-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OhzbGXWugqSA4y/mAQMMws2zG2zLUPt9fELz2yck6YRMrzGpiaHZQYXRCUW9ZNCf 2fR0CtMnWXlJWDfBD8a+Zw== /in/edgar/work/0000950152-00-007947/0000950152-00-007947.txt : 20001115 0000950152-00-007947.hdr.sgml : 20001115 ACCESSION NUMBER: 0000950152-00-007947 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGENT COMMUNICATIONS INC CENTRAL INDEX KEY: 0000913015 STANDARD INDUSTRIAL CLASSIFICATION: [4832 ] IRS NUMBER: 311492857 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-46435 FILM NUMBER: 764455 BUSINESS ADDRESS: STREET 1: 50 EAST RIVERCENTER BOULEVARD STREET 2: SUITE 180 CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6062920030 MAIL ADDRESS: STREET 1: 50 EAST RIVERCENTER BLVD STREET 2: SUITE 180 CITY: COVINGTON STATE: KY ZIP: 41011 10-Q 1 l84957ae10-q.txt REGENT COMMUNICATIONS, INC. FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ______________ COMMISSION FILE NUMBER 0-15392 REGENT COMMUNICATIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 31-1492857 ------------------------------- ------------------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 100 EAST RIVERCENTER BOULEVARD 9TH FLOOR COVINGTON, KENTUCKY 41011 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (859) 292-0030 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $.01 par value - 34,049,727 shares outstanding as of October 31, 2000 2 REGENT COMMUNICATIONS, INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2000 INDEX PART I FINANCIAL INFORMATION Page Number ------ Item 1. Financial Statements Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2000 (unaudited) and September 30, 1999 (unaudited) ....................... 3 Condensed Consolidated Balance Sheets as of September 30, 2000 (unaudited) and December 31, 1999 ................. 4 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2000 (unaudited) and September 30, 1999 (unaudited).................................... 5 Notes to Condensed Consolidated Financial Statements (unaudited) ..... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ...................................... 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk...... 16 PART II OTHER INFORMATION Item 1. Legal Proceedings............................................... 16 Item 2. Changes in Securities and Use of Proceeds ...................... 16 Item 6. Exhibits and Reports on Form 8-K ............................... 16 -2- 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended September 30, September 30, -------- -------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Gross broadcast revenues $12,871,887 $ 7,118,643 $32,579,616 $ 18,747,504 Less agency commissions (1,180,498) (488,266) (2,750,598) (1,281,834) ------------ ------------ ------------ ------------ Net broadcast revenues 11,691,389 6,630,377 29,829,018 17,465,670 Station operating expenses 7,951,896 4,919,525 20,649,192 13,066,210 Depreciation and amortization 2,125,792 1,019,842 5,394,645 2,688,796 Corporate general and administrative expenses 1,087,283 540,230 3,218,734 1,699,360 ------------ ------------ ------------ ------------ Operating income 526,418 151,140 566,447 11,304 Interest expense 596,005 942,838 3,074,019 2,429,645 Interest (income) (464,409) (10,534) (1,350,615) (34,555) Write-down of carrying value of assets held for sale -- -- -- 149,542 (Gain) on sale / exchange of radio stations (17,720,355) -- (17,646,216) (100,000) Other expense, net 136,442 9,058 219,943 48,039 ------------ ------------ ------------ ------------ Income(loss) before income taxes and extraordinary items 17,978,735 (790,222) 16,269,316 (2,481,367) Income tax expense -- -- -- -- ------------ ------------ ------------ ------------ Income(loss) before extraordinary item 17,978,735 (790,222) 16,269,316 (2,481,367) Extraordinary loss on extinguishment of debt, net of taxes -- -- (1,114,124) -- ------------ ------------ ------------ ------------ Net income (loss) $17,978,735 $ (790,222) $ 15,155,192 $ (2,481,367) ============ ============ ============ ============ Income (loss) applicable to common shares: Net income (loss) $17,978,735 $ (790,222) $ 15,155,192 $ (2,481,367) Preferred stock dividend requirements -- (1,415,844) (628,568) (3,554,741) Preferred stock accretion -- -- (26,611,258) (422,103) ------------ ------------ ------------ ------------ Income (loss) applicable to common shares $17,978,735 $ (2,206,066) $(12,084,634) $ (6,458,211) ============ ============ ============ ============ Basic income (loss) per common share: Income (loss) before extraordinary items $ .52 $ (9.19) $ (0.35) $ (26.91) Extraordinary items -- -- (0.04) -- ------------ ------------ ------------ ------------ Basic net income (loss) per common share $ .52 $ (9.19) $ (0.39) $ (26.91) ============ ============ ============ ============ Diluted income (loss) per common share: Income (loss) before extraordinary items $ .51 $ (9.19) $ (0.35) $ (26.91) Extraordinary items -- -- (0.04) -- ------------ ------------ ------------ ------------ Diluted net income (loss) per common share $ .51 $ (9.19) $ (0.39) $ (26.91) ============ ============ ============ ============ Weighted average number of common shares used in determining the earnings per share calculation: Basic 34,596,076 240,000 31,121,475 240,000 Diluted 35,414,967 240,000 31,121,475 240,000
The accompanying notes are an integral part of these financial statements. -3- 4 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2000 December 31, 1999 --------------- ------------------ (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,517,501 $ 3,410,410 Accounts receivable, less allowance for doubtful accounts of $395,000 in 2000 and $203,000 in 1999 8,447,383 4,681,802 Note receivable from sale of radio stations 2,000,000 -- Other current assets 495,690 236,996 Assets held for sale -- 2,000,000 ------------- ------------- Total current assets 12,460,574 10,329,208 Property and equipment, net 21,070,308 12,373,274 Intangible assets, net 218,004,389 58,869,287 Escrow deposits on station acquisitions and dispositions 462,500 -- Other assets, net 1,820,883 2,155,386 ------------- ------------- Total assets $ 253,818,654 $ 83,727,155 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 1,268,260 $ 1,061,757 Accrued expenses 2,140,669 1,879,135 Interest payable 515,696 111,194 Current portion of long-term debt 60,000 62,500 ------------- ------------- Total current liabilities 3,984,625 3,114,586 ------------- ------------- Long-term debt, less current portion 43,525,000 25,331,307 Warrants and other long-term liabilities 2,338,328 3,825,225 ------------- ------------- Total liabilities 49,847,953 32,271,118 Redeemable preferred stock: Series A convertible preferred stock, $5.00 stated value, 620,000 shares authorized; -0- and 620,000 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 4,580,109 Series B senior convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; -0- and 1,000,000 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 7,322,054 Series C convertible preferred stock, $5.00 stated value, -0- and 400,640 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 670,318 Series D convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; -0- and 1,000,000 issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 7,081,441 Series F convertible preferred stock, $5.00 stated value, 4,100,000 shares authorized; -0- and 4,100,000 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 29,202,566 Series G convertible preferred stock, $5.00 stated value, 1,800,000 shares authorized; -0- and 372,406 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 2,608,446 Series H convertible preferred stock, $5.50 stated value, 2,200,000 shares authorized; -0- and 2,181,817 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 14,658,805 Series K convertible preferred stock, $5.50 stated value, 4,100,000 shares authorized; -0- and 3,545,453 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 23,141,613 ------------- ------------- Total redeemable preferred stock -- 89,265,352 Stockholders' equity (deficit): Preferred stock: Series C convertible preferred stock, $5.00 stated value, 4,000,000 shares authorized; -0- and 3,382,980 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 1,445,126 Series E convertible preferred stock, $5.00 stated value, 5,000,000 shares authorized; -0- and 447,842 shares issued and outstanding at September 30, 2000 and December 31, 1999, respectively -- 2,239,210 Common stock, $.01 par value, 100,000,000 shares authorized; 35,158,279 issued and 34,688,127 outstanding at September 30, 2000 and 240,000 shares issued and outstanding at December 31, 1999 (Note 3) 351,584 2,400 Treasury shares, 470,152 and -0- shares, at cost, at September 30, 2000 and December 31, 1999, respectively (2,726,461) -- Additional paid-in capital 259,261,312 -- Retained deficit (52,915,734) (41,496,051) ------------- ------------- Total stockholders' equity (deficit) 203,970,701 (37,809,315) ------------- ------------- Total liabilities and stockholders' equity $ 253,818,654 $ 83,727,155 ============= =============
The accompanying notes are an integral part of these financial statements. -4- 5 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September 30, --------------------------------------- 2000 1999 ------------- ------------ Cash flows from operating activities: Net cash provided by (used in) operating activities $ 2,560,655 $ (1,383,233) Cash flows from investing activities: Acquisitions of radio stations, net of cash acquired (148,538,858) (27,073,801) Proceeds from insurance on fire claim 97,897 -- Capital expenditures (1,289,481) (1,327,035) Proceeds from sale of radio stations -- 7,600,000 Escrow deposits on station acquisitions/dispositions ( 462,500) -- ------------- ------------ Net cash used in investing activities (150,192,942) (20,800,836) Cash flows from financing activities: Proceeds from long-term debt 44,000,000 16,500,000 Proceeds from issuance of common stock 156,937,723 -- Proceeds from the issuance of convertible preferred stocks -- 22,112,024 Payment on buyback of treasury shares (2,726,461) -- Payment of preferred stock dividends (7,296,324) -- Redemption of Series B convertible preferred stock, including dividends (5,856,575) -- Payment of notes payable -- (7,500,000) Principal payments on long-term debt (25,808,807) (5,162,500) Payments for deferred financing costs (1,904,021) (274,558) Payment of issuance costs (11,606,157) (1,844,255) ------------- ------------ Net cash provided by financing activities 145,739,378 23,830,711 ------------- ------------ Net increase (decrease) in cash and cash equivalents (1,892,909) 1,646,642 Cash and cash equivalents at beginning of period 3,410,410 478,545 ------------- ------------ Cash and cash equivalents at end of period $ 1,517,501 $ 2,125,187 ============= ============ Supplemental schedule of non-cash financing and investing activities: Common stock issued in conjunction with the acquisition of stations in Utica-Rome and Watertown, New York $ 850,000 -- Common Stock issued in conjunction with the acquisition of KZAP (FM) in Chico, California $ 2,687,000 -- Supplemental disclosure of cash flow information: Cash paid for interest $ 955,000 $ 3,117,542
The accompanying notes are an integral part of these financial statements. -5- 6 REGENT COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Regent Communications, Inc. (including its wholly-owned subsidiaries, "Regent") was formed to acquire, own and operate radio stations in medium-sized and small markets in the United States. The condensed consolidated financial statements of Regent have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown. All adjustments are of a normal and recurring nature except for those outlined in Notes 2, 3, 4 and 5. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. Results for interim periods may not be indicative of results for the full year. The December 31, 1999 condensed balance sheet was derived from audited financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in Regent's Form 10-K/A for the year ended December 31, 1999. 2. CONSUMMATED AND PENDING ACQUISITIONS AND DISPOSITIONS On March 1, 1999, Regent sold the FCC licenses and related assets used in the operations of WSSP (FM) in Charleston, South Carolina for approximately $1,600,000 in cash, resulting in a $100,000 gain which has been included in the consolidated Statement of Operations for the nine months ended September 30, 1999. On May 6, 1999, Regent consummated the acquisition of the FCC licenses and related assets used in the operations of WJON(AM), WWJO(FM) and KMXK(FM) in St. Cloud, Minnesota for approximately $12,700,000 in cash. The purchase was financed by the issuance of $5,082,000 of Series F convertible preferred stock and borrowings under Regent's senior reducing credit facility. Approximately $9,093,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 40-year period, and the remaining $3,607,000 was allocated to property and equipment. On August 1, 1999, Regent sold the FCC licenses and related assets used in the operations of KCBQ(AM) in San Diego, California for approximately $6,000,000 in cash. On September 1, 1999, Regent purchased the FCC licenses and related assets used in the operations of radio stations WXKC(FM), WRIE(AM) and WXTA(FM) in the Erie, Pennsylvania market for approximately $13,500,000 in cash. The purchase was financed by approximately $6,300,000 in proceeds from the issuance of Series H convertible preferred stock and the balance from borrowings under Regent's senior reducing credit facility. Approximately $12,400,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 40-year period. The remaining $1,100,000 was allocated to property and equipment and to a non-compete agreement. On October 15, 1999, Regent consummated the sale of the FCC licenses and related assets of KZGL(FM), KVNA(FM) and KVNA(AM) in Kingman, Arizona for approximately $5,400,000 in cash. On November 5, 1999, Regent sold the FCC licenses and related assets of KRLT(FM) and KOWL(AM) in the Lake Tahoe, California market for approximately $1,250,000 in cash. -6- 7 On January 28, 2000, Regent purchased the FCC licenses and related assets used in the operations of radio stations WODZ(FM), WLZW(FM), WFRG(FM), WIBX(AM) and WRUN(AM) in Utica-Rome, New York and WCIZ(FM), WFRY(FM), WTNY(AM) and WUZZ(AM) in Watertown, New York for approximately $43,825,000 in cash and 100,000 shares of Regent's common stock. Approximately $40,800,000 of the total purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 20-year period. The remaining $3,875,000 was allocated to property and equipment. On February 1, 2000, Regent purchased the FCC licenses and related assets used in the operations of radio stations KLAQ(FM), KSII(FM) and KROD(AM) in El Paso, Texas for approximately $23,500,000 in cash. Approximately $21,750,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 20-year period. The remaining $1,750,000 of the purchase price was allocated to property and equipment. On August 24, 2000, Regent completed an exchange agreement entered into with Clear Channel Broadcasting, Inc, Capstar Radio Operating Company and their affiliates. Under the agreement, Regent exchanged its eight stations serving the Mansfield, Ohio (2 FM/1 AM) and Victorville, California (3 FM/2 AM) markets plus approximately $80,465,000 in cash for ten stations serving the Grand Rapids, Michigan (3 FM/1 AM) and Albany, New York (4 FM/2 AM) markets. Approximately $110,069,000 of the purchase price was allocated to the FCC licenses and goodwill and is being amortized over a 20-year period. The remaining $5,208,000 of the purchase price was allocated to property and equipment. As a result of this transaction, Regent has recognized a gain on this exchange of approximately $17,700,000 which is reflected in the Consolidated Statement of Operations for the three months ended September 30, 2000. Effective on September 29, 2000, subject to the effectiveness of a Certificate of Merger to be filed with the California Secretary of State, Regent acquired radio station KZAP(FM) in Chico, California, by acquiring the stock of KZAP, Inc. in exchange for 233,333 shares of Regent's common stock with a market value of approximately $2,687,000 at March 29,2000, the date of the signing of the asset purchase agreement. Approximately $2,419,000 of the purchase price was allocated to the FCC licenses and is being amortized over a 20-year period. The remaining $268,000 of the purchase price was allocated to property and equipment. Regent has been providing programming and other services to KZAP(FM) under a time brokerage agreement since December 1, 1999. On September 30, 2000, Regent completed the sale of radio stations KZGL(FM), KVNA(AM) and KVNA(FM) in Flagstaff, Arizona to Yavapai Broadcasting Corporation for approximately $2,000,000. Regent recognized a note receivable for the $2,000,000 at September 30, 2000 which was collected on October 5, 2000. Yavapai had been providing programming and other services to the Flagstaff stations under a time brokerage agreement since May 1, 2000. The results of operations of the acquired businesses are included in Regent's financial statements since their respective dates of acquisition. -7- 8 The following unaudited pro forma data summarize the combined results of operations of Regent, together with the operations of the stations acquired in 1999 and 2000, but exclude the operations of the Lake Tahoe and Kingman stations disposed of in the fourth quarter of 1999 and the Flagstaff stations disposed in the third quarter of 2000, as though the acquisition and disposition of these operations had occurred at the beginning of each of the periods presented. Regent's 1999 dispositions of WSSP(FM) and KCBQ(AM) are not material to the results of Regent and, therefore, have not been excluded from the 1999 pro forma results.
Nine Months Ended September 30, ------------------------------- 2000 1999 ---- ---- (unaudited) (in thousands, except per share amounts) Net broadcast revenues $39,428 $38,314 Income before extraordinary items 19,328 5,427 Net income 18,214 5,427 Net loss per common share before extraordinary items: Basic and diluted $ (0.24) $ 0.08 Net loss per common share: Basic and diluted $ (0.27) $ 0.08
These unaudited pro forma amounts do not purport to be indicative of the results that might have occurred if the foregoing transactions had, in fact, been consummated at the beginning of the nine-month periods nor are they indicative of future operations. On June 21, 2000, Regent entered into an agreement to acquire by merger with StarCom, Inc. two FM and one AM radio stations serving the St. Cloud, Minnesota market for a total of $5,025,000 in cash. The purchase will be funded by borrowings under Regent's bank credit facility. Regent made an escrow deposit in the amount of $350,000. On July 1, 2000, Regent began providing programming and other services to the stations under a time brokerage agreement. Regent anticipates closing this transaction in the first quarter of 2001. On November 3, 2000, Regent entered into a definitive agreement to sell substantially all the assets of its three southern California radio stations (KTPI-FM and KAVC-AM licensed to Mojave and Tehachapi, and KOSS-FM licensed to Rosamond) to Concord Media Group of California, Inc. for approximately $13,500,000. Regent anticipates closing the disposition in 2001 following the receipt of FCC approval. 3. INITIAL PUBLIC OFFERING OF COMMON STOCK On January 28, 2000, Regent consummated an initial public offering of 16,000,000 shares of its common stock at an initial offering price of $8.50 per share. On February 7, 2000, the underwriters purchased an additional 2,400,000 shares of Regent's common stock upon exercise of their over-allotment option. Regent received total proceeds from completion of the offering, net of underwriter discounts, commissions and estimated expenses related to the offering, of $143,836,000. Of these proceeds, Regent used $67,325,000 to fund the acquisitions of stations in Utica-Rome and Watertown, New York and in El Paso, Texas; $27,052,000 to pay in full the amounts borrowed, including accrued interest and related fees, under its prior bank credit facility and fees -8- 9 related to its new bank credit facility; $7,296,000 to pay or reserve for payment accumulated, unpaid dividends on all series of convertible preferred stock converted into common stock; $5,857,000 to redeem all outstanding shares of its Series B convertible preferred stock, including accumulated unpaid dividends; and $1,513,000 to repurchase shares of its common stock from an affiliate of one of the underwriters in order to comply with rules of the National Association of Securities Dealers, Inc. Regent used the balance of the proceeds for working capital needs and the Clear Channel/Capstar transaction. In conjunction with the initial public offering of common stock, Regent redeemed 1,000,000 shares of its Series B convertible preferred stock, which constituted all outstanding shares of that series, for a redemption price of $5,857,000, being the original price paid for those shares of $5.00 per share plus accumulated, unpaid dividends on those shares. In addition, Regent required the conversion into common stock on a one-for-one basis of 15,775,839 shares of convertible preferred stock in accordance with the terms of the preferred stock. These shares represented the balance of Regent's outstanding shares of convertible preferred stock. Regent paid or has set aside for payment accumulated, unpaid dividends on those shares in the total amount of $7,296,000. Also in conjunction with the initial public offering, "put" rights associated with common stock purchase warrants issued in connection with the issuance of Regent's Series B and Series F convertible preferred stock were terminated. Warrants for 100,000 shares of Regent's common stock were exercised on March 20, 2000 (see Note 5). The remaining warrants, entitling the holders to purchase a total of 810,000 shares of Regent's common stock at $5.00 per share, remain outstanding. Regent had previously classified these warrants as long-term liabilities due to the associated "put" rights. The warrant liabilities as of December 31, 1999 were reclassified to additional paid in capital as of January 28, 2000. Also, from January 1, 2000 to January 28, 2000, approximately $1,500,000 was charged to interest expense to account for an increase in the fair value of these warrants. Regent adjusted the carrying values of its Series A, Series C, Series D, Series F, Series G, Series H, and Series K convertible preferred stock to fair value through January 28, 2000. This adjustment was recognized as a charge of $26,600,000 to retained deficit (since there was no additional paid-in capital) resulting in an adjustment to loss from continuing operations attributable to common stockholders. 4. LONG-TERM DEBT On January 27, 2000, Regent Broadcasting, Inc., a wholly-owned subsidiary of Regent Communications, Inc., as the borrower, entered into a credit agreement with a group of lenders which provides for a senior reducing revolving credit facility expiring December 31, 2006 with an initial aggregate revolving commitment of up to $125,000,000 (including a commitment to issue letters of credit of up to $25,000,000 in aggregate face amount, subject to the maximum revolving commitment available) and an additional revolving loan facility with a maximum aggregate amount of $50,000,000 available, subject to the terms of the credit agreement, which converts, after two years, to a term loan maturing December 31, 2006. Regent incurred $1,956,000 in financing costs related to this credit agreement, which are being amortized over the life of the agreement. This revolving credit facility is available for working capital and acquisitions, including related acquisition expenses. At September 30, 2000 there was approximately $82,000,000 of available borrowings under this credit facility. On August 22, 2000, Regent borrowed $44,000,000 under this facility to fund the Clear Channel asset exchange. On August 29, 2000, Regent paid down $1,000,000 against its outstanding borrowings. There were borrowings of $43,000,000 outstanding under this facility at September 30, 2000. -9- 10 On January 28, 2000, Regent paid off the outstanding debt, accrued interest and related fees totaling approximately $25,096,000 to the Bank of Montreal. The pay-off was completed using proceeds from an initial public offering of Regent's common stock, which was completed on January 28, 2000. This final paydown resulted in an extraordinary loss of approximately $1,114,000, net of income tax, from the write-off of deferred financing costs. 5. CAPITAL STOCK On January 28, 2000, Regent issued 100,000 shares of its common stock to principals of the sellers in conjunction with the acquisition of stations in the Utica-Rome and Watertown, New York markets. On March 20, 2000, Regent received $500,000 in cash and issued 100,000 shares of its common stock to CFE, Inc. upon the exercise of outstanding warrants issued in 1998 in connection with the issuance of Series B and F convertible preferred stock to its affiliate, General Electric Capital Corporation. Effective on September 29, 2000 and upon acceptance for filing by the Secretary of State of California of a Certificate of Merger, Regent will issue 233,333 shares of its common stock to a principal of the seller in conjunction with the acquisition of radio station KZAP(FM) in Chico, California. The total value of the acquisition is approximately $2,687,000. Based on the approval by Regent's Board of Directors of a program to buy back up to $10,000,000 of its common stock, during the third quarter of 2000 Regent began buying back shares of its common stock at certain market price levels. Regent acquired a total of 195,000 shares of its common stock in the third quarter for an aggregate purchase price of $1,213,125. Cumulative through October 31, 2000 Regent has acquired 833,400 shares of its common stock for an aggregate purchase price of $4,461,131. 6. EARNINGS PER SHARE SFAS 128 calls for the dual presentation of basic and diluted earnings per share("EPS"). Basic EPS is based upon the weighted average common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur if common stock equivalents were exercised. The effects of the assumed exercise of outstanding options to purchase 1,880,903 shares of common stock and warrants to purchase 890,000 shares of common stock are dilutive for the third quarter of 2000. There was no dilutive effect for the nine months ended September 30, 2000 or for either of the 1999 periods presented.
Three Months Ended Nine Months Ended Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999 -------------- -------------- -------------- -------------- Weighted Average Basic Common Shares 34,596,076 240,000 31,121,475 240,000 Dilutive effect of stock options and warrants 818,891 -- -- -- ---------- ------- ---------- ------- Weighted Average Diluted Common Shares 35,414,967 240,000 31,121,475 240,000 ========== ======= ========== =======
-10- 11 7. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 prescribes the accounting treatment for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. Regent may employ financial instruments to manage its exposure to fluctuations in interest rates. Regent does not hold or issue such financial instruments for trading purposes. In June 2000, the FASB issued SFAS 138, an amendment to SFAS 133. Regent will adopt SFAS 133 and related amendments, as required in the year 2001, and does not expect the impact of adoption to be material. The SEC issued Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which is effective for the fourth quarter of 2000. In SAB 101, the SEC staff expressed its views regarding the appropriate recognition of revenue with regard to a variety of circumstances, some of which are of particular relevance to Regent. Regent has evaluated SAB 101 and does not expect the impact of adoption to be material. In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Including Stock Compensation--an Interpretation of APB Opinion No. 25." FIN 44 provides guidance for certain issues that arose in applying APB Opinion No. 25, "Accounting for Stock Issued to Employees." Regent has adopted FIN 44, as required in the third quarter of 2000, and does not expect the impact of adoption to be material. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following discussion should be read in conjunction with the condensed consolidated financial statements. Results for the interim periods may not be indicative of the results for the full years. A comparison of the three and nine months ended September 30, 2000 versus September 30, 1999 follows: Our results from operations for the three and nine months ended September 30, 2000 showed significant increases in revenues and expenses over the same periods of 1999, primarily due to the acquisitions of stations in St. Cloud, Minnesota in May, 1999; Erie, Pennsylvania in September, 1999; Utica-Rome and Watertown, New York in January, 2000; and El Paso, Texas in February, 2000. COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2000 TO THREE MONTHS ENDED SEPTEMBER 30, 1999 Net broadcast revenues for the third quarter of 2000 increased by 76% from $6,630,377 to $11,691,388; station operating expenses increased 62% from $4,919,525 to $7,951,896; and depreciation and amortization increased 108% from $1,019,842 to $2,125,792. We experienced a 101% increase from $540,230 to $1,087,283 in corporate general and administrative expenses in 2000 compared to 1999 as a result of increasing the corporate infrastructure to support a larger, and also publicly held company. Interest expense decreased from $942,838 to $596,005 as a result of the payoff of our outstanding bank credit facility with proceeds from our initial public offering completed January 28, 2000. Interest income increased from $10,534 to $464,409 reflecting the income earned on the cash received from the initial public offering. -11- 12 We recognized a gain of $17,720,355 on the asset exchange completed with Clear Channel on August 24, 2000. For tax purposes this transaction was treated as a like kind exchange resulting in a deferred tax liability of approximately $2,200,000 and no tax provision. Other expense, net increased to $136,442 from $9,058, primarily as a result of time brokerage fees we are paying to the KZAP and STARCOM owners as we take over operating the respective radio stations. Basic income per common share for the third quarter of 2000 was $0.52. Excluding the gain recognized on the Clear Channel exchange transaction, basic earnings per share for the third quarter would have been $0.01. Comparison of per common share data for the third quarter of 2000 to that of the comparable 1999 quarter is not meaningful, as there were only 240,000 common shares outstanding at September 30, 1999. COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2000 TO NINE MONTHS ENDED SEPTEMBER 30, 1999 Net broadcast revenues for the first nine months increased over that of the 1999 period by 71% from $17,465,670 to $29,829,018; station operating expenses increased 58% from $13,066,210 to $20,649,192; and depreciation and amortization increased 101% from $2,688,796 to $5,394,645. Corporate general and administrative expenses increased 89% from $1,699,360 to $3,218,734, reflecting the increased infrastructure required to support a larger, and also publicly held company. Interest expense increased 27% from $2,429,645 to $3,074,019, reflecting the $1,494,000 increase in warrant liability, which was adjusted to fair market value as of January 28, 2000. This increase was partially offset by the payoff of our outstanding bank credit facility with proceeds from our initial public offering. Interest income increased to $1,350,615 from $34,555 as a result of the interest earned on cash received from the initial public offering. We recognized a gain of $17,646,216 on the sale/exchange of radio stations, primarily from the asset exchange transaction with Clear Channel. Other expense, net increased to $219,943 from $48,039, primarily as a result of the fees paid by us under time brokerage agreements with KZAP, Inc. and StarCom, Inc. The performance of a radio station group, such as ours, is customarily measured by its ability to generate broadcast cash flow. The term "broadcast cash flow" means operating income (loss) before depreciation and amortization and corporate general and administrative expenses, excluding barter activity. Although broadcast cash flow is not a measure of performance calculated in accordance with generally accepted accounting principles, we believe that broadcast cash flow is accepted by the broadcasting industry as a generally recognized measure of performance and is used by analysts who report publicly on the performance of broadcasting companies. Nevertheless, this measure should not be considered in isolation or as a substitute for operating income, net income, net cash provided by operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. During the third quarter of 2000 in comparison to the same period of 1999, our broadcast cash flow increased by 129% from $1,658,781 to $3,802,287. For the first nine months of 2000 compared to the same period of 1999, broadcast cash flows increased by 123% from $4,079,555 to $9,092,792. While acquisitions have affected the comparability of our 2000 operating results to those of 1999, we believe meaningful quarter-to-quarter comparisons can be made for results of operations for those markets in which we have been operating for five full quarters, exclusive of markets which we intend to sell. This group of comparable markets is currently represented by four markets and 15 stations. In these comparable markets, for the three months ended September 30, 2000 as compared to the same period in 1999, our net broadcast revenues, excluding barter revenues, increased 11.7% from $2,947,068 to $3,292,560 and broadcast cash flow increased 25.9% from $779,874 to $981,857. -12- 13 LIQUIDITY AND CAPITAL RESOURCES In the nine months ended September 30, 2000, we generated net cash from operations of $2,560,655 compared with usage of $1,383,233 for the first nine months of 1999. For the nine months ended September 30, 2000, net cash used in investing activities amounted to approximately $150,193,000 as compared to approximately $20,801,000 for the nine months ended September 30, 1999. The primary reason for the increase in 2000 were the acquisitions of the El Paso, Texas, Utica-Rome, Watertown and Albany, New York and Grand Rapids, Michigan radio stations. For the nine months ended September 30, 2000, proceeds from the initial public offering of our common stock provided all the funds necessary to pay off outstanding long-term debt under our former credit facility, redeem our Series B convertible preferred stock, pay all accrued unpaid preferred dividends, fund (together with borrowings under our current credit facility) the acquisitions of stations in El Paso, Texas, Utica-Rome, Watertown and Albany, New York and Grand Rapids, Michigan and meet requirements for ongoing operating activities and capital expenditures. As a result, we experienced a net decrease in cash for the first nine months of 2000 of $1,892,909 as compared to an increase of $1,646,642 for the same period in 1999. On January 28, 2000, the outstanding balance under our former bank credit facility, including accrued interest and related fees, totaling approximately $25,096,000, was paid and the credit facility was terminated. In conjunction with the termination of the credit facility, approximately $1,114,000 of deferred financing fees relating to that credit facility were written off in the first fiscal quarter of 2000 and are reflected as an extraordinary item in our Statement of Operations for the nine months ended September 30, 2000. On January 27, 2000, we entered into a new $125,000,000 senior secured seven-year reducing revolving bank credit facility. This facility also provides for an additional $50,000,000 on substantially the same terms to fund future acquisitions. This additional $50,000,000 borrowing capability is available during the first 24 months of the facility and thereafter will convert to a term loan maturing December 31, 2006. This bank credit facility permits the borrowing of available credit for working capital requirements and general corporate purposes, including transaction fees and expenses, and to fund pending and permitted future acquisitions. The facility permits us to request from time to time that the lenders issue letters of credit in an amount up to $25,000,000 in accordance with the same lending provisions. The commitment, and our maximum borrowings, will reduce over five years beginning in 2002 as follows: December 31, Commitment Amount 2001........................................$125,000,000 2002.........................................106,250,000 2003..........................................87,500,000 2004..........................................62,500,000 2005..........................................37,500,000 2006.................................................-0- The $25,000,000 letter of credit sub-limit also reduces proportionately but not below $15,000,000. Mandatory prepayments and commitment reductions will also be required from certain asset sales, subordinated debt proceeds, excess cash flow amounts and sales of equity securities. Under our bank credit facility, we are required to maintain a minimum interest rate coverage ratio, minimum fixed charge coverage ratio, maximum corporate overhead, and a maximum financial leverage ratio and to observe negative covenants customary for facilities of this type. Borrowings under our credit facility bear interest at a rate equal to (a) the higher of the rate announced or published publicly from time to time by the agent as its corporate base of interest or the Overnight Federal Funds Rate plus 0.5%, in -13- 14 either case plus the applicable margin determined under the credit facility, or (b) the reserve-adjusted Eurodollar Rate plus the applicable margin. As of September 30, 2000, borrowing under the credit facility bore interest at the rate of 7.87% per annum. We are required to pay certain fees to the agent and the lenders for the underwriting commitment, administration and use of the credit facility. Our indebtedness under this credit facility is collateralized by liens on substantially all of our assets and by a pledge of our operating and license subsidiaries' stock and is guaranteed by these subsidiaries. As of September 30, 2000, we had borrowings under this facility of $43,000,000. On January 28, 2000, we closed the initial public offering of 16,000,000 shares of our common stock. On February 7, 2000, the underwriters exercised their overallotment of an additional 2,400,000 shares. All shares were sold at $8.50 per share, resulting in gross proceeds of $156,400,000. Net proceeds were approximately $143,836,000. Approximately $27,052,000 of the net proceeds were used to repay all borrowings, accrued interest and related fees under our former bank credit facility along with the fees associated with entering into the new bank credit facility. Approximately $67,325,000 of the net proceeds were used to fund our acquisitions in Utica-Rome and Watertown, New York, which closed on January 28, 2000, and our acquisition in El Paso, Texas, which closed on February 1, 2000. Approximately $5,857,000 of the net proceeds were used to redeem our Series B convertible preferred stock and pay accrued dividends. Approximately $7,296,000 were used to pay accrued dividends on all other series of convertible preferred stock, and those shares were converted to common stock on a one-for-one basis. Approximately $1,513,000 were used to repurchase 275,152 shares of common stock from an affiliate of one of the underwriters in order to comply with the rules of the National Association of Securities Dealers, Inc. The remaining net proceeds of approximately $34,793,000 were used to fund working capital needs and a portion of the cash required for our exchange transaction with Clear Channel, which was completed in August, 2000. On September 30, 2000, we completed the sale of our Flagstaff, Arizona radio stations to Yavapai Broadcasting Corporation for approximately $2,000,000. We recorded a note receivable for the $2,000,000 at September 30, 2000 which was collected on October 5, 2000. These proceeds will be used to fund current operating requirements. During the third quarter of 2000, we commenced a program to buy back shares of our common stock at certain market price levels. We acquired a total of 195,000 shares in the third quarter for an aggregate purchase price of $1,213,125. Cumulative through October 31, 2000 we have acquired 833,400 shares of our common stock for an aggregate purchase price of $4,461,131. We have agreed to acquire, by means of merger with StarCom, Inc., two FM and one AM radio stations serving the St. Cloud, Minnesota market for a total of $5,025,000 in cash. The purchase will be funded with borrowings under our bank credit facility. We have made an escrow deposit in the amount of $350,000. We anticipate closing this transaction by the end of the first quarter of 2001. On November 3, 2000, we agreed to sell substantially all the assets of the radio stations in our southern California market to Concord Media Group of California, Inc. for approximately $13,500,000 in cash. We also expect over the next three months to incur up to $300,000 of capital expenditures to upgrade our equipment and facilities, primarily at stations recently acquired or those in the process of being acquired, in order to remain competitive and to create cost savings over the long term. These expenditures are expected to include upgrades necessary to return two of the stations recently acquired, which are operating under special temporary authorities, to licensed operations. We believe the cash generated from operations, net proceeds from the sale of our southern California stations and available borrowings under our bank credit facility (approximately $82,000,000 at September 30, 2000, subject to the terms and conditions of the facility) will be sufficient to complete our pending acquisition in St. Cloud, Minnesota and to meet our requirements for corporate expenses and capital expenditures for the foreseeable future, based on our projected operations and indebtedness. -14- 15 MARKET RISK During the first and third quarters of 2000, we were exposed to the impact of interest rate changes because of borrowings under our bank credit facilities. It is our policy to enter into interest rate transaction only to the extent considered necessary to meet our objectives and to comply with the requirements of our credit facility. We have not entered into interest rate transactions for trading purposes. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 prescribes the accounting treatment for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. We may employ financial instruments to manage our exposure to fluctuations in interest rates. We do not hold or issue financial instruments for trading purposes. In June 2000, the FASB issued SFAS 138, an amendment to SFAS 133. We will adopt SFAS 133 and related amendments, as required in the year 2001, and do not expect the impact of adoption to be material. The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial Statements," which is effective for the fourth quarter of 2000. In SAB 101, the SEC staff expressed its views regarding the appropriate recognition of revenue with regard to a variety of circumstances, some of which are of particular relevance to us. We have evaluated SAB 101 and do not expect the impact of adoption to be material. In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Including Stock Compensation--an Interpretation of APB Opinion No. 25." FIN 44 provides guidance for certain issues that arose in applying APB Opinion No. 25, "Accounting for Stock Issued to Employees." We have adopted FIN 44, as required in the third quarter of 2000, and do not expect the impact of adoption to be material. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Form 10-Q includes certain forward-looking statements with respect to our company that involve risks and uncertainties. These statements are influenced by our financial position, business strategy, budgets, projected costs, and plans and objectives of management for future operations. They use words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project" and other similar expressions. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, we cannot assure you that our expectations will prove correct. Actual results and developments may differ materially from those conveyed in the forward-looking statements. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include changes in general economic, business and market conditions, as well as changes in such conditions that may affect the radio broadcast industry or the markets in which we operate, including, in particular, increased competition for attractive radio properties and advertising dollars, fluctuations in the cost of operating radio properties, and changes in the regulatory climate affecting radio broadcast companies. These forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date of -15- 16 this Form 10-Q. If we do update or correct one or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect to those or any other forward-looking statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Information required by this Item 3 is set forth under Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations under the subheading "Market Risk" and is incorporated under this Item 3 by this reference. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We currently and from time to time are involved in litigation incidental to the conduct of our business. In the opinion of our management, we are not a party to any lawsuit or legal proceeding which is likely to have a material adverse effect on our business or financial condition. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS On September 29, 2000, we completed the acquisition by means of merger with KZAP, Inc. of radio station KZAP(FM), subject to acceptance for filing of a Certificate of Merger in the State of California. Upon the filing of that certificate, we will issue 233,333 shares of our common stock to the sole shareholder of KZAP, Inc. in consideration of the merger. Of these shares, 8,333 shares are to be held in an escrow account to fund any claims we might assert within one year from the date the shares are deposited into escrow. During the period from July 25, 2000 to August 24, 2000, we granted options for the purchase of an aggregate of 74,500 shares of our common stock at exercise prices ranging from $6.625 to $6.843 to a total of 15 employees under the Regent Communications, Inc. 1998 Management Stock Option Plan. These options vest ratably over a five-year period and expire ten years from the date of grant. We claimed exemptions from registration under Section 4(2) of the Securities Act of 1933 for the transactions described above, which we believe did not involve a public offering based on the number and nature of the persons involved and the generally private character of the transactions. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following is filed herewith as an exhibit to Part I of this Form 10-Q: Exhibit No. 27 Financial Data Schedule The exhibits identified as Part II Exhibits on the following Exhibit Index, which is incorporated herein by this reference, are filed or incorporated by reference as exhibits to Part II of this Form 10-Q. -16- 17 (b) Reports on Form 8-K On August 29, 2000, we filed a Current Report on Form 8-K dated August 24, 2000 reporting our acquisitions of substantially all the asets of six FM and four AM radio stations in the Albany, New York and Grand Rapids, Michigan markets, in exchange for substantially all of the assets or our five FM and three AM radio stations in the Mansfield, Ohio and Victorville, California markets and a payment by us of approximately $80,465,000 in cash, all pursuant to an Asset Exchange Agreement with Clear Channel Broadcasting, Inc., Capstar Radio Operating Company and their related entities. A Form 8-K/A was filed on November 7, 2000 to include the proforma and historical financial information required with respect to this transaction. -17- 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. REGENT COMMUNICATIONS, INC. Date: November 14, 2000 By: /s/ Terry S. Jacobs -------------------------------------- Terry S. Jacobs, Chairman of the Board and Chief Executive Officer Date: November 14, 2000 By: /s/ Anthony A. Vasconcellos -------------------------------------- Anthony A. Vasconcellos, Chief Financial Officer and Vice President (Chief Accounting Officer) S-1 19 EXHIBIT INDEX The following exhibits are filed, or incorporated by reference where indicated, as part of Part II of this report on Form 10-Q: EXHIBIT NUMBER EXHIBIT DESCRIPTION 2(a)* Asset Exchange Agreement dated as of March 12, 2000 by and among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 2(g) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 2(b)* First Amendment to Asset Exchange Agreement made on May 31, 2000 by and among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. (previously filed as Exhibit 2(b) to the Registrant's Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference) 2(c)* Second Amendment to Asset Exchange Agreement made on June 2, 2000 by and among Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership, Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc. and Regent Licensee of Mansfield, Inc. (previously filed as Exhibit 2(c) to the Registrant's Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference) E-1 20 2(d) Asset Purchase Agreement made as of October 31, 2000 among Concord Media Group of California, Inc., Regent Broadcasting of Palmdale, Inc. and Regent Licensee of Palmdale, Inc. The following exhibits and schedules to the foregoing Asset Purchase Agreement are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Exhibit Description ------- ----------- A Form of Time Brokerage Agreement B Form of Lease Agreement Schedule Description -------- ----------- 1.1(a) FCC Licenses 1.1(b) Tangible Personal Property 1.1(c) Station Contracts 1.1(d) Intangible Property 1.1(f) Real Property 1.2(h) Excluded Assets 7.13 Labor Relations 3(a)* Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended by a Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series G Preferred Stock of Regent Communications, Inc., filed January 21, 1999 (previously filed as Exhibit 3(a) to Amendment No. 1 to the Registrant's Form S-1 Registration Statement No. 333-91703 filed December 29, 1999 and incorporated herein by this reference) 3(b)* Certificate of Decrease of Shares Designated as Series G Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on June 21, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(c) to the Registrant's Form 10-Q Fourth Quarter Ended June 30, 1999 and incorporated herein by this reference) 3(c)* Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series H Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on June 21, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(d) to the Registrant's Form 10-Q for the Quarter Ended June 30, 1999 and incorporated herein by this reference) 3(d)* Certificate of Decrease of Shares Designated as Series G Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on August 23, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(e) to the Registrant's Form 10-Q for the Quarter Ended on September 30, 1999 and incorporated herein by this reference) E-2 21 3(e)* Certificate of Increase of Shares Designated as Series H Convertible Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on August 23, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(f) to the Registrant's Form 10-Q for the Quarter Ended on September 30, 1999 and incorporated herein by this reference) 3(f)* Certificate of Designation, Number, Powers Preferences and Relative, Participating, Optional, and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series K Preferred Stock of Regent Communications, Inc., filed with the Delaware Secretary of State on December 13, 1999 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended (previously filed as Exhibit 3(g) to Amendment No. 1 to the Registrants Form S-1 Registration Statement No. 333-91703 filed December 29, 1994 and incorporated herein by this reference) 3(g)* Amended and Restated By-Laws of Regent Communications, Inc. (previously filed as Exhibit 3(b) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 3(h)* Amendments to By-Laws of Regent Communications, Inc. adopted December 13, 1999 (previously filed as Exhibit 3(h) to Amendment No. 1 to the Registrant's Form S-1 Registration Statement No. 333-91703 filed December 29, 1999 and incorporated herein by this reference) 4(a)* Credit Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc., Fleet National Bank, as administrative agent, Fleet National Bank, as issuing lender, General Electric Capital Corporation, as syndication agent, Dresdner Bank AG, New York and Grand Cayman Branches, as document agent, and the several lenders party thereto (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(a) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(b)* Omnibus Amendment No. 1 and Amendment No. 1 to Credit Agreement dated as of February 4, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc., Fleet National Bank, as administrative agent, Fleet National Bank, as issuing lender, General Electric Capital Corporation, as syndication agent, Dresdner Bank AG, New York and Grand Cayman Branches, as document agent, and the several lenders party thereto (previously filed as Exhibit 4(e) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(c)* Revolving Credit Note dated as of February 7, 2000 made by Regent Broadcasting, Inc. in favor of Fleet National Bank in the original principal amount of $25 million (previously filed as Exhibit 4(f) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) (See Note 1 below) E-3 22 4(d)* Subsidiary Guaranty Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc. and each of their subsidiaries and Fleet National Bank, as collateral agent (previously filed as Exhibit 4(c) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(e)* Pledge Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc. and each of their subsidiaries and Fleet National Bank, as collateral agent (previously filed as Exhibit 4(d) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 4(f)* Security Agreement dated as of January 27, 2000 among Regent Broadcasting, Inc., Regent Communications, Inc. and each of their subsidiaries and Fleet National Bank, as collateral agent (previously filed as Exhibit 4(b) to the Registrant's Form 8-K filed February 10, 2000 and incorporated herein by this reference) 10(a)* Escrow Agreement dated as of March 12, 2000 by and among Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc., Regent Licensee of Mansfield, Inc., Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company, Capstar TX Limited Partnership and Bank of America (previously filed as Exhibit 10(a) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 10(b)* Letter agreement dated March 12, 2000 from Clear Channel Communications, Inc. addressed to Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc., Regent Licensee of Mansfield, Inc. (previously filed as Exhibit 10(b) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 10(c)* Liquidated Damages Agreement made as of March 12, 2000 by Regent Broadcasting of Victorville, Inc., Regent Licensee of Victorville, Inc., Regent Broadcasting of Palmdale, Inc., Regent Licensee of Palmdale, Inc., Regent Broadcasting of Mansfield, Inc., Regent Licensee of Mansfield, Inc. for the benefit of Clear Channel Broadcasting, Inc., Clear Channel Broadcasting Licenses, Inc., Capstar Radio Operating Company and Capstar TX Limited Partnership (previously filed as Exhibit 10(c) to the Registrant's Form 10-K for the year ended December 31, 1999 and incorporated herein by this reference) 27 Financial Data Schedule * Incorporated by reference. E-4 23 NOTES: 1. Seven substantially identical notes were made by Regent Broadcasting, Inc. as follows: Original Holder Principal Amount ------ ---------------- General Electric Capital Corporation $22,000,000 Dresdner Bank AG, New York and Cayman Islands Branches $22,000,000 Mercantile Bank National Association $16,000,000 U.S. Bank National Association $10,000,000 Summit Bank $10,000,000 Michigan National Bank $10,000,000 The CIT Group Equipment Financing, Inc. $10,000,000 E-5 EX-2.D 2 l84957aex2-d.txt EXHIBIT 2(D) 1 Exhibit 2(d) ASSET PURCHASE AGREEMENT ------------------------ THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of October 31, 2000 among the company or companies designated as Buyer on the signature page hereto (collectively, "Buyer") and the company or companies designated as Regent on the signature page hereto (collectively, "Regent"). RECITALS -------- A. Regent owns and operates the following radio broadcast stations (collectively, the "Stations") pursuant to certain authorizations issued by the FCC: KTPI-FM and KAVC-AM licensed to Mojave and Tehachapi (i.e. Palmdale), California; and KOSS-FM, licensed to Rosamond, California. B. Buyer desires to purchase and Regent desires to sell the Station Assets (detailed below) in accordance with the terms and conditions of this Agreement. AGREEMENT --------- NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows: ARTICLE 1: SALE OF ASSETS 1.1. STATION ASSETS. On the terms and subject to the conditions hereof, on the Closing Date (defined below), Regent shall assign, transfer, convey and deliver to Buyer, and Buyer shall acquire from Regent, all of the right, title and interest of Regent in and to all of the assets, properties, interests and rights of Regent of whatsoever kind and nature, real and personal, tangible and intangible, which are used in the operation of the Stations and described in this Section 1.1, but excluding the Excluded Assets as hereafter defined (the "Station Assets"): (a) all licenses, permits and other authorizations which are issued to Regent by the FCC with respect to the Stations (the "FCC Licenses") including but not limited to those described on SCHEDULE 1.1(a), including any renewals or modifications thereof between the date hereof and Closing; 2 (b) all equipment, electrical devices, towers, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and other tangible personal property of every kind and description which are used in the operation of the Stations including but not limited to those listed on SCHEDULE 1.1(b), except any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business and consistent with past practices of Regent (the "Tangible Personal Property"); (c) all Time Sales Agreements and Trade Agreements (both defined in Section 2.1), Regent Real Property Leases (defined in Section 7.7), and other contracts, agreements, and leases which are used in the operation of the Stations and listed on SCHEDULE 1.1(c), together with all contracts, agreements, and leases made between the date hereof and Closing in the ordinary course of business that are used in the operation of the Stations (the "Station Contracts"); (d) all of Regent's rights in and to the Stations' call letters and Regent's rights in and to the trademarks, trade names, service marks, franchises, copyrights, computer software, programs and programming material, jingles, slogans, logos, and other intangible property which are used in the operation of the Stations including but not limited to those listed on SCHEDULE 1.1(d) (the "Intangible Property"); (e) Regent's rights in and to all the files, documents, records, and books of account (or copies thereof) relating to the operation of the Stations, including but not limited to the Stations' local public files, programming information and studies, blueprints, technical information and engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to the Excluded Assets (defined below); and (f) any real property which is used in the operation of the Stations (including any of Regent's appurtenant easements and improvements located thereon) including but not limited to those described on SCHEDULE 1.1(f) (the "Real Property"). The Station Assets shall be transferred to Buyer free and clear of all Liens except for (i) Assumed Obligations (defined below), (ii) liens for taxes not yet due and payable and for which Buyer receives a credit pursuant to Section 3.3, (iii) such liens (not related to Regent indebtedness), easements, rights of way, building and use restrictions, exceptions, reservations and limitations common for properties of such nature that do not, and are unlikely to, in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Stations, and (iv) any items listed on SCHEDULE 1.1(b) (collectively, "Permitted Liens"). 1.2. EXCLUDED ASSETS Notwithstanding anything to the contrary contained herein, the Station Assets shall not include the following assets along with all rights, title and interest therein (the "Excluded Assets"): 2 3 (a) all cash and cash equivalents of Regent, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; (b) all accounts receivable or notes receivable of Regent arising in the operation of the Stations prior to Closing; (c) all tangible and intangible personal property of Regent disposed of or consumed in the ordinary course of business of Regent between the date of this Agreement and Closing; (d) all Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Regent; (e) Regent's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Regent, duplicate copies of the records of the Stations, and all records not relating exclusively to the operation of the Stations; (f) contracts of insurance, and all insurance proceeds or claims made thereunder; (g) all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Regent; and (h) any rights, properties or assets described on SCHEDULE 1.2(h), and all rights, properties and assets not specifically described in Section 1.1. ARTICLE 2: ASSUMPTION OF OBLIGATIONS - ------------------------------------ 2.1. BUYER ASSUMED OBLIGATIONS. On the Closing Date, Buyer shall assume the obligations of Regent (the "Assumed Obligations") arising after Closing under the Station Contracts or which were entered into in the ordinary course of business and (i) do not have a term of more than one (1) year, (ii) represent an obligation to Regent of not more than fifty thousand dollars ($50,000.00), and (iii) can be terminated by Regent with no more than ninety (90) days notice, and including without limitation all agreements for the sale of advertising time on the Stations for cash in the ordinary course of business (TIME Sales Agreements") and all 3 4 agreements for the sale of advertising time on the Stations for non-cash consideration ("Trade Agreements"). 2.2. REGENT RETAINED OBLIGATIONS. Buyer does not assume or agree to discharge or perform and will not be deemed by reason of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of the consummation of the transactions contemplated hereby, to have assumed or to have agreed to discharge or perform, any liabilities, obligations or commitments of Regent of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Buyer, other than the Assumed Obligations (the "Retained Obligations"). ARTICLE 3: CASH PAYMENT - ----------------------- 3.1. CASH PAYMENT. Regent shall at Closing (defined below) deliver to Buyer by wire transfer of immediately available funds $13,465,000, subject to adjustment pursuant to Section 3.3 (the "Cash Payment"). 3.2. DEPOSIT ESCROW. Within one business day of the date of this Agreement, Buyer shall deposit $1,000,000 in cash (the "Deposit") with Fifth Third Bank, N.A., Cincinnati, Ohio (the "Escrow Agent") pursuant to an Escrow Agreement of even date herewith among Regent, Buyer and Escrow Agent. At Closing, the Deposit shall be applied to the Cash Payment and any interest accrued on the Deposit shall be disbursed to Buyer. If this Agreement is terminated by Regent pursuant to Section 16.1(c) and Regent is entitled to liquidated damages pursuant to Section 16.3, the Deposit and any interest accrued thereon shall be paid to Regent as such liquidated damages. If this Agreement is terminated for any other reason, the Deposit and any interest accrued thereon shall be disbursed to Buyer. 3.3. PRORATIONS AND ADJUSTMENTS. Except as provided in the Time Brokerage Agreement (as defined herein) or as otherwise provided herein, all deposits, reserves and prepaid and deferred income and expenses arising from the conduct of the business and operations of the Stations shall be prorated in accordance with generally accepted accounting principles as of 11:59 p.m. on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate and other property taxes (but excluding transfer taxes which shall be paid as set forth in Section 13.1), business and license fees, music and other license fees (including any retroactive adjustments thereof), utility expenses, amounts due or to become due under contracts, rents, lease payments and similar prepaid and deferred items. Real estate taxes shall be apportioned on the basis of taxes assessed for the preceding year, with a reapportionment, if any, as soon as the new tax rate and valuation can be ascertained. Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days of the Closing Date. In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid 4 5 at the time provided herein and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Buyer and one-half by Regent. 3.4. ALLOCATION. Subject to Section 3.1, the values of the assets comprising the Station Assets shall be determined by an appraisal (the "Appraisal") prepared by Bond & Pecaro (whose fees shall be paid one-half by Buyer and one-half by Regent), which Appraisal shall be used by all parties for all tax purposes. ARTICLE 4: CLOSING - ------------------ 4.1. CLOSING . The consummation of the sale of assets under this Agreement (the "Closing") shall occur on a date (the "Closing Date") and at a time and place designated solely by Buyer after FCC Consent (defined below), subject to satisfaction or waiver of the conditions to Closing contained herein (other than those to be satisfied at Closing), provided however, that Buyer may in its sole discretion waive the requirement that the FCC Consent become a final order and elect to close at any time (upon not less than five (5) business days' notice to Regent) after the release of initial FCC approval on public notice that it has consented to the transaction contemplated hereby ("Initial Approval"). Buyer shall provide Regent with notice of the Closing Date at least three (3) business days prior to the Closing, however, Buyer reserves the right to extend the Closing Date without penalty, provided, however, the Closing Date shall not be extended beyond a date which is ninety (90) days after the satisfaction or waiver of all of the conditions to Closing contained herein, (other than those to be satisfied at Closing). If requested by Buyer, prior to Closing the parties shall hold a pre-closing conference at a time and place designated by Buyer, at which the parties shall provide (for review only) all documents to be delivered at Closing under this Agreement, each duly executed but undated, and otherwise confirm their ability to timely consummate the Closing. If Closing occurs on Initial Approval, and prior to the FCC Consent becoming a final order the FCC Consent is reversed or otherwise set aside pursuant to a final order of the FCC (or court of competent jurisdiction), then the parties shall comply with such order in a manner that otherwise complies with applicable law and returns the parties to the status quo ante in all material respects. ARTICLE 5: GOVERNMENTAL CONSENTS - -------------------------------- Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC Consent") to the assignment of the FCC Licenses to Buyer, (ii) United States Department of Justice ("DOJ") prior approval (if necessary) (the "DOJ Consent") of the transactions contemplated hereby, and (iii) expiration or termination of any applicable waiting period ("HSR Clearance") under the HSR Act (defined below). 5 6 5.1. FCC. Within ten (10) days of the date hereof, Buyer and Regent shall file applications with the FCC (the "FCC Application") requesting the FCC Consent. Buyer and Regent shall diligently prosecute the FCC Application and otherwise use their best efforts to obtain the FCC Consent as soon as possible. If the FCC Consent imposes upon Buyer any condition that Buyer can satisfy by the payment of $100,000 or less, Buyer shall comply therewith, but only if such condition can be satisfied by the payment by Buyer of $100,000 or less. 5.2. HSR. If required and if not previously filed, then within five (5) business days after the execution of this Agreement, Buyer and Regent shall make any required filings with the Federal Trade Commission and the DOJ pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. 5.3. GENERAL . Buyer and Regent shall notify each other of all documents filed with or received from any governmental agency with respect to this Agreement or the transactions contemplated hereby. Buyer and Regent shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder. ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYER - -------------------------------------------------- Buyer makes the following representations and warranties to Regent: 6.1. ORGANIZATION. Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified, or will be qualified at Closing, to do business in California. Buyer has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Buyer pursuant hereto (collectively, the "Buyer Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 6.2. AUTHORIZATION. The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized and approved by all necessary action of Buyer and do not require any further authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary Agreement when executed and delivered by Buyer and the other parties thereto will be, a legal, valid and binding agreement of Buyer enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to 6 7 general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 6.3. NO CONFLICTS. Neither the execution and delivery by Buyer of this Agreement and the Buyer Ancillary Agreements, the consummation by Buyer of any of the transactions contemplated hereby or thereby nor compliance by Buyer with or fulfillment by Buyer of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Buyer or any law, judgment, order, or decree to which Buyer is subject, or (ii) require the approval, consent, authorization or act of, or the making by Buyer of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and, if applicable, the DOJ Consent and HSR Clearance. 6.4. NO FINDER. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Buyer or any party acting on Buyer's behalf. 6.5. BUYER'S QUALIFICATIONS . To the best of Buyer's knowledge, there are no facts which, under the Communications Act, or the existing rules and regulations of the FCC, would disqualify Buyer as an assignee of the FCC Licenses. Buyer has, and will continue to have until Closing, funds committed and readily available to it sufficient to pay all amounts due at Closing. ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF REGENT - --------------------------------------------------- Regent makes the following representations and warranties to Buyer: 7.1. ORGANIZATION. Regent is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in California. Regent has the requisite power and authority to execute and deliver this Agreement and all of the other agreements and instruments to be executed and delivered by Regent pursuant hereto (collectively, the "Regent Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. 7.2. AUTHORIZATION. The execution, delivery and performance of this Agreement and the Regent Ancillary Agreements by Regent have been duly authorized and approved by all necessary action of Regent and do not require any further authorization or consent of Regent. This Agreement is, and each Regent Ancillary Agreement when executed and delivered by Regent and the other parties thereto will be, a legal, valid and binding agreement of Regent 7 8 enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 7.3. NO CONFLICTS. Neither the execution and delivery by Regent of this Agreement and the Regent Ancillary Agreements or the consummation by Regent of any of the transactions contemplated hereby or thereby nor compliance by Regent with or fulfillment by Regent of the terms, conditions and provisions hereof or thereof will: (i) conflict with any organizational documents of Regent or any law, judgment, order, or decree to which Regent is subject or, except as set forth on SCHEDULE 1.1(c), any Regent Station Contract; or (ii) require the approval, consent, authorization or act of, or the making by Regent of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except the FCC Consent and, if applicable the DOJ Consent, and HSR Clearance. 7.4. FCC LICENSES. Regent is the holder of the FCC Licenses described on SCHEDULE 1.1(a) which lists all of the material FCC Licenses for the Stations. The FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated and have not expired. Except as described on SCHEDULE 1.1(a), to the actual knowledge of the station general managers of any of the Stations, (i) each Station is operating with maximum power and facilities specified in the respective License, (ii) none of the Stations is causing objectionable interference to the transmissions of any other broadcast station or communications facility and (iii) no other broadcast station or communications facility is causing objectionable interference to the transmissions of any Station. There is not pending any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the FCC Licenses (other than proceedings to amend FCC rules of general applicability), and there is not now issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or notice of forfeiture against Regent with respect to the Stations. The Stations are operating in compliance in all material respects with the FCC Licenses, the Communications Act, and the rules, regulations and policies of the FCC. The "Public Inspection Files" for each of the respective Stations will be substantially complete and in material compliance with Section 73.3526 of the FCC's rules and regulations on the Closing Date. The transmitters for each of the respective Stations now operate in a manner such that any FCC action for which environmental factors must be considered would not constitute a major action as defined in 47 C.F.R. 1.1305 or any subsequent radio frequency radiation limitation provisions; and all required proofs of performance or measurements have been, or will be, timely completed and filed at the respective Stations, as applicable, or the FCC, as may be required. Regent has paid to the FCC the annual FCC regulatory fees, as required and due for the Stations and the FCC Licenses associated therewith. 7.5. TAXES. Regent has, in respect of the Stations' business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and 8 9 reports which are required to have been filed by it under applicable law and has paid all taxes which have become due pursuant to such returns or pursuant to any assessments which have become payable. 7.6. PERSONAL PROPERTY. SCHEDULE 1.1(b) contains a list of all material items of Tangible Personal Property included in the Station Assets. Regent has title to the Tangible Personal Property free and clear of Liens other than Permitted Liens. The items of Tangible Personal Property listed on Schedule 1.1(b) are in all material respects in good working condition, ordinary wear and tear excepted. 7.7. REAL PROPERTY. SCHEDULE 1.1(f) contains a description of all material real property used by Regent in the operation of the Stations. Regent has fee simple title to the owned Real Property ("Owned Real Property") free and clear of Liens other than Permitted Liens. SCHEDULE 1.1(f) includes a description of each material real property lease or similar agreement included in the Station Assets (the "Real Property Leases"). The Owned Real Property includes, and the Real Property Leases provide, access to the Stations' facilities. To Regent's knowledge, the Real Property is not subject to any suit for condemnation or other taking by any public authority. Except as described in Schedule 1.1(f), to the actual knowledge of the station general managers of any of the Stations, none of the buildings, structures, improvements or fixtures, including, but not limited to, any ground systems or guy anchors, constructed on any of the Buyer Owned Real Property encroach upon adjoining real property ("Encroachment Representation"). 7.8. CONTRACTS. Schedule 1.1(c) contains a description of all material Station Contracts. Each of the Station Contracts (including without limitation each of the Real Property Leases) is in effect and is binding upon Regent and, to Regent's knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors' rights generally). Regent has performed its obligations under each of the Station Contracts in all material respects, and is not in material default thereunder, and to Regent's knowledge, no other party to any of the Station Contracts is in default thereunder in any material respect. 7.9. ENVIRONMENTAL. Except as set forth in any environmental report delivered by Regent to Buyer prior to the date of this Agreement and except as set forth on SCHEDULE 1.1(f), to Regent's knowledge, (i) Regent, the Station Assets, including without limitation the Stations, the Owned Real Property and real property that is subject to the Real Property Leases ("Leased Premises") are in compliance in all material respects with applicable environmental laws, (ii) there are no Hazardous Materials (as defined below) located at or upon the Station Assets, including without limitation the Stations, the Owned Real Property, the Leased Premises, or the 9 10 Tangible Personal Property, in violation of applicable environmental laws, nor have any Hazardous Materials been stored or deposited thereat in violation of applicable environmental laws, to Regent's best knowledge, at any time in the past, except for lubricants, cleaners or other consumer products that are maintained in limited quantities for routine maintenance purposes, and (iii) Regent has complied in all material respects with all environmental, health and safety laws applicable to the Stations. Except as set forth in Schedule 1.1(f), Regent has not received, nor has any knowledge of, any complaint, notice, or order from any person or any agency of the federal, state or local government, with regard to air emissions, water discharges, noise emissions or Hazardous Materials affecting the Station Assets, including without limitation the Stations, the Tangible Personal Property, or the Owned Real Property, the Leased Premises or any portion thereof. For the purposes of this Agreement, the term "Hazardous Materials" shall mean toxic materials, hazardous wastes, hazardous substances, pollutants or contaminants, asbestos or asbestos-related products, PCB's, petroleum, crude oil or any fraction or distillate thereof (as such terms are defined in any applicable federal, state or local laws, ordinances, rules and regulations, and including any other terms which are or may be used in any applicable environmental laws to define prohibited or regulated substances). 7.10. INTANGIBLE PROPERTY. SCHEDULE 1.1(d) contains a description of the material Intangible Property included in the Station Assets. Except as set forth on SCHEDULE 1.1(d), Regent has received no notice of any claim that its use of the Intangible Property infringes upon any third party rights. Except as set forth on SCHEDULE 1.1(d), Regent owns or has the right to use the Intangible Property free and clear of Liens other than Permitted Liens. 7.11. COMPLIANCE WITH LAW. Regent has complied in all material respects with all laws, regulations, rules, writs, injunctions, ordinances, franchises, decrees or orders of any court or of any foreign, federal, state, municipal or other governmental authority which are applicable to the Station Assets or the operation of the Stations. There is no action, suit or proceeding pending or threatened against Regent in respect of the Stations or the Station Assets that will subject Buyer to liability or which questions the legality or propriety of the transactions contemplated by this Agreement. To Regent's knowledge, there are no governmental claims or investigations pending or threatened against Regent in respect of the Stations (except those affecting the industry generally). 7.12. NO FINDER. No broker, finder or other person is entitled to a commission, brokerage fee or other similar payment in connection with this Agreement or the transactions contemplated hereby as a result of any agreement or action of Regent or any party acting on Regent's behalf. 7.13. LABOR RELATIONS. That, except as disclosed in SCHEDULE 1.1(c) or SCHEDULE 7.13, respecting the Stations, Regent is not, a party to (i) any labor contract, (ii) any vacation pay, severance pay or other so-called fringe benefit arrangement with its employees, or (iii) any employment contract or agreement which is not terminable upon termination notice of thirty (30) days. No employee of Regent is represented by a union or other collective bargaining unit, no application for recognition as a collective bargaining unit has been filed with the National Labor 10 11 Relations Board; and to the best knowledge of Regent, there has been no concerted effort to unionize Regent's employees. There are no material controversies pending or, to the best knowledge of Regent, threatened between the Regent and any of its employees. 7.14. PERSONNEL DATA. Concurrent with the execution of this Agreement, and subject to strict confidentiality, delivered by Regent and initialed by or on behalf of each party, is an accurate statement showing, as of the date thereof: (a) PRESENT EMPLOYEES. The names and positions of all persons currently employed by Regent exclusively in connection with the maintenance and operation of the Stations, together with a statement of the amount paid or payable to each such person for such services and the basis thereof, their respective dates of hiring, and any accrued sick, personal or vacation days for each (or pay in lieu thereof); (b) COMPENSATION POLICIES. Regent's policies, procedures and practices as to payment of salaries and commissions, sick pay, personal days and vacation time; and (c) OTHER BENEFITS. A description of any other material compensation or personnel benefits in effect for Regent's employees. 7.15. EMPLOYEE BENEFIT AND PENSION PLANS. Regent has not incurred: (i) any material accumulated funding deficiency within the meaning of ERISA; or (ii) any material liability to the Pension Benefit Guaranty Corporation established under ERISA (or any successor thereto under ERISA) in connection with any pension plan established or maintained by it. Regent has not had any Tax assessed against it by the Internal Revenue Service for any alleged violation under Section 4975 of the Internal Revenue Code. To Regent's best knowledge, Regent does not have any unfunded liability under a plan or a contingent liability with withdrawal from a multi-employer pension plan except as disclosed in the Financial Statements. It is not a principal purpose of the transactions contemplated by this Agreement to evade or avoid liability under Sections 4069 or 4212 of ERISA. Regent does not have any liability with respect to any withdrawal from a multiemployer plan by any "person" within the meaning of ERISA Sec. 3(9) which would be regarded together with the Regent as a "single employer" under Code Sections 414(b), (c), (m) or (o). Regent has not ever maintained or contributed to a defined benefit pension plan, as defined in Section 3(35) of ERISA. 7.16. ABSENCE OF INSOLVENCY. No insolvency proceedings of any character including without limitation, bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, affecting the Regent or any of the Station Assets, are pending or, to the best knowledge of Regent, threatened, and Regent has made no assignment for the 11 12 benefit of creditors, nor taken any action with a view to, or which would constitute the basis for the institution of any such insolvency proceedings. 7.17. FULL DISCLOSURE. No representation or warranty made by Regent contained in this Agreement nor any certificate, document or other instrument furnished or to be furnished by Regent pursuant hereto contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact required to make any statement contained herein or therein not misleading. Regent is not aware of any impending or contemplated event or occurrence that would cause any of the foregoing representations not to be true and complete on the date of such event or occurrence as if made on that date. 7.18. COMPLETENESS OF STATION ASSETS. The schedules hereto describing the Station Assets are true and accurate listings of all the material Station Assets owned by Regent and used by Regent in the operation of the Stations. Except as provided in SECTION 1.2 , and its subparts, there is no material asset used or required by Regent in the normal conduct of the Stations operations which is not owned or leased by Regent and which is not listed or otherwise identified on the schedules hereto. ARTICLE 8: TIME BROKERAGE AND ACCOUNTS RECEIVABLE -------------------------------------- 8.1. TIME BROKERAGE AGREEMENT. Promptly upon the later of (a) the expiration of the 30-day public notice period following the FCC acceptance of the FCC Application, or (b) January 1, 2001 (or at such other date as the parties may agree), unless a petition or objection has been filed (and in that event as soon thereafter as such petition or objection is no longer pending), Buyer and Regent will enter into a Time Brokerage Agreement in the form of Exhibit A hereto (the "Time Brokerage Agreement"), pursuant to which Regent will make available to Buyer the broadcast transmission facilities of the Stations and/or cause to be broadcast on the Stations Buyer's programming from the Commencement Date (as defined in the Time Brokerage Agreement) and during the term thereof. An Event of Default by either party under the Time Brokerage Agreement shall constitute a material default under this Agreement and insofar as the cure period specified in the Time Brokerage Agreement has expired with respect to such default, no further cure period shall be afforded under the provisions hereof. 8.2. ACCOUNTS RECEIVABLE. All accounts receivable arising prior to the Commencement Date of the Time Brokerage Agreement in connection with the operation of the Stations, including but not limited to accounts receivable for advertising revenues for programs and announcements performed prior to the Commencement Date and other broadcast revenues for services performed prior to the Commencement Date, shall remain the property of Regent (the A Accounts Receivable") and Buyer shall not acquire any right or interest therein. Buyer shall collect the Accounts Receivable remit collections to Regent in accordance with Section 13 of the Time Brokerage Agreement. For such period remaining after Closing, if any, which is within 120 days, inclusive, after the Commencement Date (the "Collection Period"), Buyer shall collect the Accounts Receivable in the normal and ordinary course of Buyer's business and shall apply all such amounts collected to the debtor's oldest account receivable first. Buyer's obligation shall 12 13 not extend to the institution of litigation, employment of counsel or a collection agency or any other extraordinary means of collection. During the Collection Period, neither Regent nor its agents shall make any direct solicitation of any such account debtor for collection purposes or institute litigation for the collection of amounts due. Any amounts relating to the Accounts Receivable that are paid directly to Regent shall be retained by Regent (and it shall inform Buyer thereof). Within ten calendar days after the end of each month, Buyer shall make a payment to Regent equal to the amount of all collections of Regent Accounts Receivable during the preceding month. At the end of the Collection Period any remaining Accounts Receivable shall be returned to Regent for collection. ARTICLE 9: COVENANTS - -------------------- 9.1. REGENT'S COVENANTS. Regent covenants and agrees with respect to the Stations that, between the date hereof and Closing, except as permitted by this Agreement, or required or otherwise provided for by the Time Brokerage Agreement, or with the prior written consent of Buyer, which shall not be unreasonably withheld, Regent shall: (a) operate the Stations in the ordinary course of business consistent with past practice, including retaining the current format and programming (including the content thereof) and spending for promotions, advertising and research at levels shown on budgets delivered to Buyer and in all material respects in accordance with FCC rules and regulations and with all other applicable laws, regulations, rules and orders; (b) not, other than in the ordinary course of business in accordance with past practice, (i) sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets, (ii) create, assume or permit to exist any Liens upon the Station Assets, except for Permitted Liens, (iii) amend or terminate any Station Contract or enter into any new contracts (except for Time Sales Agreements) which (x) have a term of more than one (1) year, (y) represent an obligation to Regent of more than fifty thousand dollars ($50,000.00), and (z) cannot be terminated by Regent with no more than ninety (90) days notice, or (iv) except as provided for by the Regent budgets delivered to Buyer, grant any increases in the compensation of its employees; (c) furnish Buyer with such information relating to the Station Assets as Buyer may reasonably request including weekly sales projections and monthly income statements, at Buyer's expense and provided such request does not interfere unreasonably with the business of the Stations, and provide Buyer access to the Stations, Station Assets and personnel upon reasonable request and notice to Regent; and (d) provide such other customary documents as may be reasonably necessary for the implementation and consummation of this Agreement. 13 14 ARTICLE 10: JOINT COVENANTS --------------- Buyer and Regent hereby covenant and agree that between the date hereof and Closing: 10.1. COOPERATION. Subject to express limitations contained elsewhere herein, each party (i) shall cooperate fully with one another in taking any reasonable actions (including without limitation, reasonable actions to obtain the required consent of any governmental instrumentality or any third party) necessary or helpful to accomplish the transactions contemplated by this Agreement, including but not limited to the prompt satisfaction of any condition to Closing set forth herein, and (ii) shall not take any action that conflicts with its obligations hereunder or that causes its representations and warranties to become untrue in any material respect. 10.2. CONTROL OF STATIONS. Buyer shall not, directly or indirectly, control, supervise or direct the operations of the stations prior to Closing. Except as provided in the Time Brokerage Agreement, such operations, including complete control and supervision of all programs, employees and policies, shall be the sole responsibility of Regent. 10.3. CONSENTS TO ASSIGNMENT. Except as otherwise provided herein, Regent shall use commercially reasonable efforts to obtain any third party consents necessary for the assignment of any Station Contract (which shall not require any payment to any such third party). To the extent that any such contract may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant hereto shall not constitute an assignment thereof, but to the extent permitted by law shall constitute an equitable assignment and assumption of rights and obligations thereunder, with Regent making available to Buyer the benefits thereof and Buyer performing the obligations thereunder on Regent's behalf; provided, however, Regent shall indemnify (pursuant to Article 15 of this Agreement) Buyer for Damages (as hereafter defined) as a result of Regent's failure to have obtained a consent to assignment with respect to any of the leases for the main transmitter sites and studio sites included in Section 1.1(f), including but not limited to those listed on SCHEDULE 1.1(f). 10.4. EMPLOYEE MATTERS. Pursuant to Section 7.14(a) Regent has provided Buyer a list (with name, position and base salary) of all of their respective employees employed at the Stations and who work primarily for those stations. Buyer may interview and elect to hire effective as of the Commencement Date of the Time Brokerage Agreement or as of the Closing Date (and not otherwise) any or all of the Regent employees on the list with the exception of Richard Peabody (a.k.a. Ric Morgan) and Bill Hurley who will be retained by Regent but who shall continue to work in their present positions until the Commencement Date. Buyer is obligated to hire only those employees who are under employment contracts (and assume the obligations and liabilities under such employment contracts) which are included in Station Contracts. With respect to employees hired by Buyer ("Transferred Employees"), to the extent 14 15 permitted by law Regent shall provide access to its personnel records and such other information as may be reasonably requested prior to Closing. For a period of twelve (12) months after Closing or until the termination of the Time Brokerage Agreement if this Agreement has been terminated, Regent will not hire, solicit or induce for hire or make any offer or attempt to hire, any of the Transferred Employees. Provided, however, Regent may six (6) months after Closing or upon termination of the Time Brokerage Agreement if this Agreement has been terminated (but not before) hire or solicit for hire any of its former employees who are not Transferred Employees. With respect to such hired employees, Regent shall be responsible for the payment of all compensation and accrued employee benefits payable by it until the Commencement Date of the Time Brokerage Agreement (or the Closing Date in the event the Closing occurs prior to the Commencement Date) and thereafter Buyer shall be responsible for all such obligations payable by it. Buyer shall cause all employees it hires to be eligible to participate in its "employee welfare benefit plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA, respectively) in which similarly situated employees are generally eligible to participate and to the extent any such plans exist; provided, however, that all such employees and their spouses and dependents shall be eligible for coverage immediately after the Commencement Date of the Time Brokerage Agreement or Closing Date, as applicable (and shall not be excluded from coverage on account of any pre-existing condition), to the extent provided under such employee welfare benefit plans, and in the event immediate coverage is not available under such plans, coverage for any gap period shall be provided to such employees at Buyer's cost either pursuant to COBRA or other arrangements under Regent's plans. For purposes of any length of service requirements, waiting periods, vesting periods or differential benefits based on length of service in any such employee welfare benefit plans for which such employees may be eligible after the Commencement Date of the Time Brokerage Agreement (to the extent any such plans exist), Buyer shall ensure that service with Regent shall be deemed to have been service with the Buyer. No such service credit must be granted with respect to participation or eligibility in any employee pension benefit plan, to the extent any such plans exist. Notwithstanding any other provision contained herein, Buyer shall grant credit to each such employee for all unused sick leave accrued as of the Commencement Date of the Time Brokerage Agreement as an employee of Regent. Notwithstanding any other provision contained herein, Buyer shall assume and discharge Regent's liabilities for the payment of all unused vacation leave accrued by such employees of Regent as of the Commencement Date of the Time Brokerage Agreement, provided, that Buyer shall receive a proration credit in accordance with Section 3.2 for all earned but unused vacation and sick leave so assumed. 10.5. 1031 EXCHANGE. At or prior to Closing, either party may assign its rights under this Agreement (in whole or in part) to a qualified intermediary (as defined in Treasury regulation section 1.1031(k)-1(g)(4)) or similar entity or arrangement ("Qualified Intermediary"). Upon any such assignment, prompt written notice thereof shall be given to the other party, which shall cooperate with the reasonable requests of the assigning party and any Qualified 15 16 Intermediary in connection therewith. Without limiting the generality of the foregoing, if notice of such agreement is given, the other party shall (i) promptly provide written acknowledgment of such notice and (ii) at Closing, convey all or part of the Station Assets and make all or part of the Cash Payment (each as designated in writing by the Qualified Intermediary) to or on behalf of the Qualified Intermediary (which payment and conveyance shall, to the extent thereof, satisfy the obligation to make such conveyance and payment hereunder). Either party's assignment to a Qualified Intermediary will not relieve it of any of its duties or obligations herein. Except for the obligations set forth in this Section, the other party shall not have any liability or obligation to the assigning party for the failure of such other exchange to qualify as a like kind exchange under Section 1031 of the Code unless such failure is the result of the material breach or default by such other party under this Agreement. 10.6. LEASE OF KAVC-AM TOWER SITE. Concurrently with the execution and delivery of this Agreement, Regent and Buyer shall enter into a lease, commencing on the earlier of the Commencement Date of the Time Brokerage Agreement or a date 60 days after the date hereof, and continuing for a lease term ending December 31, 2050, by which Regent shall lease to Buyer, and Buyer shall lease from Regent, for the continued purpose of a broadcast tower site (and all uses incidental thereto) the real property currently used as the tower site for KAVC-AM located at Highway 58, Mojave, Kern County, California and all improvements thereon (the "Tower Site"). The lease will provide for an annual rent of One Dollar ($1.00); will be assignable by both Regent and Buyer (in the case of Buyer, with the prior written consent of lessor, except for assignment to the assignee of the FCC licenses, authorizations and permits of the Station); and otherwise will be substantially in the same form as that attached hereto as Exhibit B (the "Lease"). It is contemplated that Kern County will purchase this property subject to the existence of this Lease as provided in Section 11.3 below and following such purchase will take, in cooperation with Regent, certain remedial measures to contain burn ash and any concentration of heavy metals and other hazardous materials on the property, including the following: (a) Regent will hire a contractor who will raise the grounding anchors for the transmitting tower guy wires a minimum of two feet above the existing ground level and strengthen or replace sections of the guy wires if needed to raise the anchors. After Kern County has placed clean dirt fill around the tower as provided below, Regent will install and connect a new set of 50-foot-long radial grounding wires to the antenna tower, place pea gravel over the new grounding wires and "retune" the antenna tower to industry specifications. (b) Kern County will import, spread, compact and maintain clean dirt fill over the entire Leased Premises or, in its sole discretion, with respect to the area around the structure housing the transmitter equipment, will pave or spread pea gravel and maintain the same. (c) To reimburse Regent for the costs of step (a) above and any lost broadcast revenue as a result thereof, up to a maximum of $25,000, Kern County will deposit in escrow pursuant to the terms of the Tower Site Purchase Agreement (as defined below) $25,000. 16 17 In the event all of such remedial work has not been completed prior to the Closing hereunder, at the Closing Regent shall assign to Buyer all of Regent's rights to the $25,000 escrow fund (less the portion thereof equal to Regent's unreimbursed out-of-pocket costs incurred in the furtherance of step (a)) and Buyer shall assume and perform all of Regent's duties or agreements relating to the steps Regent is to take under the Tower Site Purchase Agreement to modify the existing broadcast facilities on the site. ARTICLE 11: CONDITIONS OF CLOSING BY BUYER ------------------------------ The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 11.1. REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties of Regent made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Regent at or prior to Closing shall have been complied with or performed in all material respects. Buyer shall have received a certificate dated as of the Closing Date from Regent, executed by an authorized officer of Regent to the effect that the conditions set forth in this Section have been satisfied. 11.2. GOVERNMENTAL CONSENTS. The FCC Consent and, if applicable, DOJ Consent and HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. 11.3. SALE OF KAVC-AM TOWER SITE TO KERN COUNTY. Regent shall have entered into a valid and binding contract for the sale of the Tower Site to Kern County, California, and such contract will provide that such transfer will be subject to the Lease which will run to Regent's and Buyer's successors and assigns, run with the land and be referred to in the deed; and will provide for full indemnity of Buyer, its successors and assigns, for "any and all losses, claims, liabilities and costs (including, without limitation, cleanup and investigatory costs, fines and penalties, and reasonable attorneys' and consultants' fees) associated with the presence as of the commencement date of the Lease of any hazardous substance, pollutant or contaminant on the Tower Site as a result of the past operation of a burn dump on the Tower Site by Kern County, California" (or in form otherwise reasonably acceptable to Buyer) (the "Tower Site Purchase Agreement"). ARTICLE 12: CONDITIONS OF CLOSING BY REGENT ------------------------------- 17 18 The obligations of Regent hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions: 12.1. REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and warranties of Buyer made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Buyer at or prior to Closing shall have been complied with or performed in all material respects. Regent shall have received a certificate dated as of the Closing Date from Buyer, executed by an authorized officer of Buyer, to the effect that the conditions set forth in this Section have been satisfied. 12.2. GOVERNMENTAL CONSENTS. The FCC Consent and, if applicable, DOJ Consent and HSR Clearance, shall have been obtained, and no court or governmental order prohibiting Closing shall be in effect. ARTICLE 13: EXPENSES -------- 13.1. EXPENSES. Each party shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement, except that (i) all recordation, transfer and documentary taxes, fees and charges, and any excise, sales or use taxes, applicable to the transfer of the Station Assets shall be paid by Regent, (ii) all FCC filing fees shall be paid equally by Buyer and Regent, and (iii) all HSR Act filing fees and expenses shall be paid equally by Regent and Buyer. ARTICLE 14: DOCUMENTS TO BE DELIVERED AT CLOSING ------------------------------------ 14.1. BUYER'S DOCUMENTS. At Closing, Buyer shall deliver or cause to be delivered to Regent: (i) certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 12.1; (iii) such documents and instruments of assumption as may be necessary to assume the Assumed Obligations; and (iv) the Cash Payment in accordance with Section 3.1 hereof. 14.2. REGENT'S DOCUMENTS. At Closing, Regent shall deliver or cause to be delivered to Buyer: (i) the certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby; (ii) the certificate described in Section 11.1; 18 19 (iii) such bills of sale, assignments, special warranty deeds, documents of title and other instruments of conveyance, assignment and transfer as may be necessary to convey, transfer and assign the Station Assets to Buyer, free and clear of Liens, except for Permitted Liens; and (iv) the executed Tower Site Purchase Agreement. ARTICLE 15: SURVIVAL; INDEMNIFICATION. ------------------------- 15.1. SURVIVAL. It is the express intention and agreement of the parties to this Agreement that all covenants and agreements (together, "Agreements") and all representations and warranties (together, "Warranties") made by Buyer and Regent in this Agreement shall survive the Closing (regardless of any knowledge, investigation, audit or inspection at any time made by or on behalf of Buyer or Regent) as follows: (a) The Agreements shall survive the Closing without limitation. (b) The Warranties in SECTION 7.5 or otherwise relating to the federal, state, local or foreign tax obligations of Regent shall survive the Closing until thirty (30) days following the period of the applicable statute of limitations, plus any extensions or waivers granted or imposed with respect thereto. (c) All other Warranties shall survive for a period of two hundred seventy (270) days from the Closing Date 15.2. INDEMNIFICATION. --------------- (a) From and after the Closing, Buyer shall defend, indemnify and hold harmless Regent from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses ("Damages") incurred by Regent arising out of or resulting from: (i) any breach or default by Buyer under this Agreement; or (ii) the Assumed Obligations or the business or operation of the Stations after Closing. (b) From and after the Closing, Regent shall defend, indemnify and hold harmless Buyer from and against any and all Damages incurred by Buyer arising out of or resulting from: (i) any breach or default by Regent under this Agreement; or (ii) the Retained Obligations or, subject to the terms of the Time Brokerage Agreement, the business or operation of the Stations before Closing provided, however, that for claims for breach of Warranties, Regent shall have no liability to Buyer hereunder until, and only to the extent that, Buyer's 19 20 aggregate Damages exceed $50,000 (except for Damages (x) for any Liens not in compliance with subsection (iii) of the last paragraph of 1.1 ("Lien Default") or (y) for breach of the Encroachment Representation ("Encroachment Default") for which Regent shall have liability for all such Damages under $200,000 or in excess of $250,000) and (ii) the maximum liability of Regent in all cases of indemnification hereunder shall be $1,000,000. Provided, however, Buyer agrees that before making a claim for Damages for Lien Default, or Encroachment Default, that it shall use its reasonable best efforts to allow Regent to avoid or cure any such default and Damages through the use of lease, contract or any other reasonable arrangements. 15.3. PROCEDURES. The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (a "Claim"), but a failure to give such notice or delaying such notice shall not affect the indemnified party's right to indemnification and the indemnifying party's obligation to indemnify as set forth in this Agreement, except to the extent the indemnifying party's ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced. The obligations and liabilities of the parties with respect to any Claim shall be subject to the following additional terms and conditions: (a) The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim. (b) In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within twenty (20) days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof). (c) Anything herein to the contrary notwithstanding: (i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (ii) the indemnifying party shall not, without the indemnified party's written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim; and (iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other 20 21 representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim. (d) All claims not disputed shall be paid by the indemnifying party within thirty (30) days after receiving notice of the Claim. "Disputed Claims" shall mean claims for Damages by an indemnified party which the indemnifying party objects to in writing within thirty (30) days after receiving notice of the Claim. In the event there is a Disputed Claim with respect to any Damages, the indemnifying party shall be required to pay the indemnified party the amount of such Damages for which the indemnifying party has, pursuant to a final determination, been found liable within ten (10) days after there is a final determination with respect to such Disputed Claim. A final determination of a Disputed Claim shall be (i) a judgment of any court determining the validity of a Disputed Claim, if no appeal is pending from such judgment and if the time to appeal therefrom has elapsed; (ii) an award of any arbitration determining the validity of such disputed claim, if there is not pending any motion to set aside such award and if the time within which to move to set aside such award has elapsed; (iii) a written termination of the dispute with respect to such claim signed by the parties thereto or their attorneys; (iv) a written acknowledgment of the indemnifying party that it no longer disputes the validity of such claim; or (v) such other evidence of final determination of a disputed claim as shall be acceptable to the parties. No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims. ARTICLE 16: TERMINATION ----------- 16.1. TERMINATION. This Agreement may be terminated at any time prior to Closing as follows: (a) by mutual written consent of Buyer and Regent; (b) by written notice of Buyer to Regent if Regent (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date, including without limitation, the consummation of the Closing in accordance with the Agreement; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below) (c) by written notice of Regent to Buyer if Buyer (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date, 21 22 including without limitation, the consummation of the Closing in accordance with the Agreement; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below) (d) by written notice of either party to the other if the FCC denies the FCC Application; (e) by written notice of Regent to Buyer if the FCC Consent, and if necessary DOJ Consent and HSR Clearance, have not been obtained before the date four months after the date of this Agreement; (f) by written notice of Buyer to Regent or Regent to Buyer if the Closing shall not have been consummated by September 30, 2001; or (g) by written notice of Buyer to Regent or Regent to Buyer if the party giving such notice has terminated the Time Brokerage Agreement. The term "Cure Period" as used herein means a period commencing the date a party receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) days thereafter or (ii) the Closing Date; provided, however, that if the breach or default cannot reasonably be cured within such period but can be cured before the Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date. Except as set forth below, the termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. Notwithstanding anything contained herein to the contrary, Section 13.1 shall survive any termination of this Agreement. 16.2. REMEDIES. The parties recognize that if either party refuses to consummate the Closing pursuant to the provisions of this Agreement or either party otherwise breaches or defaults such that the Closing has not occurred ("Breaching Party"), monetary damages alone will not be adequate to compensate the non-breaching party ("Non-Breaching Party") for its injury. Such Non-Breaching Party shall therefore be entitled to obtain specific performance of the terms of this Agreement in lieu of, and not in addition to, any other remedies, including but not limited to monetary damages, that may be available to it; provided however, that Buyer may elect to recover liquidated damages in lieu of obtaining specific performance. If any action is brought by the Non-Breaching Party to enforce this Agreement, the Breaching Party hereby waives the defense in any such suit that the Non-Breaching Party has an adequate remedy at law and agrees not to interpose any opposition, legal or otherwise, as to the propriety of specific performance as a remedy. In the event of a default by the Breaching Party which results in the filing of a lawsuit for damages, specific performance, or other remedy, the Non-Breaching Party shall be entitled to reimbursement by the Breaching Party of reasonable legal fees and expenses 22 23 incurred by the Non-Breaching Party, provided that the Non-Breaching Party is successful in such lawsuit. 16.3. LIQUIDATED DAMAGES. If Regent terminates this Agreement pursuant to Section 16.1(c), then the Deposit shall be delivered to Regent, and the proceeds thereof shall constitute liquidated damages; provided however, Regent shall not be entitled to liquidated damages in the event Regent terminates this Agreement because of a failure of a condition to be satisfied if such failure is not caused by a failure of Buyer to perform the obligations to be satisfied or performed by it under this Agreement. Provided further, Regent shall not be entitled to liquidated damages unless all of the Buyer's conditions precedent to its obligation to close as provided for in Article 11 have been satisfied and Buyer fails to consummate the Closing on the Closing Date and Regent is not in material default or breach of any of its obligations under the Agreement and has otherwise satisfied the conditions and has performed the obligations to be satisfied or performed by it pursuant to the Agreement in all material respects. It is understood and agreed that such liquidated damages amount represents Regent's and Buyer's reasonable estimate of actual damages and does not constitute a penalty. ARTICLE 17: MISCELLANEOUS PROVISIONS ------------------------ 17.1. CASUALTY LOSS. In the event any loss or damage of the Station Assets exists on the Closing Date, the parties shall consummate the Closing and assign all proceeds of any insurance payable on account of such damage or loss. 17.2. FURTHER ASSURANCES. After the Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments and take such other actions as may reasonably be requested in order to more effectively consummate the transactions contemplated hereby to exchange assets and assume obligations as contemplated by this Agreement. 17.3. ASSIGNMENT. Except as set forth in Section 10.5 (1031 Exchange), neither party may assign this Agreement without the prior written consent of the other party hereto, provided that Buyer may assign its right to acquire one or more of the radio stations covered by this Agreement to one or more 100% owned affiliates of Buyer if such assignment does not delay the governmental consents contemplated by Article 5 (or otherwise delay Closing), the representations made by it under this Agreement are true with respect to the assignee(s), and Buyer gives Regent prior written notice thereof. No such assignment shall relieve Buyer of any obligation or liability under this Agreement. With respect to any permitted assignment, the parties shall take all such actions as are reasonably necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other 23 24 governmental authorities. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and permitted assigns of the parties hereto. 17.4. AMENDMENTS. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. 17.5. HEADINGS. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. 17.6. GOVERNING LAW. The construction and performance of this Agreement shall be governed by the laws of the State of California without giving effect to the choice of law provisions thereof. 17.7. NOTICES . Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, including by facsimile, and shall be deemed to have been received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery or when delivered by facsimile transmission, and shall be addressed as follows (or to such other address as any party may request by written notice): if to Buyer: Concord Media Group of California, Inc. 11521 Innfields Drive Odessa, Florida 33556 Attention: Mark Jorgenson Facsimile: (813) 926-9001 with a copy (which shall not constitute notice) to: Rosenman & Colin LLP 805 15th Street, NW, 9th Floor Washington, DC 20005-2212 Attention: Lee W. Shubert, Esq. Facsimile: (202) 216-4700 if to Regent: c/o Regent Communications, Inc. 100 East River Center Blvd., Ninth Floor Covington, KY 41011 Attention: Terry S. Jacobs 24 25 Facsimile: (606) 292-0352 with a copy (which shall not constitute notice) to: Strauss & Troy The Federal Reserve Building 150 East Fourth Street Cincinnati, Ohio 45202 Attention: Alan C. Rosser, Esq. Facsimile: 513-241-8259 17.8. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. 17.9. NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns, any rights or remedies under or by reason of this Agreement. 17.10. SEVERABILITY. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. 17.11. ENTIRE AGREEMENT. This Agreement, and any other document executed by the parties pursuant or in connection with this Agreement of even date embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. [SIGNATURE PAGE FOLLOWS] 25 26 SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT ------------------------------------------ IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. BUYER: CONCORD MEDIA GROUP OF CALIFORNIA, INC. By: /s/ Mark W. Jorgenson ------------------------------------- Name: Mark W. Jorgenson Title: President 26 27 REGENT: REGENT BROADCASTING OF PALMDALE, INC. By: /s/ Terry S. Jacobs ------------------------------- Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF PALMDALE, INC. By: /s/ Terry S. Jacobs ------------------------------- Name: Terry S. Jacobs Title: Chairman 27 EX-27 3 l84957aex27.txt EXHIBIT 27
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 1,517,501 0 8,842,383 (395,000) 0 12,460,574 29,029,433 7,959,125 253,818,654 3,984,625 43,525,000 0 0 351,584 203,619,117 253,818,654 0 29,829,018 0 29,262,571 219,903 0 3,074,019 16,269,316 0 16,269,316 0 (1,114,124) 0 15,155,192 (0.39) (0.39)
-----END PRIVACY-ENHANCED MESSAGE-----