Document:

Exhibit 10.28

 

*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED
Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

PATENT SUBLICENSE

AGREEMENT

 

THIS PATENT SUBLICENSE AGREEMENT
(“Sublicense Agreement”), made as of this 7 day of Nov., 2003 (the “Effective
Date”), by and between SCIENCE RESEARCH
LABORATORY, INC., a Massachusetts corporation with principal offices
at 15 Ward Street, Somerville, Massachusetts 02143 (“SRL”) and CYMER, INC., a Nevada corporation, with
principal offices at 17075 Thornmint Court, San Diego California 92127
(“Cymer”).

 

WHEREAS, Cymer has
exclusively licensed by separate agreement dated May 14, 2001 (the “Patent
License Agreement”) the rights to certain issued patents, patent applications,
trade secrets, confidential information and know-how with respect to (i)
[...***...] power devices with specialized circuits useful in powering certain
lasers and [...***...] (defined below), and (ii) [...***...] light sources useful in
Lithography, Metrology and [...***...] applications (defined below) which have been
exclusively licensed to Cymer; and

 

WHEREAS, Cymer
sublicensed to SRL, by separate agreement dated May 14, 2001 (the “2001 Patent
Sublicense Agreement”) certain rights held by Cymer under the Patent License
Agreement in order for SRL to develop certain technologies in the Field of Use;
and

 

WHEREAS, SRL-EUV,
LLC (“EUV”) is the assignee of SRL under the 2001 Patent Sublicense Agreement
and holds all of SRL’s rights under the 2001 Patent Sublicense Agreement; and

 

WHEREAS,  EUV sublicensed to Cymer, by separate
agreement dated Nov. 7, 2003 (the “2003 Patent Sublicense Agreement”) all
license rights held by EUV under the 2001 Patent Sublicense Agreement;

 

WHEREAS,  Cymer is willing to grant to SRL a sublicense
to certain rights held by Cymer under the 2003 Patent Sublicense Agreement
pursuant to the terms and conditions set forth below.

 

NOW, THEREFORE, for
and in consideration of the premises, covenants, conditions, and undertakings
hereinafter set forth, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

1.1                               [...***...]

 

1.2                               DUV shall mean the deep ultraviolet region
of the electromagnetic spectrum with wavelengths, referenced to vacuum, ranging
from 150 nanometers (“nm”) up to but not exceeding 250nm.

 

1.3                               Extreme UV shall mean the extreme
ultraviolet region of the electromagnetic spectrum with wavelengths, referenced
to vacuum, ranging from 10nm up to but not exceeding 50nm.

 

1.4                               Field of Use shall mean all applications of
the Sublicensed Technology, except applications for use as Light Sources
operating in the DUV, Extreme UV, VUV, and Soft X-ray wavelengths of the
spectrum for Lithography (defined below), 
Metrology (defined below) and/or [...***...] applications (defined below).

 

1.5                               [...***...]

 

1.6                               Government Purpose shall mean conducting
research activities for or under contract with the U.S. federal government or
any instrumentality thereof.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

1.7                               Light Source shall mean any source of
electromagnetic radiation whether coherent or incoherent, whether a laser or a
lamp.

 

1.8                               Lithography shall mean the art of
transferring a spatial pattern from a reference mask to the surface of a wafer
and/or to the surface of membranes to be made into masks and reticles.

 

1.9                               Metrology shall mean the art of measuring
distances or surface topology.

 

1.10                        Research shall mean any research and development in the Field
of Use.

 

1.11                        Soft X-ray shall mean that region of the electromagnetic
spectrum ranging from 0.5 nm up to but not exceeding 3.0 nm.

 

1.12                        Sublicensed Technology shall mean all confidential
information, trade secrets, know-how, methods or processes and other materials,
tangible and non-tangible, including, but not limited to: technical and
non-technical data and information, drawings, sketches, plans, diagrams,
specifications and/or other documents or materials containing said information
and data licensed by Cymer under the Patent License Agreement in the Field of
Use as well as any Cymer Invention (as defined in the Patent License Agreement)
or Cymer’s rights under any Joint Invention (as defined in the Patent License
Agreement); in each case, which have been sublicensed by EUV to Cymer under the
2003 Patent Sublicense Agreement.

 

1.13                        Sublicensed Patents shall mean the patents or patent
applications (i) which have been sublicensed by EUV to Cymer under the
2003 Patent Sublicense Agreement; and (ii) which, in the absence of the
rights being granted under the sublicense granted by Cymer to SRL under this
Sublicense Agreement, would be infringed by SRL’s manufacture, sale or use of
the Research(s) (as defined herein) at any time during the Term of this
Sublicense Agreement.

 

1.14                        VUV shall mean vacuum ultraviolet wavelengths in the region of
the electromagnetic spectrum ranging from 120nm up to but not exceeding 150nm.

 

1.15                        Term shall have the meaning as set forth in Section 6 below.

 

ARTICLE II

 

GRANT OF SUBLICENSE

 

2.1                               Cymer hereby grants to
SRL an irrevocable exclusive, worldwide, royalty-free sublicense: (x) to
use the Sublicensed Technology for the purpose of making, or having made,
selling or having sold Research in the Field of Use for any Government Purpose;
and (y) under the Sublicensed Patents to make, have made, and use and sell
the Research in the Field of Use for any Government Purpose.

 

2.2                               SRL shall not obtain any
rights of any kind in the Sublicensed Patents or the Sublicensed Technology
except as specifically set forth in this Sublicense Agreement.

 

2.3                               In consideration of the
rights and licenses granted hereunder, SRL agrees to pay to Cymer a sublicense
fee in the amount of [...***...] due on January 5, 2004.

 

ARTICLE III

 

IMPROVEMENTS AND INVENTIONS

 

3.1                               The parties’ respective
rights of ownership with respect to improvements and inventions shall be as set
forth in Article III of the Patent License Agreement.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

2

 

ARTICLE IV

 

PATENT PROSECUTION AND INFRINGEMENT

 

4.1                               Cymer agrees that it
shall, at its own expense, prepare, file, prosecute and maintain the Sublicensed
Patents, in such countries as Cymer deems appropriate, and shall be responsible
for conducting any interferences, re-examinations, reissues, oppositions or
requests for patent term extensions relating to the Sublicensed Patents.  SRL shall cooperate fully in the
preparation, filing and prosecution of any Sublicensed Patents under this
Sublicense Agreement.  Notwithstanding
the foregoing, Cymer shall not take any such action that could adversely affect
a patent or application owned by SRL, unless such action is mutually agreed by
the parties.  Cymer shall provide SRL
with sufficient written notice of any decision not to prepare, file, prosecute
and maintain any Sublicensed Patent so that SRL may take such action on its
own.

 

4.2                               Each party will promptly
notify the other party of any written claim received by it alleging
infringement by Research of the proprietary rights or patents of a
third-party.  Cymer shall assume the
defense of any action relating to any such allegation of patent infringement.

 

4.3                               Each party will promptly
notify the other party hereto of the possible infringement by a third-party of
Research or any of the Sublicensed Technology or Sublicensed Patents comprising
Research.  Cymer shall have the sole
right to take any action it deems necessary, at its sole cost and expense, with
respect to any infringement of Research or the Sublicensed Patents.

 

4.4                               Within the Field of Use,
if Cymer fails to bring an infringement action as provided in Section 4.3
above within sixty (60) days after notice of alleged infringement, SRL shall be
permitted to take any action it deems necessary, at its sole cost and expense,
in order to protect its research, royalty and other payment interests.

 

4.5                               If either party brings
an infringement action under this Agreement, the other party shall cooperate
fully, including if required to bring such action, the furnishing of a power of
attorney.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

5.1                               Cymer. 
Cymer represents and warrants that: 
(i) it has full power to enter into this Sublicense Agreement;
(ii) it has not previously granted and will not grant any rights in
conflict with the rights and licenses granted herein; (iii) it has obtained all
necessary corporate approvals to enter and execute into this Sublicense Agreement;
and (iv) it shall fully comply with the requirements of any and all applicable
federal, state, local and foreign laws, regulations, rules and orders of any
governmental body having jurisdiction over the activities contemplated by this
Sublicense Agreement.

 

5.2                               SRL. 
SRL represents and warrants that: 
(i) it has full power to enter into this Sublicense Agreement; (ii) it
has obtained all necessary corporate approvals to enter and execute into this
Sublicense Agreement; and (iii) it shall fully comply with the requirements of
any and all applicable federal, state, local and foreign laws, regulations,
rules and orders of any governmental body having jurisdiction over the
activities contemplated by this Sublicense Agreement.

 

5.3                               Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS SUBLICENSE
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF
ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR
VALIDITY OF ANY PATENTS ISSUED OR PENDING.

 

3

 

ARTICLE VI

 

TERM

 

6.1                               Term. This Sublicense Agreement shall
become effective as of the Effective Date and shall continue until it expires
(the “Term”) in its entirety upon the termination for any reason, or
expiration, of the Patent License Agreement with respect to all Research, in
all countries, worldwide.

 

6.2                               No Termination.  The parties agree that upon payment of the sublicense fee set
forth in Section 2.3 this Sublicense Agreement shall not be terminated.

 

6.3                               Continuing Obligations; Survival.  It is understood that expiration of this
Sublicense Agreement shall not relieve a party from any obligation or liability
which, at the time of such expiration, has already accrued to the other
party.  The provisions of
Sections 2.2, 6.3, and Articles 1, 4, 5, 7, 8, 10 and 11 shall
survive the expiration of this Sublicense Agreement.  Except as otherwise expressly provided in this Article 6, all other
rights and obligations of the parties shall terminate upon expiration of this
Sublicense Agreement.

 

ARTICLE VII

 

INDEMNIFICATION

 

7.1                               Indemnification by SRL.  SRL shall indemnify, defend and hold
harmless Cymer, its directors, officers, employees, agents, successors and
assigns from and against all liabilities, expenses or costs (including
reasonable attorneys’ fees and court costs) arising out of any claim,
complaint, suit, proceeding or cause of action against any of them by a
third-party alleging (i) the negligent or intentionally wrongful acts or
omissions of SRL; (ii) any breach by SRL of any of its representations or
warranties set forth in Article V of this Sublicense Agreement; or
(iii) breach of any warranty relating to the Research of SRL covered by
the sublicense granted in Section 2.1 including, but not limited to defects in
design, manufacturing or claims under any theory of product liability.

 

7.2                               Indemnification by Cymer.  Cymer shall indemnify, defend and hold
harmless SRL, its directors, officers, employees, agents, successors and
assigns from and against all liabilities, expenses, and costs (including
reasonable attorneys’ fees and court costs) arising out of any claim,
complaint, suit, proceeding or cause of action against any of them by a
third-party alleging (i) the negligent or intentionally wrongful acts or
omissions of Cymer; or (ii) any breach by Cymer of any of its
representations or warranties set forth in Article V of this Sublicense
Agreement.

 

7.3                               Indemnification Procedure.  A party that intends to claim indemnification
(the “Indemnitee”) under this Article 7 shall promptly notify the indemnifying
party (the “Indemnitor”) in writing of any third party claim, suit or
proceeding or cause of action included within the indemnification described in
this Article 7, above (each a “Claim”) with respect to which the Indemnitee
intends to claim such indemnification, and the Indemnitor shall have sole
control of the defense and/or settlement thereof; provided that the Indemnitee
shall have the right to participate, at its own expense, with counsel of its
own choosing in the defense and/or settlement of such Claim.  The indemnification under this Article 7
shall not apply to amounts paid in settlement of any Claim if such settlement
is effected without the consent of the Indemnitor.  The Indemnitee under this Article 7, and its employees, at the
Indemnitor’s request and expense, provide full information and reasonable
assistance to Indemnitor and its legal representatives with respect to such
Claims.

 

ARTICLE VIII

 

CONFIDENTIALITY

 

8.1                               Confidential Information.  The parties may from time to time disclose
to each other Confidential Information in connection with this Agreement.  “Confidential Information” shall mean any
information disclosed by one party to the other party which information is not
generally known to the public and may include by way of

 

4

 

example, but without limitation
(a) information concerning the disclosing party’s management, financial
condition, financial operations, purchasing activities, costs of products,
sales activities, marketing activities and business plans, (b) information
concerning or resulting from the disclosing party’s research and development
work, including, but not limited to, improvements, discoveries, inventions and
new product ideas, (c) information of the disclosing party concerning actual or
potential vendors or customers, (d) the disclosing party’s computer programs,
including source code, object code, algorithms, methods, structure and related
information including diagrams, flow charts, designs, specifications, manuals,
descriptions, instructions, explanations and improvements, and (e) information
concerning the disclosing party’s products, including plans, blueprints, parts
and assembly drawings, specifications, descriptions, designs, diagrams,
dimensions, tolerances, parts and components, in each case, whether delivered
orally, in writing, electronically or through any other media.  Notwithstanding the foregoing or anything
herein to the contrary, Confidential Information shall not include any
information that, in each case the receiving party can prove by written
documentation:  (i) was already known to
the receiving party, other than under an obligation of confidentiality, at the
time of disclosure; (ii) was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving party;
(iii) became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of the
receiving party in breach of this Sublicense Agreement; (iv) was subsequently
disclosed to the receiving party by a person other than the disclosing party
who was not bound by any confidentiality obligation; or (v) was developed
entirely independently by the receiving party without use of, reliance on, or
reference to the Confidential Information of the other party.

 

8.2                               Confidentiality.  Each party agrees to protect, hold and maintain in strict
confidence all Confidential Information of the other party for a period of ten
(10) years from the date of disclosure. 
Without limiting the foregoing, neither party shall use or disclose the
Confidential Information of the other party, except as otherwise permitted by
this Sublicense Agreement or as may be necessary or useful to exercise its
rights or perform its obligations under this Sublicense Agreement provided that
employees, agents, and representatives of the receiving party shall be given
access to Confidential Information only on a need-to-know basis and only if
they are bound by obligations of confidentiality comparable to those contained
herein.  Nothing contained in this
Article 8 shall prevent either party from disclosing any Confidential
Information of the other party to (a) accountants, lawyers or other
professional advisors or in connection with a merger, acquisition or securities
offering, subject in each case to the recipient entering into an agreement to
protect such Confidential Information from disclosure; or (b) is required by
law or regulation to be disclosed; provided, however, that the party subject to
such disclosure requirement has provided written notice to the other party
promptly upon receiving notice of such requirement in order to enable the other
party to seek a protective order or otherwise prevent disclosure of such
Confidential Information.

 

ARTICLE IX

 

NON-SOLICITATION

 

9.1                               During the Term of this
Sublicense Agreement, neither party shall contact, divert, or influence, or
attempt to divert or influence any personnel of the other for purposes of
providing employment to such personnel without the prior written consent of the
current employer.  In the event that
either party breaches this non-solicitation covenant and hires (the “New
Employer”) an employee or consultant who, within the six (6) months immediately
preceding the date of hire by the New Employer, was employed by the other party
(the “Prior Employer”), the New Employer shall pay to the Prior Employer as
compensation for the loss of the employee/consultant, three (3) times the first
year’s total compensation being paid by the New Employer to the
employee/consultant.

 

9.2                               All payments due
hereunder shall be made, in-full, within thirty (30) days of the first day the
employee/consultant provides services to the New Employer.

 

5

 

ARTICLE X

 

LIMITATION OF LIABILITY

 

EXCEPT FOR
BREACH OF SECTION 8, NEITHER PARTY, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, SHALL HAVE ANY LIABILITY TO THE OTHER PARTY FROM ANY CAUSE WHATSOEVER, AND
REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR IN TORT (INCLUDING
NEGLIGENCE), FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY
DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS, REVENUES,
SAVINGS, BUSINESS INTERRUPTION AND THE LIKE) UNDER OR RELATING TO THIS
AGREEMENT, EVEN IF SUCH OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1                        Notices.  All notices
required or permitted hereunder shall 
be given in writing and sent by facsimile transmission (with
confirmation of receipt), or mailed postage prepaid, certified or registered
mail, return receipt requested, or sent by a nationally recognized express
courier service, or hand-delivered at the following address:

 

	
  To SRL:

  	
   

  	
  Science
  Research Laboratory, Inc.

  15 Ward Street

  Somerville, Massachusetts 02143

  Attn.: Jonah Jacob

  Facsimile: (617) 441-3984

  
	
   

  	
   

  	
   

  
	
  To Cymer:

  	
   

  	
  Cymer, Inc.

  17075 Thornmint Court

  San Diego, California 92127

  Attn.: Dr. Robert P. Akins, CEO

  Facsimile: (858) 385 6222

  

 

All notices shall be deemed
made upon receipt by the addressee as evidenced by the applicable written
receipt or, in the case of a facsimile, as evidenced by the confirmation of
transmission.

 

11.2                        Public Announcements.

 

11.2.1              Subject to Section 11.2.2, all publicity,
press releases and other announcements relating to this Sublicense Agreement or
the transaction contemplated hereby shall be reviewed in advance by, and be
subject to the approval of, both parties; provided, however, that either party
may, without the consent of the other, (i) disclose the existence and general
subject matter of this Sublicense Agreement without the other party’s approval
and (ii) subject to Article 8 disclose the terms of this Sublicense Agreement
as required to comply with applicable securities laws.  Any party that determines applicable
securities laws require it to file this Sublicense Agreement shall first
provide the other party a copy of the redacted version it intends to file and
shall provide the other party the opportunity to comment thereon.  Notwithstanding the foregoing, the filing
party will make the final decisions regarding the version hereof to file.

 

11.2.2              Subject to Article 8, any party that
determines applicable securities laws require it to disclose publicly (i)
non-financial information with respect to its relationship to the other party
or (ii) any aspect of the other party’s business, shall first provide the other
party a copy of the disclosure it intends to disclose and shall provide the
other party the opportunity to comment thereon.  Notwithstanding the foregoing, the disclosing party will have
final decision-making authority with respect to its disclosures.

 

6

 

11.3                        Captions and Section References.  The titles, headings or captions in this Sublicense Agreement do
not define, limit, extend, explain or describe the scope or extent of this
Sublicense Agreement or any of its terms or conditions and therefore shall not
be considered in the interpretations, construction or application of this
Sublicense Agreement.

 

11.4                        Severability.  Whenever
possible, each clause, subclause, provision or condition of this Sublicense
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any clause, subclause, provision or condition of
this Sublicense Agreement should be prohibited or invalid under applicable law,
such clause, subclause, provision or condition shall be considered separate and
severable from this Sublicense Agreement to the extent of such prohibition or
invalidity without invalidating the remaining clauses, subclauses, provisions
and conditions of this Sublicense Agreement, so long as the remaining
Sublicense Agreement reflects the economic intentions of the parties as
evidenced by this Sublicense Agreement as a whole.

 

11.5                        Entire Agreement. 
Except for the Solid State Modulator License and Manufacturing Agreement
dated as of January 26, 1995, the Patent License Agreement, the 2001 Patent
Sublicense Agreement and/or the 2003 Patent Sublicense Agreement, this
Sublicense Agreement embodies the entire agreement and understanding of the
parties hereto in relation to the subject matter hereof and supersedes any and
all prior understandings and agreements, whether written or oral in regard to
such matters. For the avoidance of doubt, unless otherwise specifically
amended, all provisions, including amounts payable by Cymer, under the Solid
State Modulator License and Manufacturing Agreement dated as of January 26,
1995, the Patent License Agreement, and the 2001 Patent Sublicense Agreement
shall remain in full force and effect.

 

11.6                        Amendment.  No
amendment, change or modification of any of the terms, provisions or conditions
of this Sublicense Agreement shall be effective unless made in writing and
signed on behalf of the parties hereto by their duly authorized
representatives.

 

11.7                        Counterparts.  This
Sublicense Agreement may be executed in one or more counterparts, by facsimile,
or both, each of which shall be deemed to be an original document, but all such
separate counterparts shall constitute only one and the same Sublicense
Agreement.

 

11.8                        Waiver.  No waiver of
any term, provision or condition of this Sublicense Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such or other term,
provision or condition of this Sublicense Agreement.

 

11.9                        Binding Agreement; Succession. This Sublicense Agreement shall
be binding upon and shall inure to the benefit of the parties and their
respective successors and permitted assigns. 
Neither party may assign this Sublicense Agreement without the prior
written approval of the other party which approval shall not be unreasonably
withheld or delayed; provided, however, that either party may assign this
Sublicense Agreement without the prior written approval of the other party in
connection with the acquisition of such party by, or merger of such party with
or into, a third party or the sale of substantially all of such party’s assets;
provided, further, however that should SRL wish to assign this Sublicense
Agreement to any third-party listed on Exhibit 11.9 attached hereto and made a
party hereof, such written approval of Cymer shall be required.

 

11.10                 Independent
Contractors.  The
relationship of Cymer and SRL established by this Sublicense Agreement is that
of independent contractors.  Nothing in
this Sublicense Agreement shall be construed to create any other relationship
between Cymer and SRL.  Neither party
shall have any right, power or authority to assume, create or incur any
expense, liability or obligation, express or implied, on behalf of the other.

 

11.11                 Governing
Law.  This Sublicense
Agreement shall be interpreted under and enforced in accordance with the laws
of the State of Massachusetts.

 

7

 

IN WITNESS WHEREOF,
the parties have caused this Sublicense Agreement to be executed as of the day
and year first above written.

 

	
  SCIENCE RESEARCH LABORATORY, INC.

  	
  CYMER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ JONAH
  JACOB

  	
   

  	
  By:

  	
  /s/ ROBERT
  P. AKINS

  
	
   

  	
  Jonah Jacob

  	
   

  	
  Robert P. Akins, Ph.D., CEO

  
					

 

8

 

EXHIBIT 11.9

 

[...***...]

 

 

9THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 ("ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

                           CONVERTIBLE PROMISSORY NOTE

                                                 Date of Note:  March  9, 2003
(US $250,000)

     FOR VALUE RECEIVED, Citadel Media, Inc., a Washington corporation
(hereinafter "Maker"), with its principal business address at 2125 Western
Avenue, Suite 200, Seattle, Washington 98121, promises to pay to the order of
Orion Acquisition Corp. II, a Delaware corporation, and its successors and
assigns (hereinafter referred to as the "Holder"), at 401 Wilshire Boulevard,
Suite 1020, Santa Monica, California, 90401 or such other place as may be
designated by the Holder hereof, from time to time, the unpaid principal balance
of this Note, with interest thereon from the date hereof, on the terms and
conditions set forth herein.

     1. INTEREST RATE: The rate of interest on the unpaid balance of this Note
shall be ten percent (10.0%) per annum, compounded annually. All interest will
be calculated based on a 360 day year and applied to the actual number of days
elapsed. If this Note is in default, the aforementioned rate of interest on the
unpaid balance of this Note will increase to eighteen percent (18%) per annum,
compounded annually.

     2. PAYMENTS: Maker shall pay interest on the principal outstanding amount
on the Maturity Date or when the principal amount of this Note is paid, unless
the Note is converted as provided in Section 10, in which there shall be no
obligation to pay interest on this Note. The principal amount of this Note shall
be due in full on the Maturity Date. Principal and interest shall be paid in
lawful money of the United States of America.

     3. ALLOCATION OF PAYMENTS: All sums paid by Maker shall be applied first to
the payment of any costs or expenses due Holder, then to any late charges then
due, then to any interest then due, and finally to payment of principal.

     4. PREPAYMENT: Maker may prepay its obligation under this Note in full (but
not in part) on any day prior to the Maturity Date, plus accrued but unpaid
interest thereon, upon fifteen (15) days advance written notice to Holder. This
Note and any outstanding or accrued interest will be extinguished on the
consummation of the Merger.

     5. EVENTS OF DEFAULT: The occurrence of one or more of the following events
(herein called "Event of Default") shall constitute a default under this Note:

     5.1 Maker fails to pay the principal and interest payment when due under
this Note;

     5.2 Maker shall makes a general assignment for the benefit of creditors, or
shall file a voluntary petition for bankruptcy, or shall file any petition or
answer in bankruptcy seeking for itself in any reorganization, arrangement,
composition, readjustment, dissolution or similar relief, or shall file any

<PAGE>

answer admitting the material allegations of a petition for bankruptcy filed
against Maker in any such proceeding, or shall seek or consent to or acquiesce
in the appointment of any trustee, receiver or liquidator of Maker, or of all or
any substantial part of the properties of Maker;

     5.3 Within ninety (90) days after the commencement of any proceeding
against Maker seeking in bankruptcy any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
bankruptcy laws, such proceeding shall not have been dismissed or, within ninety
(90) days after the appointment without the consent or acquiescence of Maker of
any trustee, receiver or liquidator of Maker or of all or any substantial part
of the properties of Maker, such appointment shall not have been vacated;

     5.4 Any default or breach by Maker or its Subsidiaries of the terms of the
Security Agreement;

     5.5 Upon the default by Maker or any of its Subsidiaries in the payment of
institutional or other debt or obligation (other than trade payables)
aggregating three hundred thousand dollars ($300,000.00) or more or any single
debt or obligation (other than trade payables) of two hundred thousand dollars
($200,000.00) or more;

     5.6 Upon the default by Maker in the payment or the terms of the promissory
note dated December 9, 2003 in the principal amount of $500,000 to Holder
(December Orion Note");

     5.7 Failure to observe any material obligation of Maker under this Note.

     6. REMEDIES: If an Event of Default has occurred, the Holder shall give
written notice of the Event of Default to Maker, which if not cured within ten
(10) business days of the giving of the notice, then the entire indebtedness
hereby represented shall become immediately due and payable. Notwithstanding the
foregoing, if the Event of Default has occurred in the payment of principal and
interest due hereunder or an event of default has occurred under the December
Orion Note as set forth in the December Orion Note, it will be deemed to be an
immediate Event of Default, not requiring any notice thereof before the Holder
may pursue any of its remedies hereunder or under the Security Agreement. All
past due amounts of principal, interest, attorneys fees, advisor's fees and
expenses incurred by Holder in connection with any default shall be added to the
principal balance.

     7. COSTS OF COLLECTION: If this Note is placed in the hands of any attorney
for collection after any Event of Default, whether suit be brought or not, Maker
promises to pay a reasonable sum as an attorney fee, in addition to all costs
and expenses incurred by Holder including costs of suit and preparation
therefor. Costs and fees covered by this paragraph include, without limitation,
attorneys' fees and expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), appeals and any anticipated
post-judgment collection services, to the extent permitted by applicable law.

     8. SECURITY: This Note is secured by a Security Agreement dated December 9,
2003, as amended of even date herewith (the "Security Agreement") which gives a
lien upon the collateral therein described, the terms of which are incorporated
herein.

     9. WAIVER: Except for the notices provided herein, Maker waives
presentment, demand, protest and notice of demand, protest and nonpayment and
consents to any and all renewals and extensions of the time of payment hereof,
and further agrees that at any time the terms of payment hereof may be modified
or security released without affecting the liability of Maker to this Note.
Maker particularly waives

                                       2
<PAGE>

the right to demand any marshalling of assets as a condition to or in connection
with the bringing of action hereon against Maker or any other party.

     10. CONVERSION OF NOTE:

     10.1 Conversion Option. If there is no Merger as a result of a Media
Withdrawal, then, at the sole option of Holder, Holder may convert prior to the
Maturity Date all (but not less than all) of the then unpaid principal balance
of this Note into 250,000 shares of Series E Preferred Stock, as provided in
Section 10.2 hereof; provided however, if the Note is not paid in full by the
Maturity Date of June 30, 2004, Holder may elect to convert this Note at any
time from the Maturity Date of June 30, 2004 until paid in full.

     10.2 Series E Preferred Stock.

          (a). The number of shares of Series E Preferred Stock to be issued
upon conversion of this Note shall be 250,000 shares of Series E Preferred
Stock.

          (b). If the Note is converted into Series E Preferred Stock, Maker
shall also issue to Holder, a Warrant, substantially in the form attached hereto
as Exhibit 10.2(b) hereof.

          (c). If the Note is converted into Series E Preferred Stock, no
interest shall be due on this Note and all accrued interest shall be deemed paid
in full upon issuance of the Warrant.

     10.3 Mechanics and Effect of Conversion. Upon conversion of this Note,
Holder shall surrender this Note, duly endorsed, at the principal offices of
Maker or any transfer agent of Maker. At its expense, Maker will, as soon as
practicable thereafter, time being of the essence, issue and deliver to Holder
the Warrant and a certificate or certificates for 250,000 shares of Series E
Preferred Stock. Upon conversion of this Note, the Security Agreement shall be
terminated and Maker will be forever released from all of its payment
obligations under this Note, including, without limitation, obligation to pay
interest on this Note; provided, however, that for clarity purposes, the other
provisions of this Note shall continue in full force and effect, including
without limitations, the Section 10, Section 11, Section 13, Section 16 and
Section 17 hereof.

     10.4 Note Definitions.

          (a). "Maturity Date" means June 30, 2004.

          (b). "Media Withdrawal" shall occur if (i) Maker withdraws from the
negotiations of the Merger, without good reason or cause, which such terms shall
include a withdrawal to pursue other financings, Sale of Maker or the like (it
being the obligation of Media to negotiate in good faith and in good faith
complete the Merger), or (ii) Maker fails to negotiate the terms of the Merger
in good faith, or (iii) if a merger agreement is approved by Maker and Orion,
Maker, or its shareholders, thereafter fails to approve, vote for, or otherwise
complete the Merger pursuant to said merger agreement.

          (c). "Merger" means any merger, consolidation, or combination of Maker
and Orion prior to the Maturity Date in which Orion is the survivor thereof.

          (d). "Orion" means Orion Acquisition Corp. II, a Delaware corporation.

                                       3
<PAGE>

          (e). "Sale of Maker" means a sale of all or substantially all of
Maker's assets, or any merger or consolidation of Maker with or into another
corporation, other than a merger or consolidation where Maker is the survivor
thereof.

          (f). "Securities" means this Note, the Series E Preferred Stock and
any common stock of Maker acquired pursuant to the Warrant.

          (g). "Series E Preferred Stock" means the Series E Preferred Stock, as
provided for in the Articles of Incorporation of Maker.

     10.5 Transfer Restrictions.

          (a). Before any Securities held by Holder or any transferee of Holder
(either being sometimes referred to as the "Holder") may be sold or otherwise
disposed of Maker or its assignee(s) shall have a right of first refusal to
purchase the Securities on the terms and conditions set forth in this Section
10.5 ("Right of First Refusal").

          (b). The Holder of the Securities shall deliver to Maker a written
notice (the "Notice") stating: (i) the Holder's bona fide intention to sell or
otherwise transfer such Securities; (ii) the name and address of any proposed
purchaser or other transferee ("Proposed Transferee"); (iii) the number of
Securities to be transferred; and (iv) the terms and conditions of any proposed
sale or transfer, including the proposed purchase price for the Securities to be
transferred (the "Offered Price").

          (c). At any time within thirty (30) days after receipt of the Notice,
Maker and/or its assignee(s) may, by giving written notice to the Holder, elect
to purchase all or any portion of the Securities proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in
accordance with Section 10.5(c) below. The purchase price ("Purchase Price") for
the Securities purchased by Maker or its assignee(s) under this Section Section
10.5 shall be the Offered Price. If the Offered Price includes consideration
other than cash, the cash equivalent value of the non-cash consideration shall
be determined by the Board in good faith.

          (d). If any of the Securities proposed in the Notice to be transferred
to a given Proposed Transferee are not purchased by Maker and/or its assignee(s)
as provided in Section 10.5, then the Holder may sell or otherwise transfer such
Securities to that Proposed Transferee at the Offered Price or at a higher
price, provided that such sale or other transfer is consummated within sixty
(60) days after the date of the Notice and provided further that any such sale
or other transfer is effected in accordance with any applicable securities laws
and the Proposed Transferee and any spouse executes an agreement, in such form
required by Maker, agreeing and acknowledging that the provisions of this
Agreement shall continue to apply to the Securities in the hands of such
Proposed Transferee. If the Securities are not transferred to the Proposed
Transferee within such period, or if the Holder proposes to change the price or
other terms to make them more favorable to the Proposed Transferee, a new Notice
shall be given to Maker, and Maker and/or its assignees shall again be offered
the Right of First Refusal before any Securities held by the Holder may be sold
or otherwise transferred.

          (e). The provisions of this Section 10.5 shall terminate upon the
earlier of (i) Merger; (ii) closing of the first sale of common stock of Maker
to the general public (an "Initial Public Offering") under a registration
statement declared effective under the Securities Act of 1933, as amended, or
any successor statute; (iii) Sale of Maker or (iv) release or terminate of these
restrictions by Maker, which Maker may do at any time in its sole discretion.

                                       4
<PAGE>

     10.6 Restrictive Legends and Stop-Transfer Orders.

          (a). The Securities and any underlying common stock, and any
securities issued in respect thereof or exchange therefor, may bear one or all
of the following legends:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED, THE WASHINGTON STATE SECURITIES ACT OR ANY OTHER APPLICABLE
     SECURITIES ACT (THE "ACTS"), AND NEITHER THE OFFERING OF THE SECURITIES NOR
     ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY AN ADMINISTRATOR UNDER THE
     ACTS. THE SECURITIES WERE ACQUIRED BY THE REGISTERED HOLDER PURSUANT TO A
     REPRESENTATION THAT THE HOLDER WAS ACQUIRING THE SECURITIES WITH THE
     HOLDER'S OWN FUNDS, FOR THE HOLDER'S OWN ACCOUNT, FOR INVESTMENT. THESE
     SECURITIES MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED, OR OFFERED
     FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
     SECURITIES UNDER THE ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
     CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
     ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN CORPORATION AND THE
     HOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION.

Any other legend may be added that Maker determines is authorized or required
pursuant to this Note or any legend required by the Blue Sky laws of any state
to the extent such laws are applicable to the Securities represented by the
certificate so legended.

     10.7 Refusal to Transfer. Maker shall not be required to transfer on its
books any Securities that have been sold or otherwise transferred in violation
of any of the provisions of this Agreement or to treat as owner of such
Securities or to accord the right to vote or pay dividends to any or other
transferee to whom such Securities shall have been so transferred. The
Securities may not be transferred or assigned in whole or in part without
compliance with applicable federal and state securities laws by the transferor
and the transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to Maker).

     10.8 Accredited Investor. Holder, other than Orion, must be an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the Act.

     10.9 "Market Stand-Off". In an underwritten registered offering effected by
Maker, Holder hereby agrees that Holder shall not sell, transfer, make any short
sale of, grant any option for the purchase of, enter into any hedging or similar
transaction with the same economic effect as a sale, or otherwise dispose of,
the Securities and underlying common stock of Holder (other than those included
in the registration) for a period specified by the representative of the
underwriters of securities of Maker not to exceed one hundred eighty (180) days
following the date of the final prospectus contained in a registration statement
of Maker filed under the Securities Act. Holder agrees to execute and deliver
such other agreements as may be reasonably requested by Maker or the
representative of the underwriters which are consistent with the foregoing or
which are necessary to give further effect thereto. Maker may impose
stop-transfer instructions with respect to the Securities and underlying common
stock subject to the foregoing restriction until the end of said one hundred
eighty (180) day period.

     10.10 Holder Representations. Holder hereby represents and warrants to
Maker that:

          (a). Maker has made available to Holder, or to Holder's attorney,
accountant, or representative, all other documents that Holder has requested.
Holder has requested all documents and other information that Holder has deemed
necessary or appropriate for making an investment in Maker and purchasing the
Securities. Maker has provided answers to all questions concerning the
investment in the Securities; and Holder has carefully considered and has, to
the extent Holder believes such discussion necessary, discussed with Holder's
professional legal, tax, and financial advisers the suitability of an investment
in Maker for Holder's particular tax and financial situation.

                                       5
<PAGE>

The Securities to be acquired by Holder will be acquired for investment for
Holder's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and Holder has no present intention
of selling, granting any participation in, or otherwise distributing the same.
Holder has full power to execute this Agreement and consummate the transactions
contemplated herein.

          (b). Holder is aware of Maker's business affairs and financial
condition and has acquired sufficient information about Maker to reach an
informed and knowledgeable decision to acquire the Securities. Holder has
obtained, to the extent that Holder deems necessary, professional advice with
respect to the risks inherent in the investment in the Securities and the
suitability of the investment in the Securities in light of Holder's financial
condition and investment needs. Holder is in a financial position to purchase
and hold the Securities and is able to bear the economic risk and withstand a
complete loss of Holder's investment in the Securities.

          (c). Holder understands that the Securities have not been, and will
not be, registered under the Securities Act, by reason of a specific exemption
from the registration provisions of the Securities Act which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
Holder's representations as expressed herein. Holder further acknowledges that
if an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the Securities, and on requirements
relating to Maker which are outside of Holder's control, and which Maker is
under no obligation and may not be able to satisfy. Holder understands that no
public market now exists for any of the securities issued by Maker, and that
Maker has made no assurances that a public market will ever exist for the
Securities.

          (d). Holder acknowledges that it has purchased the Securities in a
private offering between Maker and Orion and that Holder has not purchased the
Note as a result of any form of general solicitation or general advertising,
including advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media or broadcast over radio, or television,
or any seminar or meeting whose attendees have been invited by general
solicitation or general advertising. Holder further represents that it is a
California corporation with its principal place of business in Delaware.

11. PIGGY BACK REGISTRATION RIGHTS.

     11.1 Maker Registration.

          (a). Notice of Registration. If at any time or from time to time Maker
shall determine to register any of its securities, either for its own account or
the account of a security holder or holders, other than (x) a registration
relating solely to employee benefit plans, (y) a registration relating solely to
a Commission Rule 145 transaction pursuant to the Securities Act, or a
registration on any registration form that does not permit secondary sales, or
(z) a registration statement on Form S-4, Maker will:

                                       6
<PAGE>

               (i). promptly give Holder notice thereof, and

               (ii). include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the shares of common stock issued or issuable to the Holder
following any exercise of the Warrant or acquired pursuant to the Note (the
"Registrable Securities") specified in a written request or requests made within
fifteen (15) days after receipt of such written notice from Maker by the Holder.

          (b). Underwriting. If the registration of which Maker gives notice is
for a registered public offering involving an underwriting of the Maker's
securities on behalf of the Maker, Maker shall so advise the Holder as a part of
the written notice given pursuant to Section 11.1(a)). In such event, the right
of Holder to registration pursuant to Section 11.1 shall be conditioned upon
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting, to the extent requested and to the extent
provided herein. Holder shall (together with Maker and the other holders
distributing their securities through such underwriting (the "Other
Participating Holders")) enter into an underwriting agreement in customary form
with the managing underwriter selected for such underwriting by Maker.
Notwithstanding any other provision of this Section 11.1, if the managing
underwriter reasonably determines that factors require a limitation of the
number of shares to be underwritten, the managing underwriter may limit the
number of Registrable Securities (along with securities of Other Participating
Holders) to be included in the registration and underwriting, on a pro rata
basis based on the total number of securities requested to be registered
pursuant to registration rights granted to Holder and the Other Participating
Holders by Maker; except for a registration relating to the Maker's initial
public offering ("IPO"), IPO from which all Registrable Securities (along with
securities of Other Participating Holders) may be excluded. If the Holder or any
Other Participating Holder disapproves of the terms of any such underwriting,
it, he or she may elect to withdraw therefrom by written notice to Maker and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.

          (c). Right to Terminate Registration. Maker shall have the right to
terminate or withdraw any registration initiated by it under this Section 11.1
prior to the effectiveness of such registration, whether or not the Holder has
elected to include securities in such registration.

     11.2 Expenses of Registration. All registration expenses incurred in
connection with any registration pursuant to Section 11 excluding (1) legal
expenses of counsel to the Holder and (2) underwriting discount, selling
commissions or brokers fees relating to the sale of Registrable Securities by
the Holder, shall be borne by Maker.

     11.3 Registration Procedures. In the case of each registration,
qualification or compliance effected by Maker pursuant to this Section 11, Maker
will:

          (a). Prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities and use
its best efforts to cause such registration statement to become effective, and
remain effective until the distribution described in the registration statement
has been completed, but in no event longer than one hundred twenty (120) days.

          (b). Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act and the rules and regulations promulgated
thereunder.

                                       7
<PAGE>

          (c). Furnish to the Holder and to the underwriters, if any, of the
securities being registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other documents as
the Holder and such underwriters may reasonably request in order to facilitate
the public offering of such securities.

          (d). Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that Maker shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless Maker is already
subject to service in such jurisdiction and except as may be required by the
Securities Act.

          (e). Notify the Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

          (f). Cause all such Registrable Securities registered pursuant to this
Section 11 to be listed on each securities exchange or other trading market on
which similar securities issued by Maker are then listed.

          (g). Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.

     11.4 Information by Holder. The Holder shall furnish to Maker such
information regarding the Holder as Maker may reasonably request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Section 11.

     11.5 Transfer of Registration Rights. The rights to cause Maker to register
securities granted to the Holder under Section 11 may not be assigned to a
transferee or assignee in connection with any transfer or assignment of
Registrable Securities by the Holder (together with any affiliate); provided,
however, that such rights may be assigned to an affiliate of Holder if (a) such
transfer may otherwise be effected in accordance with applicable securities
laws, (b) notice of such assignment is given to Maker, and (c) such transferee
or assignee affiliate agrees to be bound by the terms and conditions of the Note
and the Warrant.

     11.6 Termination of Rights. The rights of the Holder to cause Maker to
register securities under Section 11 shall terminate on the earlier of (a) the
second anniversary of the effective date of the IPO or (b) such time as Rule 144
under the Securities Act or another similar exemption under the Securities Act
is available for the sale of all of the Registrable Securities during a three
(3)-month period without registration; provided, however, that in no event shall
such registration rights terminate prior to the first anniversary of the
effective date of the IPO.

     12. NOTICE. For so long as the principal and interest due hereon is unpaid
in full, Maker hereby agrees (A) to give written notice to the Holder not less
than twenty (20) days prior to (i) Sale of Maker, consummation of any merger,
consolidation, or combination involving Maker or any of its subsidiaries, other
than such with Orion, (ii) the consummation of the sale of all or substantially
all of the assets

                                       8
<PAGE>

of Maker or any of its subsidiaries by any methodology, (iii) the sale, issuance
or transfer of any securities of Maker or any of its subsidiaries by any of
those entities which results in or may result the increase of number of shares
of common stock outstanding now or in the future by more than 25% of Maker or
any of its subsidiaries, or (iv) the consummation of any loan in equal to or in
excess of $200,000, (B) to give written notice to the Holder as soon as
practicable, time being of the essence, upon its learning of a change of control
or potential change of control of more than 25% of the common stock of Maker or
its subsidiaries whether by transfer, sale, option, voting agreement or other
methodology where the beneficial ownership changes or could change, as
beneficial ownership is defined under Section 13(d) of the Securities Exchange
Act of 1934, and (C) to give written notice to the Holder not less than ten days
prior to any notice is given of any solicitation of the vote of the shareholders
(common or preferred or other) of Maker or any of its subsidiaries, which notice
will include all the solicitation materials being given to any of those
shareholders.

     13. APPLICABLE LAW: This Note shall be governed by, construed and enforced
in accordance with the internal laws of the State of Washington, without giving
effect to principles and provisions thereof relating to conflict or choice of
laws irrespective of the fact that any one of the parties is now or may become a
resident of a different state or country.

     14. BUSINESS PURPOSE: Maker represents and warrants that all funds advanced
to Maker evidenced by this Promissory Note will be used primarily and
exclusively for business purposes of Maker and its subsidiaries, and that no
portion of said proceeds will be used for any personal, family household,
agricultural or other consumer purposes.

     15. FAILURE TO ENFORCE NOT A WAIVER: Failure to exercise any right or
option of Holder shall not constitute a waiver of the right to exercise such
right or option if Maker is in default hereunder. Failure of Holder to require
strict compliance with the terms of this Note shall not waive the Holder's right
to require strict compliance in the future.

     16. NOTICES: Maker shall give notice of any Event of Default under the
terms of this Note immediately, time being of the essence, to the Holder. All
payments, notices, demands, requests, consents, approvals and other instruments
required or permitted to be given pursuant to the terms of this Note shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally
or by a nationally-recognized delivery service, or forty-eight (48) hours after
being deposited in the U.S. Mail, as certified or registered mail, with postage
prepaid, addressed to the party to be notified at such party's address as set
forth below or as subsequently modified by written notice.

     17. ARBITRATION: If any dispute, controversy, or claim arises between the
parties out of or in relation to this Note, or the breach, termination, or
invalidity thereof, both parties by mutual negotiation shall attempt to come to
a reasonable settlement of the same as soon as possible. If no settlement is
reached within thirty (30) days from the first notification of the same in
writing by either party, the same shall be settled by binding arbitration in
accordance with the American Arbitration Rules in effect as of the effective
date of this Agreement. The appointing authority shall be the American
Arbitration Association office located in Seattle, Washington, and the case
shall be administered by the same authority in accordance with its procedures
for cases under the Commercial Arbitration Rules. The place of arbitration shall
be Seattle, Washington, or such other location as the parties may agree. The
number of arbitrators shall be one, unless the parties cannot agree on a single
arbitrator. In such event, the parties shall each choose one arbitrator, and
these two arbitrators shall choose a third arbitrator who shall preside over the
proceedings. The awards rendered by the arbitrators shall be final and binding
upon both parties concerned, and judgment upon the award may be entered in any
court having jurisdiction thereof. The allocation of the expenses of the
arbitration shall be effected by the arbitration decision.

                                       9
<PAGE>

     18. ORAL AGREEMENTS, PROMISES, OR COMMITMENTS TO: (1) LOAN MONEY, (2)
EXTEND CREDIT, (3) MODIFY OR AMEND ANY TERMS OF THE LOAN DOCUMENTS, (4) RELEASE
ANY GUARANTOR, (5) FORBEAR FROM ENFORCING REPAYMENT OF THE LOAN OR THE EXERCISE
OF ANY REMEDY UNDER THE LOAN DOCUMENTS OR (6) MAKE ANY OTHER FINANCIAL
ACCOMMODATION PERTAINING TO THE LOAN ARE ALL UNENFORCEABLE UNDER WASHINGTON LAW.

Executed on the date set forth above.

                                    CITADEL MEDIA, INC.,
                                    a Washington corporation

                                    /s/ James C Heckman
                                    -------------------------------
                                    By:  James C. Heckman
                                    Its: Chief Executive Officer

                                       10
<PAGE>

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