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AGREEMENT
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This Programming Services and Equity Agreement is made this _____ day
of June, 1999, by and among ▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Corporation ("N-C"), a Delaware
Corporation, with its principal place of business located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Personal Achievement Live ("PAL"), a California
limited liability company, with its principal place of business located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Information
Network Radio, Inc. ("INR"), a California corporation with its principal place
of business located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
RECITALS
1. N-C is in the business, among other things, of publishing and
selling literary works, ("Programs") many of which are in the form of sound
recordings which feature authors expounding on subjects related to personal
achievement in areas, including but not limited to, success, health, inner self,
wealth and business.
2. N-C in conjunction with Q2 , LLC, a California limited liability
company, with its principal place of business located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, has produced and syndicated
programming for the existing Personal Achievement Network ("PAN") under a Radio
Programming and Syndication Agreement dated September 21, 1998 on personal
achievement subjects, which is broadcasted by affiliated radio stations, in
local markets throughout the United States and Canada.
3. PAL, through its Radio License Agreement dated June 3, 1998 between
CD Radio Inc. ("CDR"), a Delaware corporation with its principal offices at ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, is in the business of providing
radio broadcast programming to CDR for the purpose of broadcasting radio
programming via digital satellite broadcast technology to subscribers of CDR's
services, and intends to substantially feature a personal achievement format.
INR, a California corporation, is PAL's parent, and has formed other limited
liability companies with the purpose of providing satellite radio broadcast
programming to CDR, and other digital satellite radio broadcast providers,
throughout the United States, its territories and possessions.
4. PAL wants N-C to furnish PAL with recorded personal achievement
material owned by, or licensed to, N-C, for broadcast on PAL's satellite
broadcast channel on CDR on an exclusive basis and subject to N-C's prior
approval, and N-C wants to furnish those materials to PAL, all on the terms and
conditions hereinafter contained.
For good and valuable consideration, the parties agree as follows:
AGREEMENTS
Article 1. Recitals
The above recitals are hereby incorporated by reference and are made a
part of this Agreement.
Exhibit 10.3
Article 2. PAL to Operate Satellite Broadcast Programming Services
Section 2.01. PAL Broadcast Services.
PAL shall operate satellite radio broadcast programming services in
conformity with all applicable laws, rules and regulations, as well as in
conformity with the terms and conditions of this Agreement and under its June 3,
1998 Agreement with CDR. PAL shall develop and broadcast personal achievement
information as the majority of its 24-hour broadcast feed to CDR. For the
purposes of this Agreement, "Personal Achievement Format" means material
intended to enhance a person's success, health, inner self, wealth, and business
performance and contains N-C, and other audio publisher's, sound recording
materials.
Section 2.02. PAL to Develop Commercials Featuring N-C Audio Programs.
PAL, at its own cost, shall prepare thirty-second, sixty-second and up
to thirty-minute commercials ("PAL Commercials"), in a format suitable for radio
broadcast, featuring N-C Programs and broadcast within the PAL format on the CDR
satellite radio broadcast service. Before airing any commercials, PAL must
submit its product selection and advertising copy to N-C, for its written
approval, which will not be unreasonably withheld or delayed. PAL shall include
a designated 800 number within each commercial, and shall solely be responsible
for the costs of all telemarketing and fulfillment services incurred by it in
connection with the PAL Commercials. PAL shall air the PAL Commercials according
to its own determination and scheduling and shall be the party responsible for
the collection of all sales revenue and be the recipient of all sales proceeds
from product sales generated by the PAL Commercials.
Article 3. N-C to Provide Broadcast Segments
Section 3.01. N-C to Provide PAN Segments.
N-C agrees to make available to PAL any, or all, of the recorded
segments from the Personal Achievement Network program archive ("PAN Segments"),
whether existing now, or hereafter created. N-C has to date created, and
provided masters approximately three thousand eight hundred digital audio
formatted ("DAT") audio segments under the PAN Agreement. PAL acknowledges that
N-C has delivered these PAN Segments to it.
Section 3.02. Additional New N-C Programming for PAL.
During the term of this Agreement, PAL will from time to time request
Programs which it wishes to license hereunder from N-C. N-C, in addition, may
suggest other Programs to PAL. Nevertheless, N-C shall make the
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decision which Program it licenses, and its decision will not be subject to
challenge. Programs N-C licenses to PAL hereunder, whether now in existence or
authored hereafter, are referred to as "Licensed Programs."
PAL must edit the Licensed Programs at its costs, unless PAL elects to
engage N-C to perform editing services for it under Section 3.04. PAL must
submit each Program it edits to N-C for its approval, which will not be
unreasonably withheld or delayed. N-C will, and shall be, the owner of each
edited Program, and the copyrights therein, and PAL will not acquire any rights
of any kind by virtue of any editing it performs, or which may be performed
under its direction. PAL must confine its editing to changes necessary to
convert the Program into radio format. PAL must not change, or alter the context
or meaning of any material contained in any Program.
N-C shall provide PAL with broadcast D.A.T. masters (hereinafter
"Broadcast Masters") of each Licensed Program. N-C shall furnish PAL the
following with respect to each Licensed Program:
a. A duplicate unmixed digital audio master from the edited
Program in D.A.T. format, when available or an unmixed analog tape master if the
Licensed Program is not available on DAT, and
b. A script, in hard copy or computer disk if available, of
each master of each Licensed Program, which PAL shall use to select two to four
minute segments ("PAL Segments") which PAL will include in its programming and
use to prepare its on-air commentary concerning the segments provide.
PAL shall prepare a reference log, containing an index of all such PAL
Segments, and PAL will from time to time send a current copy of the index to
N-C, upon N-C's request.
PAL acknowledges that N-C does not possess radio broadcast rights to
all of the sound recordings licensed to (or even owned by) it, and that N-C will
prepare Broadcast Masters of Licensed Programs from materials to which N-C holds
or acquires such broadcast rights. As it may be difficult and/or costly to
obtain radio broadcast rights, N-C will only attempt to obtain them when N-C, in
its sole and absolute discretion, believes the attempt is justifiable. N-C
represents and warrants that N-C owns or possesses such rights with respect to
the material used in, or used in the preparation of, Broadcast Masters provided
to PAL. N-C shall furnish PAL with material on the following subjects:
a. Healthy lifestyles,
b. Success skills,
c. Business skills,
d. Wealthbuilding,
e. Inner self and spiritual
from Programs chosen by N-C, in consultation with PAL. PAL further acknowledges
that N-C may, from time to time, lose radio broadcast rights for PAL Segments
previously furnished to PAL, in which case PAL's license to broadcast such PAL
Segment under Article 4 shall cease.
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Section 3.03. N-C On-Air PAL Promotions.
PAL agrees to provide N-C the right to a ten to fifteen (10-15) second
on-air promotion ("Plug") of a toll-free 800 number for PAL listener's to
receive information on N-C's programs.
Pal will broadcast each day the number of N-C Plugs equal to the
greater of:
(i) the sum of 24 multiplied by a fraction, the numerator of
which is the number of minutes of all programming during the preceding month,
excluding news, commercials and public service announcements and the denominator
of which is the number of minutes of N-C's Licensed Programs broadcast during
that month (PAL shall make such calculation monthly on the first business day of
each month); or
(ii) Eight.
PAL may not air more than one N-C Plug each hour. N-C shall pay PAL
$10.00 for each "collected sale" made by N-C of an N-C proprietary six
audiocassette product generated by an N-C Plug. N-C shall pay PAL 20% of
"collected revenues" excluding all sales taxes, handling, shipping and similar
charges on N-C's sales of any of N-C's other products generated by an N-C Plug
and is sourced through a dedicated toll free number(s) used exclusively for on
air promotions. For the purposes of this Agreement, a "collected sale" is a sale
made by N-C where the customer has actually paid the purchase price to N-C and
"collected revenues" are revenues actually received by N-C from the sale of its
products. N-C will make payments to PAL quarterly, within thirty (30) days after
the end of each quarter. N-C will subtract from payments to PAL the appropriate
calculation for returns and credit card reversals.
Section 3.04. N-C Recording and Editorial Services.
PAL may from time to time wish to engage N-C to edit Licensed Programs.
In such case, PAL shall make a written offer to engage N-C. The offer must
include (a) scope of the representation, (b) applicable specifications and (c)
estimated studio time. N-C may accept or reject any offer. The following terms
shall apply, however, in each instance where N-C accepts an offer to provide
editing services:
(i) N-C will charge PAL for all direct and indirect costs,
including a reasonable allocation for overhead.
(ii) N-C will not make any profit in connection with any such
services.
(iii) N-C will ▇▇▇▇ PAL monthly, and PAL must pay N-C's
invoices within 30 days after submittal.
Section 3.05. Labor Costs.
N-C is not now a signatory to any collective bargaining agreement with
any labor union representing any persons authoring or performing (or both) on
any Broadcast Segments. The parties acknowledge that N-C's production Broadcast
talent fees, and in some cases production fees, may dramatically increase (a
"Labor Increase"), if N-C becomes a signatory to such an agreement, or otherwise
becomes subject to unionized pay structure for either or both its authors and
its performers. PAL, within 30 days after N-C's written request, agrees to
either
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a) pay any performance, or similar fee, which N-C becomes obligated to
pay because of any broadcast of Licensed Programs under this Agreement as well
as any production costs N-C incurs which specifically arise because of the
broadcast, or anticipated broadcast of Licensed Programs under this Agreement,
or
b) cease broadcast of any Licensed Program subject to a Labor Increase,
in which case PAL shall give written notice of such cessation within the 30 day
period.
Article 4. N-C's Grant of Rights
Section 4.01. Rights.
During the term of this Agreement:
a. N-C grants the royalty free, exclusive right to PAL to
broadcast by means of Digital Satellite radio, the PAL Segments and PAN
Segments, throughout the United States, its territories and
possessions. PAL may broadcast such Segments only on CDR's Station
featuring the Personnel Achievement Format (or on a CDR affiliate
broadcast service), and in connection therewith, on Landline or end
courier to CDR's designated satellite uplink service provider.
b. N-C agrees not to provide radio programming any other
digital satellite radio broadcast services within the United States and
Canada. This restriction shall not in any way, however, limit or
restrict N-C from airing short-form or long-form commercial as part of
a commercial or public relations message, on any conventional
terrestrial radio station.
The rights granted to PAL herein are specifically limited to the rights
to broadcast via digital radio satellite any PAN or PAL Segment through CDR, or
on a CDR affiliate subscription service, and shall specifically not include the
right to broadcast via radio for free home reception to the public, or any other
media that delivers audio content to consumers. Nothing contained herein,
however, shall prevent or restrict PAL's right or ability to conduct and
broadcast an on air, or pre-recorded interview of an author of an N-C product.
Section 4.02. Withdrawal of Segment.
N-C may at any time, and from time to time, withdraw from this license
any PAN or PAL Segment previously furnished to PAL, or otherwise subject to the
license herein granted, should N-C lose the radio broadcast rights to that
Segment, or should the continued broadcast of the Segment no longer, in N-C's
sole opinion, be in N-C's best interests. N-C shall notify PAL, in writing, of
the withdrawal of any Segment. N-C, as soon after the withdrawal as is
practical, shall furnish PAL with a replacement Segment or Segments, of
comparable length, to the Segment (or Segments) withdrawn. Once N-C gives notice
that a Segment is withdrawn, PAL's license to broadcast that Segment shall
terminate within thirty (30) days after the delivery of such notice, and PAL, to
the best of its abilities through the satellite radio broadcast services it has
contracted with, shall not broadcast that Segment at any time thereafter.
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Section 4.03 Rights Reserved.
N-C reserves to itself all rights not specifically granted to PAL. PAL
must broadcast each Segment in its entirety, in a single continuous time period,
interrupted only by commercial, public service and station break announcements
and other interruptions dictated by time constraints, and in such cases PAL,
with N-C's prior consent, will edit the material but only in a way as to
maintain the integrity of the subject Segments. Under no circumstances, except
as is otherwise specifically provided herein, may PAL, or the satellite radio
broadcast services it has contracted with, delete or reposition any of N-C's or
any author's copyright notices, and/or credits or adversely, in any way, affect
the artistic or sound quality of any segment, or interfere with its continuity.
PAL may not make any copies or phonorecords of any Segment, except for in-house
music license fee, and/or FCC usage purposes. N-C shall furnish PAL with a
duplicate D.A.T. Broadcast Master if PAL certifies to N-C, in writing, that the
original master is lost, damaged, or is otherwise not useable. Within thirty
(30) days after the termination of this Agreement, PAL must return to N-C all
Broadcast Masters of all PAN and PAL Segments in its possession or under its
control, along with a written certification of PAL officer that either PAL has
not made, or caused to be made, any copies or phonorecords of any Broadcast
Masters, or has made such under the terms and conditions of this Agreement, and
all such copies or phonorecords have been delivered to N-C.
Section 4.04. Right to Market and Purchase N-C Products.
N-C further grants to PAL the non-exclusive right to advertise and
promote N-C's Programs through PAL's Commercials broadcast via satellite by CDR,
or any other CDR affiliated subscription service. PAL may purchase from N-C, for
re-sale to the general public, N-C's six-cassette audiocassette Program at a
price of twelve dollars ($12.00) per album, plus freight and an additional $3.50
charge per album fulfillment charge if PAL contracts with N-C to perform
necessary fulfillment services. Notwithstanding anything contained herein to the
contrary, however, N-C may increase the Program's purchase price from time to
time, and at any time upon 90 days prior written notice, but no sooner than the
second anniversary of this Agreement to reflect any increase in N-C's actual
material and/or labor costs.
The purchase prices under this section are limited to prices for six
audiocassette products (with workbooks) published by N-C, and applicable to
neither (a) N-C's deluxe programs, nor (b) programs published by others but sold
by N-C (so called "pick up products").
Section 4.05. Right of Opportunity.
N-C will notify PAL in writing if N-C wishes to license rights to
broadcast of any of its products in a radio format not covered by the license
granted hereunder, including, for example, pay-per-listen, cable radio, Internet
radio, and AM or FM radio syndication. If PAL is interested in acquiring such
rights, it will so notify N-C within fifteen (15) days after receipt of N-C's
notice, and the parties agree to thereupon negotiate in good faith upon the
terms of a license. If the parties are unable to enter into a definitive written
agreement within forty-five (45) days after N-C's notification, then N-C may
negotiate with others, and may enter into an agreement to license such rights
with any party of its choosing, without further restriction by this Agreement.
Nothing contained herein, however, shall restrict or prohibit or otherwise
affect N-C's right to sell, assign or license its rights to any work in any
media now known or hereafter known, other than satellite radio broadcast
technology.
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Article 5. Responsibilities
Section 5.01 PAL to Develop Programming.
PAL shall develop a Personal Achievement Format for broadcast via
satellite radio broadcast technology. The format includes the PAN and PAL
Segments licensed to PAL hereunder by N-C. Those segments will account for most
of, but not all of, PAL's programming. Personal Achievement Format will also
include announcer commentary, commercials, news, music, weather, and other
programming consistent with the personal achievement theme. PAL alone shall be
responsible for ensuring that all content, including the PAN and PAL Segments,
along with other content broadcast by PAL, complies with the Federal
Communications Act and all regulations promulgated thereunder. PAL shall operate
the its broadcast and programming services in accordance with all applicable
laws and ordinances, and will take no action, or omit to take any action, which
would harm either N-C's reputation or the reputation of any author of any of the
Segments. PAL must maintain a written log of the PAN and PAL Segments used,
including the title of each PAN and PAL Segment and the time it is aired or
module that it was included with.. PAL shall deliver a copy of the segment log
to N-C upon N-C's request. PAL shall submit scripts pertaining to N-C, and any
PAL commercials promoting N-C products, to N-C, or its designated agent for its
approval, which approval will not be unreasonably withheld. N-C will be deemed
to have approved a script if it does not disapprove it within five (5) business
days after its receipt.
Section 5.02. Either Party May Inspect Facilities.
Either party, at any time, and from time to time, during normal
business hours, upon giving the other reasonable notice, may inspect the other
party's offices and records kept with respect to this Agreement to determine
whether the other party is abiding by its obligations. Each party agrees to
cooperate with the other during all such inspections, and to furnish the other
with any documents requested relevant to this Agreement.
Section 5.03. Taxes.
PAL shall pay and hold N-C harmless from all taxes and related
charges, assessments and other fees now or hereafter imposed or based upon or
resulting from the delivery, exhibition, possession or use by PAL of the
Segments licensed hereunder. PAL will be responsible for sales taxes on such N-C
Programs sold by PAL through PAL programming.
Article 6. Names
PAL shall retain and regularly update on a computer database (the
"database") the names, addresses and other relevant information of all actual
and potential customers generated by PAL Commercials. PAL hereby grants to N-C
the following rights in and to PAL's database and the content thereof:
a. PAL from time to time shall furnish a current copy of the
database to N-C, upon its request, so that N-C may promote the sale of its
products, in any formats now known or later developed.
b. N-C may not exchange, rent, or lease the database or the
data therefrom to any third party.
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c. N-C shall reimburse PAL for the actual cost of any computer
run costs incurred by PAL regarding any special selects requested by N-C,
including by way of example, and not in limitation, zip code specific and gender
related data.
N-C grants to PAL the royalty free, single use right to use N-C's list
of names, and addresses of actual and potential customers generated by N-C
Commercials to allow PAL to promote itself when it launches a new programming
format or otherwise desires to make an announcement to the general public. PAL
acknowledges N-C's lists are N-C's trade secrets and agrees to keep the contents
confidential, and in a secure location. PAL further agrees to communicate the
confidentiality of such information to all persons having access to it.
Article 7. Term
Section 7.01. Initial Term.
This Agreement shall begin on the date hereof, and unless terminated
earlier, shall end seven (7) years therefrom. If PAL does not begin broadcasting
PAL programming on the CDR satellite radio broadcast service before June 30,
2001 this Agreement will be automatically terminated, and all materials provided
to PAL by N-C shall be returned within thirty (30) days, and all rights granted
to PAL herewithin shall terminate.
Section 7.02. Renewal.
This Agreement may be renewed for a consecutive five-year terms after
expiration of the initial term by mutual agreement of both parties, provided the
following conditions have been met:
a. The notice of renewal must be agreed to, in writing by both
parties no later than sixty (60) days before the end of the prior term and;
b. Neither party is in material default of any of the material
provisions of this Agreement, beyond any applicable cure periods, and that the
Agreement upon the date of such renewal notice is in full force and effect; and
c. PAL at the time of renewal notice features a personal
achievement format during a majority of its programming day.
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The parties, if they wish, may together waive the requirements of a or
b (or both above). Neither party, however, may unilaterally waive the
requirements of a, and the breaching party may not unilaterally waive the
requirements of b
Section 7.03. Bankruptcy and Default.
(a) If PAL materially defaults in any of its obligations
hereunder, and such default continues for a period of ten (10) days after
notice, or, if PAL is adjudicated a bankrupt, or files a petition in bankruptcy,
or makes an assignment for the benefit of creditors or takes advantage of the
provisions of any bankruptcy or debtor relief act, or if any involuntary
petition in bankruptcy is filed against PAL and is not vacated or discharged
within thirty (30) days, then, and upon the occurrence of any one or more of
such events, and without prejudice to any right or remedy which may be available
to N-C, at law or in equity, and without in any way discharging or releasing PAL
from any of its obligations under this Agreement, N-C shall have the right to
terminate each and all of the rights of PAL and/or suspend the further delivery
of Segments until such defaults have ceased and have been remedied.
(b) If N-C incurs any expenses for legal services, court
costs, and associated expenses by reason of any of the foregoing, the sum or
sums so paid by N-C and the amount of such fees, costs and associated expenses
shall be payable forthwith by PAL to N-C, together with interest thereon at ten
(10) percent per annum from the due date thereof until actual payment.
(c) If N-C materially defaults in any of its obligations
hereunder, and such default continues for a period of ten (10) days after
notice, or, if N-C is adjudicated a bankrupt, or files a petition in bankruptcy,
or makes an assignment for the benefit of creditors or takes advantage of the
provisions of any bankruptcy or debtor relief act, or if any involuntary
petition in bankruptcy is filed against N-C and is not vacated or discharged
within thirty (30) days, then, and upon the occurrence of any one or more of
such events, and without prejudice to any right or remedy which may be available
to PAL, at law or in equity, and without in any way discharging or releasing N-C
from any of its obligations under this Agreement, PAL shall have the right to
terminate this Agreement.
(d) If PAL incurs any expenses for legal services, court
costs, and associated expenses by reason of any of the foregoing, the sum or
sums so paid by PAL and the amount of such fees, costs and associated expenses
shall be payable forthwith by N-C to PAL, together with interest thereon at ten
(10) percent per annum from the due date thereof until actual payment.
Article 8. Contingency
8.1 INR intends to make a public offering of its common stock, and on
April 19, 1999, filed a registration with the Securities and Exchange Commission
("SEC"). INR, upon execution of this Agreement, as further consideration for the
rights granted by N-C, agrees to transfer to N-C 12,500 of INR's fully paid
non-assessable common stock, free and clear of any liens or encumbrances of any
kind or nature. INR shall cause N-C's stock to be registered with the SEC, free
of any cost to N-C, as part of INR's registration. INR represents that 12,500
shares of INR common stock is, as of the date hereof, equivalent in value to 50%
of the membership units of PAL, according to a bona fide appraisal made by PIA
Consulting dated March 22, 1999, of all of INR's satellite radio channels.
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In the event INR shall issue additional shares (other than the current
public offering), which would have the effect of substantially diluting the
interest of N-C in INR stock, N-C shall have the right to purchase, at the same
price as the offering price for such additional shares, the number of shares
that will permit N-C to remain substantially undiluted. This clause shall not
apply to stock issued for property for fair value or for INR company stock
option plans. Substantial dilution shall mean dilution of N-C's interest to less
than 4% of the capital of INR on a fully diluted basis. This right shall not be
assignable or transferable.
8.2. If INR does not make a public offering by December 31, 1999, then
it shall immediately cause the transfer to N-C of 50% of PAL's membership units,
against delivery of N-C's stock in INR, and INR and N-C shall amend PAL's
operating agreement in certain respects. The parties have not as yet concluded
all of their negotiations concerning the transfer, and the amendment of PAL's
operating agreement. Nevertheless, the parties intend that under such
circumstances that they will enter into, and execute a definitive amendment to
PAL's Operating Agreement memorializing their agreements. The amendment, among
other things, will provide that:
a. INR has transferred to N-C 50% of PAL's membership units
free and clear of all liens and encumbrances; and
b. INR grants to N-C a right of first refusal with respect to
any offers, to sell or transfer any of INR's membership units in PAL. INR must
give N-C, within ten days after its receipt, a copy of any offer (an "Offer") it
wishes to accept to purchase, or otherwise transfer, any interest in PAL. N-C
will upon receipt of the offer have an option to purchase all, but not less than
all of such units on all of the terms and conditions of the Offer, for a thirty
day period after it receives notice. N-C may only exercise its option in
writing. N-C shall be deemed to have refused to exercise its option if it does
not give written exercise of option to INR within the thirty day period
provided; and
c. INR shall provide N-C with a fair and reasonable mechanism
to prevent N-C's interest in PAL from being diluted.
d. Members holding 65% of the membership units must approve
any material actions affecting PAL's capital structure, direction, organization,
and policies, including but not limited to approval of:
(i) budgets;
(ii) loans in excess of $100,000.00;
(iii) executive's salaries;
(iv) changes in capitalization;
(v) changes in business purpose;
(vi) changes in Manager;
(vii) distributions to Members;
(viii) liquidation, merger or consolidation;
(ix) commencement, settlement or compromise of litigation;
(x) selection of accountants, attorneys and other
professional advisors;
(xi) material agreements;
(xii) sale of substantially all of PAL's assets;
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(xiii) Amendment of Operating Agreement;
(xiv) commencement of bankruptcy;
(xv) authorization of any additional units;
(xvi) entry into joint ventures, partnerships,
establishment of subsidiaries.
e. That there is then no litigation pending or threatened
against PAL or INR, or both, or their respective properties or assets, which may
have a materially adverse affect on PAL or its operations, PAL is then in
compliance with all applicable governmental rules, regulations and ordinances
and is duly organized and existing under the laws of California, and has all
necessary authority and approvals to conduct business, and there are no
outstanding warrants, rights, subscriptions or other commitments where PAL may
be obligated to issue, deliver or sell any of its units.
f. PAL's Manager, at the time of said Amendment, shall be ▇▇▇▇
▇▇▇▇▇▇▇, or such other person or entity acceptable to members holding 65% of the
membership units of PAL.
g. Such other terms as a similarly situated investor may
reasonably believe are necessary or advisable to protect its interests and
investments in PAL.
8.3. If the parties do not enter into a definitive written amendment to
PAL's operating agreement within 90 days after the date INR is obligated to
transfer 50% of PAL's membership units to N-C, then the parties must, within 10
days after the end of the 90 day period, submit any disputes which they may have
in regard to the amendment to mediation before and with the mediation services
of the American Arbitration Association, at Chicago, Illinois, and for a period
of three months after submittal must negotiate in good faith, with the
mediator's assistance, to resolve any such disputes. Each party shall bear
one-half of the costs of the mediation. If the parties, after using reasonable
bona fide efforts, are not able to resolve their differences, then the parties
must, within 15 days notice after expiration of the three month period, submit
any unresolved dispute before, to and under the rules then pertaining of the
American Arbitration Association, again at Chicago, Illinois, for binding
arbitration, to resolve those disputes, utilizing this Agreement as a guide to
such resolution. Each party shall bear one-half of the costs of the arbitration.
8.4 N-C may declare PAL's rights under this Agreement to be
non-exclusive, if at any time either N-C's interest in PAL falls below 50% of
the total outstanding membership units, or N-C's interest in INR falls below 4%
of the total of the outstanding and issued common stock.
Article 9. Indemnification
(a) Each party assumes liability for, and shall indemnify,
defend, protect, save and hold harmless the other from and against any and all
claims, actions, suits, costs, liabilities, judgments, obligations, losses,
penalties, damages and expenses (including legal fees and expenses) of
whatsoever kind and nature arising out of any breach or alleged breach by such
party of any of its warranties or representations, covenants or obligations made
pursuant to this Agreement. Further, N-C shall indemnify and hold PAL harmless
for any such loss caused because any breach of any of N-C's representations, or
because the Segments, commercials, or infomercials furnished by N-C breach, or
are alleged to have breached, any copyright, trademark trade secret or any other
right of any third party; and PAL shall indemnify and hold N-C harmless,
resulting from any breach of PAL's representations, or because or as a result of
any of PAL's programming (exclusive of the Segments, commercials and
infomercials), or from PAL's operation of the radio station.
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(b) The party seeking indemnification must promptly notify the
other of any claim or litigation of which it is aware to which the
indemnification relates, provided the failure to notify will only release the
other to the extent of actual prejudice.
Article 10. Independent Contractors
N-C and PAL are independent contractors with respect to each other.
Nothing herein shall create any association, partnership, joint venture or
agency relationship between N-C and PAL. PAL shall be solely responsible for all
persons employed by PAL in connection with PAL's performance hereunder
including, without limitation, responsibility for all compensation, withholding
taxes, worker's compensation insurance and other required payments in connection
with such employees.
Article 11. General
(a) The captions of the sections and articles of this
Agreement are for convenience only and shall not in any way affect the
interpretation of any section or article of this Agreement or the Agreement
itself.
(b) A waiver by any party of any of the terms or conditions of
this Agreement shall not be deemed or construed to be a waiver of such term or
condition for the future, or of any subsequent breach thereof. All remedies,
rights, undertakings, obligations and agreements contained in this Agreement
shall be cumulative and none of them shall be in limitation of any other remedy,
right, undertaking, obligation or agreement of any party.
(c) All notices, statements and other documents required to be
given shall be given in writing either by personal delivery, mail or facsimile
(except as herein otherwise expressly provided) at the respective addresses of
the parties as set forth, or such other addresses as may be designated in
writing by either party. Notice given by mail or by facsimile shall be deemed
given on date of faxing or upon the date of receipt for mail notices.
(d) This Agreement and all matters or issues collateral
thereto shall be governed by the laws of the State of Illinois.
(e) This Agreement constitutes the entire agreement between
N-C and PAL and INR with respect to the subject matter herein contained and this
Agreement cannot be changed or terminated orally, and no changes, amendments or
assignments thereof shall be binding upon N-C until accepted in writing by a
duly authorized officer of N-C.
(f) This Agreement supersedes all prior written or oral
communications or understandings between the parties concerning the subject
matter.
(g) Each party shall execute any and all further instruments
which either party may deem reasonably necessary and proper to carry out the
purposes of this Agreement.
(h) If any party shall fail to comply with the terms of this
Agreement because of any act of God, war, fire, flood, strike, labor dispute,
public disaster, transportation or laboratory difficulties, order or decree of
governmental agency or any other similar or dissimilar cause beyond such party's
reasonable control, then such failure shall not be deemed to be a breach of this
Agreement.
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(i) No party shall assign any of its rights or obligations
hereunder without the prior written consent of the others.
IN WITNESS WHEREOF, each of the parties has duly executed and delivered
this Agreement as of the date first written above.
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION PERSONAL ACHIEVEMENT LIVE, LLC
By____________________________ By_________________________________
Name _________________________ Name ______________________________
Title __________________________ Title _____________________________
INFORMATION RADIO NETWORK, INC.
By_________________________________
Name ______________________________
Title _____________________________
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