TIME BROKERAGE AGREEMENT

EXHIBIT 7

TIME BROKERAGE AGREEMENT

64


Time Brokerage Agreement Between Watts Communications, Inc.,
and American Communications Enterprises, Inc.


TIME BROKERAGE AGREEMENT

Watts Communications, Inc., a Texas corporation, with its principal offices
located at 600 Fisk Avenue, Brownwood, Texas 76801, referred to as LICENSEE, and
American Communications Enterprises, Inc., a Nevada corporation, with its
principal offices located at 7103 Pine Bluffs Trail, Austin, Texas 78729,
referred to as BROKER, agree:

*** TERM ***

Unless earlier terminated, this agreement shall be for a term of twelve months,
beginning on June 1, 1999.

Upon the approval of the Federal Communications Commission (FCC) to any transfer
or assignment of the operating authorities of the STATIONS, except to an entity
controlled by LICENSEE, this agreement shall terminate.

Licensee herein grants to Broker an irrevocable option to purchase the STATIONS
pursuant to the terms and conditions of a definitive Asset Purchase Agreement to
be negotiated and executed following the exercise of such option. Attached as an
exhibit of this agreement is a copy of the Letter of Intent that Licensee and
Broker have executed as a prelude to the negotiation and execution of that
definitive Asset Purchase Agreement as Exhibit "C".

*** FACILITIES ***

LICENSEE is the owner and permitee of stations KXYL AM/FM, Brownwood, Texas and
KSTA AM/FM, Coleman, Texas, and warrants that it is duly licensed and authorized
to broadcast the stations referred to above. All of the licenses and permits
required are in full force and effect. There is no pending or threatened action
by the FCC or other authorities to revoke, cancel, suspend, modify or limit the
licenses or permits or the stations. LICENSEE has no reason to believe that any
such license or permit may be restricted or modified so that the present
operation of the facility shall be limited.

The LICENSEE shall maintain the facility at its sole expense, and shall insure
that the facilities during the term of this agreement shall be operated in
accordance with first class broadcast practice, and shall be operated
consistently with the maximum authorized facilities by the FCC.

Pursuant to this agreement, BROKER purchases from LICENSEE air time as is
described herein.

LICENSEE shall make the stations' facilities available to BROKER for the
broadcast of programs either from the studios of the broker or from the
STATIONS.
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During the term of this agreement, BROKER shall have the right to utilize the
studios and premises of the LICENSEE, provided that BROKER shall return such
equipment to the LICENSEE in the same condition as received, ordinary wear and
tear excepted. BROKER shall be responsible for any damage to the equipment due
to any negligence by the BROKER or BROKER's employees.

*** TIME PURCHASED ***

BROKER herewith purchases the time from Monday, 12:01am to Saturday, 11:59pm,
and from Sunday at 6:00am to 11:59 PM.

Upon request by the LICENSEE, BROKER shall cede up to 4 additional hours per
week on Saturday or Sunday to the LICENSEE. In the event of such request, the
fee for the time purchased shall be reduced proportionately.

During each broadcast hour, BROKER shall provide sufficient time, not to exceed
15 seconds per hour, to permit a legal station identification to be inserted by
LICENSEE into the programming of the STATIONS, which time shall be as close to
the beginning of each hour as is possible. Upon request of the LICENSEE, BROKER
shall insert such station identifications in programming produced by it.

BROKER shall, upon the request and direction of the LICENSEE, broadcast a
message of up to 30 seconds duration in each hour indicating that the
programming has been purchased by the BROKER.

*** PAYMENT ***

BROKER shall pay LICENSEE for the broadcast of the programs provided for herein
the sum of $4000.00 (four thousand & no/100 dollars) or, at BROKER's sole
discretion, the equivalent of that fee in the form of up to 400 (four hundred)
30-second commercials to run during BROKER's scheduled programming time at BTA
(Best Times Available).

In the event that BROKER fails to pay or provide said commercials in the
aforementioned monthly amount, as agreed, the STATIONS shall be entitled to
cancel this agreement on 5 days notice.

In addition to the foregoing, BROKER shall reimburse LICENSEE for all costs
actually incurred by LICENSEE in the ordinary course of STATIONS business
including:

Studio Rent (Main Brownwood studios/offices of $1,300 per month) Managerial
Employee of LICENSEE (Not to exceed $1,000 per month - base salary) Second
Employee of LICENSEE (Not to exceed $432.50 per month) Utilities (Electric,
Telephone-Long Distance - only for operation of STATIONS) Insurance (Existing
station liability policies) Existing Monthly Note Payments ($2,150 [Van Horn],
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$2,395 [CTC], $1,000 [Texas Bank-Coleman], and the prorated share of the
existing personal loan of LICENSEE on a Dodge pickup truck and a RV that is used
in station promotions with BROKER paying only the part attributable to the RV.)

BROKER shall reimburse LICENSEE for the foregoing expenses within ten (10) days
of the date on which LICENSEE provides BROKER with documentation evidencing the
expense or such other period of time as the parties may agree.

Notwithstanding the foregoing, it is expressly understood and agreed that BROKER
shall have no obligation to pay or reimburse LICENSEE for any obligation,
commitment or liability of the STATIONS, LICENSEE, management of LICENSEE or any
agent of LICENSEE incurred prior to June 1, 1999 for which the STATIONS for
which the STATIONS or LICENSEE has not been invoiced prior to June 1, 1999.

*** TERMINATION BY STATIONS ***

In the event of any material breach of this agreement by BROKER other than
payment, LICENSEE may terminate this agreement on 5 working days notice.
Provided, however, that if the breach is curable and LICENSEE shall have cured
the breach prior to the terminations effect, the breach shall be deemed to be
waived. However, LICENSEE may terminate this agreement on 2 working days notice
if the LICENSEE has previously breached the same covenant or duty.

*** SALES OF ADVERTISING BY THE BROKER ***

Subject to the terms and conditions of this agreement, the BROKER may sell
commercial or program time upon the STATIONS during the term of the agreement.
BROKER shall insert in all contracts, purchase orders and confirmations of sales
of commercials or programs a legend, in a form acceptable to the STATIONS, that
the time is being purchased from the BROKER, and that the agreement is not
directly with the LICENSEE of the STATIONS, and that the broadcasts are
contingent upon the continuation of this brokerage agreement.

*** RIGHT TO REJECT PROGRAMMING; RIGHT TO SUBSTITUTE MATERIAL JUDGED TO BE OF
GREATER PUBLIC IMPORTANCE ***

The LICENSEE shall have the right at any time to reject any program provided by
the BROKER if in the sole discretion of the LICENSEE, the programming is not
suitable for any reason or if in the judgment of the LICENSEE, which shall be
final, any program or portion thereof is in violation of any law or regulation.

In addition, the LICENSEE shall have the right to interrupt BROKER's programming
to broadcast any program, which the LICENSEE deems to be of greater public
importance.
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In the event of any interruption in programming due to the exercise of this
right, the LICENSEE shall refund or credit a proportionate portion of the fees
paid by BROKER. Included, as Exhibit "A" is a copy of LICENSEE's Broadcast
Station Programming Policy Statement that BROKER agrees to uphold.


*** LOGS ***

LICENSEE shall be solely responsible for the preparation of program logs, issues
list, the public file, and any other reports and logs which are required by FCC
regulations or other applicable laws and regulations. Upon the request of the
LICENSEE, BROKER shall provide to LICENSEE information concerning programs
broadcast by the BROKER, which are responsive to the public needs and interests
of the community.

BROKER shall provide any information reasonably requested by the LICENSEE in
order to enable the LICENSEE to prepare, file or maintain the records or reports
required by the FCC or other competent authorities.

*** PERFORMING RIGHTS ***

BROKER shall be solely responsible for the payment of ASCAP, BMI, SEASAC, or
other performing rights or copyright permissions related to the programming
provided by BROKER. BROKER will upon request of STATIONS provide proof of
obtaining such licenses and permissions.

*** MAIL ***

BROKER shall promptly provide any mail to LICENSEE which constitutes comments or
other materials related to the stations' programming.

*** POLITICAL ADVERTISING ***

BROKER shall cooperate with LICENSEE in complying with rules of the FCC
regarding political advertising. BROKER shall provide correct information
concerning its rates to LICENSEE to assist LICENSEE in compliance with political
advertising regulations.

In the event that the LICENSEE requires inventory in order to comply with FCC or
other regulations, LICENSEE shall inform BROKER of such requirements as early as
is possible. BROKER shall upon request of the LICENSEE, release inventory as is
required to fulfill such obligations. The decision of LICENSEE as to the
necessity of release of time shall be final. Any sums collected from such
released inventory shall be paid over to BROKER upon collection.
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*** COMPLIANCE WITH SECTIONS 508 and 317 OF THE COMMUNICATIONS ACT ***

BROKER shall not accept any compensation, gift or gratuity unless the provider
or payer of such compensation, gift or gratuity is identified on the air as is
required by the regulations of the FCC and other applicable regulations.

Upon request of the LICENSEE, BROKER shall provide its affidavit of compliance,
and, upon the direction of the LICENSEE the BROKER shall obtain affidavits as to
such compliance for its employees and agents. Attached is this Agreement as
Exhibit "B" is a copy of the proposed Anti-Payola/Plugola Affidavit that will be
used by Broker.

*** INDEMNIFICATION ***

BROKER will indemnify and hold LICENSEE harmless against all claims or liability
for libel, slander, defamation, or other claims related to or arising out of the
broadcasts of the BROKER. This duty shall survive any termination of this
agreement.

*** INTERRUPTION OF NORMAL OPERATIONS ***

In the event that the STATIONS suffers any degradation to their transmission
facilities, LICENSEE shall immediately inform BROKER of this fact and shall, in
good faith and within the normal industry standard and practices, restore the
maximum authorized facilities with all possible expedition. LICENSEE shall be
entitled to a proportional credit for any time in which the STATIONS are off the
air.

In the event that the facilities will require more than 48 continuous hours to
repair if the repairs are done in accordance with usual standards of diligence
and dispatch, BROKER shall have the option to terminate this agreement, or, to
accept liquidated damages.

The parties recognize that the losses in the event of a cessation of
broadcasting for long term repairs which may be incurred by the BROKER are
difficult to set exactly since under this agreement the BROKER contemplates
sales of time in each hour at varying rates, and therefore, as liquidated
damages and not as a penalty, shall allow a credit to the LICENSEE in the sum of
twice the proportional refund of the broadcast time lost.

BROKER shall permit the STATIONS to conduct routine maintenance or repairs
during the experimental period of Midnight to 6am as is required by the STATIONS
without a proportional refund, provided that advance notice is given and that
such routine maintenance does not require more than 2 such time periods per
month.


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*** RESPONSIBILITY FOR EXPENSES AND AUTHORITY TO
BIND THE PARTIES ***

The BROKER shall be solely responsible for the payment of all of the salaries,
taxes, insurance and other costs related to the production of their program.
BROKER shall have no authority to bind the STATIONS. This agreement is solely
for a purchase and sale of broadcast time, and no joint venture, partnership or
relationship of other than vendor and purchaser is created herein. The STATIONS
shall be solely responsible for the payment of its employees, including all
employees who are necessary for the broadcast of STATIONS' signal and its
general manager.

LICENSEE shall be responsible for the operating expenses of the LICENSEE,
including payment of utilities, taxes, FCC filings and maintenance of the
transmission facilities.

BROKER shall not be responsible for any of LICENSEE's agreements or contracts
unless other noted in writing in an agreement signed by both LICENSEE and
BROKER.

*** RIGHT OF USE OF PROGRAMS ***

The BROKER shall have the sole right of use of the programs, which it produces,
including the right to rebroadcast the same, provided that the BROKER shall
eliminate any reference to the STATIONS.

*** FUTURE ADVERSE REGULATIONS, DECISIONS OR LAWS ***

This agreement is contingent upon the continuation of regulation of time
brokerage agreements in their present form (47 CFR 73.4267; see also 82 FCC 2d
107).

In the event of an adverse change in the laws or regulations related to
broadcasting or time brokerage occur, which in the opinion of legal counsel for
the LICENSEE, makes the present agreement illegal or untenable of performance,
the parties shall in good faith renegotiate the agreement to bring the same into
compliance with the altered regulations before their effective date. In the
event that the parties do not agree, this agreement may be canceled by either
party on 30 days notice without further liability.

In the event that any court or administrative body conduct an adjudicative
process in regard to the continuation of the LICENESEE's license to operate the
STATIONS, or, issues a challenge or complaint concerning this agreement, or
orders the termination of this agreement, or a material and adverse change to
this agreement, the BROKER and LICENSEE shall each at their own expense defend
this agreement. The parties shall cooperate and diligently defend this
agreement. In the event of an adverse ruling, either party may terminate this
agreement, without further liability.

After an adverse ruling, BROKER shall have the option, at its sole expense, to
seek further appellate review of the rulings. However, unless a stay is granted
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by competent authority, LICENSEE may terminate this agreement upon such ruling
without further liability.

*** SPECIFIC PERFORMANCE ***

The parties agree that damages are not a sufficient remedy for any losses
suffered by the BROKER in the event of a material breach by the STATIONS. BROKER
shall have the right to obtain a decree of specific performance of this
agreement.

*** RIGHT TO ASSIGN ***
The rights herein may not be assigned by BROKER, nor may BROKER sub-broker the
time herein, without the prior written consent of LICENSEE, with the exception
of weekend programming (defined as Friday afternoons at 5PM through 6AM Monday
mornings) on KXYL AM. BROKER shall have the right to sub-broker that allotted
time.

*** TITLE ***

LICENSEE shall maintain good and marketable title to the assets and properties
necessary to the operation of the STATIONS. LICENSEE may not pledge or encumber
the same during the term of this agreement, unless such pledge or lien is
subordinate to the rights contained in this agreement. This provision shall not
apply to liens or pledges in effect as of the date of the execution of this
agreement.

*** ENTIRE AGREEMENT ***

This is the entire agreement between the parties, with any exhibits attached,
and this agreement may not altered except in writing by both parties. This
agreement will be construed and executed under the laws of the State of Texas.



___/s/ Phil Watts______________________________ Date:__5-17-99___________

Phil Watts, President, Watts Communications, Inc. (LICENSEE)



___/s/ Dain L. Schult___________________ Date:_______5-17-99____________

Dain L. Schult, President, American Communications Enterprises, Inc. (BROKER)

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EXHIBIT A
BROADCAST STATION PROGRAMMING POLICY STATEMENT
Broker agrees to cooperate with Licensee in the broadcasting of programs of the
highest possible standard of excellence, and for this purpose to observe the
following regulations in the preparation, writing and broadcasting of its
programs.

1. NO PLUGOLA OR PAYOLA. Except for commercial material aired in compliance
with 47 CF.R ss. 73.1212, Broker shall not receive any consideration in
money, goods, services, or otherwise, directly or in directly (including
receipt by relatives of Broker, its partners, agents, or employees) from
any person or company for the presentation of any programming over the
Stations, without reporting the same to Licensee's General Manager.
The commercial mention of any business activity or '@p I ug" for any
commercial, professional, or other related endeavor, except where
contained in an actua I commercial message or program of a sponsor, is
prohibited.

II. NO LOTTERIES. Announcements giving any information about lotteries or
games, to the extent, that such announcements are prohibited by federal or
state law or regulation, are prohibited.

III. ELECTION PROCEDURES. At least fifteen (I 5) days before the start of any
primary or general election campaign, Broker will clear with Licensee's
General Manager the rates that Broker will charge for advertising time
to be sold on the Stations to legally-qualified candidates for
election to public office and/or to their supporters, in order to make
certain that the rates charged are in conformance with applicable law and
station policy.

IV. REOUIRED ANNOUNCEMENTS. Brokershallbroadcast(i.)anannouncementinaform
satisfactory to Licensee at the beginning and at the end of each day's
transmissions by the Stations and at the beginning of each hour during
the Stations' operations, to identify the Stations, and (ii) any
other announcements that may be required by law, regulation, or
Licensee policy.

V. NO ILLEGAL ANNOUNCEMENTS. No announcements or promotion prohibited by
federal or state law or regulation shall be made over the Station. Any
game, contest or promotion relating to or to be presented over the
Stations must be fully stated and explained in advance to Licensee who
reserves the right in its sole discretion to reject any game, contest, or
promotion.

VI. LICENSE DISCRETION PAPAMOUNT. In accordance with Licensee's
responsibility under the Act and the rules and regulations of the FCC,
Licensee reserves the right to reject or to terminate any advertising
proposed to be presented or being presented over the Stations which is in
conflict with Station policy or which in Licensee's or its General
Manager's sole judgment would not serve the public interest.

Licensee may waive any of the foregoing regulations in specific instances,
if, in its opinion, the Stations will remain in compliance with all
applicable laws, rules, regulations, and policies and if broadcasting
in the public interest will be served. In any case where questions of
policy or iiiterpretati-on arise', Broker should submit such questions
to Licensee for decision before making any comniliments In connection
therewith.

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EXHIBIT B
FORM OF PAYOLA AFFIDAVIT
ANTI-PAYOLA/PLUGOLA AFFIDAVIT

________________________ , being first duty swom, deposes and says as follows:

1. He/she is_____________________
(Title)

2. He/she has acted in the above capacity since__________________________.

3. No matter has been broadcast by Station _____ for which service, money, or
other valuable consideration has been directly or indirectly paid or
promised to, or charged, or accepted by him/her from any person, which
matter at the time so broadcast has not been announced or otherwise
indicated as having been paid for or fumished by such person.

4. So far as ______________________ is aware, no matter has been broadcast by
Station ______ for which service, money or other valuable consideration
has been directly or indirectly paid, or promised to, or charged or
accepted by Station ____ or by an independent contractor engaged by
Station ______ in furnishing programs from any person, which matter at the
time so broadcast has not been announced or otherwise indicated as having
been paid for or furnished by such person.

_________________________
Afflant

Subscribed and sworn to me this______day of _____, 1999

____________________________
Notary Public
My Commission expires ________________________
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EXHIBIT C
AMERCIAN COMMUNICATIONS ENTERPRISES, INC.

Page 1 of 1
April 16, 1999

Mr. Phil Watts, President
Watts Communications, Inc.
#1 Texas Avenue
Brownwood, Texas 76804

Re: Acquisition of KXYL AM/FM, Brownwood, Texas and KSTA AM/FM, Coleman,
Texas

Dear Mr. Watts:

The purpose of this letter is to express our mutual intent with respect to
the acquisition by American Communications Enterprises, Inc., a Nevada
corporation, ("Buyer"), of substantially all of the assets of Watts
Communications, Inc, a Texas corporation ("Seller"), which will include radio
stations KXYL AM and FM in Brownwood, Texas and KSTA AM and FM, Coleman, Texas
(the "Stations"). In addition to the Stations, the assets to be purchased would
include the names under which the Stations have operated, both tangible and
intangible assets, two (2) station office/studio buildings (one located in
Brownwood and one located in Coleman) and the real estate upon which they are
located, broadcasting equipment, broadcasting towers and transmitters, any and
all applicable STL equipment and STL licenses, station vehicles, station
trailers, station cookers, office equipment and furnishings, accounts
receivable, goodwill and all other assets, including all necessary licenses and
permits issued by the Federal Communications Commission ("FCC") associated with
ownership or operation of the Stations, except cash and cash equivalents
(collectively, the "Assets"). Although the form of the transaction may be
changed to accommodate the needs of the parties, it is proposed that the
transaction would be effected in the manner and on the terms generally outlined
in this letter.

1 Agreement and Purchase Price. Seller, its shareholder(s)and
Buyer promptly will endeavor to negotiate and execute a definitive
purchase agreement (the "Agreement") pursuant to which Seller
will sell the Assets to Buyer. The consideration to be received
by Seller would be as follows:

$1,050,000 would be paid in immediately available funds on the date
upon which the transaction contemplated by the Agreement are
consummated (the "Closing Date" and such consummation the
"Closing"),

$250,000 would be paid in immediately available funds on the date
upon which the transaction contemplated by the Agreement are
consummated in consideration for Seller's and its shareholders'
covenants not to compete with Buyer,

$325,000 would be paid pursuant to a subordinated convertible
promissory note (the "Convertible Note") issued by the Buyer, and

Buyer's assumption of certain assumed liabilities of Seller as
outlined in Section 2 below.

The Convertible Note shall (i) bear 8% interest, shall be due and
payable quarterly after the Closing, until converted, and (ii)
provide for conversion by Seller (at its sole discretion) into
shares of Buyer's common stock at the market value of that stock as
of the date of conversion of this note after the Closing. The
Convertible Note, while in existence, shall be fully subordinated to
any and all of Buyer's senior debt.
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The aggregate amount of purchase price payable by Buyer to Seller on
the Closing Date will be adjusted down on a dollar for dollar basis
for the aggregate amount as of the Closing Date of:

(i) earnest money previously paid by Buyer,

(ii) the aggregate amount as of the Closing Date of any liabilities with
respect to the Stations and the business of the Seller, except to
the extent included in an assumed liabilities schedule agreed to by
Buyer,

(iii) liabilities underlying Licenses (as defined below) against or
otherwise affecting the Assets and,

(iv) any amounts expended or incurred by Buyer, in excess of amounts
agreed to pursuant to this letter for filing fees associated with
the assignments of FCC Authorizations.

2 Title to Assets. The Agreement will provide that Seller must deliver
to Buyer good and marketable title to the Assets free and clear of
all liens, security interests, mortgages, encumbrances, judgments
and other adverse claims (collectively, "Liens"). Buyer will assume
no liabilities except for liabilities specified as assumed
liabilities in the Agreement.

3 Non-Competition. The Agreement will contain covenants pursuant to
which Seller, its shareholders and affiliates agree not to use or
disclose confidential or proprietary information relating to Buyer,
or the Assets and businesses conducted therewith not to interfere
with the business relationships of the Stations and Buyer, including
those with employees, suppliers and customers and not to compete
with the Stations or Buyer in the radio broadcasting business within
the total signal range of the Stations for three years after the
Closing Date.

4 Representations and Warranties. The Agreement will contain the terms
and conditions described in this letter and those that would be
customary for a transaction of the type contemplated. The Agreement
will provide for written disclosure of comprehensive information
concerning Seller, the Assets and any related liabilities,
including, but not limited to, disclosure regarding the conditions
of the Assets, contingent liabilities, litigation, employee
disputes, and status of all licenses and financial statements.

5 Indemnification. Seller and its shareholders shall indemnify and
hold harmless Buyer and its agents, employees, officers, directors
and shareholders (the "Indemnities") from all claims, damages,
liabilities, expenses and judgments suffered by, recovered from or
asserted against the Indemnitees which arise from any breach by
Seller of any representation, warranty, covenant or agreement set
forth in the Agreement. The Agreement shall provide for the offset
against the amounts due to the Seller and/or such shareholders, for
any amounts for which the Indemnitees are entitled to be indemnified
pursuant to the indemnification provisions of the Agreement.

6 Conditions to Closing. Buyer's obligation to close the transactions
will be conditioned upon obtaining financing by for the acquisition
of the Assets by Buyer on terms reasonably satisfactory to Buyer,
the obtaining of any governmental, regulatory or other consents or
approvals necessary or appropriate to be obtained before the Closing
Date, complete release of any and all Liens against the Assets the
continued accuracy and truth of the representations and warranties
of the Seller and its shareholders on the Closing Date and the
tender to Buyer of good and marketable title to the Assets free and
clear of all Liens.
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7 Access. Buyer and its officers, attorneys, accountants and
authorized representatives are hereby granted the right during
normal business hours, to inspect the assets, properties, books and
records of Seller relating to the Assets, and to consult with the
officers, directors, employees, suppliers, customers, creditors,
agents, accountants and attorneys of Seller concerning the Assets
and ownership and operation thereof, as long as such access is not
unreasonably disruptive to its operations. Such inspections may
reasonably include, for example, environmental and other physical
inspections of the Assets review of the books, records of account,
tax records, and stock or other ownership books and records of
Seller relating to the Assets and a review of records of corporate
proceedings, contracts, trademarks, FCC filings, correspondence and
other records containing FCC authorizations to own and operate the
Stations and other business activities and matters in which Buyer
may have an interest in light of the transactions contemplated by
this letter.

Buyer agrees to maintain all information it learns from such
inspections in confidence and will not disclose such information
except to its officers, directors, employees, attorneys,
accountants, creditors, lenders or prospective lenders and their
attorneys, and other authorized representatives unless such
information is or becomes public knowledge through no fault of
Buyer.


8 Standstill. Seller and Buyer will cease as of the date of execution
of this Letter Agreement through July 12, 1999 (the "Standstill
Period"), any negotiations for the sale of Seller, its capital stock
or any material portion of its assets, including, without
limitation, the Stations. Neither Seller, Buyer nor their respective
agents shall during the Standstill Period in any way contact,
negotiate or contract with any other corporation, entity or other
form of business, or any individual concerning any purchase or sale
of capital stock, merger, reorganization, sale of material assets or
any other form of disposition or change in status quo of the
ownership of the Seller, the Stations or any material portion of the
assets of the Seller.

The purchase price payable by Buyer to Seller on the Closing Date
shall be reduced by the amount of Earnest Money paid by Buyer to
Seller upon execution of an Asset Purchase Agreement. Further, if
Buyer has tendered to Seller the Earnest Money and the Closing has
not occurred before October 12, 1999, then either (i) Seller shall
promptly refund the Earnest Money to Buyer if all of the conditions
set forth in Section 6 above have not occurred and Seller is unable
to demonstrate on October 12, 1999 that it is ready, willing and
able to cause the occurrence of such conditions on October 12, 1999.

9 Press Release. Except as mutually agreed in writing, neither any of
Buyer, Seller nor any of their respective affiliates or agents shall
issue any press release or public announcement of the execution of
this letter or the Agreement, or the transactions contemplated
hereby or thereby.

10 Termination Expenses. While it is understood that this letter does
not (except as specifically provided in Section 8) constitute a
binding agreement between the parties hereto, it does set forth the
understanding in principle and present intention of the parties
hereto to enter into the Agreement providing for the above
understandings upon terms and conditions mutually acceptable to all
parties. Termination of negotiations by Seller on the one hand, or
by Buyer on the other, prior to execution of the Agreement shall be
without liability to the other party, except as may arise under
Sections 8 or 9 above, this Section 10 or Section 11 below. Buyer
and Seller will equally bear the expense associated with the fee for
filing the FCC Assignment Application covering the transactions
contemplated hereby. Except as otherwise provided in this Section10,
any and all attorneys' fees, brokerage commissions or any other
expenses incurred by any party in connection with this letter, the
Agreement or the transactions contemplated hereby or thereby shall
be borne by the party incurring such fees or other expenses.
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Seller shall bear the costs of obtaining environmental inspections
and remediation in respect of such real property. Any amounts
expended by Buyer, which are payable by Seller pursuant to this
letter or the Agreement, to cover such costs shall be deducted from
the cash consideration otherwise payable by Buyer to Seller on the
Closing Date. This letter shall be governed by the internal laws,
and not the laws of conflict, of the State of Texas.

11 Brokers. To the extent that Buyer or Seller or any of their
respective directors, officers, or agents have employed any broker,
agent or finder or incurred any liability for any brokerage fees,
agent's fees, commissions or finder's fees in connection with this
letter, the Agreement or the consummation of the proposed
transaction, such party shall be solely liable for any of such fees.

If the foregoing constitutes a basis upon which we may proceed with
actions intended to result in the execution of the Agreement, please cause this
letter to be executed by Seller and all of its shareholders, and return it to
the undersigned at your earliest convenience. This offer will expire unless
accepted by Seller in the foregoing manner before 5:00 p.m., Austin, Texas time,
on April 23, 1999.

Very truly yours,

American Communications Enterprises, Inc.



/s/ Dain L. Schult
By: Dain L. Schult, President

AGREED TO AND ACCEPTED BY:

Watts Communications, Inc.


By: /s/ Phil Watts


Printed Name and Title:__Phil Watts_________________

Date Signed:____4/16/99________________

All Shareholders of Watts Communications:

Name:___Phil Watts___________________________

Date Signed:______4/16/99_______________

Name:______________________________

Date Signed:_____________________
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