ASSET PURCHASE AGREEMENT

by and between

AM RADIO 1370, INC.

and

BROADCASTING CORPORATION OF AMERICA

for the Sale and Purchase of

Station KUPA(AM), Pearl City, Hawaii

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT ("Agreement"), made and entered into as of this __ day of June, 2005, by and among AM RADIO 1370, INC., a corporation organized under the laws of the State of Utah ("Seller"), and BROADCASTING CORPORATION OF AMERICA, a corporation organized under the laws of the State of Nevada ("Buyer").  

W I T N E S S E T H:

WHEREAS, Seller holds certain licenses, permits and authorizations issued by the Federal Communications Commission (the "Commission") for the operation of KUPA(AM), FCC Facility No. 26441, Pearl City, Hawaii (the "Station"); and

WHEREAS, Seller desires to sell and/or assign, and Buyer desires to purchase and/or assume certain of the assets, property and business used in the operation of the Station; and

WHEREAS, the assignment of the licenses of the Station is subject to the prior approval of the Commission.

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:

SECTION 1

ASSETS TO BE SOLD

1.1

On the Closing Date, Seller shall sell, assign, transfer, convey, set over, and deliver to Buyer, and Buyer shall purchase and/or accept assignment of the following (hereinafter collectively the "Assets") free and clear of any security interests, claims, encumbrances, liens or liabilities except for Permitted Liens and the "Assumed Obligations" (as defined in paragraph 5.1). "Permitted Liens" shall consist only of (i) Liens for taxes, assessments, water and sewer charges, license fees, and all other fees, special assessments and charges assessed or imposed by a public body upon the Purchased Assets or any part thereof, provided such fees, assessments or taxes are not yet due and payable or are being contested in good faith in an appropriate proceeding and disclosed in Schedule 1.1; (ii) zoning laws and ordinances; (iii) rights reserved to any governmental authority to regulate the affected property; and (iv) those additional liens, if any, described on Schedule 1.1:

1.1.1

Authorizations.  All licenses, permits and authorizations issued or granted by the Commission for the operation of, or used in connection with the operation of, the Station and all applications filed with the Commission (hereinafter "Commission Authorizations") which are listed in Schedule 1.1.1.  All franchises, licenses, permits, and authorizations issued by any administrative body or licensing authority or governmental or regulatory agency, other than Commission Authorizations, used in connection with the operation of the Station (hereinafter "Other Authorizations") which are listed in Schedule 1.1.1.

1.1.2

Tangible Personal Property.  All of Seller's rights in and to all fixed and tangible property used or held for use in the operation of the Station listed on Schedule 1.1.2, together with replacements thereof, additions and alterations thereto, and substitutions therefor, made between the date hereof and the Closing Date (hereinafter collectively the "Tangible Personal Property").  

1.1.3

Intangibles.  All right, title and interest of Seller in and to call signs, logos, jingles, marketing plans, copyrights, trademarks, trade names, websites, domain names, and other intangible property of Seller, including but not limited to those set forth on Schedule 1.1.3 attached hereto and made a part hereof (hereinafter collectively the "Intangibles").

1.1.4

Accounts Receivable.   All accounts receivable for the Station.

1.1.5

Business Records.  Copies of financial records, engineering, advertising reports, programming studies, consulting reports, computing software, marketing data, and business and personnel records relating solely to the business or operation of the Station (hereinafter collectively "Business Records") or to assets or agreements purchased or assumed by Buyer.

1.1.6

Real Property.  Seller's interests in the Grant of Easement for the use of the transmitter site (the "Real Property") as set forth on Schedule 1.1.6.  At Closing, Seller shall cause Diamond Broadcasting Corporation to assign the Grant of Easement to Buyer as part of the consideration to be received in this transaction.

1.1.7

Contracts.  Seller's interest in the agreements listed in Schedule 1.1.7 (the "Contracts").

1.2

Excluded Assets.  The Assets shall not include the following assets along with all rights, title and interest therein which shall be referred to as the "Excluded Assets":

1.2.1

All cash, cash equivalents or similar type investments of Seller, such as certificates of deposit, Treasury bills and other marketable securities on hand and/or in banks;

1.2.2

All claims, rights and interest of Seller to any (i) refunds of taxes or fees of any nature whatsoever or (ii) deposits or utility deposits, which in each case relate solely to the period prior to the Closing Date;

1.2.3

All contracts that have terminated or expired prior to the Closing Date in the ordinary course of business or as permitted hereunder;

1.2.4

All contracts of Seller not assumed by Buyer;

1.2.5

Seller's records or materials relating to Seller generally and not substantially involving the Assets or operation of the Station;

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1.2.6

Contracts of insurance, including the cash surrender value thereof, and all insurance proceeds or claims made by Seller with respect to matters arising prior to the Closing Date; and

1.2.7

All pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Seller.

1.3

Assignments of Contracts.  Any of the Contracts to be included in the Purchased Assets, and the rights and benefits thereunder necessary or appropriate or relating to the conduct of the business and activities of Seller and/or the Station that are not, by their terms, assignable, are identified by an asterisk on Schedule 1.1.7.  Anything in this Agreement to the contrary notwithstanding, this Agreement shall not constitute an agreement to assign any such Contract so identified, and Buyer shall not be deemed to have assumed the same or to be required to perform any obligations thereunder, if an attempted assignment thereof, without the consent of a third party thereto, would constitute a breach thereof or in any way affect the rights under any such Contract of Buyer or Seller thereunder.   However, in such event,  upon request of Buyer, Seller will cooperate with Buyer in all lawful ways to provide for Buyer all benefits to which Seller is entitled under such Contracts so long as Buyer undertakes to perform or cause to be performed the obligations of Seller under such Contracts, and any transfer or assignment to Buyer by Seller of any such Contract or any right or benefit arising thereunder or resulting therefrom which shall require the consent or approval of any third party shall be made subject to such consent or approval being obtained.  Seller will use its best efforts prior to, and if requested by Buyer after, the Closing Date to obtain all necessary consents to the transfer and assignment of the Contracts.  Buyer will cooperate with Seller, to the extent reasonably requested by Seller, to obtain any such consents, provided, however, that Buyer shall have no obligation to make substantial expenditures or grant any substantial financial accommodation to obtain any such consent.  Consent to the assignment of all contracts marked with a double asterisk (the "Material Contracts") must be obtained as a condition precedent to Buyer's obligation to close the transactions contemplated by this Agreement unless such consent is waived by Buyer.

1.4

Satisfaction of Liens.  Prior to or at Closing (or if closing proceeds are to be used, within a reasonable period following assignment), Seller shall cause all Liens on or relating to any of the Purchased Assets (other than Permitted Liens), to be released, extinguished and discharged in full, and shall deliver to Buyer instruments releasing, extinguishing and discharging all such Liens, and all rights and claims of any holder(s) of any of such Liens with respect to any of the Purchased Assets, all in such form and substance as Buyer shall reasonably require (collectively the "Lien Release Instruments").

SECTION 2

PURCHASE PRICE

2.1

Purchase Price.  In consideration of Seller's performance of this Agreement, the total purchase price (the "Purchase Price") to be paid by Buyer for the assets shall be Six Hundred and Fifty Thousand Dollars (US$650,000.00), as adjusted pursuant to Section 3, hereto, to be paid as follows:

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(a)  Upon execution of this Agreement, Bayer shall place into escrow the sum of Fifty Thousand Dollars ($50,000.00) (the "Deposit"), which sum shall be held in escrow by Dan J. Alpert, as escrow agent for the transaction.

(b) On the Closing Date, the balance of the Purchase Price shall be paid, by cash, certified check, or same day wire delivery of funds.  

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