-----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, Jg3OSaWCEt6SXwBaxp6i9SwDygBU7Pb5lx5GDwrCKFi5vbJ3FqoODC3JqlTxwc+l KSf3EBKlwj0IUlBHHqM/pA== 0000950152-01-505610.txt : 20020410 0000950152-01-505610.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950152-01-505610 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGENT COMMUNICATIONS INC CENTRAL INDEX KEY: 0000913015 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 311492857 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-46435 FILM NUMBER: 1780463 BUSINESS ADDRESS: STREET 1: 100 EAST RIVERCENTER BOULEVARD STREET 2: 9TH FLOOR CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6062920030 MAIL ADDRESS: STREET 1: 100 EAST RIVERCENTER BLVD STREET 2: 9TH FLOOR CITY: COVINGTON STATE: KY ZIP: 41011 10-Q 1 l91281ae10-q.txt REGENT COMMUNICATIONS, INC. FORM 10-Q 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, 2001 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 -34,704,738 shares outstanding as of November 7, 2001 REGENT COMMUNICATIONS, INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001 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, 2001 (unaudited) and September 30, 2000 (unaudited)............... 3 Condensed Consolidated Balance Sheets as of September 30, 2001 (unaudited) and December 31, 2000............ 4 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2001 (unaudited) and September 30, 2000 (unaudited).................................... 5 Notes to Condensed Consolidated Financial Statements (unaudited)............... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk..................... 17 PART II OTHER INFORMATION Item 1. Legal Proceedings.............................................................. 17 Item 2. Changes in Securities and Use of Proceeds...................................... 17 Item 6. Exhibits and Reports on Form 8-K............................................... 18
-2- PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share amounts)
Three Months Ended September 30, Nine Months Ended September 30, 2001 2000 2001 2000 ----------------- ----------------- ---------------- ---------------- Gross broadcast revenues $15,507 $12,872 $44,119 $32,580 Less agency commissions 1,478 1,181 4,098 2,751 ----------------- ----------------- ---------------- ---------------- Net broadcast revenues 14,029 11,691 40,021 29,829 Station operating expenses 9,851 7,952 28,165 20,649 Depreciation and amortization 3,380 2,126 9,998 5,395 Corporate general and administrative expenses 1,227 1,087 3,810 3,219 ----------------- ----------------- ---------------- ---------------- Operating (loss) income (429) 526 (1,952) 566 Interest expense (724) (596) (2,498) (3,074) Gain on sale of radio stations - 17,720 4,463 17,646 Other (expense) income, net (239) 329 (515) 1,131 ----------------- ----------------- ---------------- ---------------- (Loss) income before income taxes and extraordinary items (1,392) 17,979 (502) 16,269 Income tax benefit 400 - 1,000 - ----------------- ----------------- ---------------- ---------------- (Loss) income before extraordinary item (992) 17,979 498 16,269 Extraordinary loss on extinguishment of debt, net of taxes - - - (1,114) ----------------- ----------------- ---------------- ---------------- Net (loss) income ($992) $17,979 $498 $15,155 ================= ================= ================ ================ (Loss) income applicable to common shares: (Loss) income ($992) $17,979 $498 $15,155 Preferred stock dividend requirements - - - (629) Preferred stock accretion - - - (26,611) ----------------- ----------------- ---------------- ---------------- (Loss) income applicable to common shares ($992) $17,979 $498 ($12,085) ================= ================= ================ ================ Basic net (loss) income per common share: (Loss) income before extraordinary item ($0.03) $0.52 $0.01 ($0.35) Extraordinary item - - - (0.04) ----------------- ----------------- ---------------- ---------------- Net (loss) income per common share ($0.03) $0.52 $0.01 ($0.39) ================= ================= ================ ================ Diluted net (loss) income per common share: (Loss) income before extraordinary item ($0.03) $0.51 $0.01 ($0.35) Extraordinary item - - - (0.04) ----------------- ----------------- ---------------- ---------------- Net (loss) income per common share ($0.03) $0.51 $0.01 ($0.39) ================= ================= ================ ================ Number of common shares used in Basic calculation 34,153 34,596 33,945 31,121 Number of common shares used in Diluted calculation 34,153 35,415 34,851 31,121
The accompanying notes are an integral part of these condensed consolidated financial statements -3- REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
September 30, December 31, 2001 2000 ------------------- --------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,245 $ 778 Accounts receivable, less allowance of $700 and $403 at September 30, 2001 and December 31, 2000, respectively 10,507 10,639 Other current assets 859 595 ------------------- --------------- Total current assets 12,611 12,012 Property and equipment, net 21,672 20,716 Intangible assets, net 226,493 217,897 Other assets, net 1,945 2,108 ------------------- --------------- Total assets $ 262,721 $ 252,733 =================== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,816 $ 1,672 Accrued compensation 1,495 932 Other current liabilities 1,842 2,298 ------------------- --------------- Total current liabilities 5,153 4,902 Long-term debt, less current portion 49,034 45,010 Deferred taxes and other long-term liabilities 3,451 4,401 ------------------- --------------- Total liabilities 57,638 54,313 Commitments and Contingencies Stockholders' equity: Common stock, $.01 par value, 60,000,000 shares authorized 36,012,911 and 35,158,349 shares issued at September 30, 2001 and December 31, 2000, respectively 360 352 Treasury shares, 1,363,752 shares, at cost, at September 30, 2001 and December 31, 2000 (7,063) (7,063) Additional paid-in-capital 265,543 259,386 Retained deficit (53,757) (54,255) ------------------- --------------- Total stockholders' equity 205,083 198,420 ------------------- --------------- Total liabilities and stockholders' equity $ 262,721 $ 252,733 =================== ===============
The accompanying notes are an integral part of these condensed consolidated financial statements -4- REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands)
Nine months ended September 30, 2001 2000 ---------------------- --------------------- Cash flows from operating activities: Net cash provided by operating activities $ 4,977 $ 2,560 Cash flows from investing activities: Acquisitions of radio stations, net of cash acquired (19,503) (148,539) Capital expenditures (2,129) (1,289) Net proceeds from sale of radio stations 13,440 - Escrow deposits for acquisitions of radio stations (375) (463) Other 23 98 ---------------------- --------------------- Net cash used in investing activities (8,544) (150,193) Cash flows from financing activities: Proceeds from issuance of common and convertible preferred stocks 20 156,938 Payment on buyback of treasury shares - (2,726) Dividends paid on all series of preferred stock - (7,296) Redemption of Series B preferred stock - (5,857) Principal payments on long-term debt (16,476) (25,809) Long-term debt borrowings 20,500 44,000 Payments for deferred financing costs - (1,904) Payment of issuance costs (10) (11,606) ---------------------- --------------------- Net cash provided by financing activities 4,034 145,740 Net increase (decrease) in cash and cash equivalents 467 (1,893) Cash and cash equivalents at beginning of period 778 3,411 ---------------------- --------------------- Cash and cash equivalents at end of period $ 1,245 $ 1,518 ====================== ===================== Supplemental schedule of non-cash financing and investing activities: Common stock issued in conjunction with the acquisitions of stations in Utica-Rome and Watertown, New York $ - $ 850 Common stock issued in conjunction with the acquisition of KZAP-FM in Chico, California $ - $ 2,687 Common stock issued in conjunction with the acquisition of six radio stations in Peoria, Illinois $ 6,000 $ -
The accompanying notes are an integral part of these condensed consolidated financial statements -5- REGENT COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Regent Communications, Inc. (including its wholly-owned subsidiaries, the "Company" or "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. 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, 2000 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 for the year ended December 31, 2000. 2. COMPLETED AND PENDING ACQUISITIONS AND DISPOSITIONS COMPLETED ACQUISITIONS AND DISPOSITIONS On May 9, 2001, the Company completed the acquisition by merger with StarCom, Inc. of one AM and two FM radio stations (KXSS-AM, KKRS-FM and KLZZ-FM) serving the St. Cloud, Minnesota market for approximately $5.0 million in cash. The purchase was funded by borrowings under Regent's bank credit facility. Prior to the closing of the purchase, the Company provided programming and other services to the stations under a time brokerage agreement, which began in July 2000. The Company has allocated approximately $4.9 million of the purchase price to FCC licenses and other intangibles and approximately $0.1 million to fixed assets. On June 1, 2001, the Company completed the sale of substantially all the assets of its three radio stations serving the Palmdale, California market (KTPI-FM, KAVC-AM, and KOSS-FM) to Concord Media Group, Inc. for approximately $13.5 million in cash. The Company recognized a pre-tax gain of approximately $4.5 million on the sale. On August 29, 2001, the Company completed an acquisition from Two Petaz, Inc.; WFYR, Inc.; Winston Communications, Inc. of Illinois; and the Cromwell Group, Inc., of (i) substantially all the assets of WGLO-FM, WPPY-FM, WRVP-FM and WVEL-AM, serving the Peoria, Illinois market, for a purchase price of approximately $14.0 million in cash and (ii) substantially all the assets of radio stations WFYR-FM and WIXO-FM, also serving the Peoria market, in exchange for 786,141 shares of Regent common stock, valued at approximately $6.0 million. Prior to the closing of the purchase, the Company provided programming and other services to the stations under time brokerage agreements, which began in May 2001. The Company has preliminarily allocated approximately $18.4 million of the purchase price to FCC licenses and approximately $1.6 million to fixed assets, pending final review of the assets purchased. This acquisition falls within the guidance of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), which prescribes that intangible assets purchased through a -6- business combination which is completed subsequent to June 30, 2001, and are classified as having indefinite lives, such as FCC licenses, are not to be amortized. See Note 6 in the Notes to Condensed Consolidated Financial Statements for more information regarding the provisions of SFAS 142. The following unaudited pro forma data summarize the combined results of operations of Regent, together with the operations of the stations acquired in 2000 and 2001, but excluding the operations of the Palmdale, California stations disposed of in the second quarter of 2001, as though the acquisition or disposition of stations had occurred at the beginning of each of the periods presented.
Nine Months Ended September 30, ------------------------------- 2001 2000 ---- ---- (unaudited) (In thousands, except per share amounts) Net broadcast revenues $ 40,093 $ 39,089 Loss before extraordinary items $ (3,124) $ (1,665) Net loss $ (3,124) $ (2,779) Net loss per common share before extraordinary items: Basic and diluted $ (0.09) $ (0.05) Net loss per common share: Basic and diluted $ (0.09) $ (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 been consummated at the beginning of the nine-month periods. ACQUISITIONS COMPLETED SUBSEQUENT TO SEPTEMBER 30, 2001 On October 15, 2001, the Company completed the acquisition of substantially all the assets of WJET-FM, serving the Erie, Pennsylvania market, from NextMedia Group II, Inc. for $4.9 million in cash. PENDING ACQUISITIONS On July 27, 2001, the Company entered into a definitive agreement to purchase an option to buy Haith Broadcasting Corporation for approximately $1.1 million in cash, and the stock of Haith Broadcasting Corporation, owner of WFGR-FM, serving the Grand Rapids, Michigan market, for approximately $3.9 million in cash. Regent has placed in escrow $250,000 to secure its obligations under the agreement. The Company expects the transaction to close in the first quarter of 2002. Also on July 27, 2001, the Company entered into a definitive agreement to purchase the stock of Frankenmuth Radio Co., Inc., owner of WZRZ-FM, serving the Flint, Michigan market, for a purchase price of approximately $2.0 million, of which approximately $1.4 million is payable in Regent common stock. Regent has placed in escrow $125,000 to secure its obligations under the agreement. The Company expects the transaction to close in the first quarter of 2002. -7- On August 29, 2001, the Company entered into a definitive agreement to purchase substantially all of the assets of seven radio stations serving the Lafayette, Louisiana market from ComCorp of Lafayette, Inc. and its affiliates for approximately $39.6 million in cash. Regent delivered an irrevocable letter of credit in the amount of $2.0 million to secure its obligations under the agreement. The Company expects the transaction to close in the fourth quarter of 2001. 3. LONG-TERM DEBT In January of 2000, the Company 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 $125.0 million (including a commitment to issue letters of credit of up to $25.0 million in aggregate face amount, subject to the maximum revolving commitment available) and an additional revolving loan facility with a maximum aggregate amount of $50.0 million available, subject to the terms of the credit agreement. This additional $50.0 million of borrowing capacity is available until January 2002, and would thereafter convert to a term loan maturing December 31, 2006. The credit facility is available for working capital and acquisitions, including related acquisition expenses. At September 30, 2001, there were borrowings of approximately $48.6 million outstanding under this facility and there were approximately $76.4 million of available borrowings, subject to the terms and conditions of the credit facility, of which approximately $2.3 million was committed under letters of credit. Under the credit facility, the Company is required to maintain a minimum interest rate coverage ratio, minimum fixed charge coverage ratio, maximum corporate overhead, and maximum financial leverage ratio, and to observe negative covenants customary for facilities of this type. Borrowings under the credit facility bear interest at a rate equal to, at the Company's option, either (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 either case plus the applicable margin determined under the credit facility, or (b) the reserve-adjusted Eurodollar Rate plus the applicable margin, which varies between 1.25% and 2.75% depending upon the Company's financial leverage. Borrowings under the credit facility bore interest at an average rate of 4.8% as of September 30, 2001. The Company is required to pay certain fees to the agent and the lenders for the underwriting commitment, administration and use of the credit facility. The Company's indebtedness under this credit facility is collateralized by liens on substantially all of its assets and by a pledge of its operating and license subsidiaries' stock and is guaranteed by these subsidiaries. 4. CAPITAL STOCK The Company's authorized capital stock consists of 60,000,000 shares of common stock and 40,000,000 shares of preferred stock. No shares of preferred stock were issued at September 30, 2001. Of the authorized but unissued preferred stock, 620,000 shares are designated as Series A convertible preferred stock, 1,000,000 shares as Series B senior convertible preferred stock, 4,000,000 shares as Series C convertible preferred stock, 1,000,000 shares as Series D convertible preferred stock, 5,000,000 shares as Series E convertible preferred stock, 4,100,000 shares as Series F convertible preferred stock, 1,800,000 shares as Series G convertible preferred stock, 2,200,000 shares as Series H convertible preferred stock and 4,100,000 shares of Series K convertible preferred stock. The Company also has 16,180,000 shares of preferred stock whose series and designation have not been fixed. In January 2000, the Company repurchased 275,152 shares of its common stock for approximately $1.5 million from an affiliate of one of the underwriters of its initial public -8- offering of stock in order to comply with rules of the National Association of Securities Dealers, Inc. In July 2000, Regent's Board of Directors approved a program to buy back up to $10.0 million of its common stock, of which approximately $5.5 million was used during the year 2000 to purchase 1,088,600 shares. There were no purchases of common stock by Regent during the first nine months of 2001, leaving the Company the ability to buy back, at its discretion, up to $4.5 million worth of its common stock under the program. On March 20, 2001, Regent issued 37,230 shares of its common stock to River Cities Capital Fund Limited Partnership upon the exercise in full, on a cashless net issue basis, of outstanding warrants which provided for the purchase of a total of 100,000 shares of Regent common stock at $5.00 per share. These warrants had been issued in 1998 in connection with the issuance of Series B and F convertible preferred stock. Regent's remaining warrants, which expire in 2003, entitle the holders to purchase a total of 790,000 shares of Regent's common stock at $5.00 per share. In August 2001, the Company issued 786,141 shares of its common stock, valued at approximately $6.0 million, in connection with the acquisition of six radio stations in Peoria, Illinois. 5. EARNINGS PER SHARE Regent follows the provisions of SFAS 128, "Earnings Per Share," which 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. For the nine months ended September 30, 2001, the effects of the assumed exercise of outstanding options to purchase 1,885,058 shares of common stock and warrants to purchase 790,000 shares of common stock are dilutive. For the three months ended September 30, 2001, the effects of the assumed exercise of the above options and warrants are not dilutive, therefore, basic EPS and diluted EPS are the same for that period. 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 quarter ended September 30, 2000, but are not dilutive for the nine months ended September 30, 2000, therefore, basic EPS and diluted EPS for that period are the same.
Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 ------------- ------------- ------------- ------------- (in thousands) Weighted Average Basic Common Shares 34,153 34,596 33,945 31,121 Dilutive effect of stock options and warrants - 819 906 - ------------- ------------- ------------- ------------- Weighted Average Diluted Common Shares 34,153 35,415 34,851 31,121
-9- 6. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141") and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141, which became effective on July 1, 2001, eliminated the use of pooling of interests for all business combinations initiated after June 29, 2001 and also established specific criteria for the recognition of intangible assets separate from goodwill. As the Company historically reflected acquisitions using the purchase method, we do not believe that SFAS 141 will have a significant impact on the Company. SFAS 142 requires that a company no longer amortize the goodwill and intangible assets determined to have an indefinite life and also requires an annual impairment testing of those assets. SFAS 142 must be adopted in the first quarter of the first fiscal year beginning after December 15, 2001. The Company will adopt SFAS 142 on January 1, 2002. The Company is currently evaluating the full impact that SFAS 141 and SFAS 142 will have on its consolidated financial statements, and believe that SFAS 142 could have a material impact on its financial statements as amortization of goodwill and certain other intangible assets represents a significant expense for the Company. For the three and nine months ended September 30, 2001, amortization expense related to goodwill and indefinite life intangibles was approximately $2.6 million and $7.7 million, respectively. In addition, upon adoption, the Company will perform the first of the required impairment tests of goodwill and indefinite life intangibles and have not yet determined what the effect of these tests will be on the Company's financial position or results of operations. In June 2001, the FASB issued Statement of Financial Accounting Standards No.143, "Accounting for Asset Retirement Obligations" that addresses the recognition of asset retirement obligations. The statement is effective for fiscal years beginning after June 15, 2002. The Company has not yet determined the impact, if any, of adopting SFAS 143. In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" ("SFAS 144"). SFAS 144 supersedes SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Assets to be Disposed of" and certain provisions of APB Opinion 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS 144 establishes a single accounting model for long-lived assets to be disposed of by sale. SFAS 144 must be adopted in the first quarter of the first fiscal year beginning after December 15, 2001. The Company will adopt SFAS 144 on January 1, 2002. The Company is currently evaluating the full impact that SFAS 144 will have on its consolidated financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL 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. 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 -10- 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. 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 may 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, the ongoing impact of the September 11, 2001 tragedy and the war on terrorism, increased competition for attractive radio properties and advertising dollars, fluctuations in the cost of operating radio properties, our ability to manage our growth, our ability to integrate our acquisitions, 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 this Form 10-Q. If we do update one or more forward-looking statements, you should not conclude that we will make additional updates with respect to those or any other forward-looking statements. 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, 2001 versus September 30, 2000 follows: Our results from operations for the three and nine months ended September 30, 2001 have been substantially affected by the terrorist activities of September 11, 2001. At the time of the attacks we decided the public interest would be best served by the presentation of continuous, commercial-free coverage of the unfolding events on our stations. The resulting loss of revenue, plus the economic uncertainty fueled by the attacks, on top of an already sluggish economy, has resulted in reduced earnings for the current year periods presented below. COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2001 TO THREE MONTHS ENDED SEPTEMBER 30, 2000 Net broadcast revenues for the third quarter of 2001 increased by 20% over the prior year quarter, from $11.7 million in 2000 to $14.0 million in 2001. For the same comparable periods, station operating expenses increased 24% from $8.0 million to $9.9 million, and depreciation and amortization increased 59% from $2.1 million to $3.4 million. A primary factor influencing the increases in all categories was the August 24, 2000 exchange of radio stations with Clear Channel Communications, Inc. (the "Clear Channel Exchange"), whereby we relinquished three stations in Mansfield, Ohio, five stations in Victorville, California, and $80.5 million in cash to obtain four stations in Grand Rapids, Michigan and six stations in Albany, New York. Additionally, our -11- operation under a time brokerage agreement and subsequent purchase of six stations in Peoria, Illinois during the third quarter of 2001 also contributed to these increases. The increases in the above categories were partially offset by the sale of the Palmdale, California stations during the second quarter of 2001 and net broadcast revenues were offset by the economic impact of the terrorist attacks of September 11. The Clear Channel Exchange, offset by the sale of Palmdale and the economic impact of the terrorist attacks, also contributed to a 7% increase in our broadcast cash flow, excluding barter, for the third quarter of 2001, increasing to $4.1 million from $3.8 million in 2000. While the acquisitions mentioned above have affected the comparability of our 2001 results from operations to those of 2000, we believe more direct 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 any markets held for sale. This group of comparable markets is currently represented by 34 radio stations in eight markets. In these comparable markets, for the three months ended September 30, 2001, as compared to the same period in 2000, our net broadcast revenues, excluding barter revenues, increased by less than one percent, and broadcast cash flow decreased by 19.4%. The flat revenue and decrease in broadcast cash flow is largely attributable to the commercial free format the Company adopted in the days following the September 11 terrorist attack, and the subsequent decline in advertising revenue, as advertisers decreased spending levels due to the general economic uncertainty caused by the attacks, on top of an already weak economy, and in certain instances, diverted funds from their advertising budgets to make contributions to relief efforts. Corporate general and administrative expenses increased $0.1 million, or 13%, from approximately $1.1 million in the third quarter of 2000 to $1.2 million in the third quarter of 2001. Our corporate expenses stabilized in the second and third quarters of 2001, as the programs we implemented during the year 2000 to increase our corporate and technical infrastructure for our larger size became effective. Interest expense increased 21% from approximately $0.6 million in 2000 to $0.7 million in 2001, primarily due to more borrowings under the credit facility during the third quarter of 2001 than the comparable 2000 quarter, and three full months of borrowings in the third quarter of 2001, versus one and one-half months in 2000. The increase was mitigated somewhat by lower interest rates during the third quarter of 2001. During the third quarter of 2000, we recognized a pre-tax gain of approximately $17.7 million on the Clear Channel Exchange. We recorded an income tax benefit of approximately $0.4 million for the third quarter of 2001, as compared to no tax provision recorded in the third quarter of 2000, as a full valuation allowance recorded against the deferred tax assets was released as we considered the impact of the tax liabilities resulting from purchase transactions; statutory restrictions on the use of operating losses; and a tax planning strategy available to us. Diluted net loss per common share for the third quarter of 2001 was $0.03 compared to diluted net income per common share of $0.51 in 2000. The large per share amount for 2000 was primarily the result of the gain we recognized on the Clear Channel Exchange during the third quarter of 2000. COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2001 TO NINE MONTHS ENDED SEPTEMBER 30, 2000 Net broadcast revenues for the first nine months of 2001 increased over that of the 2000 period by 34%, from $29.8 million to $40.0 million, while station operating expenses increased from $20.6 million to $28.2 million, an increase of 36%. Depreciation and amortization increased from $5.4 million to $10.0 million, an increase of 85%. The increase in all categories is -12- due primarily to the stations acquired through the Clear Channel Exchange during the third quarter of 2000, and to a lesser extent, the acquisition of stations in Utica-Rome and Watertown, New York during the first quarter of 2000. Our time brokerage agreement for stations in St. Cloud, Minnesota during the third quarter of 2000, and time brokerage agreement and subsequent purchase of stations in Peoria, Illinois during the second and third quarters of 2001, respectively, also contributed to the increases. These increases were partially offset by the sale of the Palmdale, California stations during the second quarter of 2001 and broadcast revenues were also offset by the economic impact of the events of September 11, 2001. The above factors also contributed to the 27% increase in broadcast cash flow, excluding barter, for the nine months ended September 30, 2001, increasing to $11.5 million from $9.1 million for the same period in 2000. Corporate general and administrative expenses increased 18% from $3.2 million in 2000 to $3.8 million in 2001, as we increased the corporate and technical infrastructures to support the expansion of our operations and prepare for future increases in size. Interest expense decreased 19%, from approximately $3.1 million in 2000 to $2.5 million in 2001. After removing the effect of approximately $1.5 million of the 2000 interest expense, which was the result of the mark to fair market value of our warrant liability, interest expense increased $0.9 million, or approximately 59%. This increase was the result of a full nine months of debt service during 2001, versus one and one-half months in 2000. We recognized a pre-tax gain on the sale of the Palmdale, California radio stations of approximately $4.5 million during the second quarter of 2001. During the third quarter of 2000, we recognized a pre-tax gain of approximately $17.7 million on the Clear Channel Exchange. The effective tax rate differs from that computed at the federal statutory rate of 34% principally because of the effect of state income taxes of 2.5%, net of federal benefit, and an increase in deferred tax assets for true-up of net operating loss carry-forwards in the first quarter of 2001. For the comparable period of 2000 there was no tax provision, as a full valuation allowance recorded against the deferred tax assets was released as we considered the impact of the tax liabilities resulting from purchase transactions; statutory restrictions on the use of operating losses; and a tax planning strategy available to us. During the first nine months of 2000 we recognized an extraordinary charge of approximately $1.1 million, net of taxes, related to the write-off of deferred financing fees associated with the payoff of our former credit facility in January of 2000. Diluted net income per common share for the first nine months of 2001 was $0.01 compared to a net loss per common share of $0.39 for the same period in 2000. The large net loss per common share in 2000 was primarily the result of redeemable preferred stock dividends and redeemable preferred stock and warrants accretion from January 1 through completion of our initial public offering on January 28, 2000, offset partially by the gain on exchange of radio stations in the third quarter of 2000. LIQUIDITY AND CAPITAL RESOURCES Our cash balance at September 30, 2001 was approximately $1.2 million compared to $1.5 million at September 30, 2000. Net cash provided by operating activities was $5.0 million in 2001 compared to $2.6 million for 2000. The increase was due primarily to the operating activities of radio stations acquired and/or operated under time brokerage agreements in 2001 and those acquired through the Clear Channel Exchange in the third quarter of 2000. Net cash used in investing activities was $8.5 million for 2001. The purchase of three stations in St. Cloud, Minnesota and six stations in Peoria, Illinois used approximately $19.5 million of cash. These -13- outflows were partially offset by net proceeds of approximately $13.4 million from the sale of our radio stations in Palmdale, California. For the comparable period in 2000, cash flow used in investing activities was $150.2 million, due principally to the acquisitions of radio stations in Utica and Watertown, New York, El Paso, Texas, and the cash payment for the stations we acquired through the Clear Channel Exchange. Cash flows provided by financing activities were approximately $4.0 million in 2001 due primarily to borrowings under our credit facility to finance our 2001 acquisitions, net of repayments of the facility with proceeds from the sale of our Palmdale radio stations. In the first nine months of 2000, cash flows provided by financing activities were approximately $145.7 million, due primarily to net proceeds received from our initial public offering in January 2000 and borrowings under our credit facility to fund a portion of the cash payment in the Clear Channel Exchange. These proceeds were offset by the payoff of our old credit facility and issuance costs related to our initial public offering in January 2000. SOURCES OF FUNDS In January 2000, we entered into a $125.0 million senior secured seven-year reducing revolving bank credit facility maturing December 31, 2006. This facility also provides for an additional $50.0 million of borrowing capacity on substantially the same terms to fund future acquisitions, subject to terms and conditions of the credit agreement. While we do not anticipate any borrowings under this additional capacity, it is available until January 27, 2002, and any borrowings thereunder would thereafter convert to a term loan maturing December 31, 2006. The credit facility permits the borrowing of available credit for working capital requirements and general corporate purposes, including transaction fees and expenses, and to fund permitted acquisitions. The facility also permits us to request from time to time that the lenders issue letters of credit in an aggregate amount up to $25.0 million in accordance with the same lending provisions. The commitment, and our maximum borrowings, will reduce over five years beginning in 2002 as follows (in thousands): December 31, Commitment Amount ------------ ----------------- 2001 $125,000 2002 106,250 2003 87,500 2004 62,500 2005 37,500 2006 0 The $25.0 million letter of credit sub-limit also reduces proportionately but not below $15.0 million. 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 the terms of the facility, we are required to maintain a minimum interest rate coverage ratio, minimum fixed charge coverage ratio, maximum corporate overhead and maximum financial leverage ratio and to observe negative covenants customary for facilities of this type. Borrowings under the 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 either case plus the applicable margin determined under the credit facility, or (b) the reserve-adjusted Eurodollar Rate plus the applicable margin, which varies between 1.25% and 2.75% depending upon our financial leverage. Borrowings outstanding at September 30, 2001 bore interest at an average rate of 4.8%. -14- 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. At November 1, 2001 there were borrowings of approximately $53.1 million outstanding under our facility, and there was approximately $71.9 million of available borrowings, subject to the terms and conditions of the credit facility, of which approximately $2.0 million was committed under a letter of credit. On June 1, 2001, we completed the sale of substantially all the assets of our three radio stations serving the Palmdale, California market (KTPI-FM, KAVC-AM, and KOSS-FM) to Concord Media Group, Inc. for approximately $13.5 million. We recognized a pre-tax gain of approximately $4.5 million on the sale of these stations, and the net proceeds were used to pay down outstanding borrowings under our credit facility. USES OF FUNDS On May 9, 2001, we completed the acquisition by merger with StarCom, Inc. of one AM and two FM radio stations (KXSS-AM, KKRS-FM and KLZZ-FM) serving the St. Cloud, Minnesota market for approximately $5.0 million in cash, which was funded from the credit facility. Prior to the closing of the purchase, we provided programming and other services to the stations under a time brokerage agreement, which began in July 2000. We have allocated approximately $4.9 million of the purchase price to FCC licenses and other intangibles and approximately $0.1 million to fixed assets. On August 29, 2001, we completed the acquisition of one AM and three FM radio stations (WVEL-AM, WGLO-FM, WPPY-FM and WRVP-FM) serving the Peoria, Illinois market for approximately $14.0 million in cash, which was funded with borrowings under the credit facility. We also purchased substantially all the assets of radio stations WFYR-FM and WIXO-FM, also serving the Peoria market, for approximately $6.0 million, paid by the issuance of 786,141 shares of Regent common stock. Prior to the completion of the acquisition, we provided programming and other services to the stations under time brokerage agreements, which began in May 2001. We have preliminarily allocated approximately $18.4 million of the purchase price to FCC licenses and approximately $1.6 million to fixed assets, pending final review of the assets purchased. This acquisition falls within the guidance of Statement of Financial Accounting Standards No. 142 ("SFAS 142"), which prescribes that intangible assets purchased through a business combination which is completed subsequent to June 30, 2001, and are classified as having indefinite lives, such as FCC licenses, are not to be amortized. See Recently Issued Accounting Pronouncements for more information on SFAS 142. In the first nine months of 2001 we funded capital expenditures of $2.1 million, of which approximately $650,000 was related to the acquisition of a new broadcasting tower in our Flint, Michigan market. The remaining balance was utilized to upgrade our equipment and facilities, primarily at stations acquired in 2000, in order to remain competitive and to create cost savings over the long term. We expect capital expenditures in 2001 to be approximately $2.7 million, resulting in an increase of approximately $1.0 million compared to last year, due to various capital projects related to the radio stations we acquired in 2000 and 2001 and the correlating increase in the size of our infrastructure. SUBSEQUENTLY COMPLETED ACQUISITIONS On October 15, 2001, we completed the acquisition of substantially all the assets of WJET-FM, serving the Erie, Pennsylvania market, from NextMedia Group II, Inc. for $4.9 million in cash, which we funded with borrowings under the credit facility. -15- PENDING ACQUISITIONS On July 27, 2001, the Company entered into a definitive agreement to purchase an option to buy Haith Broadcasting Corporation for approximately $1.1 million in cash, and the stock of Haith Broadcasting Corporation, owner of WFGR-FM, serving the Grand Rapids, Michigan market, for approximately $3.9 million in cash. Regent has placed in escrow $250,000 to secure its obligations under the agreement. The Company expects the transaction to close in the first quarter of 2002. Also on July 27, 2001, the Company entered into a definitive agreement to purchase the stock of Frankenmuth Radio Co., Inc., owner of WZRZ-FM, serving the Flint, Michigan market, for a purchase price of approximately $2.0 million, of which approximately $1.4 million is payable in Regent common stock. Regent has placed in escrow $125,000 to secure its obligations under the agreement. The Company expects the transaction to close in the first quarter of 2002 On August 29, 2001, we entered into a definitive agreement to purchase substantially all of the assets of seven radio stations serving the Lafayette, Louisiana market from ComCorp of Lafayette, Inc. and its affiliates for approximately $39.6 million in cash. We delivered an irrevocable letter of credit in the amount of $2.0 million to secure our obligation under the agreement. We expect the transaction to close in the fourth quarter of 2001. We believe that the cash generated from our operations, available borrowings under our credit facility, and/or various other sources of funds that may be available to us, will be sufficient to complete our pending acquisitions and to meet our requirements for corporate expenses and capital expenditures for the foreseeable future, based on our projected operations and indebtedness. After giving effect to all pending transactions, the outstanding borrowings under our credit facility would be approximately $97.9 million with available borrowings of approximately $27.1 million, subject to the terms and conditions of the credit facility. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In June 2001, the FASB issued Statement of Financial Accounting Standards No. 141, "Business Combinations" ("SFAS 141") and No 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 141, which became effective on July 1, 2001, eliminated the use of pooling of interests for all business combinations initiated after June 29, 2001 and also established specific criteria for the recognition of intangible assets separate from goodwill. As we historically have reflected acquisitions using the purchase method, we do not believe SFAS 141 will have a significant impact on us. SFAS 142 requires that a company no longer amortize the goodwill and intangible assets determined to have an indefinite life and also requires an annual impairment testing of those assets. SFAS 142 must be adopted in the first quarter of the first fiscal year beginning after December 15, 2001. We will adopt SFAS 142 on January 1, 2002 and are currently evaluating the full impact that SFAS 141 and SFAS 142 will have on our consolidated financial statements. We believe that SFAS 142 could have a material impact on our financial statements as amortization of goodwill and certain other intangible assets represents a significant expense for us. For the three and nine months ended September 30, 2001, amortization expense related to goodwill and indefinite life intangibles was approximately $2.6 million and $7.7 million, respectively. In addition, upon adoption, we will perform the first of the required impairment tests of goodwill and indefinite life intangibles, and we have not yet determined the effect of these tests on our financial position or results of operations. -16- In June 2001, the FASB issued Statement of Financial Accounting Standards No.143, "Accounting for Asset Retirement Obligations" that addresses the recognition of asset retirement obligations. The statement is effective for fiscal years beginning after June 15, 2002. The Company has not yet determined the impact, if any, of adopting SFAS 143. In October 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets" ("SFAS 144"). SFAS 144 supersedes SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Assets to be Disposed of" and certain provisions of APB Opinion 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS 144 establishes a single accounting model for long-lived assets to be disposed of by sale. SFAS 144 must be adopted in the first quarter of the first fiscal year beginning after December 15, 2001. The Company will adopt SFAS 144 on January 1, 2002. The Company is currently evaluating the full impact that SFAS 144 will have on its consolidated financial statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to the impact of interest rate changes as borrowings under our credit facility bear interest at variable interest rates. It is our policy to enter into interest rate transactions only to the extent considered necessary to meet our objectives. As of September 30, 2001, we have not employed any financial instruments to manage our interest rate exposure. Based on our exposure to variable rate borrowings at September 30, 2001, a one percent (1%) change in the weighted average interest rate would change our annual interest expense by approximately $486,000. 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 (c) On August 29, 2001, the Company issued 786,141 shares of Regent common stock to a shareholder of the selling corporations in connection with the Company's acquisition of radio stations in Peoria, Illinois as described above under "Management's Discussion and Analysis of Financial Condition and Results of Operations." These securities were issued pursuant to the exemptions contained in section 4(2) of the Securities Act of 1933, as amended and Rule 506 of Regulation D promulgated thereunder. -17- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 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. (b) Reports on Form 8-K No Reports on Form 8-K were filed during the third quarter of 2001 -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 9, 2001 By: /s/ Terry S. Jacobs ------------------------------------- Terry S. Jacobs, Chairman of the Board and Chief Executive Officer Date: November 9, 2001 By: /s/ Anthony A. Vasconcellos ------------------------------------- Anthony A. Vasconcellos, Senior Vice President and Chief Financial Officer (Chief Accounting Officer) S-1 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 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 the Registrant's Form 10-K for the Fiscal Year Ended December 31, 1998, filed March 31, 1999 and incorporated herein by this reference) 3(b)* Certificate of Amendment of Amended and Restated Certificate of Incorporation of Regent Communications, Inc. filed with the Delaware Secretary of State on November 19, 1999 (previously filed as Exhibit 3(b) to the Registrant's Form 10-Q for the Quarter Ended June 30, 2001 and incorporated herein by this reference) 3(c)* 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 for the Quarter Ended June 30, 1999 and incorporated herein by this reference) 3(d)* 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(e)* 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) 3(f)* 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(g)* 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, 1999 and incorporated herein by this reference) 3(h)* 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(i)* 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)* Amendment No. 2 and Consent, dated as of August 23, 2000, to the Credit Agreement dated as of January 27, 2000, as amended, 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(c) to the Registrant's Form 10-K for the year ended December 31, 2000 and incorporated herein by this reference) 4(d)* Amendment No. 3 dated as of December 1, 2000, to the Credit Agreement dated as of January 27, 2000, as amended, 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(d) to the Registrant's Form 10-K for the year ended December 31, 2000 and incorporated herein by this reference) 4(e)* 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) 4(f)* 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(g)* 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(h)* 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) Registration Rights Agreement, dated as of August 28, 2001, between Regent Communications, Inc. and Bayard H. Walters. 10(b) Third Amendment to Registration Rights Agreement, dated August 28, 2001, among Regent Communications, Inc. and the Stockholders who are signatories thereto. - ---------------- * Incorporated by reference. EX-10.A 3 l91281aex10-a.txt EXHIBIT 10(A) Exhibit 10(a) REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of August 28, 2001 by and between Regent Communications, Inc., a Delaware corporation, ("Regent" or the "Company") and Bayard H. Walters, an individual (the "Investor"). W I T N E S S E T H: WHEREAS, pursuant to that certain Reorganization Agreement dated as of May 15, 2001 (the "Reorganization Agreement") by and among Regent Broadcasting, Inc., Regent Communications, Inc. and the Investor, the Investor is acquiring shares of Common Stock of Regent. WHEREAS, to induce the Investor to consummate the transactions contemplated by the Reorganization Agreement (the "Transactions"), the parties are willing to enter into this Agreement on the terms and conditions contained herein. NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. DEFINITIONS. Certain capitalized terms used herein are defined in Appendix A hereto. 2. PIGGYBACK REGISTRATIONS. a. RIGHT TO PIGGYBACK. At any time following the consummation of the Transactions, if the Company proposes to register any Common Stock in a Qualified Offering and the registration form to be used in such Qualified Offering also may be used for the registration of Registrable Securities, the Company will give written notice to the Holders of Registrable Securities, of the Company's intention to effect such registration as soon as practicable (but in no event less than 30 days before the anticipated filing date of the Company's registration statement with the SEC). Subject to subparagraph 1(b) below, the Company will include in such registration all Registrable Securities with respect to which the Company has received from the Holders written requests for inclusion therein within 20 days after the date on which the Company sends the Piggyback Notice to the Holders. b. PRIORITY OF REGISTRATION. If any Holder has exercised his right to request a Piggyback Registration and thereafter the Company determines that, or in the case of an underwritten registration, the managing underwriters advise the Company in writing that in their opinion, the number of Registrable Securities requested to be included in such registration exceeds the number which can be sold in an orderly manner within a price range acceptable to the Company, then Company will include in such registration: (i) first, all the securities the Company proposes to sell; (ii) second, all the Senior Securities requested to be included in such -22- registration by any Senior Holders, pro rata among such Senior Holders on the basis of the number of securities requested for inclusion in such registration by each such holder; (iii) third, the Registrable Securities and any Pari Passu Securities requested to be included in such registration, pro rata among the Holders and the Pari Passu Holders requesting such registration on the basis of the number of shares of Registrable Securities and Pari Passu Securities requested for inclusion in such registration by each such holder; and (iv) any other securities requested to be included in such registration, pro rata among the holders of such other securities on the basis of the number of securities requested for inclusion in such registration by each such holder. c. SELECTION OF UNDERWRITERS. In the case of an underwritten registration, the Company will have the sole right to select the investment banker(s) and manager(s) to underwrite the offering notwithstanding any Holder's exercise of his right to request a Piggyback Registration. 2. HOLDBACK AGREEMENTS. For so long as he holds Registrable Securities, the Holder agrees not to effect any public sale or distribution (including sales pursuant to Rule 144) of any equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during any time requested by the managing underwriter for the registration in which the Holder is participating following the Holder's exercise of his right to request a Piggyback Registration. 3. WITHDRAWAL OF REGISTRATION STATEMENT; DELAY OR POSTPONEMENT OF EFFECTIVENESS. If, at any time after the Piggyback Notice and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register Common Stock in connection with such registration statement, the Company may, in its sole discretion, give written notice of such determination to the Holders (if such Holder made a request for Piggyback Registration) and thereupon the Company shall be relieved of its obligation to register any Registrable Securities in connection with such registration. The Company further may delay or postpone seeking the effectiveness of the registration statement in its sole discretion. 4. REGISTRATION PROCEDURES. Subject to the other provisions of this Agreement including without limitation the provisions of Section 3, whenever a Holder has requested that any Registrable Securities be registered in connection with a Piggyback Registration pursuant to this Agreement, the Company will use reasonable efforts to effect the registration and facilitate the sale and distribution of all such Registrable Securities specified in such registration request in accordance with the intended method of disposition thereof and pursuant thereto the Company will as expeditiously as possible: a. prepare and file with the SEC a registration statement which includes such Registrable Securities and use reasonable efforts to cause such registration statement to become effective and to comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; 2 b. prepare and file with the SEC such amendments, post-effective amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement continuously effective for the period required by the intended method of disposition, and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement, provided, however, that the Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act; c. furnish to each Holder, who is selling Registrable Securities, without charge, such number of copies of such registration statement, each amendment, post-effective amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by him; d. use reasonable efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as the Investor reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable the Holders to consummate the disposition in such jurisdictions of the Registrable Securities owned by the Holders (provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdiction, (iii) consent to general service of process in any such jurisdiction (unless the Company is subject to service in such jurisdiction and except as may be required by the Securities Act), or (iv) qualify such Registrable Securities in a given jurisdiction where expressions of investment intent are not sufficient in such jurisdiction to reasonably justify the expense of qualification in that jurisdiction or where such qualification would require the Company to register as a broker or dealer in such jurisdiction); e. promptly notify any Holder who is selling Registrable Securities, at any time when a prospectus relating to the Registrable Securities is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading; f. cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and to be qualified for trading on each system on which similar securities issued by the Company are from time to time qualified; g. otherwise cooperate with the Holders and the managing underwriter to facilitate the timely preparation and delivery of certificates representing Registrable Securities to 3 be sold and not bearing any restrictive legends, other than as provided in the Company's certificate of incorporation, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriter may reasonably request prior to any sale of Registrable Securities to the underwriters; h. along with each Holders who is selling Registrable Securities, enter into such customary agreements (including underwriting agreements in customary form with customary indemnification provisions) with the managing underwriter of such offering; and i. in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any shares of Common Stock included in such registration statement for sale in any jurisdiction, the Company will promptly notify each Holder who is selling Registrable Securities and use reasonable efforts to promptly obtain the withdrawal of such order; Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in paragraphs 4(e) or (i) hereof, he will forthwith discontinue disposition of shares of Common Stock pursuant to a Piggyback Registration until receipt of copies of an appropriate supplement or amendment to the prospectus under paragraph 4(e) or until the withdrawal of such order under paragraph 4(i). 5. PARTICIPATION IN REGISTRATIONS. No Holder may participate in any registration hereunder which is underwritten unless such Holder (a) agrees to sell such person's securities on the basis provided in any underwriting arrangements approved by the Company, (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents as may be reasonably requested by the Company or the managing underwriters of the offering or as required under the terms of such underwriting arrangements, provided that no holder of Registrable Securities included in any underwritten registration shall be required to make any representations or warranties to the Company or the underwriters other than representations and warranties regarding such holder and such holder's intended method of distribution. Each Holder further agrees that, in connection with any registration of Registrable Securities, he will provide such information to the Company as is requested by the Company and is necessary and/or desirable to ensure full compliance by the Company with federal and state securities laws and that he will have no right to withdraw any of his Registrable Securities included in such offering subsequent to the distribution of any preliminary prospectus by the Company and/or the managing underwriter of such offering absent the written approval by the Company, which approval may be withheld in the Company's sole discretion. 6. REGISTRATION EXPENSES. All Registration Expenses will be borne by the Company. In connection with any Piggyback Registration undertaken pursuant to this Agreement, the Company and the Holders agree that each of them will bear their own legal fees and expenses and all underwriting fees, commissions, discounts and expenses applicable to the securities sold by them, respectively. 4 7. INDEMNIFICATION. a. The Company agrees to indemnify, to the extent permitted by law, the Holders against all losses, claims, damages, liabilities and reasonable expenses, including any of the foregoing, and reasonable fees and expenses of counsel, incurred in investigating, preparing or defending against, and aggregate amounts paid in settlement of, any litigation, action, investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not a party, based upon, caused by or arising out of any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto required to be filed or prepared hereunder on behalf the Investor or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by a Holder (or on behalf of a Holder) expressly for use therein. b. In connection with any registration statement in which a Holder is participating, the Holder will furnish to the Company in writing such information relating to the Holder as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company, its directors, partners, members, stockholders, employees, trustees and officers and each Person who controls (within the meaning of the Securities Act) the Company against any losses, claims, damages, liabilities and reasonable expenses as incurred, including any of the foregoing, and reasonable fees and expenses of counsel incurred in investigating, preparing or defending against, and aggregate amounts paid in settlement of, any litigation, action, investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not a party, or any claim whatsoever, based upon, caused by or arising out of any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information so furnished in writing by the Holder expressly for such purpose. c. Any Person entitled to indemnification hereunder will (i) give reasonably prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. 5 d. The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, manager, agent or controlling Person of such indemnified party and will survive the transfer of securities. The Company also agrees to make such provisions, as are reasonably requested by any indemnified party, for contribution to such party in the event the Company's indemnification is unavailable for any reason. Such right to contribution shall be in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Holder on the other (in such proportions that the Holder is severally, not jointly, responsible for the balance), in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified parties shall be determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or the indemnified parties, and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such action. The parties hereto agree that it would not be just or equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediate preceding paragraph, provided, however, that in no event shall the aggregate liability, if any, of any Holder pursuant to this Section 7 exceed the net proceeds from his sale of Registrable Securities. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. 8. MISCELLANEOUS. a. REMEDIES. Any Person having rights under any provision of this Agreement will be entitled to enforce such rights specifically to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement. The Holders further agree that no Holder shall have any right to obtain or seek to obtain an injunction restraining or otherwise delaying any registration undertaken by the Company as the result of any controversy or dispute that might arise with respect to the interpretation or implementation of this Agreement nor shall any holder have any right to compel or seek to compel the Company to accelerate the effectiveness of any registration that the Company has delayed or withdrawn in accordance with Section 3 hereof. 6 b. AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of the Company and the Holders of at least a majority of the Registrable Securities then outstanding. c. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto, including any pledgee, whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of purchasers or holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent holder or pledgee of Registrable Securities provided that such subsequent holder executes a counterpart to this Agreement and agrees to be bound to the terms hereof. The parties hereto expressly agree that in the event that the Investor and any subsequent Holder distributes Registrable Securities to any third party, all covenants and agreements in this Agreement shall inure to the benefit of such distributees of the Registrable Securities provided that such subsequent holder executes a counterpart to this Agreement and agrees to be bound to the terms hereof. d. SEVERABILITY. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. e. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. f. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. g. GOVERNING LAW. This Agreement will be governed by and construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. h. NOTICES. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally to the recipient, sent to the recipient by reputable express courier service (charges prepaid) or mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications will be sent to the parties hereto at the address indicated on the records of the Company and to the Company at the address indicated below: Regent Communications, Inc. 7 100 East RiverCenter Blvd. 9th Floor Covington, Kentucky 41011 Attention: Anthony A. Vasconcellos or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. i. This Agreement represents the entire agreement of the parties with respect to the subject matter contained herein and supersede all prior agreements and understandings between the parties with respect to such subject matter. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. REGENT COMMUNICATIONS, INC. By: /s/ William J. Stakelin ----------------------------- William J. Stakelin President and Chief Operating Officer INVESTOR /s/ Bayard H. Walters ----------------------------------- Bayard H. Walters, an individual 8 APPENDIX A DEFINITIONS "COMMON STOCK" means shares of the common capital stock of Regent. "COMPANY" means Regent. "HOLDER" means any person, including the Investor, owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with the terms of this Agreement. "NASD" means the National Association of Securities Dealers, Inc. "PARI PASSU HOLDER" means any Person who is a holder of Common Stock and to whom the Company has granted piggyback registration rights substantially equivalent to the rights granted to the Investor pursuant to this Agreement. "PARI PASSU SECURITIES" means any Common Stock held by a Pari Passu Holder that would qualify as Registrable Securities hereunder if the Investor held such securities. "PERSON" means an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof. "PIGGYBACK NOTICE" means the notice delivered by the Company to the Investor under Section 1(a) of this Agreement. "PIGGYBACK REGISTRATION" means the registration of Registrable Securities pursuant to Section 1(a) of this Agreement. "QUALIFIED OFFERING" means a primary registered offering of Common Stock by the Company, other than pursuant to (i) a registration on Form S-4 or any successor form, (ii) an offering of securities in connection with an employee benefit, stock dividend, stock ownership or dividend reinvestment plan, (iii) an offering of securities or any securities convertible into or exchangeable or exercisable for such securities of the Company, for non-cash consideration to persons selling stock or assets to the Company, or (iv) any other offering of securities that is otherwise directly related to securities to be issued in a merger, acquisition of the stock or assets of another entity or in any similar transaction, including any registration providing for the resale of the securities issued in such a transaction. "REGENT" means Regent Communications, Inc., a Delaware corporation. "REGISTER," "REGISTERED" and "REGISTRATION" mean any registration effected by preparing and filing a registration statement or similar document with the SEC in compliance with the 9 Securities Act, and the declaration of ordering or effectiveness of such registration statement or document. "REGISTRATION EXPENSES" means any and all expenses incident to performance of or compliance with this Agreement, including, without limitation: (i) all SEC or NASD registration and filing fees; (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualification of any of the Registrable Securities and the preparation of a Blue Sky Memorandum) and compliance with the rules of the NASD; (iii) all expenses of any Person engaged by the Company in preparing or assisting in preparing, word processing, printing and distributing any registration statement, prospectus, certificates or other documents relating to the performance of or compliance with this Agreement; (iv) all fees and expenses incurred in connection with the listing of any of the Registrable Securities on any securities exchange or exchanges pursuant to Section 4(f) hereof; and (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company, including the expenses of any special audits or "cold comfort" letters, if any, required by or incident to such performance and compliance. Registration Expenses do not include discounts, commissions, fees and expenses, including legal fees, of underwriters or of holders of Registrable Securities. "REGISTRABLE SECURITIES" means the 786,141 shares of Common Stock issued to the Investor in connection with the Transactions, including any such shares that subsequently were received by the Investor by way of replacement, stock dividend, stock split or in connection with a combination of shares of stock, recapitalization, merger, consolidation or other reorganization for the Common Stock. As to any particular Registrable Securities, such securities will cease to be Registrable Securities when they have been sold to the public pursuant to an offering registered under the Securities Act or sold to the public in compliance with Rule 144 under the Securities Act (or any similar rule then in force) or when they become eligible for sale under Rule 144 under the Securities Act without regard to the volume limitations set forth in Rule 144(e) under the Securities Act. "SEC" means the U.S. Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended, or any similar federal law then in force. "SENIOR HOLDERS" means any Person who is a party to that certain Registration Rights Agreement dated as of June 15, 1998, including any amendment thereto, who is a holder of shares of stock of the Company issued by the Company, and any other Person to whom the Company grants rights regarding the registration of Common Stock which are senior in any respect to the Registrable Securities. "SENIOR SECURITIES" means any shares of stock of the Company held by a Senior Holder. "TRANSACTIONS" has the meaning set forth in the second Whereas clause of this Agreement. 10 EX-10.B 4 l91281aex10-b.txt EXHIBIT 10(B) Exhibit 10(b) THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT This Third Amendment to Registration Rights Agreement (this "Third Amendment") is dated effective as of August 28, 2001, by and among Regent Communications, Inc. (the "Company") and the undersigned stockholders (the "Stockholders"). WITNESSETH WHEREAS, the Company and the Stockholders are parties to a certain Registration Rights Agreement dated as of June 15, 1998, as amended (the "Agreement"), under which the Stockholders have been granted certain registration rights; and WHEREAS, the terms of the Agreement restrict the granting of the right to register company shares except by amendment of the Agreement; and WHEREAS, the Company and the Stockholders feel that it is in the best interests of the Company and its stockholders that Bayard H. Walters ("Walters") be granted certain rights to register Company shares being issued to Walters (the "Junior Registration Rights") in connection with the acquisition of certain assets owned by Winston Communications, Inc. of Illinois, an Illinois corporation and WFYR, Inc., an Illinois Corporation, both of which Walters is the sole shareholder; and WHEREAS, the Company and the Stockholders are willing to cause the Agreement to be amended in certain respects to allow such Junior Registration Rights. NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: 1. AMENDMENT TO SECTION 10(a) OF THE AGREEMENT. Notwithstanding anything to the contrary stated in the Agreement including, but not limited to, Section 10(a) thereof, Walters shall be granted the Junior Registration Rights as set forth more fully on the attached EXHIBIT A, which Junior Registration Rights shall include only the right to participate in a primary registered offering of Company shares initiated by the Company; PROVIDED, HOWEVER, that the Junior Registration Rights cannot be exercised by Walters in any particular primary registered offering of Company shares until the Stockholders set forth in the Agreement register all of the shares that they wish to register in such offering. 2. COUNTERPARTS. This Third Amendment may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that the parties need not sign the same counterpart. 3. GOVERNING LAW. This Third Amendment shall be governed and construed in accordance with the laws of the State of Delaware, without regard to any applicable conflicts of law principles (except to the extent that mandatory provisions of federal or state law apply). [SIGNATURE PAGES FOLLOW] IN WITNESS WHEREOF, the undersigned Stockholders have caused this Third Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written. REGENT COMMUNICATIONS, INC. By: /s/Anthony A. Vasconcellos ----------------------------------- Its: Senior Vice- President and CFO ----------------------------------- /s/ Terry S. Jacobs - ----------------------------------------- Terry S. Jacobs /s/ William J. Stakelin - ----------------------------------------- William J. Stakelin WALLER-SUTTON MEDIA PARTNERS, L.P. By: /s/ William H. Ingram ----------------------------------- Its: ----------------------------------- GENERAL ELECTRIC CAPITAL CORPORATION By: ----------------------------------- Its: ----------------------------------- BLUE CHIP CAPITAL FUND II LIMITED PARTNERSHIP By: /s/ John H. Wyant ----------------------------------- Its: ----------------------------------- BLUE CHIP CAPITAL FUND III LIMITED PARTNERSHIP By: /s/ John H. Wyant ----------------------------------- Its: ----------------------------------- /s/ William H. Ingram - ----------------------------------------- William H. Ingram WPG CORPORATE DEVELOPMENT ASSOCIATES, V. L.P. By: /s/ ---- Its: ----------------------------------- WPG CORPORATE DEVELOPMENT ASSOCIATES (OVERSEAS), V. L.P. By: /s/ ----------------------------------- Its: ----------------------------------- MIAMI VALLEY VENTURE FUND L.P. By: /s/ John H. Wyant ----------------------------------- Its: ----------------------------------- PNC BANK, N.A., AS TRUSTEE By: /s/ John H. Wyant, for PNC Trust ----------------------------------- Its: ----------------------------------- THE ROMAN ARCH FUND L.P. By: ----------------------------------- Its: ----------------------------------- THE ROMAN ARCH FUND II L.P. By: ----------------------------------- Its: ----------------------------------- MESIROW CAPITAL PARTNERS VII By: /s/ ----------------------------------- Its: Sr. Managing Director ----------------------------------- PNC BANK, N.A., CUSTODIAN By: /s/ John H. Wyant, for PNC Trust ----------------------------------- Its: ----------------------------------- THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By: /s/ ----------------------------------- Its: V.P. ----------------------------------- EXHIBIT A REGISTRATION RIGHTS AGREEMENT -----END PRIVACY-ENHANCED MESSAGE-----