
Telephone: (918) 488-4800
Facsimile: (918) 488-4848
If to Customer: USA Radio Network, Inc.
2290 Springlake Road, Suite 107
Dallas, Texas 75234
Attn: Vice President and General Manager
Telephone: (800) 484-3900
Facsimile: (214) 241-6826
17. CONFIDENTIALITY.
a. Each party acknowledges that in the course of
performance of its obligations pursuant to this Agreement or any
amendment, it may obtain certain confidential and/or proprietary
information of the other party or the other party's customers,
including the terms and conditions of this Agreement or any
amendment ("Information"). Each party hereby agrees that all
Information communicated to it by the other party or its
customers, whether before or after the Execution Date shall be
and was received in strictest confidence, shall be used only for
purposes of this Agreement or any amendment, and shall not be
disclosed by such receiving party, its agents or employees
without the prior written consent of the disclosing party, except
as may be necessary by reason of legal, accounting or regulatory
requirements beyond the reasonable control of the receiving
party. The obligations imposed by this paragraph shall not apply
to a party's Information, or any portion thereof, which is
(i) publicly known through no unauthorized act of the other
party, (ii) independently developed by the other party, (iii)
already known by the other party without an obligation of
confidentiality, or (iv) rightfully received from a third party
who is not obligated to keep such Information confidential. The
obligations set forth in this paragraph shall survive termination
of this Agreement or any amendment.
b. While the specific terms of this Agreement, including
pricing terms, are confidential, the existence of this Agreement
shall not be confidential, and SpaceCom and Customer shall each
have the other's
Page 3 of 11
<PAGE>
approval and permission to distribute and/or publish news
releases, advertisements, and any other type of marketing or
promotional materials which contain non-confidential information
such as the names and primary contacts of SpaceCom and Customer
and a general description of the services contracted for under
this Agreement.
18. GOVERNING LAW. The parties hereto agree that this
Agreement shall be deemed to have been executed and delivered in
the State of Oklahoma, and it shall be governed by and construed
in accordance with the laws of said State.
19. ARBITRATION. Any dispute, claim or controversy in
connection with or arising under this Agreement, its
interpretation, validity or any breach hereof, which cannot be
resolved between the parties within sixty (60) days after both
parties are aware of the dispute, claim or controversy, shall be
finally and exclusively resolved by arbitration under the rules
of the American Arbitration Association then prevailing. The
site for any arbitration hearing shall be Tulsa, Oklahoma. In
resolving the dispute, the arbitrators shall be bound by the
terms of this Agreement and the governing law of this Agreement.
The non-prevailing party shall be assessed all arbitration fees
and costs. The award of the arbitrators shall be final and
binding. If it becomes necessary for either party to enforce an
arbitration award by legal action, the other party shall pay all
reasonable costs and attorney's fees incurred by the party
seeking to enforce the award.
20. INCORPORATION BY REFERENCE. Appendix One and Exhibits
I-IV attached to this Agreement, and the premises immediately
preceding this Agreement, are hereby incorporated into this
Agreement.
21. SEVERABILITY. If any term or condition of this
Agreement is ever found to be invalid or unenforceable for any
reason, such invalidity or unenforceability shall not affect the
remaining terms and conditions of this Agreement and this
Agreement, excluding only the invalid or unenforceable term or
condition or portion thereof, shall continue to remain in full
force and effect.
22. HEADINGS. The headings of the sections of this
Agreement have been set forth for ease of reference only and
shall not be used to construe or interpret the terms and
conditions of this Agreement hereto.
Entire Agreement. This Agreement represents the total
understanding between the parties. There are no other
agreements, representations, or warranties, whether oral or
written, respecting the subject matter hereof. This Agreement
may be amended or modified only by written amendment signed by
the parties.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date of the last signature hereto.
SpaceCom: Customer:
SPACECOM SYSTEMS, INC., USA RADIO NETWORK, INC.,
a Delaware corporation a Texas corporation
By: /s/ By: /s/ David F. Reeder
-------------------------- ---------------------------
Title: Vice President David F. Reeder
Title: Vice President and
Date: 3/11/17 General Manager
Date: March 10, 1997
<PAGE>
APPENDIX ONE
------------
DEFINITIONS
-----------
AS USED IN THIS AGREEMENT:
- -------------------------
a. CIT - shall mean the Chicago International Teleport,
SpaceCom's satellite transmission facility in Monee, Illinois.
b. DOWNLINK - shall mean equipment provided by Customer
and/or its customers for reception of the satellite signals and
demodulation of the signals provided by Customer.
c. SATELLITE SERVICE PROVIDER - shall mean GE American
Communications, Inc. or the entity with which SpaceCom contracts
for space segment capacity on any replacement of the SCPC
Transponder.
d. SCPC - shall mean a single-channel-per-carrier
transmission method.
e. SCPC CHANNEL - shall mean that channel described at
paragraph 5 of the Agreement to which this Appendix is attached.
f. SCPC TRANSPONDER - shall mean Transponder 3 on the
Satcom C-5 Satellite on which SCPC space has been allocated.
g. SERVICE COMMENCEMENT DATE - shall mean February
24,1997.
h. TECHNICAL SPECIFICATIONS - shall mean the technical
specifications for the SCPC Channel as presented in Exhibit 11
attached to the Agreement to which this Appendix is also
attached.
March 15, 1999
.......................................
Satellite Services and
Space Segment Lease Agreement
for
USA Radio Network,
Inc.
<PAGE>
TABLE OF CONTENTS
Paragraph Page
1.
Supplemental Agreement 1
2. Definitions 1
3. Term; Payment 1
4. Taxes 1
5. Customer Use of FM Quad Channels 1
6. Customer Use of FM Quad-Related SCPC Channels 1
7. Transition Period 2
8. Equipment, Maintenance, and Signal Delivery
Responsibilities 2
9. Risk of Loss and Insurance Requirements at CIT 2
10. Indemnity 3
11. Interruptions and Technical Failures 3
12. Force Majeure 3
13. SpaceCom Relocation Rights 3
14. Conditional Protected Services 4
15. Assignment 4
16. No Consequential or Incidental Damages 4
17. Notices 4
18. Confidentiality 4
19. Governing Law 5
20. Arbitration 5
21. Incorporation by Reference 5
22. Severability 5
23. Headings 5
24. Entire Agreement 5
Appendix One - Definitions 7
Exhibit I - Payment Schedule
Exhibit II - FM Quad Technical Specifications
Exhibit III - Operating Specifications
Exhibit IV - Terms and Conditions Relating to Proected Services
-i-
<PAGE>
SUPPLEMENTAL SATELLITE SERVICES AND SPACE SEGMENT LEASE AGREEMENT
THIS SUPPLEMENTAL SATELLITE SERVICES AND SPACE SEGMENT LEASE
AGREEMENT (the "Supplemental Agreement") is entered into by and
between SpaceCom Systems, Inc. ("SpaceCom"), a Delaware
corporation (a wholly-owned subsidiary of United Video Satellite
Group, Inc.) with its principal offices at One Technology Plaza,
7140 South Lewis Avenue, in Tulsa, Oklahoma 74136-5422, and USA
Radio Network, Inc. ("Customer"), a Texas corporation, with its
principal offices at 2290 Springlake Road, Suite 107, Dallas,
Texas 75234.
WHEREAS, SpaceCom and Customer have previously entered into
that certain Satellite Services and Space Segment Lease Agreement
March 30, 1995 (the "Original Agreement"); and
WHEREAS, SpaceCom has rights to certain specific satellite
transmission services, including its "FM Squared", "FM Quad" and
"SCPC" (each as hereinafter defined) transmission techniques, and
space segment capacity on the GE3 Satellite through February 29,
2000, as described more fully below; and
WHEREAS, SpaceCom is currently negotiating for such
additional space segment capacity for that period after
February 29, 2000; and
WHEREAS, Customer desires to supplement its current contract
with SpaceCom in an effort to allow Customer to use satellite
transmission services and space segment capacity for that period
after February 29, 2000.
NOW, THEREFORE, in consideration of the premises set forth
above and the following mutual covenants, the parties hereto
agree as follows:
1. Supplemental Agreement. This Supplemental Agreement
shall supplement, amend, and modify the Original agreement as set
forth herein. SpaceCom and Customer intend that, to the extent
not inconsistent with this Supplemental Agreement, the terms and
conditions of the Original Agreement shall remain in full force
and effect.
2. Definitions. Appendix One attached to this
Supplemental Agreement.
3. Term; Payment. The term of this Supplemental Agreement
shall commence on March 1, 2000 and shall continue in effect
until March 1, 2005, except as otherwise set forth herein.
Payment for services provided under this Supplemental Agreement
shall be in accordance with Exhibit I attached hereto. Payment
for the FM Quad Channels and the FM Quad-Related SCPC Channels
(as defined herein) shall commence at the beginning of the Post
Dual Feed Period (as defined in Section 7 below) and shall
continue until the end of the term of this Supplemental Agreement
regardless of whether Customer actually uses the FM Quad Channels
or the FM Quad-Related SCPC Channels.
4. Taxes. In addition to the monthly charges and other
payments set out in Exhibit I, Customer shall be solely
responsible for any and all taxes or fees, including but not
limited to any sales, use, value added or other taxes (excluding
all forms of income tax) which are imposed by any local, state or
United States governmental entity on the services or good
provided by SpaceCom under this Supplemental Agreement.
5. Customer Use of FM Quad Channels. Subject to the
provisions below in Paragraph 7, SpaceCom shall make available to
Customer, and Customer accepts from SpaceCom the use of and
agrees to pay SpaceCom for hereunder two (2) 192 kb/s FM Quad
Channels (the "FM Quad Channels") located on a Transponder on the
GE3 Satellite for which SpaceCom obtains space segment capacity.
The FM Quad Channels shall have Technical Specifications as
outlined in Exhibit II.
<PAGE>
6. Customer Use of FM Quad-Related SCPC Channels.
a. Subject to the provisions set forth below in
Paragraph 7, SpaceCom shall make available to Customer and
Customer accepts from SpaceCom the use of and agrees to pay
SpaceCom for hereunder, two (2) 192 kb/s SCPC Channels (the
"FM Quad-Related SCPC Channels") located on a Transponder on
the GE3 Satellite for which SpaceCom obtains space segment
capacity (the "FM Quad-Related SCPC Transponder") for SCPC
backhaul delivery of Customer's signal from the Dallas Fort
Worth Teleport ("DFWT") to SpaceCom's Chicago International
Teleport (the "CIT" as hereinafter defined). The FM Quad-
Related SCPC Channels will have Technical Specifications as
outlined in Exhibit II (as such Exhibit may be replaced by
SpaceCom from time to time to reflect any change in
transponder and/or Satellite in accordance with the terms of
this Supplemental Agreement).
b. SpaceCom has initially contracted with the DFWT
for backhaul of the FM Squared Channels (the "FM Squared
Channels") by SCPC (as defined herein) transmission from the
DFWT to the CIT. Backhaul from the DFWT to the CIT of the
FM Quad Channels shall be the responsibility of SpaceCom, to
be carried out initially through its contract with DFWT.
Backhaul transmission method shall be determined solely by
SpaceCom.
7. Transition Period. Under the Original Agreement,
Customer is using two (2) SCPC Channel(s) on Transponder 13 (the
"FM Squared-Related SCPC Channels") and three (3) FM Squared
Channel(s) on Transponder 13 (the "FM Squared Channels"). In
order to allow the Customer a transition period, effective
July 15, 1999 through February 29, 2000 (the "Dual Feed Period'),
SpaceCom shall make available for Customer's use the FM Quad
Channels as set forth above, in addition to the FM Squared-
Related SCPC Channels and FM Squared Channels currently being
provided pursuant to the original Agreement. During the Dual
Feed Period, Customer shall continue to be charged the rate
specified in the Original Agreement for the FM Squared Channels
and FM Squared-Related SCPC Channels and shall not be charged any
additional fees for the FM Quad Channels. The period commencing
on termination of the Dual Feed Period shall be referred to
herein as the "Post Dual Feed Period".
8. Equipment, Maintenance, and Signal Delivery
Responsibilities.
a. Customer accepts sole responsibility for
delivering its signals to the DFWT.
b. SpaceCom shall at its cost provide, operate and
maintain (or cause to be done) all SCPC transmission
equipment required at the DFWT to transmit Customer's
backhaul channels to the CIT and the SCPC Channels.
c. SpaceCom shall, at its cost, provide, install and
maintain all downlink equipment required to receive
Customer's backhaul channels at the CIT.
d. SpaceCom shall at its cost provide, operate and
maintain all FM Quad transmission equipment required at the
CIT to transmit Customer's signal from the CIT to the GE3
Satellite.
e. Customer shall at its cost equip, install and
maintain all sites (or cause them to be equipped, installed
and maintained) with any downlink equipment required for
reception of Customer's FM Quad Channels. SpaceCom shall
have no liability due to any failure of Customer's sites to
receive Customer's signal due to downlink equipment,
installation, and/or maintenance provided by others.
f. SpaceCom Systems, Inc. will have the DVE Carrier
up within thirty days of receipt of working and fully
functional hardware from Wegener Communications, Inc.
9. Risk of Loss and Insurance Requirements at CIT.
a. Customer shall bear all risk of loss to its
equipment or other property located at the CIT, regardless
of the cause of any such loss.
b. To cover its employees and/or agents performing
work at the CIT, and Customer's equipment or other property
located at the CIT, Customer shall carry and maintained its
own cost during the term of
-2-
<PAGE>
this Supplemental Agreement, with insurance companies having
an "A.M. Best's" rating of "A-" or better, the insurance
indicated below as a minimum requirement:
Type of Coverage Limits of Liability
-------------------------------------------------------------
Workers' Compensation Statutory per State of Illinois
Employers Liability $500,000
Commercial General Liability $1,000,000
Occurrence
Broad Form Contractual Liability
Customer shall furnish SpaceCom certificates evidencing such
coverage stating that SpaceCom be provided with 30 days prior
written notice of cancellation, non-renewal or reduction of
limits. All policies shall contain an endorsement waiving
subrogation rights of insurer against SpaceCom.
c. Customer shall not by any act of commission or
omission cause an increase in the rate of insurance or the
cancellation of any insurance policy carried by SpaceCom
covering the CIT.
10. Indemnity. Customer shall indemnify, defend and hold
SpaceCom, and the Satellite Transponder Provider, their parent
and affiliate corporations, officers, directors, employees,
agents, successors and assigns, harmless from and against any and
all losses, liabilities, claims, demands, costs, and expenses
arising out of or related directly or indirectly to Customer's
use of the FM Quad and FM Quad-Related SCPC Channels (including,
but not limited to, reasonable attorneys' fees and costs of
suit). Customer's indemnification of SpaceCom, and the Satellite
Transponder Provider, their parent and affiliate corporations,
officers, directors, employees, agents, successors and assigns,
shall include but not be limited to claims for libel, slander,
infringement of copyright or patent, unauthorized use or
infringement of trademark, trade name or service mark, or any
signal interference, arising out of or related to Customer's use
of the FM Quad and FM Quad-Related SCPC Channels.
11. Interruptions and Technical Failures. SpaceCom shall
have no liability whatsoever for interruptions in satellite
service that are caused (1) by Customer or Customer-provided
facilities; (2) by sun transient outage; or (3) by rain fade.
In the event of any interruption of satellite service or
technical failure for any reason other than these three reasons,
the SOLE AND EXCLUSIVE liability of SpaceCom shall be a pro rata
refund of the monthly fee (as such fee is specified in Exhibit 1
hereto or in Exhibit 1 to the Original Agreement, as applicable)
paid by Customer for any period exceeding five (5) minutes in a
one (1) hour period during which service shall not have been
provided. No more than one full day's credit will be allowed for
any period of twenty-four (24) hours. The length of the
interruption shall be measured from the time Customer notifies
SpaceCom of the interruption. Such pro rata refund shall be
Customer's EXCLUSIVE REMEDY for such interruption of satellite
service or technical failure, and Customer shall have no other
remedy against SpaceCom or the Satellite Transponder Provider,
their parent and affiliate corporations, officers, directors,
employees agents, successors and assigns with respect to any such
interruption.
12. Force Majeure. SpaceCom shall not be liable to
Customer hereunder nor shall it be considered to be in breach of
this Supplemental Agreement due to SpaceCom's failure to perform
its obligations hereunder in a timely manner as a direct result
of any cause beyond its reasonable control, including but not
limited to any nature calamity, work stoppage by any unaffiliated
third party supplier, act of any public enemy or any military,
civil or regulatory authority, a material change in any law or
regulation governing the performance of the parties hereunder,
disruption or outage of communication equipment, loss of electric
power, damage or destruction to satellite equipment, or loss of
access to applicable satellite transponder capacity.
13. SpaceCom Relocation Rights.
a. SpaceCom shall have the right to move Customer's
FM Quad Channels to another transponder and/or satellite
other than the transponder and/or satellite to which
Customer is initially assigned, provided, however, that
SpaceCom shall give Customer thirty (30) days' advance
written notice of any planned
-3-
<PAGE>
move and, provided, further, that SpaceCom shall not
exercise this relocation right without good cause, such
cause to be determined solely by SpaceCom.
b. SpaceCom shall have the right to move Customer's
FM Quad-Related SCPC service to another transponder and/or
satellite other than the transponder and/or satellite to
which Customer is initially assigned, provided, however,
that SpaceCom shall give Customer thirty (30) days' advance
written notice of any planned move; and provided further,
that SpaceCom will not exercise this relocation right
without good cause, such cause to be solely determined by
SpaceCom.
c. SpaceCom shall have the right to change the
frequency of Customer's FM Quad and/or FM Quad-Related SCPC
Channels. SpaceCom will not exercise this right without
good cause, such cause to be determined solely by SpaceCom,
and SpaceCom will give Customer a minimum of ten (10) days'
advance written notice of the change of frequency.
d. SpaceCom shall have the right during the term of
this Supplemental Agreement to relocate and/or to
reconfigure the CIT.
14. Conditional Protected Services. SpaceCom has a current
contract for protected transponder service from GE, which service
is outlined on Exhibit IV hereto. SpaceCom shall provide
protected service under this Supplemental Agreement to Customer
to the same extent that SpaceCom receives protected service from
the Satellite Transponder Provider.
15. Assignment. Customer shall not assign or transfer its
rights, interests and obligations under this Supplemental
Agreement to any other parties without SpaceCom's prior written
consent, which consent shall not be unreasonably withheld or
delayed. Customer agrees that SpaceCom may assign or transfer
its rights, interests and/or obligations under this Supplemental
Agreement.
16. No Consequential or Incidental Damages. Except for
Customer's indemnification obligations pursuant to Paragraph 10
of this Supplemental Agreement, in no vent whatsoever shall
either party have any liability to the other or to any other
party for consequential or incidental damages.
17. Notices. Notices to be given the parties hereunder
shall be mailed by certified or registered mail, return receipt
requested, sent by private courier service, or personally
delivered to the parties at the following addresses:
If to SpaceCom: SpaceCom Systems, Inc.
One Technology Plaza
7140 South Lewis Avenue
Tulsa, Oklahoma 74136-5422
Attn: Senior Vice President/General
Manager
Telephone: (918) 488-4800
Facsimile: (918) 488-4848
If to Customer: USA Radio Network, Inc.
2290 Springlake Road, Suite 107
Dallas, TX 75234
Attn: Vice President and General
Manager
Telephone: (972) 484-3900
Facsimile: (972) 241-6826
18. Confidentiality.
a. Each party acknowledges that in the course of
performance of its obligations pursuant to this Supplemental
Agreement or any amendment, it may obtain certain
confidential and/or proprietary information of the other
party or the other party's customers, including the terms
and conditions of this Supplemental Agreement
-4-
<PAGE>
or any amendment ("Information"). Each party hereby agrees
that all Information communicated to it by the other party
or its customers, whether before or after the Execution Date
shall be and was received in strictest confidence, shall be
used only for purposes of this Supplemental Agreement or any
amendment, and shall not be disclosed by such receiving
party, its agents or employees without the prior written
consent of the disclosing party, except as may be necessary
by reason of legal, accounting or regulatory requirements
beyond the reasonable control of the receiving party. the
obligations imposed by this paragraph shall not apply to a
party's Information, or any portion thereof, which is
(i) publicly known through no unauthorized act of the other
party, (ii) independently developed by the other party,
(iii) already known by the other party without an obligation
of confidentiality, or (iv) rightfully received from a third
party who is not obligated to keep such Information
confidential. The obligations set forth in this paragraph
shall survive termination of this Supplemental Agreement or
by amendment.
b. While the specific terms of this Supplemental
Agreement, including pricing terms, are confidential, the
existence of this Supplemental Agreement shall not be
confidential, and SpaceCom and Customer shall each have the
other's approval and permission to distribute and/or publish
news releases, advertisements, and any other type of
marketing or promotional materials which contain non-
confidential information such as the names and primary
contacts of SpaceCom and Customer and a general description
of the services contracted for under this Supplemental
Agreement.
19. Governing Law. The parties hereto agree that this
Supplemental Agreement shall be deemed to have been executed and
delivered in the State of Oklahoma, and it shall be governed by
and construed in accordance with the laws of said State.
20. Arbitration. Any dispute, claim or controversy in
connection with or arising under this Supplemental Agreement, its
interpretation, validity or any breach hereof, which cannot be
resolved between the parties within sixty (60) days after both
parties are aware of the dispute, claim or controversy, shall be
finally and exclusively resolved by arbitration under the rules
of the American Arbitration Association then prevailing. The
site for any arbitration hearing shall be Tulsa, Oklahoma. In
resolving the dispute, the arbitrator(s) shall be bound by the
terms of this Supplemental Agreement and the governing law of
this Supplemental Agreement. The non-prevailing party shall be
assessed all arbitration fees and costs. The award of the
arbitrator(s) shall be final and binding. If it becomes
necessary for either party to enforce an arbitration award by
legal action, the other party shall pay all reasonable costs and
attorney's fees incurred by the party seeking to enforce the
award.
21. Incorporation by Reference. Appendix One and
Exhibits I - IV attached to this Supplemental Agreement, and the
premises immediately preceding this Supplemental Agreement, are
hereby incorporated into this Supplemental Agreement.
22. Severability. If any term or condition of this
Supplemental Agreement is ever found to be invalid or
unenforceable for any reason, such invalidity or unenforceability
shall not affect the remaining terms and conditions of this
Supplemental Agreement and this Supplemental Agreement, excluding
the invalid or unenforceable term or condition or portion
thereof, shall continue to remain in full force and effect.
23. Headings. The headings of the paragraphs of this
Supplemental Agreement have been set forth for ease of reference
only and shall not be used to construe or interpret the terms and
conditions of the Supplemental Agreement.
24. Entire Agreement. This Supplemental Agreement, when
read in conjunction with the Original Agreement, represents the
total understanding between the parties. Other than the Original
Agreement, there are not other agreements, representations, or
warranties, whether oral or written, respecting the subject
matter hereof. This Supplemental Agreement may be amended or
modified only by written amendment signed by the parties.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Supplemental Agreement as of the date of the last signature
hereto.
SpaceCom: Customer:
SPACECOM SYSTEMS, INC., USA RADIO NETWORK
a Delaware Corporation a Texas Corporation
By: /s/ By: /s/ Tom Tradup
-------------------- ----------------
Tom Tradup
Title: Senior Vice President Title: Vice President
General Manager & General Manager
Date: 1/15/99 Date: 1/15/99
-6-
<PAGE>
APPENDIX ONE
DEFINITIONS
AS USED IN THIS AGREEMENT:
a. BACKHAUL - shall mean the method of delivering
Customer's signal(s) to the CIT for purposes of this contract,
whether by satellite or leased lines.
b. CIT - shall mean the Chicago International
Teleport, SpaceCom's satellite transmission facility in Monee,
Illinois.
c. DOWNLINK -shall mean equipment provided by
Customer and/or its customers for reception of the satellite
signals and demodulation of the signals provided by Customer.
d. FM QUAD - shall mean a DVB compliant, QPSK
modulated carrier.
e. FM QUAD CHANNEL - shall mean that channel
described at paragraph 5 of the Supplemental Agreement to which
this Appendix is attached.
f. FM QUAD TRANSPONDER - shall mean that Transponder
on Satellite GE3 on which FM Quad modulation techniques are used.
g. MODULATION INDEX (MI) - shall refer to subcarrier
with respect to its deviation of the main carrier. MI is
determined by applying the following formula:
MI = The peak deviation of the main carrier due o a given
subcarrier divided by the subcarrier's operating frequency.
h. OPERATING SPECIFICATIONS - shall mean those
operating specifications and access procedures for transmit earth
stations under Customer's direct control which use FM Quad
Transponder under this Supplemental Agreement.
i. SATELLITE TRANSPONDER PROVIDER - shall mean GE
American Communications or such other satellite provider designed
by SpaceCom in accordance with the terms of the Supplemental
Agreement.
j. SCPC - shall mean a single-channel-per-carrier
transmission method which has been designated for signal delivery
to the CIT.
k. FM Quad-Related SCPC CHANNEL - shall mean that
channel described at paragraph 6 of the Supplemental Agreement to
which this Appendix is attached.
l. SCPC TRANSPONDER - shall mean that transponder on
Satellite GE3 on which FM Quad-Related SCPC space has been
allocated.
m. TECHNICAL SPECIFICATIONS - shall mean the
technical specifications for the FM Quad and FM Quad-Related SCPC
Channels as presented in Exhibit II attached to the Supplemental
Agreement to which this Appendix is also attached (as such
Exhibit may be replaced by SpaceCom from time to time to reflect
any change in transponder and/or satellite in accordance with the
terms of the Supplemental Agreement).
-7-
UPI
WORLDWIDE NEWS, INC.
T/A UNITED PRESS INTERNATIONAL
1510 H STREET, N.W.
WASHINGTON, D.C. 20005
202-898-8000
SUBSCRIPTION AGREEMENT
SUBSCRIBER INFORMATION
Corporate Name: USA RADIO NETWORK
Address: 2290 Springlake Road, Suite 107
City, State, Zip: Dallas, TX 75234
Federal Identification Number:
================================================================
1. PRODUCT(S): Subject to compliance by Subscriber with all of
the terms of this Agreement, UPI grants to subscriber the
non-exclusive right and privilege to use the "Product(s)"
described in the Schedule below. These "Product(s)" are to
be used for news and informational purposes only.
Subscriber agrees that the "Product(s)" are to be used at
the following "User's Location" only and by the named
"Organization" only, except for the immediate distribution
to Subscriber's readers, listeners, or viewers:
User Location: same
Address: same
City, State, Zip: same
Contact Name: Tom Tradup, VP/GM
Telephone: 800-829-8111, Ext 138
FAX: 972-241-6826
2. START DATE: June 1, 1998
3. TERM: This Agreement shall continue for 24 months
commencing on actual initiation of service, if different
from date shown in Paragraph 2.
4. RATE: Subscriber agrees to pay UPI a "Total Monthly Rate"
of $10,000.00 except that during the first six months the
rate shall be $7,500.00 monthly and based upon the following
Schedule of service.
PRODUCT(S), EQUIPMENT, DELIVERY, SOFTWARE:
UPI TEXT (50%) AND AUDIO CUTS SERVICE (50%) $10,000.00 MONTHLY
<PAGE>
I hereby certify that I have read and agree to be bound by all
terms and conditions on the front and reverse side of this
agreement. Upon the signing or upon the first receipt of the
Product(s), whichever occurs first, this agreement goes into
effect and binds both parties and/or their successors and
assigns. Made this day of 1998, in
Washington, D.C.
USA RADIO NETWORK
/s/ Thomas R. Tradup VICE PRESIDENT & GENERAL MANAGER 3/27/98
- ----------------------- -------------------------------- -------
AUTHORIZED SIGNATURE TITLE DATE
FOR SUBSCRIBER
Thomas R. Tradup
/s/
- ----------------------- -------------------------------- -------
ACCEPTED BY (AUTHORIZED TITLE DATE
UPI SIGNATURE)
NationsBank, N.A.
Demand Note
Customer #4607198
Date September 30, 1998
[ ] NEW [X] Renewal
Amount $100,000.00
=================================================================
Bank: Borrower:
NationsBank, N.A.
Banking Center: USA Radio Network, Inc.
Irving Banking Center 2290 Springlake Rd.,
2520 W. Irving Blvd. Suite 107
Irving, TX 75061 Dallas, TX 75234-5874
County: Dallas County: Dallas
=================================================================
FOR VALUE RECEIVED, on Demand, the undersigned Borrower
unconditionally (and jointly and severally, if more than one)
promises to pay to the order of Bank, its successors and assigns,
without setoff, at its offices identified above, or at such other
place as Bank designates, the principal amount of ONE HUNDRED
THOUSAND DOLLARS AND NO/100 ($100,000.00), or so much thereof as
may be advanced from time to time in immediately available funds,
together with interest computed daily on the outstanding
principal balance hereunder, at an annual interest rate, and in
accordance with the payment schedule, indicated below.
1. RATE.
PRIME RATE. The Rate shall be the Prime Rate, Plus 1.00 percent,
per annum. The "Prime Rate" is the fluctuating rate of interest
established by Bank from time to time, at its discretion, whether
or not such rate shall be otherwise published. The Prime Rate is
established by Bank as an index and may or may not at any time be
the best or lowest rate charged by Bank on any loan.
Notwithstanding any provision of this Note, Bank does not intend
to charge and Borrower shall not be required to pay any amount of
interest or other charges that exceed the maximum permitted by
applicable law Borrower agrees that during the full term hereof,
the maximum lawful interest rate for this Note as determined
under Texas law shall be the indicated rate ceiling as specified
in Section 304.002 Tex. Finance Code. Further, to the extent
that any other lawful rate ceiling exceeds the rate ceiling so
determined then the higher rate ceiling shall apply.. Any payment
in excess of such maximum shall be refunded to Borrower or
credited against principal, at Bank's option.
2. ACCRUAL METHOD. Interest will be calculated by the 365/360
day method (a daily amount of interest is computed for a
hypothetical year of 360 days; that amount is multiplied by the
actual number of days for which any principal is outstanding
hereunder).
3. PAYMENT SCHEDULE. All payments received hereunder shall be
applied first to the payment of any expense or charges payable
hereunder or under any other loan documents executed in
connection with this Note, then to interest due and payable, with
the balance applied to principal, or in such other order as Bank
shall determine at its option.
Principal shall be paid on demand. Interest thereon shall be
paid MONTHLY, commencing on October 30,1998, and continuing on
the last day of each successive month, quarter or other period
(as applicable) thereafter, with a final payment of all unpaid
interest at the same time as the principal is paid.
4. REVOLVING FEATURE. Borrower may borrow, repay and reborrow
hereunder at any time, up to a maximum aggregate amount
outstanding at any one time equal to the principal amount of this
Note, provided that the borrowings hereunder do not exceed any
borrowing base or other limitation on borrowings by Borrower.
Bank shall incur no liability for its refusal to advance funds
based upon its determination that any conditions of such further
advances have not been met. Bank records of the amounts borrowed
from time to time shall be conclusive proof thereof.
AUTOMATIC PAYMENT. Borrower has elected to authorize Bank to
effect payment of sums due under this Note by means of debiting
Borrower's account number _____________________. This
authorization shall not affect the obligation of Borrower to pay
such sums when due, without notice, if there are insufficient
funds in such account to make such payment in full on the due
date thereof, or if Bank fails to debit the account.
5. WAIVERS, CONSENTS AND COVENANTS. Borrower, and any indorser
or any other party to this Note (individually an "Obligor" and
collectively "Obligors") and each of them jointly and severally:
(a) waive presentment, demand, protest, and any notice required
to be given under the law in' connection with the delivery,
acceptance, performance, or enforcement of this Note, or any
other note or other loan documents now or hereafter executed in
connection with any obligation of Borrower to Bank (the "Loan
-1-
<PAGE>
Documents"); (b) consent to all delays, extensions, renewals or
other modifications of the Loan Documents, or waivers of any
provisions of the Note or the Loan Documents, or Bank's release
or discharge of any such party, or release, substitution or
exchange of any security for the payment of this Note, or Bank's
failure to act, or any indulgence shown by Bank and agree that no
such action, failure to act or failure to exercise any right or
remedy by Bank shall in any way affect the obligations of any
such party or be construed as a waiver by Bank of, or otherwise
affect, any of Bank's rights under this Note, or under any of the
Loan Documents; and (c) agree to pay, on demand, all costs and
expenses of collection or defense of this and/or the enforcement
or defense of Bank's rights with respect to, or the
administration, supervision, preservation, or protection of, or
realization upon, any property securing payment hereof,
including, without limitation, reasonable attorney's fees related
to any suit, mediation or arbitration proceeding, out of court
payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by an
arbitrator or court as appropriate.
6. FINANCIAL STATEMENTS AND OTHER INFORMATION. Until full
payment and performance of all obligations of Borrower under this
Note, Borrower will, unless Bank consents otherwise in writing
(and without limiting any requirement of any other Loan Document)
maintain a system of accounting satisfactory to Bank and in
accordance with GAAP applied on a consistent basis throughout the
period involved, permit Bank's officers or authorized
representatives to visit and inspect Borrower's books of account
and other records at such reasonable times and as often as Bank
may desire, and pay the reasonable fees and disbursements of any
accountants or other agents of Bank selected by Bank for the
foregoing purposes. Unless written notice of another location is
given to Bank, Borrower's books and records will be located at
Borrower's chief executive office set forth above. In addition,
Borrower will furnish to Bank (i) annual financial statements of
Borrower for each fiscal year of Borrower, within 150 days after
the close of each such fiscal year, prepared in form and content
acceptable to Bank by independent certified public accountants
acceptable to Bank; and (ii) internally prepared financial
statements (including a balance sheet and profit and loss
statement) of Borrower for each quarter of each fiscal year of
Borrower, within 90 days after the close of each such period in
form and content acceptable to Bank.
7. DEMAND NOTE. The Borrower acknowledges and agrees that this
Note is payable immediately upon demand by the Bank, and that the
recitation of defaults in any of the Loan Documents is intended
merely to provide examples of events which may result in the Bank
making demand for payment hereunder. Under no circumstances
shall the Bank's demand for payment be conditioned upon the
existence or non-existence of any event of default contained in
any of the Loan Documents or any other circumstance, including he
imposition of any condition or duty, such as a duty of good faith
or a duty to demand only upon the existence of an event of
default contained in any of the Loan Documents. The Bank shall
at all times be entitled to demand payment of all or any portion
of the amounts due and owing under this Note at any time and from
time to time in its sole and absolute discretion, without prior
notice to or consent of the Borrower or any other Obligor.
8. REMEDIES AFTER DEMAND. If this Note is not paid upon
demand, (a) the entire balance outstanding under this Note and
all other obligations of any Obligor to Bank shall, at the option
of Bank, become immediately due and payable and any obligation of
Bank to permit further borrowing under this Note shall
immediately cease and terminate, and/or (b) to the extent
permitted by law, the rate of interest on the unpaid principal
shall be increased at Bank's discretion up to the maximum rate
allowed by law, or if none, 25% per annum (the "Post Demand
Rate"). Imposition of a Post Demand Rate shall not extend the
time for any payment on this Note. At Bank's option, any accrued
and unpaid interest, fees or charges may, for purposes of
computing and accruing interest on a daily basis after demand, be
deemed to be a part of the principal balance, and interest shall
accrue on a daily compounded basis after demand at the Post
Demand Rate provided in this Note until the entire outstanding
balance of principal and interest is paid in full. Whenever
demand is made under this Note, Bank is authorized at any time,
at its option and without notice or demand, to set off and charge
against any deposit accounts of any Obligor (and against any
money, instruments, securities, documents, chattel paper,
credits, claims, demands, income and any other property, rights
and interests of any Obligor), which come into the possession or
custody or under the control of Bank or any of its agents,
affiliates or correspondents, all obligations due under this
Note. Additionally, Bank shall have all rights and remedies
available under each of the Loan Documents, as well as all rights
and remedies available at law or in equity.
9. NON-WAIVER. Bank's failure to exercise any option or any
other right under this Note is not a waiver of that right or
option, and will not bar Bank's exercise of any options or rights
at a later date. All rights and remedies of Bank are cumulative
and may be pursued singly, successively or together, at Bank's
option. Bank's acceptance of any partial payment is not a waiver
of any of Bank's rights under this Note. Any waiver of Bank's
rights and any modification of this Note must be in writing and
duly signed on behalf of Bank; any such waiver shall apply only
to the specific instance involved, and will not impair the rights
of Bank or the obligations of Obligors to Bank in any other
respect or at any other time.
10. APPLICABLE LAW, VENUE AND JURISDICTION. Borrower agrees
that this Note shall be deemed to have been made in the State of
Texas at Bank's address indicated at the beginning of this Note
and shall be governed by, and construed in accordance with, the
laws of the State of Texas and is performable in the City and
County of Texas indicated at the beginning of this Note. In any
litigation in connection with or to enforce this Note or any
endorsement or Guaranty of this Note or any Loan Documents,
Obligors, and each of them, irrevocably consent to and confer
personal jurisdiction on the courts of the State of Texas or
-2-
<PAGE>
the United States courts located within the State of Texas.
Nothing contained herein shall, however, prevent Bank from
bringing any action or exercising any rights within any other
state or jurisdiction or from obtaining personal jurisdiction by
any other means available under applicable law.
11. PARTIAL INVALIDITY. The unenforceabilitv or invalidity of
any provision of this Note shall not affect the enforceability or
validity of any other provision of this Note and the invalidity
or unenforceability of any provision of this Note to any person
or circumstance shall not affect the enforceability or validity
of such provision to any other persons or circumstances.
12. BINDING EFFECT. This Note shall be binding upon and inure
to the benefit of Borrower, Obligors and Bank and their
respective successors, assigns, heirs and personal
representatives, but no obligations of Borrower or Obligors
hereunder can be assigned without prior written consent of Bank.
13. CONTROLLING DOCUMENT. To the extent that this Note
conflicts with or is in any way incompatible with any other
document related specifically to the loan evidenced by this Note,
this Note shall control over any other such document, and if this
Note does not address an issue, then each other such document
shall control to the extent that it deals most specifically with
that issue.
14. YEAR 2000 REPRESENTATIONS AND WARRANTIES.
(A) Borrower has (i) begun analyzing the operations of
Borrower and its subsidiaries and affiliates that could be
adversely affected by failure to become Year 2000 compliant (that
is, that computer applications, imbedded microchips and other
systems will be able to perform date-sensitive functions prior to
and after' December 31, 1 999) and; (ii) developed a plan for
becoming Year 2000 compliant in a timely manner, the
implementation of which is on schedule in all material respects.
Borrower reasonably believes that it will become Year 2000
compliant for its operations and those of its subsidiaries and
affiliates on a timely basis except to the extent that a failure
to do so could not reasonably be expected to have a material
adverse effect upon the financial condition of the Borrower.
(B) Borrower reasonably believes any suppliers and vendors
that are material to the operations of Borrower or its
subsidiaries and affiliates will be Year 2000 compliant for their
own computer applications except to the extent that a failure to
do so could not reasonably be expected to have a material adverse
effect upon the financial condition of Borrower.
(C) Borrower will promptly notify Bank in the event
Borrower determines that any computer application which is
material to the operations of Borrower, its subsidiaries or any
of its material vendors or suppliers will not be fully Year 2000
compliant on a timely basis, except to the extent that such
failure could not reasonably be expected to have a material
adverse effect upon the financial condition of Borrower.
15. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF
OR RELATING TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY
RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM
BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES
OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL
DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF
("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE
EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO
WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE
EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND
ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS
OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL
ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (i) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY
WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR
(ii) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR
(iii) LIMIT THE RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP
REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE
AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL,
-3-
<PAGE>
OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK MAY EXERCISE
SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN
SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER
THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO
THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF
SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
Borrower represents to Bank that the proceeds of this loan are to
be used primarily for business, commercial or agricultural
purposes. Borrower acknowledges havinc3 read and understood, and
agrees to be bound by, all terms and conditions of this Note and
hereby executes this Note under seal as of the date here above
written.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Bank Corporate or Partnership Borrower
NationsBank, N.A. USA Radio Network, Inc.
By: /s/ John Richardson By: /s/ Robert M. Maddoux
----------------------- -------------------------
Name: John Richardson Name: Robert M. Maddoux
Title: Assistant Vice Title: President
President
/s/
Attest (if Applicable)
[Corporate Seal]
-4-
THIRD AMENDMENT TO LEASE AGREEMENT
BETWEEN
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
AND
U.S.A. RADIO NETWORK
This THIRD AMENDMENT TO LEASE AGREEMENT between PHOENIX HOME LIFE
MUTUAL INSURANCE COMPANY (hereinafter referred to as Landlord)
and U.S.A. RADIO NETWORK (hereinafter referred to as Tenant),
dated June 7, 1994, pertains to the leased premises at 2290
Springlake, Suite 107, Dallas, Texas, consisting of approximately
22,399 square feet:
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have entered into that certain lease
agreement dated May 3, 1989, referenced herein and made a part
hereof (Exhibit "A"), hereinafter called the "lease"), covering
the premises described in the lease (hereinafter called the
"leased premises"), the terms of such lease and extension
thereof; and
WHEREAS, Landlord and Tenant wish to continue the term of the
Lease under the same terms, provisions, covenants, agreements and
conditions, except::
(1) Term of Lease: The term of the lease shall be for
seven (7) years, beginning July 1, 1994 and ending June
30, 2001.
(2) Rental Rate: The rental rate shall be as follows:
Years 1 - 5 @ $6.75/SF or $12,599.44 per month.
Years 6 - 7 @ $7.25/SF or $13,532.73 per month.
(3) Base Year: The base year shall be 1994.
(4) Taxes and Insurance: Tenant shall pay his pro rata
share of increases in taxes and insurance over the base
year during the term of the lease.
(5) Common Area Maintenance: Tenant shall be his pro rata
share of the common area maintenance during the term of
the lease.
(6) Finish Allowance: Landlord will provide a finish out
allowance not to exceed $75,000 to be used for tenant
improvements to the leased premises. All work shall be
approved by Landlord.
(7) HVAC Repairs: Landlord shall provide $6,000 for the
replacement of compressors to the HVAC units in the
leased premises. All other maintenance and repairs to
the HVAC system are the responsibility of Tenant as
outlined in Article 7.03 of the Lease.
(8) Dead Storage Space: Landlord will allow Tenant to use
approximately 1,000 square feet of warehouse space
located at 2270 Springlake on a month-to-month basis.
There will be no additional rent charged for this
space.
(9) Right of First Refusal: Landlord will grant Tenant a
Right of First Refusal on any contiguous lease space.
The terms and conditions of the Right of First Refusal
are outlined in Section 15.17 of the Lease.
(10) Real Estate Commission: A real estate commission of 4-
1/2% of the base rental over the term of the lease
shall be paid to Hay & Jones. The commission shall be
paid one-half upon the execution of the Third Amendment
to Lease Agreement and one-half upon lease
commencement.
(11) Water and Sewer: Tenant hereby agrees to pay its pro
rata share of the monthly water and sewer service for
the building located at 2290 Springlake in Farmers
Branch, Texas.
<PAGE>
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency which is hereby acknowledged, Landlord does hereby
LEASE, DEMISE, AND LET unto Tenant, and Tenant hereby takes and
accepts the leased premises, and Landlord and Tenant do hereby
agree to extend the Lease for seven years, unless sooner
terminated as provided in the Lease.
WITNESS WHEREOF, Landlord and Tenant have executed this THIRD
AMENDMENT TO LEASE AGREEMENT as of the date first above written.
TENANT: LANDLORD:
U.S.A. RADIO NETWORK PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By: /s/ Marlin Maddoux By: /s/ Mary Ann Kennedy
---------------------- --------------------------------
Title: /s/ President Title: Director - Real Estate
-------------------- ------------------------------
6-8-94 Phoenix Home Life Mutual Ins. Co.
COOPERATING REALTOR:
HAY & JONES INC.
By: /s/
License No. 0381246
Tax I.D. No. 75-1541148
-2-
Third Amendment
to Lease Agreement
<PAGE>
SECOND AMENDMENT TO LEASE AGREEMENT
BETWEEN
PHOENIX MUTUAL LIFE INSURANCE COMPANY
AND
U.S.A. RADIO NETWORK
This Second Amendment to Lease Agreement between Phoenix Mutual
Life Insurance Companv (hereinafter referred to as Landlord) and
U.S.A. Radio Network (hereinafter referred to as Tenant), dated
May 3, 1989, pertains to an expansion of 2290 Springlake Road,
Suite 107.
(1) Tenant agrees to lease an additional 4160 square feet of
expansion space from Landlord. The additional square
footage is outlined on Exhibit "A" to the Second Amendment
to the Lease Agreement attached hereto.
(2) Tenant is leasing the additional space on an "As Is" basis
and any improvements will be at Tenant's expense. Any such
improvements will be subject to Landlord's approval.
(3) The lease term for the 4160 square feet of expansion space
as outlined on Exhibit "A" to the Second Amendment to the
Lease Agreement shall be for thirty-eight (38) months,
beginning November 1, 1991 and ending December 31, 1994.
(4) The rental rate for the 4160 square feet of expansion space
as outlined on Exhibit "A" to the Second Amendment to the
Lease Agreement shall be as follows:
November, 1991 & December, 1991 @ $2.00/sq.ft or $693.33/mnth
January, 1992 & February, 1992 @ $2.00/sq.ft. or $693.33/mnth
March, 1992 - December, 1992 @ $4.50/sq.ft. or $1,560.00/mnth
January, 1993 - December, 1993 @ $5.00/sq.ft. or $1,733.33/mnth
January, 1994 - December, 1994 @ $5.50/sq.ft. or $1,906.68/mnth
(5) A real estate commission of 4-1/2% of the gross on the
expansion space shall be paid to Rubenstein-Hay Commercial
Realtors, Inc. The commission shall be paid one-half upon
execution of the Second Amendment to Lease Agreement and one-
half upon commencement. The total commission due for the
expansion is $2,792.40 (4-1/2% of $62,053.32).
All other terms and conditions of the Lease Agreement dated
May 3, 1989, remain in full force and effect.
AGREED to this 29th day of October, 1991.
TENANT: LANDLORD:
U.S.A. RADIO NETWORK PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY, a Connecticut
corporation
By: /s/ Marlin Maddoux By: /s/ Terence P. O'Day
------------------------- -----------------------------
Title: /s/ President Title: Managing Director
---------------------- -------------------------
Second Amendment to Lease Agreement
<PAGE>
EXHIBIT "A"
TO
SECOND AMENDMENT TO LEASE AGREEMENT
BETWEEN
PHOENIX MUTUAL LIFE INSURANCE COMPANY
AND
U.S.A. RADIO NETWORK
[DIAGRAM OF LEASED PREMISES]
Second Amendment to Lease Agreement
<PAGE>
FIRST AMENDMENT TO LEASE AGREEMENT
BETWEEN
PHOENIX MUTUAL LIFE INSURANCE COMPANY
AND
U.S.A. RADIO NETWORK
This First Amendment to Lease Agreement dated May 3, 1989,
pertains to an expansion of 2290 Springlake Road, Suite 107.
(1) Tenant agrees to lease an additional 3239 square feet of
expansion space from Landlord. The original and additional
square footage are outlined on Exhibit A attached hereto and
hereinafter the term demised premises shall refer to the
18,239 square feet outlined in Exhibit A to the First
Amendment to Lease Agreement.
(2) Landlord agrees to provide Tenant with a Leasehold
Improvements Allowance for the 3239 square foot expansion
space of $7.50/sq.ft. ($24,292.50).
(3) The expansion space of 3239 square feet is leased at the
same per square foot rate and on the same rental schedule as
agreed to in the above-referenced lease. The total
leaseable square footage is 18,239 and the new base rental
schedule is as follows:
Months 1 - 4 --------------- $5,319.71/month
Months 5 - 12 --------------- $10,639.42/month
Months 13 - 24 --------------- $11,019.40/month
Months 25 - 36 --------------- $11,399.38/month
Months 37 - 48 --------------- $11,779.35/month
Months 49 - 60 --------------- $12,159.33/month
(4) Notwithstanding anything to the contrary, Tenant shall
commence paying rent in accordance with the rental schedule
outlined in paragraph (3) above on January 1, 1990. It is
agreed and understood that this commencement date shall be
in effect whether or not the leasehold improvements have
been completed by Tenant and whether or not Tenant has taken
possession and accepted the demised premises. Tenant hereby
acknowledges delivery of the demised premises by Landlord.
(5) A real estate commission of 4-1/2% of the gross rental on
the expansion space shall be paid to Rubenstein-Hav
Commercial Realtors, Inc. The commission shall be paid one-
half upon execution of the First Amendment to Lease
Agreement and one-half upon the rental commencement date
(January 1, 1990). The total commission due for the
expansion is $5,294.55 (4-1/2% of $117,656.72).
All other terms and conditions of the Lease Agreement dated May
3, 1989, remain in full force and effect.
AGREED to this 7th day of October, 1989.
TENANT: LANDLORD:
U.S.A. RADIO NETWORK PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY, a Connecticut
corporation
By: /s/ Marlin Maddoux By: /s/ Richard F. Russell
-------------------------- ------------------------------
Title: /s/ President Title: Second Vice President
----------------------- ---------------------------
First Amendment to Lease Agreement
<PAGE>
EXHIBIT "A"
TO
FIRST AMENDMENT TO LEASE AGREEMENT
BETWEEN
PHOENIX MUTUAL LIFE INSURANCE COMPANY
AND
U.S.A. RADIO NETWORK
[DIAGRAM OR LEASED PREMISES]
First Amendment to Lease Agreement
<PAGE>
LEASE AGREEMENT
ARTICLE ONE: BASIC TERMS
1.01 Date of Lease: May 3, 1989
1.02 Landlord: Phoenix Mutual Life Insurance Company
Address of Landlord: One American Row
Hartford, CT 06115
1.02 Tenant: U.S.A. Radio Network
Address of Tenant: 2290 Springlake Rd.
Farmers Branch, TX 75229
1.04 Property (included street address, as well as legal
description and approximate square footage):
Being approximately 15,000 Square Feet of Lease Space in a
building containing approximately 30,356 Square Feet. Said
building is located at 2290 Springlake Road in Farmers
Branch, Texas.
1.05 Lease Term: Sixty (60) months beginning on ____________
Completion of Space and ending on__________________.
1.06 Rent: See "Exhibit C" (Rent Schedule)
Dollars ($______________) per month.
1.07 Security Deposit: $6,811.00 (Transferred from previous
Lease)
1.08 Permitted Use (see Section 6.01): Office and Broadcasting
facility
1.09 Principal REALTOR(R) (If none, so state):
Rubenstein-Hay Commercial Realtors
P.O. Box 29246
Address: Dallas, TX 75229
1.10 Cooperating REALTOR(R) (If none, so state): none
Address:
1.11 REALTOR'S(R) Commissions (See Article Fourteen):
A. Commissions due to the undersigned Principal REALTOR(R)
shall be calculated and paid in accordance with paragraph
(a) or (b) or Section 14.01 (Strike out inapplicable
letter).
B. The percentage applicable in Sections 14.01 and 14.02
shall be six percent (6%)
1.12 Base Year for Taxes (see Section 4.02): 1989
1.13 Party to Receive Payments from Tenant Hereunder:
Phoenix Mutual Life Insurance Company
c/o Kelley Lund
100 Decker Ct., Suite 180
Irving, Texas 75062
Landlord; Principal REALTOR(R) (strike one)
1.14 Daily Late Charge (See Section 3.03):
Dollars ($____________) per day. (See Section 15.13.)
1.15 Acceptance:
The number of days for acceptance shall be Five (5) days.
ARTICLE TWO: LEASE AND LEASE TERM
2.01. Lease of Property for Lease Term. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord
for the Lease Term stated in Section 1.05. As used herein, the
"Commencement Date" shall be the date specified in Section 1.05
for the beginning of the Lease Term, unless advanced or delayed
under any provision of this Lease.
2.02. Delay in Commencement. Landlord shall not be liable to
Tenant if Landlord does not deliver possession of the Property to
Tenant on the first date specified in Section 1.05 above.
Landlord's non-delivery of the Property to Tenant on that date
shall not affect this Lease or the obligations of the Tenant
under this Lease. However, the Commencement Date shall be delayed
until possession of the Property is delivered to Tenant. The
Lease Term shall be extended for a period equal to the delay in
delivery of possession of the Property to Tenant, plus the number
of days necessary to end the Lease Term on the last day of a
month. If Landlord does not deliver possession of the Property to
Tenant within sixty (60) days after the first date specified in
Section 1.05 above, Tenant may elect to
<PAGE>
cancel this Lease by giving written notice to Landlord within ten
(10) days after the 60-day period ends. If Tenant gives such
notice, the Lease shall be cancelled effective as of the date of
its execution, and no party hereto shall have any obligations,
one to the other. If Tenant does not give such notice, Tenant's
right to cancel the Lease shall expire and the Lease Term shall
commence upon the delivery of the Property to Tenant. If delivery
of possession of the Property to Tenant is delayed, Landlord and
Tenant shall, upon such delivery, execute an amendment to this
Lease setting forth the Commencement Date and expiration date of
the Lease.
2.03. Early Occupancy. If Tenant occupies the Property prior to
the Commencement Date, Tenant's occupancy of the Property shall
be subject to all of the provisions of this Lease. Early
occupancy of the Property shall not advance the expiration date
of this Lease. Tenant shall pay Base Rent and all other charges
specified in this Lease for the occupancy period.
2.04. Holding Over. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall
reimburse Landlord for and indemnify Landlord against all damages
incurred by Landlord from any delay by Tenant in vacating the
Property. If Tenant does not vacate the Property upon the
expiration or earlier termination of the Lease, Tenant's
occupancy of the Property shall be a "month-to-month" tenancy,
subject to all of the terms of this Lease applicable to a month-
to-month tenancy, except that the Base Rent then in effect shall
be increased by fifty percent (50%).
ARTICLE THREE - RENT AND SECURITY DEPOSIT
3.01. Manner of Payment. All sums to become due hereunder by
Tenant shall be made to the party named in Section 1.13 above, at
the address stated herein for such party, unless such address is
changed as provided herein. [INFORMATION DELETED]. All sums
payable by Tenant hereunder, whether or not expressly denominated
as rent, shall constitute rent for the purposes of section
502(b)(7) of the Bankruptcy Code.
3.02. Time of Payment. Upon execution hereof, Tenant shall pay
the rent for the first month of the Lease Term. On or before the
first day of the second month of the Lease Term and of each month
thereafter, a likely monthly installment shall be due and
payable, in advance, without off-set, deduction or prior demand.
If the Lease Term commences or ends during a calendar month, the
rent for any fractional calendar month following the Commencement
Date or preceding the end of the Lease Term shall be prorated by
days.
3.03. Late Charges. [INTENTIONALLY DELETED] (See Section 15.13.)
3.04. Security Deposit. Upon execution hereof, Tenant shall
deposit with the party named in Section 1.13 above a cash
Security Deposit in the sum stated in Section 1.07. Landlord may
apply all or part of the Security Deposit to any unpaid rent or
other charges due from Tenant or to cure any other defaults of
Tenant. If Landlord uses any part of the Security Deposit, Tenant
shall restore the Security Deposit to its full amount within ten
(10) days after Landlord's written request. Tenant's failure to
do so shall be a material default under this Lease. No interest
shall be paid on the Security Deposit. Landlord shall not be
required to keep the Security Deposit separate from its other
accounts and no trust relationship is created with respect to the
Security Deposit. Upon any termination of this Lease not
resulting from Tenant's default, and after Tenant has vacated the
Property in the manner required by this Lease, Landlord shall
refund the unused portion of the Security Deposit to Tenant.
ARTICLE FOUR: TAXES
4.01. Payment by Landlord. Landlord shall pay the real estate
taxes on the Property during the Lease Term.
4.02. Payment by Tenant. Tenant shall pay the party named in
Section 1.13 above, as additional rental, the excess, if any, of
the real estate taxes for any year during the Lease Term over the
real estate taxes for the base year stated in Section 1.12,
Tenant shall make such payment within fifteen (12) days after
receipt of a statement showing the amount and computation of such
increase. Tenant shall be responsible for the pro-rata portion of
such additional rental for any fractional part of a year
preceding the end of the Lease Term, which prorated sum shall be
due and payable upon the termination of this Lease. If the
termination of this Lease occurs before the tax rate is fixed for
the particular year, the proration shall be upon the basis of the
tax rate for the preceding year applied to the latest assessed
valuation, and notwithstanding the termination of this Lease, any
difference in the actual real estate taxes for such year shall be
adjusted between the parties upon receipt of written evidence of
the payment thereof.
4.03. Improvements by Tenant. In the event the real estate taxes
levied against the Property for the real estate tax year in which
the Lease Term commences are increased as a result of any
alterations, additions or improvements made by Tenant or by
Landlord at the request of Tenant, Tenant shall pay to Landlord
upon demand the amount of such increase. For the purposes of the
calculations under Section 4.02, the amount of the real estate
taxes during the real estate tax year in which the Lease Term
commences shall not include any taxes resulting from any such
alterations, additions or improvements made in or to the
Property. Landlord shall obtain from the tax assessor assessors a
written statement of the total amount of such increase.
-2-
<PAGE>
4.04. Joint Assessment. If the real estate taxes are assessed
against the Property jointly with other property not constituting
a part of the Property, the real estate taxes for such years
shall be equal to the amount bearing the same proportion to the
aggregate assessment that the total square feet of building area
in the Property bears to the total square feet of building area
included in the joint assessment.
4.05. Personal Property Taxes. Tenant shall pay all taxes
charged against trade fixtures, furnishings, equipment or any
other personal property belonging to Tenant, Tenant shall try to
have its personal property taxed separately from the Property,
but if any of Tenant's personal property is taxed with the
Property, Tenant shall pay the taxes for the personal property
within fifteen (15) days after Tenant receives a written
statement for such personal property taxes.
ARTICLE FIVE: INSURANCE AND INDEMNITY
5.01. Casualty Insurance. During the Lease Term, Landlord shall
maintain policies of insurance covering loss of or damage to the
Property in such amount or percentage of replacement value as
Landlord or its insurance advisor deems reasonable in relation to
the age, location, type of construction and physical condition of
the Property and the availability of such insurance at reasonable
rates. Such policies shall provide protection against all perils
included within the classification of fire and extended coverage
and any other perils which Landlord deems necessary. Landlord may
obtain insurance coverage for Tenant's fixtures, equipment or
building improvements installed by Tenant in or on the Property.
Tenant shall, at Tenant's expense, maintain such primary or
additional insurance on its fixtures, equipment and building
improvements as Tenant deems necessary to protect its interest.
Tenant shall not do or permit to be done anything which
invalidates any such insurance policies. Any casualty insurance
which may be carried by Landlord or Tenant shall be for the sole
benefit of the party carrying such insurance and under its sole
control.
5.02. Increase In Premiums. Tenant shall not permit any
operation or activity to be conducted or storage or use of any
volatile or any other materials on the Property that would cause
suspension or cancellation of any fire and extended coverage
insurance policy carried by Landlord, or increase the premiums
therefor, without the prior written consent of Landlord. If
Tenant's use and occupancy of the Property causes an increase in
the premiums for any fire and extended coverage insurance policy
carried by Landlord on the day before Tenant shall have first
gone into possession of the Property under this Lease, Tenant
shall pay, as additional rental, the amount of such increase to
Landlord upon demand and possession of written evidence of the
increase by Landlord.
5.03. Liability Insurance. During the Lease Term, Tenant shall
maintain a policy of comprehensive public liability insurance, at
Tenant's expense, insuring Landlord against liability arising out
of the ownership, use, occupancy or maintenance of the Property.
The initial amount of such insurance shall be at least
$1,000,000, and shall be subject to periodic increase based upon
inflation, increased liability awards, recommendation of
professional insurance advisors, and other relevant factors.
However, the amount of such insurance shall not limit Tenant's
liability nor relieve Tenant of any obligation hereunder. The
policy shall contain cross-liability endorsements, if applicable,
and shall insure Tenant's performance of the indemnity provisions
of Section 5.04. Such policy shall contain a provision which
prohibits cancellation or modification of the policy except upon
thirty (30) days' prior written notice to Landlord. Tenant may
discharge its obligations under this Section by naming Landlord
as an additional insured under a policy of comprehensive
[unreadable] insurance [unreadable] and containing the coverage
and provisions described in this Section. Tenant shall deliver a
copy of such policy or certificate (or a renewal thereof) to
Landlord prior to the Commencement Date and prior to the
expiration of any such policy during the Lease Term. If Tenant
fails to maintain such policy, Landlord may elect to maintain
such insurance at Tenant's expense. Tenant shall, at Tenant's
expense, maintain such other liability insurance as Tenant may
deem necessary to protect Tenant.
5.04. Indemnity. Landlord shall not be liable to Tenant or to
Tenant's employees, agents or visitors, or to any other person
whomsoever, for any injury to persons or damage to property on or
about the Property or any adjacent area owned by Landlord caused
by the negligence or misconduct of Tenant, its employees,
subtenants, licensees or concessionaires or any other person
entering the Property under express or implied invitation of
Tenant, or arising out of the use of the property by Tenant and
the conduct of its business therein, or arising out of any breach
or default by Tenant in the performance of its obligations
hereunder, and Tenant hereby agrees to indemnify Landlord and
hold it harmless from any loss, expense or claims arising out of
such damage or injury. Tenant shall not be liable for any injury
or damage caused by the negligence or misconduct of Landlord, or
its employees or agents, and Landlord agrees to indemnify Tenant
and hold it harmless from any loss, expense or damage arising out
of such damage or injury.
5.05. Waiver of Subrogation. Each party hereto waives any and
every claim which arises or may arise in its favor against the
other party hereto during the term of this Lease or any renewal
or extension thereof for any and all loss of, or damage to, any
of its property located within or upon, or constituting a part
of, the Property, which loss or damage is covered by valid and
collectible fire and extended coverage insurance policies, to the
extent that such loss or damage is recoverable under such
insurance policies. Such mutual waivers shall be in addition to,
and not in limitation or derogation of, any other waiver or
release contained in this Lease with respect to any loss of, or
damage to, property of the parties hereto. Inasmuch as such
mutual waivers will preclude the assignment of any aforesaid
claim by way of subrogation or otherwise to an insurance company
(or any other person), each party hereby agrees immediately to
give to each insurance company which has issued to it policies of
fire and extended coverage insurance, written notice of the terms
of such mutual waivers, and to cause such insurance policies to
be properly endorsed, if necessary, to prevent the invalidation
of such insurance coverages by reason of such waivers.
ARTICLE SIX: USE OF PROPERTY
6.01. Permitted Use. Tenant may use the Property only for the
permitted use stated in Section 1.08.
-3-
<PAGE>
6.02 Compliance with Law. Tenant shall comply with all
governmental laws, ordinances and regulations applicable to the
use of the Property, and shall promptly comply with all
governmental orders and directives for the correction, prevention
and abatement of nuisances in or upon, or connected with the
Property, all at Tenant's sole expense.
6.03. Certificate of Occupancy. Tenant may, prior to the
commencement of the term of this Lease, apply for a Certificate
of Occupancy to be issued by the municipality in which the
Property is located, but this Lease shall not be contingent upon
issuance thereof. Nothing herein contained shall obligate
Landlord to install any additional electrical wiring, plumbing or
plumbing fixtures which are not presently existing on the
Property, or which have not been expressly agreed upon by
Landlord in writing.
6.04. Signs. Without the priors written consent of Landlord,
Tenant shall not place or affix any signs or other objects upon
or to the Property, including but not limited to the roof or
exterior walls of the building or other improvements thereon, or
paint or otherwise deface said exterior walls. Any signs
installed by Tenant shall conform with applicable laws and deed
and other restrictions. Tenant shall remove all signs at the
termination of this Lease and shall repair any damage and close
any holes caused or revealed by such removal.
6.05. Utility Services. Tenant shall pay the cost of all utility
services, including but not limited to initial connection
charges, all charges for gas, water and electricity used on the
Property, and for all electric lights, lamps and tubes.
6.06. Landlord's Access. Landlord and its authorized agents
shall have the right, during normal business hours, to enter the
Property (a) to inspect the general condition and state of repair
thereof, (b) to make repairs required or permitted under this
Lease, (c) to show the property to any prospective tenant or
purchaser or (d) for any other reasonable purpose. During the
final 150 days of the Lease Term, Landlord and its authorized
agents shall have the right to erect and maintain on or about the
Property customary signs advertising the Property for lease or
resale.
(See Section 15.10.)
6.07. Quiet Possession. If Tenant pays the rent and complies
with all other terms of this Lease, Tenant may occupy and enjoy
the Property for the full Lease Term, subject to the provisions
of this Lease.
6.08. Exemptions from Liability. Landlord shall not be liable
for any damage or injury to the person, business (or any loss of
income therefrom), goods, wares, merchandise or other property of
Tenant, Tenant's employees, invitees, customers or any other
person in or about the Property, whether such damage or injury is
caused by or results from: (a) fire, steam, electricity, water,
gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures or any other cause; (c)
conditions arising on or about the Property or upon other
portions of any building of which the Property is a part, or from
other sources or places; or (d) any act or omission of any other
tenant of any building of which the Property is a part. Landlord
shall not be liable for any such damage or injury even though the
cause of or the means of repairing such damage or injury are not
accessible to Tenant. The provisions of this Section 6.08 shall
not, however, exempt Landlord from liability for Landlord's gross
negligence or willful misconduct.
ARTICLE SEVEN: MAINTENANCE, REPAIRS AND ALTERATIONS
7.01. Acceptance of Premises. Tenant acknowledges that it has
fully inspected the Property and accepts the Property in its
condition as of the execution of this Lease as suitable for the
purposes for which it is leased. Tenant acknowledges that, except
as stated in the following sentence, neither Landlord nor an
agent of Landlord has made any representation as to the condition
of the Property or the suitability of the Property for Tenant's
intended use. Landlord represents that on the Commencement Date,
the plumbing, electrical system and exterior doors, and any fire
protection sprinkler system, heating system, air conditioning
equipment and elevators existing on the date of this Lease, are
or will be in good operating condition.
7.02. Landlord's Obligation to Repair. Subject to the provisions
of Article Eight (Damage or Destruction) and Article Nine
(Condemnation) and except for damage caused by any act or
omission of Tenant, Landlord shall keep the foundation, roof and
the structural portions of exterior walls of the improvements of
the Property in good order, condition and repair. However,
Landlord shall not be obligated to maintain or repair windows,
doors, plate glass or the surfaces of walls. In addition,
Landlord shall not be obligated to make any repairs under this
Section until a reasonable time after receipt of written notice
from Tenant of the need of such repairs. If any repairs are
required to be made by Landlord, Tenant shall, at Tenant's sole
cost and expense, promptly remove Tenant's fixtures, inventory,
equipment and other Property, to the extent required to enable
Landlord to make such repairs. Landlord's liability hereunder
shall be limited to the cost of such repairs or corrections.
Tenant waives the benefit of any present or future law which
might give Tenant the right to repair the Property at Landlord's
expense or to terminate the Lease because of the condition of the
Property.
7.03. Tenant's Obligation to Repair. Subject to the provisions
of the last sentence of Section 7.01, the preceding Section 7.02,
Article Eight (Damage or Destruction) and Article Nine
(Condemnation) Tenant shall, at all times, keep that portion of
the Property not required to be maintained by Landlord in good
order, condition and repair, including but not limited to repairs
(including all necessary replacements) of the windows, plate
glass, doors, hearing system, air conditioning equipment, fire
protection sprinkler system, elevators, interior and exterior
plumbing and the interior of the building in general. In
addition, Tenant shall, at Tenant's expense, repair any damage to
the roof, foundation or structural portions of exterior walls
caused by Tenant's acts or omissions. If Tenant fails to maintain
and repair the property as required by this Section, Landlord
may, on ten (10) days' prior written notice, enter the Property
and perform such maintenance or repair on behalf of Tenant,
except that no notice shall be required in case of emergency, and
Tenant shall reimburse Landlord for all costs incurred in
performing such maintenance or repair immediately upon demand.
(See Section 15.11.)
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7.04. Alterations, Additions and Improvements. Tenant shall not
create any openings in the roof or exterior walls, or make any
alterations, additions or improvements to the Property without
the prior written consent of Landlord. Consent for nonstructural
alterations, additions or improvements shall not be unreasonably
withheld by Landlord. Tenant shall have the right to erect or
install shelves, bins, machinery, air conditioning or heating
equipment and trade fixtures, provided that Tenant complies with
all applicable governmental laws, ordinances and regulations. At
the expiration or termination of this Lease, Tenant shall,
subject to the restrictions of Section 7.05 below, have the right
to remove such items so installed by it, provided Tenant is not
in default at the time of such removal and provided further that
Tenant shall, at the time of removal of such items, repair in a
good and workmanlike manner any damage caused by installation or
removal thereof. Tenant shall pay for all costs incurred or
arising out of alterations, additions or improvements in or to
the Property and shall not permit a mechanic's or materialman's
lien to be asserted against the Property. Upon request by
Landlord, Tenant shall deliver to Landlord proof of payment
reasonably satisfactory to Landlord of all costs incurred or
arising out of any such alterations, additions or improvements.
ARTICLE EIGHT: DAMAGES OR DESTRUCTION
8.01. Notice. If the building or other improvements situated on
the Property should be damaged or destroyed by fire, tornado or
other casualty, Tenant shall immediately give written notice
thereof to Landlord.
8.02. Partial Damage. If the building or other improvements
situated on the Property should be damaged by fire, tornado or
other casualty but not to such an extent that rebuilding or
repairs cannot reasonably be completed within 120 days from the
date Landlord receives written notification by Tenant of the
happening of the damage, this Lease shall not terminate, but
Landlord shall, at its sole cost and risk, proceed forthwith and
use reasonable diligence to rebuild or repair such building and
other improvements on the Property (other than leasehold
improvements made by Tenant or any assignee, subtenant or other
occupant of the Property) to substantially the condition in which
they existed prior to such damage; provided, however, if the
casualty occurs during the final 18 months of the Lease Term.
Landlord shall not be required to rebuild or repair such damage
unless Tenant shall exercise its renewal option (if any is
contained herein) within fifteen (15) days after the date of
receipt by Landlord of the notification of the occurrence of the
damage. If Tenant does not elect to exercise its renewal option
or if there is no renewal option contained herein or previously
unexercised at such time, this Lease shall terminate at the
option of Landlord and rent shall be abated for the unexpired
portion of this Lease, effective from the date of actual receipt
by Landlord of the written notification of the damage. If the
building and other improvements are to be rebuilt or repaired and
are untenantable in whole or in part following such damage, the
rent payable hereunder during the period in which they are
untenantable shall be adjusted equitably.
8.03. Substantial or Total Destruction. If the building or other
improvements situated on the Property should be substantially or
totally destroyed by fire, tornado or other casualty, or so
damaged that rebuilding or repairs cannot reasonably be completed
within 120 days from the date Landlord receives written
notification by Tenant of the happening of the damage, this Lease
shall terminate at the option of Landlord and rent shall be
abated for the unexpired portion of this Lease, effective from
the date of receipt by Landlord of such written notification. If
this Lease is not terminated, the building and the improvements
shall be rebuilt or repaired and rent abated to the extent
provided under Section 8.02.
ARTICLE NINE: CONDEMNATION
If, during the term of this Lease or any extension or renewal
thereof, all or a substantial part of the Property should be
taken for any public or quasi-public use under any governmental
law, ordinance or regulation or by right of eminent domain, or
should be sold to the condemning authority under threat of
condemnation, this Lease shall terminate and the rent shall be
abated during the unexpired portion of this Lease, effective from
the date of taking of the Property by the condemning authority.
If less than a substantial part of the demised premises is taken
for public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, or is
sold to the condemning authority under threat of condemnation.
Landlord, at its option, may by written notice terminate this
Lease or shall forthwith at its sole expense restore and
reconstruct the buildings and improvements (other than leasehold
improvements made by Tenant or any assignee, subtenant or other
occupant of the Property) situated on the Property in order to
make the same reasonably tenantable and suitable for the use for
which the Property is leased as defined in Section 6.01. The rent
payable hereunder during the unexpired portion of this Lease
shall be adjusted equitably. Landlord and Tenant shall each be
entitled to receive and retain such separate awards and portions
of lump sum awards as may be allocated to their respective
interests in any condemnation proceedings. The termination of
this Lease shall not affect the rights of the respective parties
to such awards.
ARTICLE TEN: ASSIGNMENT AND SUBLETTING
Tenant shall not, without the prior written consent of Landlord,
assign this Lease or sublet the Property or any portion thereof.
Any assignment or subletting shall be expressly subject to all
terms and provisions of this Lease, including the provisions of
Section 6.01 pertaining to the use of the Property. In the event
of any assignment or subletting, Tenant shall remain fully liable
for the full performance of all Tenant's obligations under this
Lease. Tenant shall not assign its rights hereunder or sublet the
Property without first obtaining a written agreement from the
assignee or sublessee whereby the assignee or sublessee agrees to
be bound by the terms of this Lease. No such assignment or
subletting shall constitute a novation. In the event of the
occurrence of an event of default while the Property is assigned
or sublet, Landlord, in addition to any other remedies provided
herein or by law, may at Landlord's option, collect directly from
such assignee or subtenant all rents becoming due under such
assignment or subletting and apply such rent against any sums due
to Landlord hereunder. No direct collection by Landlord from any
such assignee or subtenant shall release Tenant from the
performance of its obligations hereunder.
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ARTICLE ELEVEN: DEFAULT AND REMEDIES
11.01. Default. The following events shall be deemed to be
events of default under this Lease:
(a) Failure of Tenant to pay any installment of the rent or
other sum payable to Landlord hereunder on the date that same is
due and such failure shall continue for a period of ten (10)
days.
(b) Failure of Tenant to comply with any term, condition or
covenant of this Lease, other than the payment of tent or other
sum of money, and such failure shall not be cured within thirty
(30) days after written notice thereof to Tenant;
(c) Tenant or any guarantor of Tenant's obligation hereunder
shall generally not pay its debts as they become due or shall
admit in writing its inability to pay its debts, or shall make a
general assignment for the benefit of creditors.
(d) Tenant or any guarantor of Tenant's obligations
hereunder shall commence any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial
part of its property.
(e) Any case, proceeding or other action against Tenant or
any guarantor of Tenant's obligations hereunder shall be
commenced seeking to have an order for relief entered against it
as debtor, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under
any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any
substantial part of its property, and Tenant (i) fails to obtain
a dismissal of such case, proceeding, or other action within
sixty (60) days of its commencement or (ii) converts the case
from one chapter of the Federal Bankruptcy Code to another
chapter or (iii) is the subject of an Order of Relief which is
not fully stayed within seven business days after the entry
thereof.
(f) Abandonment by Tenant of any substantial portion of the
Property or cessation of the use of the Property for the purpose
leased.
11.02. Remedies. Upon the occurrence of any of the events of
default listed in Section 11.01., Landlord shall have the option
to pursue any one or more of the following remedies without any
notice or demand whatsoever:
(a) Terminate this Lease, in which event Tenant shall
immediately surrender the Property to Landlord. If Tenant fails
to so surrender such premises, Landlord may, without prejudice to
any other remedy which it may have for possession of the Property
or arrearages in rent, enter upon and take possession of the
Property and expel or remove Tenant and any other person who may
be occupying such premises or any part thereof, by force if
necessary, without being liable for prosecution or any claim for
damages therefor. Tenant shall pay to Landlord on demand the
amount of all loss and damage which Landlord may suffer by reason
of such termination, whether through inability to relet the
Property on satisfactory terms or otherwise:
(b) Enter upon and take possession of the Property, by force
if necessary, without terminating this Lease and without being
liable for prosecution or for any claim for damages therefor, and
expel or remove Tenant and any other person who may be occupying
such premises or any part thereof. Landlord may relet the
Property and receive the rent therefor. Tenant agrees to pay to
Landlord monthly or on demand from time to time any deficiency
that may arise by reason of any such reletting. In determining
the amount of such deficiency, the brokerage commission,
attorneys' fees, remodeling expenses and other costs of reletting
shall be subtracted from the amount of rent received under such
reletting;
(c) Enter upon the Property, by force, if necessary, without
terminating this Lease and without being liable for prosecution
or for any claim for damages therefor, and do whatever Tenant is
obligated to do under the terms of this Lease. Tenant agrees to
pay Landlord on demand for expenses which Landlord may incur in
thus effecting compliance with Tenant's obligations under this
Lease, together with interest thereon at the rate of twelve
percent (12%) per annum from the date expended until paid.
Landlord shall not be liable for any damages resulting to Tenant
from such action, whether caused by negligence of Landlord or
otherwise.
Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies herein provided or any other
remedies provided by law, nor shall pursuit of any remedy herein
provided constitute a forfeiture or waiver of any rent due to
Landlord hereunder or of any damages accruing to Landlord by
reason of the violation of any of the terms, conditions and
covenants herein contained.
11.03 Notice of Default. Tenant shall give written notice of
any failure by Landlord to perform any of its obligations under
this Lease to Landlord and to any ground lessor, mortgagee or
beneficiary under any deed of trust encumbering the Property
whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord
(or such ground lessor, mortgagee or beneficiary) fails to cure
such non-performance within thirty (30) days after receipt of
Tenant's notice. However, if such non-performance reasonably
requires more than thirty (30) days to cure, Landlord shall not
be in default if such cure is commenced within such thirty (30)
day period and thereafter diligently pursued to completion.
11.04 Limitation of Landlord's Liability. As used in this
Lease, the term "Landlord" means only the current owner or owners
of the fee title to the Property or the leasehold estate under a
ground lease of the Property at the time in question. Each
Landlord is obligated to perform the obligations of Landlord
under this Lease only during the time such Landlord owns such
interest or title. Any landlord who transfers its title or
interest is relieved of all liability with respect to the
obligations of Landlord under this Lease to be performed on or
after the date of transfer. However, each Landlord shall deliver
to its transferee all funds previously paid by Tenant if such
funds have not yet been applied under the terms of this Lease.
ARTICLE TWELVE: LANDLORD'S LIEN
In addition to the statutory Landlord's lien, Tenant hereby
grants to Landlord a security interest to secure payment of all
rent and other sums of money becoming due hereunder from Tenant,
upon all goods, wares, equipment, fixtures, furniture and other
personal property of Tenant situated in or upon the Property,
together with the proceeds from the sale or lease thereof. Such
property shall not be removed without the consent of Landlord
until all
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arrearages in rent and other sums of money then due to Landlord
hereunder shall first have been paid and discharged. Upon the
occurrence of an event of default, Landlord may, in addition to
any other remedies provided herein or by law, enter upon the
Property and take possession of any and all goods, wares,
equipment, fixtures, furniture and other personal property of
Tenant situated on the Property without liability for trespass or
conversion, and sell the same at public or private sale, with or
without having such property at the sale, after giving Tenant
reasonable notice of the time and place of any such sale. Unless
otherwise required by law, notice to Tenant of such sale shall be
deemed sufficient if given in the manner prescribed in this Lease
at least ten (10) days before the time of the sale. Any public
sale made under this Article shall be deemed to have been
conducted in a commercially reasonable manner if held on the
Property or where the property is located, after the time, place
and method of sale and a general description of the types of
property to be sold have been advertised in a daily newspaper
published in Dallas County, Texas, for five consecutive days
before the date of the sale. Landlord or its assigns may
purchase at a public sale and, unless prohibited by law, at a
private sale. The proceeds from any disposition dealt with in
this Article, less any and all expenses connected with the taking
of possession, holding and selling of the property (including
reasonable attorneys' fees and legal expenses), shall be applied
as a credit against the indebtedness secured by the security
interest granted herein. Any surplus shall be paid to Tenant or
as otherwise required by law; Tenant shall pay any deficiencies
forthwith. Upon request by Landlord, Tenant agrees to execute
and deliver to Landlord a financing statement in form sufficient
to perfect the security interest of Landlord in the
aforementioned property and proceeds thereof under the provisions
of the Uniform Commercial Code in force in the State of Texas.
The statutory lien for rent is expressly reserved; the security
interest herein granted is in addition and supplementary thereto.
ARTICLE THIRTEEN: PROTECTION OF LENDERS
13.01. Subordination. Landlord shall have the right to
subordinate this Lease to any ground Lease, deed of trust or
mortgage encumbering the Property, and advances made on the
security thereof and any renewals, modifications, consolidations,
replacements or extensions thereof, whenever made or recorded.
However, Tenant's right to quiet possession of the Property
during the Lease Term shall not be disturbed if Tenant pays the
rent and performs all of Tenant's obligations under this Lease
and is not otherwise in default. If any ground lessor,
beneficiary or mortgagee elects to have this Lease prior to the
lien of its ground lease, deed of trust or mortgage and gives
written notice thereof to Tenant, this Lease shall be deemed
prior to such ground lease, deed of trust or mortgage whether
this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording
thereof.
13.02. Attornment. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust,
mortgagee or purchaser at a foreclosure sale, Tenant shall attorn
to the transferee of or successor to Landlord's interest in the
Property and recognize such transferee or successor as Landlord
under this Lease. Tenant waives the protection of any statute or
rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon
the transfer of Landlord's interest.
13.03. Signing of Documents. Tenant shall sign and deliver any
instruments or documents necessary or appropriate to evidence any
such attornment or subordination or agreement to do so. If
Tenant fails to do so within ten 910) days after written request,
Tenant hereby makes, constitutes and irrevocably appoints
Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such
instrument or document.
13.04. Estoppel Certificates.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement
certifying: (i) that none of the terms or provisions of this
Lease have been changed (or if they have been changed, stating
how they have been changed); (ii) that this Lease has not been
cancelled or terminated; (iii) the last date of payment of the
Base rent and other charges and the time period covered by such
payment: and (iv) that Landlord is not in default under this
Lease (or, if Landlord is claimed to be in default, stating why).
Tenant shall deliver such statement to Landlord within ten 910)
days after Landlord's request. Any such statement by Tenant may
be given by Landlord to any prospective purchaser or encumbrancer
of the Property. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.
(b) If Tenant does not deliver such statement to Landlord
within such ten (10) day period, Landlord, and any prospective
purchaser or encumbrancer, may conclusively presume and rely upon
the following facts; (i) that the terms and provisions of this
Lease have not been changed except as otherwise represented by
Landlord; (ii) that this Lease has not been cancelled or
terminated except as otherwise represented by Landlord; (iii)
that not more than one month's Base Rent or other charges have
been paid in advance; and (iv) that Landlord is not in default
under the Lease. In such event, Tenant shall be stopped from
denying the truth of such facts.
13.05. Tenant's Financial Condition. Within ten (10) days
after written request from Landlord, Tenant shall deliver to
Landlord such financial statements as are reasonably required by
Landlord to verify the net worth of Tenant, or any assignee,
subtenant, or guarantor of Tenant. In addition, Tenant shall
deliver to any lender designated by Landlord any financial
statements required by such lender to facilitate the financing or
refinancing of the Property. Tenant represents and warrants to
Landlord that each such financial statement is a true and
accurate statement as of the date of such statement. All
financial statements shall be confidential and shall be used only
for the purposes set forth herein.
ARTICLE FOURTEEN: REALTORS" COMMISSIONS
14.01 Amount and Manner of Payment of Commissions. Commissions
due to the undersigned principal REALTOR(R) shall be calculated
and paid as follows:
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(a) [INTENTIONALLY DELETED]
(b) Landlord agrees to pay to the undersigned Principal
Realtorr a commission for negotiating this Lease equal to the
percentage stated in Section 1.11B of the total rent to become
due to Landlord during the term of this Lease. [INFORMATION
DELETED "See Brokers Registration & Commission Schedule."
14.02 [INTENTIONALLY DELETED]
14.03 [INTENTIONALLY DELETED]
14.04 [INTENTIONALLY DELETED]
14.05 [INTENTIONALLY DELETED]
14.06 [INTENTIONALLY DELETED]
ARTICLE FIFTEEN: MISCELLANEOUS
15.01. Force Majeure. In the event performance by Landlord of
any term, condition or covenant in this Lease is delayed or
prevented by any Act of God, strike, lockout, shortage of
material or labor, restrictions by any governmental authority,
civil riot, flood, or any other cause not within the control of
Landlord, the period for performance of such term, condition or
covenant shall be extended for a period equal to the period
Landlord is so delayed or hindered.
15.02 Interpretation. The captions of the Articles or Sections
of this Lease are to assist the parties in reading this Lease and
are not a part of the terms or provisions of this Lease.
Whenever required by the context of this Lease, the singular
shall include the plural and the plural shall include the
singular. For convenience, each party hereto is referred to in
the neuter gender, but the masculine, feminine and neuter genders
shall each include the other. In any provision relating to the
conduct, acts or omissions of Tenant, the term "Tenant" shall
include Tenant's agents, employees, contractors, invitees,
successors or others using the Property with Tenant's expressed
or implied permission.
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15.03. Waivers. All waivers must be in writing and signed by
the waiving party. Landlord's failure to enforce any provisions
of this lease or its acceptance of rent shall not be a waiver and
shall not prevent Landlord for enforcing that provision or any
other provision of this Lease in the future. No statement on a
payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or
without notice to Tenant, negotiate such check without being
bound to the conditions of such statement.
15.04. Severability. A determination by a court of competent
jurisdiction that any provision o this Lease or any part thereof
is illegal or unenforceable shall not cancel or invalidate the
remainder of such provision or this Lease, which shall remain in
full force and effect.
15.05. Joint and Several Liability. All parties signing this
Lease as Tenant shall be jointly and severally liable for all
obligations of Tenant.
15.06. Incorporation of Prior Agreements; Modifications. This
Lease is the only agreement between the parties pertaining to the
lease of the Property and no other agreements are effective. All
amendments to this Lease shall be in writing and signed by all
parties. Any other attempted amendment shall be void.
15.07. Notices. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or
shall be deemed to be delivered, whether actually received or
not, when deposited in the United States mail, postage pre-paid,
registered or certified mail, return receipt requested, addressed
as stated herein. Notices to Tenant shall be delivered to the
address specified in Section 1.03 above, except that, upon
tenant's taking possession of the Property, the Property shall be
Tenant's address for notice purposes. Notices to any other party
hereto shall be delivered to the address specified in Article One
as the address for such party. Any party hereto may change its
notice address upon written notice to the other parties.
15.08. Attorneys' Fees. If on account of any breach or default
by any party hereto in its obligations to any other party hereto
(including but not limited to the Principal REALTOR(R)), it shall
become necessary for the non-defaulting party to employ an
attorney to enforce or defend any of its rights or remedies
hereunder, the defaulting party agrees to pay the non-defaulting
party its reasonable attorneys' fees, whether or not suit is
instituted in connection therewith.
15.09 Insurance. Tenant shall pay to the Landlord the amount
by which premiums for fire and general liability insurance with
all its endorsements payable with respect to the demised premises
exceed the amount of such premiums payable during the year 1989.
Tenant's share of said increased premium shall be computed on the
ratio which the total floor area of the Lease Space bears to the
total floor area of all rentable space in the building of which
the demised premises form a part. For the purpose of calculating
Tenant's apportioned share for a fractional year each day of
Tenant's occupancy shall be regarded as one three hundred sixty
fifth of a full year's share and Tenant shall be considered as in
"occupancy" during the full period of the lease term falling
within such fractional calendar year.
15.10 Right of Entry. The Landlord and its authorized agents
shall have the right to enter the lease Space at any time in the
event of an emergency.
15.11. Common Area Maintenance. Tenant agrees to pay the
Landlord on a monthly basis his pro rata share of the common area
maintenance and upkeep. These costs include, but are not limited
to parking lot maintenance (excluding replacement), lawn
maintenance, landscape maintenance, exterior maintenance (only
when it relates to the entire building), cost of maintaining
common area lighting, and cost of water for landscape.
15.12. Water and Sewer. Tenant hereby agrees to pay its pro
rata share of the monthly water and sewer service for the
building located at 2290 Springlake in Farmers Branch.
15.13. Late Charge. As per this lease, all rentals will be due
and payable on the first day of each month. Should Landlord not
receive Tenant's rent within ten (10) days of the due date, a
service charge of 5% of he monthly rental rate, will be added to
the rental for that month and each succeeding month that said
rental is not paid when due.
15.14. SIGNAGE. All signs must be approved in writing by the
landlord.
15.15. Parking. Tenant agrees not to abuse the parking rights
as provided by the building. Additionally, the parking of cars
of Tenant's personnel will not interfere with the operation of
the other tenants in this building.
15.16. Building Rules and Regulations. See Exhibit A.
15.17. Right of First Offer. Tenant shall have the option to
add space, as hereinafter defined, to the Lease Space defined in
Section 1.04. of this Lease upon the terms hereinafter set forth;
provided, however, that said Option shall exist only if at the
time of Tenant's exercise of said Option and at the time of
commencement of Tenant's lease of the Option Space, (i) Tenant
shall not be default under any terms of this Lease; (ii) Tenant
shall not have assigned the Lease, except as expressly permitted
by Article Ten of the Lease; (iii) Tenant shall occupy all of the
Lease Space defined in Section 1.04.
Once during the term of this Lease, Landlord shall by written
notice ("Offer Notice") offer to Tenant the option to add to the
Lease Space any portion of contiguous space ("Option Space"), as
defined in Exhibit D of this Lease, at a rental rate which shall
be reasonably determined by Landlord to be fair market value,
provided that said Option Space is greater than or equal to 3,000
rentable square feet, for a period commencing on a date to be
designated by Landlord in the Offer Notice (the "Option
Commencement Date"), and continuing for the balance of the term.
Said Option Commencement Date shall not be less than thirty (30)
days nor more than sixty (60) after the date of the
-9-
<PAGE>
Offer Notice. Tenant shall notify Landlord of its election to
exercise said Option by written notice given by Tenant to
Landlord not later than ten (10) days after the date Tenant
receives the Offer Notice.
If said Option is exercised by Tenant, from and after the Option
Commencement Date, the Option Space shall be subject to all the
provisions of this Lease with exception to the rental rates
referenced in Section 1.06. and Exhibit C. In the event that
Tenant does not elect to exercise its option to lease the Option
Space within the ten (10) day period set forth above, Tenant
shall have no further right to lease the Option Space.
15.18. Exhibits. See Exhibits "A", "B", "C" and "D" attached
hereto and made apart thereof.
15.19 Emergency Electrical Generator. Landlord will allow
Tenant to install an emergency electrical generator. Plants for
the installation will be submitted by Tenant to Landlord and re
subject to Landlord's approval, which is not to be unreasonably
withheld. Tenant agrees to remove said emergency electrical
generator prior to its vacancy of the Lease Space. Tenant agrees
to hold Landlord harmless, for any occurrence that may result
from the installation, use, maintenance, or removal of said
electrical generator.
15.20. Rental Prior to Completion of Leasehold Improvements.
Landlord agrees to allow Tenant to remain in existing Suite of
said building at a monthly rental of $4,354.00 beginning with a
June 1, 1989 payment and continuing until the completion of the
leasehold Improvements referenced in "Exhibit B" of this Lease.
Leasehold Improvements shall be deemed to be completed at the
time of Landlord's receipt of a Certificate of Occupancy for said
Lease Space.
15.21. Registration and Commission Agreement. See registration
and commission agreement attached hereto and made a part hereof.
Executed in two or more counterparts on the day and year first
above written.
TENANT: LANDLORD:
U.S.A. RADIO NETWORK PHOENIX MUTUAL LIFE INSURANCE
COMPANY, a Connecticut
corporation
By: /s/ Marlin Maddoux By: /s/ Richard F. Russell
---------------------------- ------------------------
- ---
Title: /s/ President Title: Second Vice President
--------------------------- -----------------------
5-18-89
Broker letter from Tenant attached hereto and made a part hereof.
/s/ M.M.
-10-
<PAGE>
EXHIBIT "A"
BUILDING RULES AND REGULATIONS
1. Landlord agrees to furnish Tenant two (2) keys without
charge. Additional keys will be furnished at a nominal
charge.
2. Tenant will refer all contractors, contractor's
representatives and installation technicians, rendering any
service on or to the premises for Tenant, to Landlord for
Landlord's approval and supervision before performance of
any contractual service. This provision shall apply to all
work performed in the Building including installation of
telephones, telegraph equipment, electrical devises and
attachments and installations of any nature effecting
floors, walls, woodwork, trim, windows, ceilings, equipment
or any other physical portion of the building.
3. No tenant shall at any time occupy any part of the Building
as sleeping or lodging quarters.
4. Tenant shall not place, install or operate on demised
premises or in any part of Building, any engine, stove or
machinery or conduct mechanical operations or cook thereon
or therein or place or use in or about premises any
explosives, gasoline, kerosene, oil, acids, caustics or any
other inflammable, explosive or hazardous material without
prior written consent of Landlord.
5. Landlord will not be responsible for lost or stolen personal
property, equipment, money or jewelry from Tenant's area or
public rooms regardless of whether such loss occurs when
area is locked against entry or not.
6. No birds, fowl or animals shall be brought into or kept in
or about the building.
7. Landlord will not permit entrance to Tenants' offices by use
of pass key controlled by Landlord to any person at any time
without written permission by Tenant, except employees,
contractors or service personnel directly supervised or
employed by Landlord.
8. None of the entries, passages, doors, hallways or stairways
shall be blocked or obstructed or any rubbish, litter, trash
or material of any nature placed, emptied or thrown into
these areas, or such areas be used at any time except for
access or egress by Tenant, Tenant's agent, employees or
invitees.
9. The water closets and other water fixtures shall not be used
for any purpose other than those for which they were
constructed and any damage resulting to them from misuse, or
the defacing or injury of any part of the building shall be
borne by the person who shall occasion it. No person shall
waste water by interfering with the faucets or otherwise.
10. No person shall disturb the occupants of the Building by the
use of any musical instruments, the making of unseemly
noises or other unreasonable use.
11. Nothing shall be thrown out of the windows of the Building
or down the stairways or other passages.
12. Tenant shall not store any materials, equipment, products,
etc. outside the leased premises as shown on the plat(s)
attached hereto.
13. Tenant shall not erect any sign or other insignia upon any
part of the Building or other portion of the leased premises
without the prior written consent of the Landlord.
14. Tenant shall comply with all local and federal codes and
ordinances. In the event of fire or code problems, Tenant
shall comply with said requirements.
15. Tenant shall at least on an annual basis have the hearing,
ventilation, and/or air conditioning system(s) completely
checked out and repaired if necessary. Additionally, the
Tenant shall have the filters on said system(s) changed at
least on a quarterly basis.
16. Tenant will provide for his own trash pick-up and removal.
17. The Landlord reserves the right to rescind any of these
rules and make such other and further rules and regulations
as in the judgment of Landlord shall from time to time be
needed for the safety, protection, care and cleanliness of
the Building, the operation thereof, the preservation of
good order therein, and the protection and comfort of its
Tenants, their agents, employees and invitees, which rules
when made and notice thereof given to a Tenant shall be
binding upon Tenant in like manner as if originally herein
prescribed. In the event of any conflict, inconsistency, or
other difference between the terms and provisions of these
Rules and Regulations, as now or thereafter in effect and
the terms and provisions of any lease now or hereafter in
effect between Landlord and any Tenant in the Building,
Landlord shall have the sole option to relay either on the
term or provision in such lease or such Rules and
Regulations.
<PAGE>
EXHIBIT B
LEASEHOLD IMPROVEMENTS
Attached and made part of the Lease Agreement between Phoenix
Mutual Life Insurance Company and U.S.A. Radio Network dated May
3, 1989.
Landlord agrees to provide Tenant with a Leasehold Improvements
Allowance up to $150,000.00 (One Hundred Fifty Thousand and
no/100 dollars) for any expenses, including but not limited to,
the design and construction of Leasehold Improvements to the
Lease Space referenced in Section 1.04. of the Lease. Any costs
or expenses that exceed the Leasehold Improvement Allowance shall
be paid by the Tenant. All phases of the planning and
construction of the above referenced Leasehold Improvements shall
be coordinated by the Landlord.
Plans for Leasehold Improvements
a. Preparation. Tenant shall cooperate with Landlord's
architect (including attending meetings as the architect deems
necessary) in the preparation of plans ("Plans") for the
Leasehold Improvements which shall include but not be limited to
Location of doors, partitioning, reflected ceiling, electrical
fixtures, outlets and switches, telephone outlets, plumbing
fixtures, extraordinary floor loads and other special
requirements.
b. Approval. Within ten (10) business days after receiving the
proposed Plans from Landlord, Tenant shall either approve or
disapprove them in writing. The date of Tenant's approval shall
be deemed to be the Plan Approval Date. Tenant's failure to do
so shall be deemed disapproval. In the event of a disapproval,
Tenant shall be liable for any delay and increased cost incurred
in completing the Leasehold Improvements.
c. Working Drawings. After Tenant approves the Plans, Landlord
shall have prepared by its architect or engineer working drawings
from the Leasehold Improvements.
d. Regulations. The Plans shall not be in conflict with any
applicable building codes or other governmental regulations or
with insurance regulations. The Plans and working drawings shall
be in a form satisfactory to the governmental entities which will
issue permits necessary for construction.
<PAGE>
EXHIBIT C
RENT SCHEDULE
Attached and made part of the Lease Agreement between Phoenix
Mutual Life Insurance Company and U.S.A. Radio Network dated May
3, 1989.
The Base Rent shall be:
Months 1 - 4 ................... $4,375.00 per Month
Months 5 - 12 ................... $8,750.00 per Month
Months 13 - 24 ................... $9,062.50 per Month
Months 25 - 36 ................... $9,375.00 per Month
Months 37 - 48 .................... $9,687.50 per Month
Months 49 - 60 ................... $10,000.50 per Month
Gross Base Rent for the term of the lease ...........$545,000.00
<PAGE>
EXHIBIT D
Attached and made part of the Lease Agreement between Phoenix
Mutual Life Insurance Company and U.S.A. Radio Network dated May
3, 1989.
[DIAGRAM OF LEASED PREMISES]
<PAGE>
USA May 19, 1989
Radio Network
Phoenix Mutual Life Insuance Company
One American Row
Hartford, Connecticut 06115
Gentlemen:
The Undersigned hereby appoints Rubenstein-Hay Commercial
Realtors, Inc./William G. Jones to continue in it's role as our
Exclusive Agent and to represent U.S.A. RADIO NETWORK and/or
INTERNATIONAL CHRISTIAN MEDIA in the expansion and/or renewal of
the Lease Agreement between Phoenix Mutual Life Insurance Company
as Landlord and U.S.A. Radio Network/International Christian
Media as Tenant.
This letter shall be incorporated into our Lease Agreement as a
term and condition thereof.
Sincerely,
/s/ Marlin Maddoux
Marlin Maddoux
President
NationsBank, N.A. NEW
Texas 41944
M987840-001-001
NM
Promissory Note
Date September 30, 1997 New
Amount: $100,000.00 Maturity Date: September 30, 2000
=================================================================
Bank: Borrower:
NationsBank of Texas, N.A.
Banking Center:
Irving U.S.A. Radio Network, Inc.
2520 West Irving 2290 Springlake #107
Irving, TX 75061-4248 Dallas, TX 75234
Dallas County Dallas County
=================================================================
FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and
jointly and severally, if more than one) promises to pay to the
order of Bank, its successors and assigns, without setoff, at its
offices indicated at the beginning of this Note, or at such other
place as may be designated by Bank, the principal amount of One
Hundred Thousand Dollars and No Cents ($100,000.00), or so much
thereof as may be advanced from time to time in immediately
available funds, together with interest computed daily on the
outstanding principal balance hereunder, at an annual interest
rate, and in accordance with the payment schedule, indicated
below.
1. RATE.
Fixed Rate. The Rate shall be fixed at 10.00 percent, per
annum.
Notwithstanding any provision of this Note, Bank does not intend
to charge and Borrower shall not be required to pay any amount of
interest or other charges in excess of the maximum permitted by
applicable law. Borrower agrees that during the full term
hereof, the maximum lawful interest rate for this Note as
determined under Texas law shall be the indicated rate ceiling as
specified in Article 5069-1.04 of VATS. Further, to the extent
that any other lawful rate ceiling exceeds the rate ceiling so
determined then the higher rate ceiling shall apply. Any payment
in excess of such maximum shall be refunded to Borrower or
credited against principal, at the option of Bank.
2. ACCRUAL METHOD. Interest at the Rate set forth above will
be calculated by the actual/360 day method (a daily amount of
interest is computed for a hypothetical year of 360 days; that
amount is multiplied by the actual number of days for which any
principal is outstanding hereunder).
3. RATE CHANGE DATE. Any Rate based on a fluctuating index or
base rate will change, unless otherwise provided, each time and
as of the date that the index or base rate changes. In the event
any index is discontinued, Bank shall substitute an index
determined by Bank to be comparable, at its sole discretion.
4. PAYMENT SCHEDULE. All payments received hereunder shall be
applied first to the payment of any expense or charges payable
hereunder or under any other loan documents executed in
connection with this Note, then to interest due and payable, with
the balance applied to principal, or in such other order as Bank
shall determine at its option.
Fixed Principal and Interest. Principal and interest shall
be paid in consecutive equal installments of $3,233.19, payable
monthly, commencing on October 30, 1997, and continuing on the
same day of each successive month thereafter, with a final
payment of all unpaid principal and interest due thereon on
September 30, 2000. If, on any payment date, accrued interest
exceeds the installment amount set forth above, Borrower will
also pay such excess as and when billed.
If due to changes in the interest rate, installments payable
hereunder are inadequate to amortize this Note to the
satisfaction of the Bank, then Bank may from time to time upon
five days notice to the Borrower, increase the amount of the
installments due hereunder to an amount adequate in the opinion
of the Bank to amortize this Note over its term.
5. AUTOMATIC PAYMENT. If an account number appears at the end
of this sentence, Borrower has elected to authorize Bank to
effect payment of sums due under this Note by means of debiting
Borrower's account number ____________. This authorization shall
not affect the obligation of Borrower to pay such
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<PAGE>
sums when due, without notice, if there are insufficient funds in
such account to make such payment in full on the due date
thereof, or if Bank fails to debit the account.
6. WAIVERS, CONSENTS AND COVENANTS. Borrower, any indorser or
guarantor hereof, or any other party hereto (individually an
"Obligor" and collectively "Obligors") and each of them jointly
and severally: (a) waive presentment, demand, protest, notice of
demand, notice of intent to accelerate, notice of acceleration of
maturity, notice of protest, notice of nonpayment, notice of
dishonor and any other notice required to be given under the law
to any Obligor in connection with the delivery, acceptance,
performance, default or enforcement of this Note, any indorsement
or guaranty of this Note, or any other documents executed in
connection with this Note or any other note or other loan
documents now or hereafter executed in connection with any
obligation of Borrower to Bank (the "Loan Documents"); (b)
consent to all delays, extensions, renewals or other
modifications of this Note or the Loan Documents, or waivers of
any term hereof or of the Loan Documents, or release or discharge
by Bank of any of Obligors, or release, substitution or exchange
of any security for the payment hereof, or the failure to act on
the part of Bank, or any indulgence shown by Bank (without notice
to or further assent from any of Obligors), and agree that no
such action, failure to act or failure to exercise any right or
remedy by Bank shall in any way affect or impair the obligations
of any Obligors or be construed as a waiver by Bank of, or
otherwise affect, any of Bank's rights under this Note, under any
indorsement or guaranty of this Note or under any of the Loan
Documents; and (c) agree to pay, on demand, all costs and
expenses of collection or defense of this Note or of any
endorsement or guaranty hereof and/or the enforcement or defense
of Bank's rights with respect to, or the administration,
supervision, preservation, or protection of, or realization upon,
any property securing payment hereof, including, without
limitation, reasonable attorney's fees, including fees related to
any suit, mediation or arbitration proceeding, out of court
payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by any
arbitrator or court, whichever is applicable.
7. PREPAYMENTS. Prepayments may be made in whole or in part at
any time on any loan for which the Rate is based on the Prime
Rate. All prepayments of principal shall be applied in the
inverse order of maturity, or in such other order as Bank shall
determine in its sole discretion. No prepayment of any other
loan shall be permitted without the prior written consent of
Bank. Notwithstanding such prohibition, if there is a prepayment
of any such loan, whether by consent of Bank, or because of
acceleration or otherwise, Borrower shall, within 1 5 days of any
request by Bank, pay to Bank any loss or expense which Bank may
incur or sustain as a result of such prepayment. For the
purposes of calculating the amounts owed only, it shall be
assumed that Bank actually funded or committed to fund the loan
through the purchase of an underlying deposit in an amount and
for a term comparable to the loan, and such determination by Bank
shall be conclusive, absent a manifest error in computation.
8. EVENTS OF DEFAULT. The following are events of default
hereunder: (a) the failure to pay or perform any obligation,
liability or indebtedness of any Obligor to Bank, or to any
affiliate or subsidiary of NationsBank Corporation, whether under
this Note or any Loan Documents, as and when due (whether upon
demand, at maturity or by acceleration); (b) the failure to pay
or perform any other obligation, liability or indebtedness of any
Obligor to any other party; (c) the death of any Obligor (if an
individual); (d) the resignation or withdrawal of any partner or
a material owner/guarantor of Borrower, as determined by Bank in
its sole discretion; (e) the commencement of a proceeding against
any Obligor for dissolution or liquidation, the voluntary or
involuntary termination or dissolution of any Obligor or the
merger or consolidation of any Obligor with or into another
entity; (f) the insolvency of, the business failure of, the
appointment of a custodian, trustee, liquidator or receiver for
or for any of the property of, the assignment for the benefit of
creditors by, or the filing of a petition under bankruptcy,
insolvency or debtor's relief law or the filing of a petition for
any adjustment of indebtedness, composition or extension by or
against any Obligor; (g) the determination by Bank that any
representation or warranty made to Bank by any Obligor in any
Loan Documents or otherwise is or was, when it was made, untrue
or materially misleading; (h) the failure of any Obligor to
timely deliver such financial statements, including tax returns,
other statements of condition or other information, as Bank shall
request from time to time; (i) the entry of a judgment against
any Obligor which Bank deems to be of a material nature, in
Bank's sole discretion; (j) the seizure or forfeiture of, or the
issuance of any writ of possession, garnishment or attachment, or
any turnover order for any property of any Obligor; (k) the
determination by Bank that it is insecure for any reason; (1) the
determination by Bank that a material adverse change has occurred
in the financial condition of any Obligor; or (m) the failure of
Borrower's business to comply with any law or regulation
controlling its operation.
9. REMEDIES UPON DEFAULT. Whenever there is a default under
this Note (a) the entire balance outstanding hereunder and all
other obligations of any Obligor to Bank (however acquired or
evidenced) shall, at the option of Bank, become immediately due
and payable and any obligation of Bank to permit further
borrowing under this Note shall immediately cease and terminate,
and/or (b) to the extent permitted by law, the Rate of interest
on the unpaid principal shall be increased at Bank's discretion
up to the maximum rate allowed by law, or if none, 25% per annum
(the "Default Rate"). The provisions herein for a Default Rate
shall not be deemed to extend the time for any payment hereunder
or to constitute a "grace period" giving Obligors a right to cure
any default. At Bank's option, any accrued and unpaid interest,
fees or charges may, for purposes of computing and accruing
interest on a daily basis after the due date of the Note or any
installment thereof, be deemed to be a part of the principal
balance, and interest shall accrue on a daily compounded basis
after such date at the Default Rate provided in this Note until
the entire
-2-
<PAGE>
outstanding balance of principal and interest is paid in full.
Upon a default under this Note, Bank is hereby authorized at any
time, at its option and without notice or demand, to set off and
charge against any deposit accounts of any Obligor, (as well as
any money, instruments, securities, documents, chattel paper,
credits, claims, demands, income and any other property, rights
and interests of any Obligor), which at any time shall come into
the possession or custody or under the control of Bank or any of
its agents, affiliates or correspondents, any and all obligations
due hereunder. Additionally, Bank shall have all rights and
remedies available under each of the Loan Documents, as well as
all rights and remedies available at law or in equity.
10. NON-WAIVER. The failure at any time of Bank to exercise any
of its options or any other rights hereunder shall not constitute
a waiver thereof, nor shall it be a bar to the exercise of any of
its options or rights at a later date. All rights and remedies
of Bank shall be cumulative and may be pursued singly,
successively or together, at the option of Bank. The acceptance
by Bank of any partial payment shall not constitute a waiver of
any default or of any of Bank's rights under this Note. No
waiver of any of its rights hereunder, and no modification or
amendment of this Note, shall be deemed to be made by Bank unless
the same shall be in writing, duly signed on behalf of Bank; each
such waiver shall apply only with respect to the specific
instance involved, and shall in no way impair the rights of Bank
or the obligations of Obligors to Bank in any other respect at
any other time.
11. APPLICABLE LAW, VENUE AND JURISDICTION. Borrower agrees
that this Note shall be deemed to have been made in the State of
Texas at Bank's address indicated at the beginning of this Note
and shall be governed by, and construed in accordance with, the
laws of the State of Texas, and is performable in the City and
County of Texas indicated at the beginning of this Note. In any
litigation in connection with or to enforce this Note or any
endorsement or guaranty of this Note or any Loan Documents,
Obligors, and each of them, irrevocably consent to and confer
personal jurisdiction on the courts of the State of Texas or the
United States courts located within the State of Texas. Nothing
contained herein shall, however, prevent Bank from bringing any
action or exercising any rights within any other state or
jurisdiction or from obtaining personal jurisdiction by any other
means available under applicable law.
12. PARTIAL INVALIDITY. The unenforceability or invalidity of
any provision of this Note shall not affect the enforceability or
validity of any other provision herein and the invalidity or
unenforceability of any provision of this Note or of the Loan
Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to
other persons or circumstances.
13. BINDING EFFECT. This Note shall be binding upon and inure
to the benefit of Borrower, Obligors and Bank and their
respective successors, assigns, heirs and personal
representatives, provided, however, that no obligations of
Borrower or Obligors hereunder can be assigned without prior
written consent of Bank.
14. CONTROLLING DOCUMENT. To the extent that this Note
conflicts with or is in any way incompatible with any other
document related specifically to the loan evidenced by this Note,
this Note shall control over any other such document, and if this
Note does not address an issue, then each other such document
shall control to the extent that it deals most specifically with
an issue.
15. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF
OR RELATING TO THIS INSTRUMENT, AGREEMENT, OR DOCUMENT OR ANY
RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM
BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES
OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL
DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF
("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE
EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL.
JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO
WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE
EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND
ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL
SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS
OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL
ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (1) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF
-3-
<PAGE>
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
INSTRUMENT, AGREEMENT OR DOCUMENT; OR (11) BE A WAIVER BY BANK OF
THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (111) LIMIT THE RIGHT OF
BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR
PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT
PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE
UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY
REMEDIES BEFORE, DURING OR AFTER THE PENDANCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR
DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH
ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM
OCCASIONING RESORT TO SUCH REMEDIES.
Borrower represents to Bank that the proceeds of this loan are to
be used primarily for business, commercial or agricultural
purposes. Borrower acknowledges having read and understood, and
agrees to be bound by, all terms and conditions of this Note.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN PROMISSORY NOTE
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Borrower:
U.S.A. Radio Network, Inc.
(a Texas Corporation)
By: /s/ ROBERT M. MADDOUX
------------------------------
Name: Robert M. Maddoux
Title: President
(Corporate Seal)
Bank: NationsBank of Texas, N.A.
By: /s/ Jesus Guevara
-------------------------------
Name: Jesus Guevara
Title: Asst. Vice President
-4-
EQUITY
RADIO
NETWORK 14605 N. Airport Dr., Suite 312, Scottsdale, AZ 85260
Phone: 602-483-8762; Fax: 602-483-8503
TRANSMISSION SERVICE AGREEMENT
This Agreement is effective as of _______________________, 1995,
by and between Equity Radio Network Inc., a Arizona corporation
having its principal office at 14605 N. Airport Dr., Suite 312,
Scottsdale, AZ 85260 ("ERN") and USA Radio Network at 2290
Springlake Rd., Suite 107, Dallas, Texas 75234 ("Customer").
For and in consideration of the promises and covenants set forth
in this Agreement, the parties hereby agree as follows:
1. Primary ERN Services.
(a) Subject to the terms and conditions of this Agreement, ERN
hereby agrees to provide to Customer, and Customer agrees to take
from ERN, full time 24 hours, 7 days a week, space segment and
audio uplink services on Satcom C-5, Transponder 15 DATS, 7.5 khz
audio Channel 10-0.
2. Customers Responsibilities.
(a) Customer understands that the quality of the original
broadcast signal will impact the final transmission quality.
3. Charges and Payment.
(a) The charges for the Primary Services described in Paragraph
1 above will be $10,695.00 per month.
(b) The first month payment of $10,695.00 will be due before
service is started.
(c) From time to time, ERN may buy back from the Customer
satellite time on their full time channel. If ERN, so elects to
buy back the satellite time, it will be at a rate of $50.00 per
hour. However, under no circumstance, is ERN responsible, liable
or required to buy back any time or is the Customer required to
sell back the time.
(d) Payment for the monthly services shall be due on the 1st day
of the month in which service is to be provided.
(e) Monthly bills will be rendered fifteen (15) days prior to
due date. ERN will assess a late payment charge of 1.5 percent
per month compounded monthly on payments not received by the
payment due date or thirty (30) days after the date the bill is
received, whichever is later. In addition, if any payment is not
received when due, ERN shall be entitled to give written notice
to Customer of ERN's intention to discontinue service.
(f) If Customer fails to bring its account with ERN current
within fifteen (15) days after the date of receipt of such
written notice, ERN shall have the right to discontinue all
service to Customer without further notice and without liability
or penalty of any kind on account of such termination. If
service under this Agreement is terminated due to Customer
nonpayment, service will be restored only when all outstanding
invoices, regardless of due date, have been paid, and continued
service thereafter will require that charges for the Primary
Services be paid in advance.
4. Service Availability and Liability.
(a) ERN shall not be responsible for monitoring the transmission
of Customer's programming signals for content or compliance with
FCC rules and regulations, or for any other purposes other than
transmission integrity assurance.
(b) ERN shall not be responsible for any down time or other
interruption of facilities or services not provided by ERN; acts
of God or third parties or other causes beyond the reasonable
control of ERN.
<PAGE>
(c) In the event of transmission interruption due to the failure
of ERN provided service, ERN will credit Customer on a prorated
basis for the actual outages in excess of five (5) minutes.
(d) ERN agrees to use it's best efforts to provide the
facilities and services ordered herein. However, ERN shall not
be responsible for the failure to provide said services and
facilities due to acts of God, labor disputes or any other
reasons beyond ERN reasonable control.
5. Terms and Termination.
(a) The Initial Term of service under this Agreement shall
commence on August 28, 1995 and shall continue for a period of
five years. Service under this agreement is non-cancelable
except as provided in Paragraph 5(c) of this Agreement.
(b) If Customer elects not to renew this Agreement at the end of
the Initial Term or a Renewal Term, Customer must deliver to ERN,
a written notice, at least sixty (60) days prior to the
expiration of such Initial or Renewal Term.
(c) Customer may terminate this Agreement, without penalty, upon
thirty (30) days prior written notice if ERN fails to meet the
quality standards set forth in Paragraph 1 of this Agreement, and
fails to cure such failure within two (2) days of notice thereof.
If Customer cancels, for any reason other than the reason stated
within this Paragraph 5(c), Customer is responsible for the
remaining balance of the Service Order.
(d) If for any reason, ERN defaults on their contract with GE
American Communications, the supplier of the above channel
described in Paragraph l(a), GE American Communications has
specified in their contract with ERN that USA Radio Network can
assume the life of the contract for the channel at the rate of
$10,695.00 per month.
6. Third Party Requirements.
(a) The. parties acknowledge and agree that, in providing
satellite transmission services, ERN will be required to operate
in accordance with the practices and procedures of the carrier
from whom satellite Transponder space or other transmission
facilities are utilized, and to the extent carrier practices and
procedures are inconsistent with the terms of this Agreement such
practices and procedures will control ERN performance hereunder.
(b) The satellite uplink transmission service to be provided by
ERN under this Agreement are subject to regulation by the Federal
Communications Commission (the "FCC").
7. Miscellaneous.
(a) Payment of the charges set forth in this Agreement entitles
Customer to receive only the services expressly described in this
Agreement as being covered by such charges, and all other extra
or additional services which Customer may wish to obtain from ERN
shall only be supplied to Customer at prices and on such other
terms as may be agreed to between the parties.
(b) Customer will indemnify and hold ERN harmless from and
against any and all claims, losses, liabilities, direct or
consequential damages, costs and expenses, including reasonable
attorney's fees, arising out of or related to the content of
Customer's programming or other material furnished by Customer
hereunder, including without limitation any claim for libel,
slander or infringement of copyright. This indemnification shall
survive any termination of this Agreement.
(c) Insofar as not inconsistent with Paragraph 7(b) above, ERN
will indemnify and hold Customer harmless from and against any
and all claims, losses, liabilities, damages, costs and expenses,
including reasonable attorney's fees, arising out of or relating
to the activities of ERN or its agents and employees in
transmitting Customer's programming, including but not limited to
failure to maintain necessary licenses or interference with a
third party's transmissions. This indemnification shall survive
any termination of this Agreement.
(d) Neither party has any authority to make any statement,
representation, warranty or other commitment on behalf of the
other party, and this Agreement does not create any agency,
employment, partnership, joint venture or similar relationship
between the parties.
(e) Neither party may assign any rights or obligations under
this Agreement without the prior written consent of the other
party, such consent is not to be unreasonably withheld, provided,
however, that either party may assign its rights hereunder
without the consent of the other party to any entity with which
it may be merged or consolidated or which acquires all or
substantially all of its assets, provided that such entity agrees
to writing to assume all of the obligations of Customer or ERN,
as the case may be, under this Agreement.
(f) All notices which either party may be required or desire to
give to the other party under this Agreement shall be given by
personal service or by registered or certified mail, return
receipt requested, addressed to such party at its respective
address as set forth at the beginning of this Agreement, or to
such other address as a party may hereafter designate by proper
written notice to the other party.
(g) No waiver of any breach of this Agreement shall constitute a
waiver of any other breach of the same or any other provision of
the Agreement, and no waiver shall be effective unless made in
writing. In the event that any provisions of this Agreement
shall be judged illegal or unenforceable by a court of competent
jurisdiction, such provision shall be severed and the entire
Agreement shall not fail but the balance of this Agreement shall
continue in full force and effect.
(h) Customer and ERN acknowledge that they have read this entire
Agreement and that this Agreement constitutes the entire
understanding and contract between the parties hereto, and
supersedes any and all prior or contemporaneous oral or written
communications with respect to the subject matter hereof, all of
which are merged herein. This Agreement shall not be modified,
amended or in any way altered except by an instrument in writing
signed by both of the parities hereto.
WHEREFORE, this Agreement shall take effect as of the date first
written above when it has been executed below on each of two
copies of duly authorized representatives of each party hereto.
EQUITY RADIO NETWORK, INC.
- ------------------------------
SIGNATURE
- ------------------------------
PRINT NAME
- ------------------------------
TITLE
DATE:
-------------------------
USA RADIO NETWORK, INC.
/s/ David F. Reeder
- ----------------------------------
SIGNATURE
DAVID F. REEDER
- ----------------------------------
PRINT NAME
V.P./General Manager
USA Radio Network
- -----------------------------------
TITLE
DATE: August 16, 1995
-------------------------
[LOGO] Bank of America
- -----------------------------------------------------------------
Bank of America Texas, N.A.
Business Lending Services
P. 0. Box 6022
Pasadena, CA 91102-6022
September 12, 1997
U.S.A. RADIO NETWORK INC
ATTN: JAMES BALLARD
2290 SPRINGLAKE UNIT NO. 107
DALLAS, TX 75234
ABC Line Number 52208514216017001
Welcome! Credit Limit $40,000.00
Your new Advantage Business Credit(R) (ABC) line has been
approved and is now available to help you manage your short term
business expenses. Enclosed is your Advantage Business Credit
Line Agreement (the "Agreement"), which describes the terms and
conditions of your line of credit, and two copies of a
Confirmation.
To Gain Access To Funds
* Please complete and execute one copy of the
enclosed Confirmation and deliver it to your BofA
branch. Once you have done so, you may request
advances under your line of credit. In fact, you
may request your first advance by indicating the
amount you want on the Confirmation itself. If
you do so, we will promptly deposit the advance
into the checking account indicated on your loan
application. You may retain the Agreement and the
other copy of the Confirmation for your records.
* The signature(s) of your duly authorized
officer(s) on the Confirmation will indicate your
agreement to the terms and conditions of the
Agreement. Please return the signed Confirmation
by September 26, 1997
Advances and Payments by Telephone
* Transfer funds to and make payments from your
designated BofA business checking account quickly
and easily by calling our toll-free customer
service number 1-800-245-2523. If you didn't
request this service and are interested, please
complete die appropriate section on the
Confirmation.
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<PAGE>
Convenient Credit Line Checks
* Use your credit line checks to pay your business
expenses directly or to deposit funds into your
business checking account. Your new credit line
checks will be mailed to you separately in
approximately 10 business days. If you wish to
authorize additional signers to access the line of
credit, please complete the appropriate section on
the Confirmation.
Customer Service Hours: 1-800-245-2523
* For extended hours service, an automated Voice
Response Unit (VRU) is available to provide you
with information on your Line and to make
automated telephone transfers.
* Our professional Customer Service Representatives
are available during standard business hours to
provide you with personalized service.
Extended Hours (VRU)
7 Days a Week 8 a.m. to 12 p.m.
Standard Business Hours
Monday - Friday 9 a.m. to 6 p.m.
Saturday 11 a.m. to 4 p.m.
* If you call by 4 p.m. Monday through Friday,
telephone transfers will be processed the same
day. Requests made after 4 p.m., or on Saturday,
Sunday, or holidays, will be processed the next
business day.
Monthly Statements
* Each month you will receive a statement that
summarizes your credit line activity for the prior
monthly period. Your monthly payment will be due
no later than 10 days from the statement date. If
you requested Automatic Payment Service, your
monthly payment will be deducted from your
designated BofA business checking account on the
10th day of each month, or on the next business
day if the 10th falls on a non-business day. If
you didn't request this service and are
interested, please complete the appropriate
section on the Confirmation.
Thank you for giving us this opportunity to serve your business
financing needs. We look forward to earning your continued
business by ensuring your satisfaction. If we can be of further
service, please don't hesitate to give us a call.
Sincerely,
/s/ Janet A. Garufis
Janet A. Garufis
Senior Vice President
N-2191E-TX JTF 5/97
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<PAGE>
[LOGO] Bank of America
- -----------------------------------------------------------------
- --------------------------------------------------
Advantage Business Credit(R) Line
Confirmation
TO: Bank of America Texas, N.A.
FROM: U.S.A. RADIO NETWORK INC.
DATE: 9/18/97
RE: $40,000.00 Advantage Business Credit Line
CONFIRMATION/REQUEST FOR ADVANCE.
This Confirmation is delivered in connection with the attached
Advantage Business Credit Line/Loan Agreement between Bank of
America Texas, National Association ("Bank") and U.S.A. RADIO
NETWORK INC. ("Borrower") dated as of September 12, 1997
(the "Agreement").
1. Borrower acknowledges having received a completed copy of
the Agreement.
2. Please check one:
[ ]Borrower hereby requests an advance under the line of credit
in the amount of $___________ (not to exceed the amount
referenced above), to be disbursed by Bank into Borrower's
account listed in the Agreement, or if no account was given,
the following account #:______________.
[X] Borrower does not request an advance at this time.
3. Borrower hereby agrees to all the terms and conditions
stated in the Agreement. In addition, Borrower hereby
confirms that the representations and warranties stated in
the Agreement are true and correct in all material respects
as of the date hereof.
4. This Confirmation is hereby incorporated into and made a
part of the Agreement for all purposes. Borrower's
execution of this Confirmation shall constitute execution of
the Agreement.
ADDITIONAL SERVICES. If you did not request the following
services and are interested, simply check the box next to the
service(s) you are interested in adding to your line. Please
provide your business checking account number below.
[X] Automatic Payment Service and Telephone Transfer Service.
Yes, reduce my interest rate by 1% with Automatic Payment
Service. Automatically deduct the required monthly payment
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<PAGE>
from my account listed below. I understand that this also
includes Telephone Transfer Service to and from this
business checking account and my ABC line of credit.
[ ]Telephone Transfer Service. Yes, I would like to take
advantage of Telephone Transfer Service to and from my
account listed below, however, I am not interested in
Automatic Payment Service at this time.
Bank of America Business Checking Account #31429-2588 for
service(s) requested above.
ADDITIONAL SIGNERS FOR CHECK ACCESS TO THE LINE.
Section I.D. of the Agreement indicates that checks may be signed
by any one individual who signed the application for credit.
Section IV.J. of the Agreement indicates that checks are to be
used only by the Borrower. This section further states that, if
the Borrower permits anyone else to use the checks without the
Bank's consent, the Borrower will be obligated for any advances
obtained by that person plus any interest and other charges
attributed to such advances.
If you wish to authorize additional signers to access the line,
please provide their name, title, social security number and a
specimen of their signature below:
Print Name Title Social Security Signature
1. Mark Maddoux VP XXXXXXXXX /s/ Mark Maddoux
2. ____________ _____ ____________ ________________
3. ____________ _____ ____________ ________________
_____________________________
4. ____________ _____ ____________ ________________
TO COMPLETE, PLEASE SIGN BELOW AND RETURN TO YOUR BANK OF AMERICA
BRANCH.
U.S.A. RADIO NETWORK INC.
By: /s/ R. Maddoux By:
------------------ ------------------------
R Maddoux
President
By: ------------------- By: ------------------------
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<PAGE>
[LOGO] Bank of America
- -----------------------------------------------------------------
ADVANTAGE BUSINESS CREDIT
LINE/LOAN AGREEMENT
VARIABLE RATE
TO: Bank of America Texas, N.A.
Unit #2619
I-925 West John Carpenter Freeway
Irving, Texas 75063
CUSTOMER NAME
U.S.A. RADIO NETWORK INC.
LINE OF CREDIT/LOAN NO.: 52208514216017001
CREDIT LIMIT/LOAN AMOUNT: $40,000.00
BRANCH NO.: 7735
DEPOSIT ACCOUNT NO.
("ACCOUNT")
INTRODUCTION. This Agreement dated as of September 12, 1997
is entered into between U.S.A. RADIO NETWORK INC. (the
"Borrower") and Bank of America Texas, National Association (the
"Bank") concerning the Borrower's Advantage Business Credit
facility with the Bank. When the Borrower signed the application
for an Advantage Business Credit facility, the Borrower agreed to
comply with the terms of this Agreement:
[X] I. THE LINE OF CREDIT
A. NATURE OF THE LINE. If the box above is checked, the Bank
has made available to the Borrower a revolving line of
credit ("Line") in the principal amount shown above as
"Credit Limit" subject to the terms and conditions of this
Agreement. This means that the Borrower, or any person
provided for in Section I.C. and I.D. below, may request an
advance of all or a part of the Line at any time while the
Line is available. Any amount repaid by the Borrower
becomes available for the Borrower to reborrow after the
expiration of a hold period for payments by personal checks
of up to eleven business days. If the Bank delays the
availability of funds, it will mail to the Borrower a notice
within one business day.
B. ADVANCES. Advances under the Line may be in any amount not
to exceed the credit limit remaining available. Advances
may be made by telephone authorization deposited into the
Borrower's account listed above, if any, or such other of
the Borrower's accounts with the Bank as designated by the
Borrower in writing (the "Account").
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<PAGE>
C. TELEPHONE AUTHORIZATION. The Bank may honor telephone
instructions for advances or repayments given by any one of
the individuals who signed the application for this
Advantage Business Credit Line on the Borrower's behalf, or
any other individual designated by any one of such
authorized individuals. Repayments authorized by telephone
shall be withdrawn from the Borrower's Account. The
Borrower indemnities and excuses the Bank (including its
officers, employees, and agents) from all liability, loss,
and costs in connection with any act resulting from
telephone instructions it reasonably believes are made by
any individual authorized by the Borrower to give such
instructions. This indemnity and excuse will survive this
Agreement's termination.
D. CREDIT LINE CHECKS.
[X] If the box to the left is checked, the following
paragraphs apply:
1. WRITING CHECKS. The Bank will issue checks to the
Borrower at no cost. The Borrower may borrow money under
the Line (up to the Credit Limit remaining available) by
writing checks. The Borrower agrees not to write checks in
an amount less than $300, and not to write more than five
checks in any one billing cycle. The Bank may charge a fee
for any checks written for a lesser amount, or if more than
the permitted number of checks are written. Each paid check
will be charged to the Line. Checks may be signed by any
one individual who signed the application for credit. Only
one signature shall be required on any check.
2. STOP PAYMENTS. The Borrower may stop payment on a
check as long as the request is received by the Bank prior
to the time the check is posted to the Line. The request
must include the information which the Bank requires. The
Borrower may be charged a fee to place or renew a stop
payment order. A stop payment shall be effective for 1 80
days. The Borrower must renew the stop payment if it wishes
the stop payment to be effective for a longer period. In
some cases, the Bank may pay a check even if a stop payment
is in effect. For example, if a branch of the Bank or
another person or entity becomes a "holder in due course" of
a check, the Bank may still pay the check and post the
amount to the Line.
3. CHECK CERTIFICATION. The Bank will not certify checks.
4. LOST OR STOLEN CHECKS. The Borrower must notify the
Bank immediately at the Bank of America Address shown at the
top of
5. CANCELLED CHECKS. The Bank will not return the
cancelled checks to the Borrower, but will retain
photocopies for eight (8) years. The Borrower agrees to
examine the monthly billing statement on the Account
promptly in order to identify improper or unauthorized
transactions. If the Borrower requests a copy of a check,
the Borrower must write a letter to the Bank, including the
Account number, the check number and amount, and the date
that the check posted to the billing statement. The Bank may
charge a fee for providing a copy of checks.
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<PAGE>
6. AUTHORIZED USE. The checks issued to the Borrower must
be used only by the Borrower. If the Borrower permits anyone
else to use its checks without the Bank's consent, the
Borrower will be obligated to pay for any advances obtained
by that person plus any interest and other charges
attributable to such advances.
7. RETURN OF CHECKS. At the Bank's request, the Borrower
will return to the Bank any unused checks if the Account is
terminated. If any such event occurs, the Bank may return
unpaid any checks presented against the Account.
E. DEFAULT. The Bank may, in its sole discretion, refuse to
make advances hereunder if an Event of Default has occurred
(as defined in Section VII. below).
F. AVAILABILITY OF THE LINE. Advances under the Line will be
available until the earlier of the following (the
"Termination Date"): (1) the anniversary of the date of this
Agreement, unless the Agreement is renewed by the Bank as
described in paragraph I below; or (2) the date the Bank
terminates the Line because of an Event of Default pursuant
to Section VII.; or (3) the date the Line is cancelled by
the Borrower pursuant to Section IV.A. On the Termination
Date, no further advances will be made available to the
Borrower.
G. CREDIT LIMIT. A credit limit has been set on the Line and
is shown above as "Credit Limit". The Borrower agrees not
to allow the principal amount which the Borrower owes at any
one time under this Agreement to exceed the Credit Limit.
The Bank does not have to honor any request for an advance
which, when added to the unpaid balance, would exceed the
Credit Limit.
H. PAYMENTS.
1. The minimum payment due each month shall be the amount
of all accrued but unpaid interest owed on the last day of
the immediately preceding month. Such payment shall be due
and payable in full on the tenth (10th) day of each month,
or on the next Business Day if said date falls on a Saturday
or Sunday, or on a holiday on which the Bank is closed. In
addition, the Borrower must pay any amounts past due, any
amount that exceeds the Credit Limit and any other charges
assessed as described in this Agreement. As used herein,
the term "Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banks are authorized
to be closed under the laws of the State of Texas.
2. The entire outstanding principal balance of the Line,
together with all accrued and unpaid interest thereon, and
fees and charges owing in connection therewith, shall be due
and payable in full on the Termination Date.
3. All sums received from the Borrower for application to
the Line shall be applied to the Borrower's obligations
under the Line in such order as determined by the Bank.
I. RENEWAL. Upon a review of the Borrower's performance under
this Agreement and other credit factors, the Bank may, in
its sole and absolute discretion, renew this
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<PAGE>
Agreement under terms and conditions satisfactory to the
Borrower and the Bank. Any such renewal will be for a
period of one year from the date of the renewal.
[ ] II. THE LOAN
A. AMOUNT. If the box above is checked, the Bank has made
available to the Borrower a term loan ("Loan") in the
principal amount shown above as "Loan Amount" subject to the
terms and conditions of this Agreement.
B. PRINCIPAL AND INTEREST PAYMENTS
1. The Borrower promises to pay to the Bank principal on
the Loan in ________ installments of ______________________
Dollars plus interest, each payable on the _____ day of each
month, or on the next Business Day if said date falls on a
Saturday or Sunday, or on a holiday on which the Bank is
closed, beginning __________, and continuing until
___________, on which date all unpaid principal and accrued
unpaid interest shall be paid in full. The principal and
accrued unpaid interest on the Loan may also at the Bank's
option be due and payable in full upon an Event of Default
in accordance with Section VII herein.
2. All sums received from the Borrower for application to
the Loan shall be applied to the Borrower's obligation under
the Loan in such order as determined by the Bank.
III. PAYMENTS, INTEREST AND FEES
A. PAYMENTS. The Borrower can pay the balance of the credit
outstanding under this Agreement in full or part at any time
without premium or penalty. The Bank may accept partial
payments, whether or not marked "paid in full" without
losing our rights under this Agreement.
Payments should be made to:
Bank of America Texas, N.A.
Unit #1738
P. O. Box 7041
Pasadena, CA 91109-7041
If the Bank receives the payment at the above address by
9:00 a.m. on any Business Day, except Saturday or Sunday,
the Bank will credit the payment to the amount outstanding
under this Agreement as of that day. Payments may also be
made at any of the Bank's Texas branches. Payments received
at a branch after 4:00 p.m. or on a Saturday, Sunday or
holiday will be posted the following Business Day.
B. AUTOMATIC REPAYMENT
[X] If the box to the left is checked, the following
paragraphs apply:
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<PAGE>
1. The Borrower hereby chooses to have its principal and
interest payments made pursuant to the Bank's Automatic
Payment Service, and authorizes the Bank to collect all sums
due hereunder by charging the full amount thereof to the
Account. Should there be insufficient funds in the Account
to pay when due all or any portion of the amount due, the
full amount of such deficiency shall be immediately due and
payable by the Borrower.
2. If, for any reason during the term of this Agreement,
this Automatic Payment service is terminated by the Borrower
or the Bank, the interest rate under this Agreement will
increase by one (1) percentage point and the amount of each
payment will be increased accordingly.
C. INTEREST RATE
1. The principal balance outstanding under this Agreement
shall bear interest at a fluctuating interest rate per annum
equal to the lesser of (a) the Bank's Reference Rate plus
3.6250 percentage points, as said Reference Rate may change
from time to time (the "Applicable Rate"), or (b) the
Maximum Rate (as hereinafter defined).
The Reference Rate is the rate of interest publicly
announced from time to time by the Bank as its Reference
Rate. The Reference Rate is set based on various factors,
including the Bank's costs and desired return, general
economic conditions and other factors, and is used as a
reference point for pricing some loans. The Bank may price
loans to its customers at, above, or below the Reference
Rate. Any change in the Reference Rate shall take effect at
the opening of business on the day specified in the public
announcement of a change in the Reference Rate.
As used herein, the terms "Maximum Rate" shall mean the
maximum nonusurious interest rate, if any, that at any time,
or from time to time, may be contracted for, charged,
collected or received on the indebtedness evidenced by this
Agreement under the laws of the United States and the State
of Texas applicable to the holder of this Agreement and such
indebtedness. TEX. REV. CIV. STAT. ANN. Art. 5069-1.04, as
amended (the "Act"), shall be relevant to this Agreement for
the purposes of determining the Maximum Rate, and Bank and
Borrower elect to determine such applicable legal rate under
the Act pursuant to the "indicated rate ceiling" from time
to time in effect, as referred to and defined in Article
1.04(a)(1) of the Act, subject, however, to any right Bank
may have subsequently, under applicable law, to change the
method of determining the Maximum Rate.
2. COMPUTATION OF INTEREST AND FEES. All computations of
the Applicable Rate and fees made or called for hereunder
shall be calculated on the basis of the actual number of
days the unpaid principal balance is outstanding divided by
a 365/366 day year as appropriate.
3. DEFAULT RATE. At the Bank's sole option in each
instance, subject to Section VIII.H., any amount not paid
when due under this Agreement (including interest) shall
bear interest from the due date at the Maximum Rate.
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D. PROMISE TO PAY FEES AND COSTS. The Borrower promises to pay
according to the terms of this Agreement, all amounts
outstanding and fees and costs which may be assessed under
this Agreement including reasonable attorneys' fees (which
may include the allocated costs of in-house counsel), court
costs, and collection costs.
E. FEES. Upon the date of this Agreement, the Borrower will
pay a nonrefundable loan fee of $100.00. This fee may be
deducted from the Loan proceeds or treated as a principal
advance from the Line. The advance will be subject to all
the terms of this Agreement. In addition, if this is a Line,
and if the Bank renews the Line, an annual fee will be
assessed as a principal advance on the Line in the 13th
monthly billing cycle after the date of this Agreement and
annually thereafter whether or not the Borrower uses the
Line. There is no annual fee for the first year. The annual
fee is non-refundable, and the Borrower shall owe it once it
is posted to the Line, even if the Line is subsequently
changed, suspended or terminated for any reason.
IV. OTHER TERMS
A. CANCELLATION BY THE BORROWER. The Borrower may cancel this
Agreement by written notice to the Bank. The Borrower's
request will take effect at the time it is received by the
Bank. If there is more than one Borrower, the Bank may treat
a request by one of them under this paragraph as a request
by all of them. At the time of cancellation, the outstanding
balance will be immediately due and payable.
B. STATEMENT COPIES. A fee may be charged for each statement
copy requested, plus an hourly charge for any necessary
research time.
C. LATE FEES. A late charge of 6% of the unpaid portion of the
payment amount, with a minimum fee of $5.00 and a maximum
fee of $15.00, may be assessed if payment is not received
within fifteen days after the date the payment is due. This
fee may be changed by the Bank at its option.
D. OVERLIMIT FEES. An overlimit fee of $15 may be assessed
each time the Borrower exceeds the Credit Limit, regardless
of whether the Bank permits the Borrower to exceed the
Credit Limit.
E. RETURNED ITEM FEE. The Borrower may be charged a $10
returned item fee each time a payment is returned or if
there are insufficient funds in the Account when a payment
is attempted through Automatic Payment Services.
V. FINANCIAL STATEMENTS
The Borrower represents and warrants that:
A. Statements and data submitted in writing by the Borrower to
the Bank in connection with this request for credit are true
and correct, and said statements truly present the financial
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<PAGE>
condition of the Borrower as of the date hereof and the
results of the operations of the Borrower for the period
covered thereby, and have been prepared on a consistently
maintained basis, in accordance with generally accepted
accounting principles or another basis acceptable to the
Bank. Since such date there have been no material adverse
changes in the financial condition or operations of the
Borrower's business. The Borrower has no knowledge of any
liabilities, contingent or otherwise, at such date not
reflected in said statements, and the Borrower has not
entered into any special commitments or substantial
contracts which are not reflected in said statements, other
than in the ordinary and normal course of its business,
which may have a materially adverse effect upon its
financial condition, operations or business as now
conducted.
B. The representations and warranties contained in Section V.A.
above shall apply to each financial statement submitted
pursuant to Section VI.B. herein and shall be continuous and
shall be automatically restated for each such financial
statement as of the date of such statement.
VI. COVENANTS
The Borrower agrees that so long as credit is available
under this Agreement and until the Bank is repaid in full,
it will, unless the Bank shall otherwise consent in writing:
A. INSURANCE. Maintain public liability, property damage and
worker's compensation insurance and insurance on all its
insurable property against fire and other hazards with
responsible insurance carriers to the extent usually
maintained by similar businesses.
B. RECORDS AND REPORTS. Maintain a standard and modern system
of accounting in accordance with generally accepted
accounting principles or another basis acceptable to the
Bank; permit the Bank's representatives to have access to
and to examine its properties, books and records at all
reasonable times; and furnish the Bank:
1. Promptly, a notice in writing of the occurrence of any
event of default hereunder or of any event which would
become an event of default hereunder upon giving of notice,
lapse of time, or both.
2. Financial statements and other information relating to
the affairs of the Borrower and any guarantors as the Bank
may request from time to time.'
C. TYPE OF BUSINESS. Not make any substantial change in the
character of its business.
D. PURPOSE. Use the proceeds of the credit provided in this
Agreement solely for business purposes.
E. OUTSIDE INDEBTEDNESS. Not create, incur, assume or permit
to exist any indebtedness for borrowed money other than
loans from the Bank except obligations now existing as shown
on the credit application or the personal financial
statement or data submitted with such application pursuant
to Section V.A. herein; or sell or transfer, either
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<PAGE>
with or without recourse, any accounts or notes receivable
or any money due or to become due.
F. LIENS AND ENCUMBRANCES. Not create, incur, assume or permit
to exist any mortgage, deed of trust, security interest
(whether possessory or nonpossessory) or other encumbrance
of any kind (including without limitation, the charge upon
property purchased under conditional sale or other title
retention agreement) upon or on any of its property or
assets, or sell, assign, pledge or otherwise transfer for
security any of its accounts, contract rights, general
intangibles, or chattel paper with or without recourse,
whether now owned or hereafter acquired (hereinafter
collectively called "Liens"), other than (1) Liens for taxes
not delinquent or being contested in good faith in
appropriate proceedings; (2) Liens in connection with
worker's compensation, unemployment insurance or social
security obligations; (3) Mechanics', workmens',
materialmens', landlords', carriers', or other like liens
arising in the ordinary and normal course of business with
respect to obligations which are not due or which are being
contested in good faith; (4) Liens on margins tock as
defined within Regulation U of the Board of Governors of the
Federal Reserve System, as amended from time to time, and
(5) Liens in favor of the Bank.
G. LOANS, SECONDARY LIABILITIES. Not make any loans or
advances to any person or other entity other than in the
ordinary and normal course of its business as now conducted;
or guarantee or otherwise become liable upon the obligation
of any person or other entity, except by endorsement of
negotiable instruments for deposit or collection in the
ordinary and normal course of its business.
H. ACQUISITION OR SALE OF BUSINESS; MERGER OR CONSOLIDATION.
Not purchase or otherwise acquire the assets or business of
any person or other entity, or liquidate, dissolve, merge or
consolidate, or commence any proceedings therefor; or sell
any assets except in the ordinary and normal course of its
business as now conducted, or sell, lease, assign, or
transfer any substantial part of its business or fixed
assets, or any property or other assets necessary for the
continuance of its business as now conducted, including
without limitation the selling of any property or other
asset accompanied by the leasing back of the same.
I. COMPLIANCE WITH LAWS. Comply with the laws, regulations and
orders of any government body with authority over the
Borrower's business.
VII. EVENTS OF DEFAULT
The occurrence of any of the following events of default
shall, at the Bank's option, terminate the Bank's obligation
to extend credit under this Agreement, and make all sums of
principal and interest immediately due and payable, all
without demand, presentment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration or
other notice, all of which are hereby expressly waived and
the Bank may exercise all its rights against the Borrower,
any guarantor and any collateral as provided by law.
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<PAGE>
A. FAILURE TO PAY INDEBTEDNESS. Failure to pay when due any
obligation of the Borrower to the Bank.
B. OTHER DEFAULTS. The occurrence of any event of default
whether or not waived by the obligee under any other
indebtedness extended by any institution or individual to
the Borrower.
C. BREACH OF COVENANT. Failure of the Borrower to perform any
other term or condition of this Agreement binding upon the
Borrower.
D. BREACH OF WARRANTY. Any of the Borrower's representations
or warranties made herein or any statement or certificate at
any time given pursuant hereto or in connection herewith
shall be false or misleading in any material respect.
E. INSOLVENCY; RECEIVER OR TRUSTEE. The Borrower, any
guarantor of the indebtedness of the Borrower to the Bank or
general partner of the Borrower shall become insolvent; or
admit its inability to pay its debts as they mature, or make
an assignment for the benefit of creditors; or apply for or
consent to the appointment of a receiver or trustee for it
or for a substantial part of its property or business.
F. JUDGMENTS, ATTACHMENTS. Any money judgment, writ, or
warrant of attachment, or similar process shall be entered
or filed against the Borrower or any guarantor of any of the
Borrower's obligations to the Bank or any of its assets and
shall remain unvacated, unbonded or unstayed for a period of
ten days or in any event later than five days prior to the
date of any proposed sale thereunder.
G. BANKRUPTCY. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for relief
under any bankruptcy law or any law for the relief of
debtors shall be instituted by or against the Borrower, any
guarantor of the indebtedness of the Borrower to the Bank or
general partner of the Borrower.
H. MATERIAL ADVERSE CHANGE. A material adverse change occurs
in the Borrower's financial condition or the financial
condition of any guarantor of the Borrower's obligations to
the Bank, which, in the opinion of the Bank, would affect
the ability of the Borrower to repay any advances made by
the Bank hereunder or any other of the Borrower's
obligations hereunder, or of such guarantor to perform under
its guaranty.
I. GUARANTY. Any guaranty of the indebtedness of the Borrower
to the Bank, at any time after the execution and delivery of
such guaranty and for any reason other than satisfaction in
full of all indebtedness incurred hereunder, ceases to be in
full force and effect or is declared to be null and void; or
the validity or enforceability thereof is contested in a
judicial proceeding; or any guarantor denies that it has any
further liability under such guaranty; or any guarantor
defaults in any provision of any guaranty; or any financial
information provided by any guarantor is false or misleading
in any material respect.
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<PAGE>
J. DEATH. The Borrower or any guarantor dies; if the Borrower
is a sole proprietorship, any owner dies; if the Borrower is
a trust, a trustor dies; if the Borrower is a partnership,
any general partner dies; or if the Borrower is a
corporation, any principal officer or majority stockholder
dies.
K. GOVERNMENT ACTION. Any government authority takes action
that the Bank believes materially adversely affects the
Borrower's or any guarantor's financial condition or ability
to repay.
VIII. MISCELLANEOUS PROVISIONS
A. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on
the part of the Bank, in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise
thereof or of any other right, power or privilege. All
rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies
otherwise available.
B. OTHER AGREEMENTS. Nothing herein shall in any way limit
the effect of the conditions set forth in any security or
other agreement executed by the Borrower, but each and every
condition hereof shall be in addition thereto.
C. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS. Tex. Rev. Civ. Stat. Ann. Art. 5069, ch. 15 (which
regulates certain revolving loan accounts and revolving
triparty accounts) shall not apply to this Agreement.
D. SEVERABILITY. If any provision of this Agreement is held to
be unenforceable, such determination shall not affect the
validity of the remaining provisions of this Agreement.
E. SUCCESSORS AND ASSIGNS. This Agreement is binding on the
Borrower's and the Bank's successors and assignees. The
Borrower agrees that it may not assign this Agreement
without the' Bank's prior consent.
F. ARBITRATION
1. This paragraph concerns the resolution of any
controversies or claims between the Borrower and the Bank,
including but not limited to those that arise from: (a) This
Agreement (including any renewals, extensions or
modifications of this Agreement); (b) Any document,
agreement or procedure related to or delivered in connection
with this Agreement; (c) Any violation of this Agreement; or
(d) Any claims for damages resulting from any business
conducted between the Borrower and the Bank, including
claims for injury to persons, property or business interests
(torts).
2. At the request of the Borrower or the Bank, any such
controversies or claims will be settled by arbitration in
accordance with the United States Arbitration Act. THE
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<PAGE>
UNITED STATES ARBITRATION ACT WILL APPLY DESPITE THE
PROVISIONS OF PARAGRAPH C., "GOVERNING LAW," ABOVE.
3. Arbitration proceedings will be administered by the
American Arbitration Association and will be subject to its
commercial rules of arbitration.
4. For purposes of the application of the statute of
limitations, the filing of an arbitration pursuant to this
paragraph is the equivalent of the filing of a lawsuit, and
any claim or controversy which may be arbitrated under this
paragraph is subject to any applicable statute of
limitations. The arbitrators will have the authority to
decide whether any such claim or controversy is barred by
the statute of limitations and, if so, to dismiss the
arbitration on that basis.
5. If there is a dispute as to whether an issue is
arbitrable, the arbitrators will have the authority to
resolve any such dispute.
6. The decision that results from an arbitration
proceeding may be submitted to any authorized court of law
to be confirmed and enforced.
7. This provision does not limit the right of the Borrower
or the Bank to: (a) exercise self-help remedies such as
setoff; (b) foreclose against or sell any real or personal
property collateral; or (c) act in a court of law, before,
during or after the arbitration proceeding to obtain (i) an
interim remedy; and/or (ii) additional or supplementary
remedies.
8. The pursuit of or a successful action for interim,
additional or supplementary remedies, or the filing of a
court action, does not constitute a waiver of the right of
the Borrower or the Bank, including the suing party, to
submit the controversy or claim to arbitration if the other
party contests the lawsuit.
G. HAZARDOUS WASTE INDEMNIFICATION. The Borrower will
indemnify and hold harmless the Bank from any loss or
liability directly or indirectly arising out of the use,
generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a
hazardous substance. This indemnity will apply whether the
hazardous substance is on, under or about the Borrower's
property or operations or property leased to the Borrower.
The indemnity includes but is not limited to attorneys' fees
(including the reasonable estimate of the allocated cost of
in-house counsel and staff). The indemnity extends to the
Bank, its parent, subsidiaries and all of their directors,
officers, employees, agents, successors, attorneys and
assigns. For these purposes, the term "hazardous
substances,, means any substance which is or becomes
designated as "hazardous" or "toxic" under any federal,
state or local law. This indemnity will survive repayment
of the Borrower's obligations to the Bank.
H. INTEREST. Any provision herein or in any other agreement or
commitment between Bank and Borrower to the contrary
notwithstanding, Bank shall never be entitled to charge,
receive, or collect, not shall amounts received hereunder be
credited so that Bank
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<PAGE>
shall be paid, as interest a sum greater than interest at
the Maximum Rate. It is the intention of the parties that
this Agreement and all other instruments securing the
payment of Borrower's obligations to Bank, or executed or
delivered in connection herewith, shall comply with
applicable law. If Bank ever contracts for, charges,
receives, or collects anything of value which is deemed to
be interest under applicable law, and if the occurrence of
any circumstance or contingency, whether acceleration of
maturity of such obligations or other event, should cause
such interest to exceed the maximum lawful amount, any
amount which exceeds interest at the Maximum Rate shall be
applied to the reduction of the unpaid principal balance
under this Agreement or any other indebtedness owed to Bank
by Borrower, and if this Agreement and such other
indebtedness are paid in full, any remaining excess shall be
paid to Borrower. In determining whether the interest
hereunder exceeds interest at the Maximum amount of interest
shall be spread throughout the entire term of this Agreement
until its payment in full.
I. MULTIPLE BORROWERS. If there are two or more Borrowers
under this Agreement, each will be individually obligated to
repay the Bank in full, and all will be obligated together.
The Bank may terminate the availability of credit under this
Agreement if the Bank receives conflicting instructions from
the Borrowers.
J. ONE AGREEMENT. This Agreement and any related security or
other agreements required by this Agreement collectively:
(1) represent the sum of the understandings and agreements
between the Bank and the Borrower concerning this credit;
and (2) replace any prior oral or written agreements between
the Bank and the Borrower concerning this credit; and (3)
are intended by the Bank and the Borrower as the final,
complete and exclusive statement of the terms agreed to by
them. In the event of any conflict between this Agreement
and any other agreements required by this Agreement, this
Agreement will prevail.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
K. CHANGE OF TERMS. The Bank may change any term or condition
of this Agreement, to the extent permitted by law, by
providing written notice to the Borrower. Any such change
shall apply to any unpaid balance outstanding under this
Agreement as well as any future transactions under this
Agreement.
L. NOTICE. As required herein, notice to the Bank shall be
sent to the address shown on the Borrower's latest billing
statement, to be effective when received. Any written notice
to the Borrower shall be sent to the Borrower's address in
the Bank's records, to be effective when deposited in the
U.S. mail, postage prepaid, unless otherwise stated in the
notice. The Borrower agrees to notify the Bank promptly in
writing of a change in the Borrower's mailing address.
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<PAGE.
M. COSTS. If the Bank incurs any expense in connection with
administering or enforcing this Agreement, or if the Bank
takes collection action under this Agreement, it is entitled
to costs and reasonable attorneys' fees, including, to the
extent permitted by applicable law, any allocated costs of
in-house counsel. At the Bank's option, the Bank may add
these costs to the principal amount outstanding under this
Agreement.
N. ATTORNEYS' FEES. In the event of a lawsuit or arbitration
proceeding, the prevailing party is entitled to recover
costs and reasonable attorneys' fees (including any
allocated costs of in-house counsel) incurred in connection
with the lawsuit or arbitration proceeding, as determined by
the court or arbitrator.
O. TELEPHONE MONITORING. To the extent not prohibited by law,
the Bank's supervisory Quality Control personnel may listen
to telephone calls between the Borrower and the Bank's
customer service employees for the purpose of monitoring the
quality of service the Borrower receives.
P. SETOFF. At any time after the occurrence of an event of
default, the Bank may exercise a right of setoff against any
deposit account of the Borrower maintained with the Bank by
applying such account to the indebtedness outstanding under
this Agreement.
IX. MOTOR VEHICLE FINANCING
[N/A] If the box to the left is checked, the credit
extended pursuant to this Agreement is primarily for
the purchase of one or more motor vehicles (other than
a heavy commercial vehicle).
If the foregoing box is checked, then, notwithstanding any
provisions to the contrary contained in this Agreement or
any other agreement executed in connection with or as
security for this Agreement, the following provisions shall
apply.
A. AUTOMATIC REPAYMENT. If the Automatic Payment Service
described in Section III.B. is terminated by Bank, such
termination will not cause any increase in the Applicable
Rate and no documentation fee shall be payable. If the
Automatic Payment Service is terminated by Borrower, the
Applicable Rate will increase by one percent (1%), but no
documentation fee shall be payable.
B. OTHER CHARGES, FEES, AND EXPENSES. The following charges,
fees and expenses, and no other charges, fees, or expenses
of any kind, shall be payable by Borrower in connection with
this credit facility: (1) interest, as specified in Section
III.C. and VIII.A., (2) amounts actually incurred by Bank as
court costs, (3) attorneys' fees assessed by a court, (4)
lawful fees for filing, recording, or releasing to any
public office any instrument securing indebtedness
outstanding hereunder, (5) the reasonable cost actually
expended for repossessing, storing, preparing for sale, or
selling any security, (6) fees for noting a lien on or
transferring a certificate of title to any motor vehicle
offered as
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<PAGE>
security for indebtedness outstanding hereunder and (7)
premiums or indentifiable charges in connection with the
sale of any authorized insurance.
This agreement is effective as of the date stated at the top
of the first page.
-14-
USA RADIO NETWORK
STANDARD AFFILIATION AGREEMENT
TERMS & CONDITIONS
The parties hereto AGREE AS FOLLOWS:
1. GRANT OF RIGHTS: USA grants to Affiliate and Affiliate
hereby agrees to broadcast from Affiliate's Station certain
programs from USA's services as specified in the USA Radio News
and/or USA Radio Programming Addenda attached hereto
("Programming"), pursuant to the terms and conditions stated
within this Agreement and the Addenda. This Agreement does not
bind USA to any published schedule, as programs and talent can be
changed, canceled, or added as deemed necessary or appropriate by
USA.
2. DELIVERY: USA transmits Programming on several separate
satellite signals for delivery to Affiliates and the Affiliate
agrees to receive the Programming from one of the available
satellite frequencies for broadcast to Affiliate's Station
Service area. Affiliate is responsible for equipment used to
receive the Programming.
3. PROOF OF PERFORMANCE: (Commercial Stations Only) Affiliate
shall complete and return a Declaration of Clearance
("Declaration") with the executed Agreement. This Declaration is
binding until Network is notified and agrees to any changes. If
Affiliate at any time reformats the Station, whereby it is
incapable of complying with its original Declaration, a new
Declaration shall be completed promptly by Affiliate and returned
to USA for approval. The original and any subsequent Declaration
sent to USA must show clearances that meet or exceed the minimum
broadcast requirements of USA.
4. PREEMPTION: Affiliate shall have the right to preempt any
Programming that it reasonably believes is not in the public
interest. In the event of a preemption of Network's Programming,
Affiliate agrees to notify USA in writing within five (5)
business days stating the date(s) and time(s) of each preemption.
5. CLEARANCE: Affiliate agrees that it shall commence
broadcasting USA Programming that it has agreed to clear
immediately upon reception at the station, unless otherwise
stated in this Agreement or in the attached Addenda.
6. PERFORMING RIGHTS: The Affiliate shall maintain such
licenses, including performing rights licenses, as may be
necessary for the use of the Programming furnished hereunder.
7. INTERRUPTION OF PROGRAMMING: USA shall not be liable for
the interruption or discontinuance of any Programming, including,
but not limited to, acts of God or the ability or inability to
maintain facilities. USA will not be liable for any act or
omission of any participating common carrier or USA supplier.
8. INDEMNITY: The Affiliate agrees to indemnify, defend and
hold USA harmless from and against any and all losses, claims,
demands, liabilities, costs and expenses, including but not
limited to, claims for libel, slander, infringement of copyright
or unauthorized use of any trademark, trade name, or service
mark, arising out of the material data, information or other
content transmitted or received over USA's satellite service from
any program producer other than USA.
9. TERMINATION OF RIGHTS: USA shall have the option to
terminate this Agreement following thirty (30) days written
notice upon the occurrence of any of the following:
(i) Affiliate's failure to perform any of its obligations as set
forth herein; (ii) Affiliate's loss of its broadcasting license
or change in or termination of its broadcast operations; or
(iii) Affiliate's misrepresentation of facts concerning its
broadcast facility which adversely affect the terms or conditions
of this Agreement.
10. WAIVERS: The waiver of any provision of this Agreement must
be in writing to be valid. The delay or omission to exercise any
right, or remedy accruing to USA hereunder upon breach or default
by Affiliate shall not impair the enforcement of any right or
remedy to be construed as a waiver of any similar breach or
default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any subsequent breach or
default.
11. BINDING ARBITRATION: Any dispute arising out of this
Agreement which cannot be resolved by the parties shall be
submitted to binding arbitration. If the parties cannot agree
upon a single arbitrator to decide the dispute, then each party
will select a representative and the representatives will select
an arbitration panel. Each party will be entitled to be
represented by counsel, pre-trial discovery will be governed by
the Texas Rules of Civil Procedure, and the arbitrator or
arbitration panel shall award to the prevailing party a recovery
for reasonable attorney's fees and reasonable costs in obtaining
a decision. The parties agree to post a bond fixed by the
arbitrator or arbitration panel in advance of the hearing to
cover the cots of the arbitration. A cash deposit may be
substituted in lien of a bond. The hearing will take place in
either Dallas County or Tarrant County, Texas.
12. ENFORCEMENT: The parties agree that neither will seek
relief of the courts without first following completely the
arbitration procedure outlined in paragraph 11. A party may seek
enforcement of the arbitration decision through the courts only
in the event that the other party fails to abide by the decision
of the arbitrator or arbitration panel. The parties agree that
the proper venue for any litigation in the courts will be in a
court of competent jurisdiction in Dallas County, Texas, the
principal place of business of USA. Should litigation occur, the
prevailing party in any litigation arising in connection with
this Agreement will be entitled to recover reasonable attorney's
fees and reasonable costs pertaining to the enforcement of the
Agreement or any arbitration decision.
13. ASSIGNMENT OR TRANSFER: This Agreement shall remain in
force during the initial or successive terms of this Agreement to
the benefit of and be binding upon the parties hereto and their
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<PAGE>
respective successors or assigns. Affiliate agrees that if any
application is made to the Federal Communications Commission
pertaining to an assignment or transfer of control of Affiliate's
license for the Station or any interest therein, Affiliate shall
notify USA immediately upon the filing of such application. This
Agreement shall not be assigned by Affiliate without the prior
written consent of USA, and any permitted assignment shall not
relieve Affiliate of its obligations hereunder. Any purported
assignment of this Agreement by Affiliate without such consent
shall be null and void and not enforceable against USA. Except
as to assignments or transfers of control made pursuant to
Section 73.3540(f) of the Rules and Regulations of the Federal
Communications Commission, USA shall have the right to terminate
this Agreement effective as of the effective date of any
assignment or transfer of control (voluntary or involuntary) of
Affiliate's license for the Station or any interest therein,
provided USA shall have given Affiliate notice of such
termination within thirty (30) days after USA has been advised
that such application for assignment or transfer has been filed
with the Federal Communications Commission. If USA does not so
terminate this Agreement, Affiliate agrees, prior to the
effective date of any such assignment or transfer of control of
Affiliate's Station, to procure and deliver to USA, in form
satisfactory to USA, the agreement of the proposed assignee or
transferee that, upon consummation of the assignment or transfer
of control of the Station's authorization, the assignee or
transferee will assume and perform this Agreement in its entirety
without limitation of any kind. If Affiliate fails to notify USA
of the proposed assignment or transfer of control of said
Station's authorization, or fails to procure the agreement of the
proposed assignee or transferee in accordance with the preceding
sentence, then such failure shall be deemed a material breach of
this Agreement and, without limiting any of USA's rights or
remedies under this Agreement or otherwise, (i) USA shall be
entitled to liquidated damages in the amount of local stations
published rate card per spot for the remaining term of this
Agreement; and (ii) USA shall have the right to terminate this
Agreement upon thirty (30) days' notice to Affiliate and the
transferee or assignee, given at any time within ninety (90) days
after the effective date of such assignment or transfer or the
date on which USA learns of such assignment or transfer,
whichever is later.
14. COPYRIGHT: USA retains complete copyright and other
property rights in all programming produced by and distributed by
USA, including rights in ideas, formats, names, plots, music,
artistic materials or stories and nothing in this Agreement is
intended to transfer said rights to Affiliate. The Affiliate
shall not authorize others to copy or tape any part of the USA
Programming nor use it for any purpose other than as expressly
provided herein.
15. GENERAL: No inducements, representations or warranties,
except as specifically set forth herein, have been made by any of
the parties hereto. This Agreement supersedes any and all prior
agreements, whether written or oral, between the parties hereto.
16. ENTIRE AGREEMENT: This Agreement and the attached Addenda
and Declaration constitute the entire agreement between the
parties, supersedes any and all prior agreements, whether written
or oral and may not be modified, renewed, or discharged except as
provided herein, or by an Addendum, in writing, signed by both
parties. All representations or agreements between USA and
Affiliate must be in writing to be valid. All notices required
or permitted hereunder shall be sent by U.S. mail and addressed
as set forth in this Agreement, except discharges or
cancellations which must be sent by a carrier that requires a
signature upon arrival at USA.
17. LAWS: The obligations of USA and the Affiliate under this
Agreement are subject to all applicable federal, state and local
laws, rules and regulations (including, but not limited to, the
Communications Act of 1934, as amended, and the Rules and
Regulations of the Federal Communications Commission) and this
Agreement and all interpretations thereof shall be governed by
the laws of the State of Texas.
18. Special Considerations: __________________________________
_______________________________________________________________
_______________________________________________________________
I agree with the terms herein:
- ---------------- -------- --------------------------- -----
Thomas R. Tradup Date Authorized Station Signature Date
Vice President/General Manager
USA Radio Network
-------------------------
Print Name, Title &
Station's Call Letters
-------------------------
Station's City & State of
License
<PAGE>
USA RADIO NETWORK
TOP-OF-THE-HOUR NEWS
Addendum to Affiliation Agreement
(Commercial Station - USA 2)
This is an Addendum to the Network Affiliation Agreement
between USA Radio Network and ___________________________
("Affiliate"), dated ______________________________, 20________,
to commence upon ____________________________________, 20_____,
for Radio Station ("Station"), Station's City and State of
License ________________________________________, Station's
Mailing Address of __________________________________________,
City ____________________________, State ________, Zip Code
_________________. This Agreement is subject to the "Standard
Affiliation Agreement Terms and Conditions" stated in the pages
attached hereto shall be deemed contractual provisions.
1. Term: This Agreement shall commence at program sign on
(verified by the stations signed affidavit of performance) and
shall continue for ____ year(s) ("Initial Term"). Sign on will
be no later than 90 days after USA Radio Network approves this
contract.
This Agreement shall be automatically renewed for a term of
_____ year(s) ("Successive Years"); unless either party notifies
the other in writing, by certified mail addressed to the said
party's address set forth in this Agreement, no less than ninety
(90) days before the end of the then current term, of its
decision to not renew the Agreement, in which event, this
Agreement shall terminate at the end of the then current term.
Any exceptions to these terms must be agreed to in writing by
both parties and clearly defined in paragraph #8 - "Special
Considerations" in this agreement.
2. Programming. Permission to broadcast "USA Radio Top-of-
the-Hour News" is given as an Addendum to the "Affiliation
Agreement" with Affiliate. USA will make the following programs
available to Affiliate:
A. Business Reports
B. Marlin Maddoux Commentary
C. USA Health Newsfeed
D. Presidential Address
E. Special Events (all added coverage from USA News.)
3. Broadcast Requirements of Spot Announcements. The
Affiliate must broadcast a minimum of 24 minutes of National Spot
Announcements daily (one and one-half minutes per hour) between
5:00 A.M. and 9:00 P.M. (Eastern time zone), including weekends.
These National Spot Announcements occur during the Top-of-the-
Hour Newscast, but can be aired by Affiliate at any time within
the same hour. By clearing the 1 & 1/2 minutes per hour, Affiliate
is allowed to air any or all of the programs listed in No. 2.
4. If Affiliate broadcasts any USA Programming the
Affiliate may not tape-delay for rebroadcast any of these
programs. If Affiliate desires to broadcast any portion of the
Programming in part, it must obtain Network's prior consent and
Network must receive attribution. Affiliate is responsible for
using the Programming content in a responsible manner.
5. To meet the Minimum Requirement, National Spot
Announcements must be broadcast at the scheduled times. "Make
Goods" must be pulled from certain newscasts or from the bulk
feed and rebroadcast on the Station at a mutually agreed upon
time. These "Make Goods" must be logged on the Declaration and
reported on the Affidavits.
6. Affiliate shall complete and return a notarized
affidavit of performance ("Affidavit"). This Affidavit will
confirm the Affiliate's original Declaration on record. The form
used for this Affidavit will be supplied by the Network. This
Affidavit must be returned to the Network no later than the tenth
day of each month following broadcast of Network Programming.
7. If the cost to Network to provide the Programming to
the Affiliate increases due to news gathering expenses beyond
Network's control to the point that it is no longer profitable to
Network, then Network may cancel this Agreement upon sixty (60)
days written notice.
8. Special Considerations.
_________________________________________________________________
_________________________________________________________________
I agree with the terms herein:
- ---------------- ----- ---------------------------- -----
Thomas R. Tradup Date Authorized Station Signature Date
Vice President/General Manager
USA Radio Network
------------------------------
Print Name, Title & Station's
Call Letters
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL DATA INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF USARADIO.COM, INC. FOR THE YEAR ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-31-1999
<PERIOD-END> DEC-31-1999
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<SECURITIES> 0
<RECEIVABLES> 488,621
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 666,462
<PP&E> 613,557
<DEPRECIATION> 434,826
<TOTAL-ASSETS> 845,193
<CURRENT-LIABILITIES> 790,738
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0
0
<COMMON> 2,673
<OTHER-SE> (87,869)
<TOTAL-LIABILITY-AND-EQUITY> 845,193
<SALES> 0
<TOTAL-REVENUES> 3,692,244
<CGS> 0
<TOTAL-COSTS> 3,967,852
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (54,774)
<INCOME-PRETAX> (515,382)
<INCOME-TAX> 59,500
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (455,882)
<EPS-BASIC> (0.03)
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