-----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, I8jN0gkWw8Gep9vtzuyxa41AWzrjQ7TKpF7O7+ySdhRSxChgAHDRpAWXL8il6z34 Tu+9HSOPRhB8/UoSqwUL1g== 0000950152-99-006982.txt : 19990817 0000950152-99-006982.hdr.sgml : 19990817 ACCESSION NUMBER: 0000950152-99-006982 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 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: SEC FILE NUMBER: 333-46435 FILM NUMBER: 99692519 BUSINESS ADDRESS: STREET 1: 50 EAST RIVERCENTER BOULEVARD STREET 2: SUITE 180 CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6062920030 MAIL ADDRESS: STREET 1: 50 EAST RIVERCENTER BLVD STREET 2: SUITE 180 CITY: COVINGTON STATE: KY ZIP: 41011 10-Q 1 REGENT COMMUNICATIONS, INC. FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark one) [x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 1999 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.) 50 East RiverCenter Boulevard Suite 180 Covington, Kentucky 41011 (Address of Principal Executive Offices) (Zip Code) (606) 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 Section 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 - 240,000 shares as of August 12, 1999. 2 REGENT COMMUNICATIONS, INC. FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1999 INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 1999 (unaudited) and June 30, 1998 (unaudited) Condensed Consolidated Balance Sheets as of June 30, 1999 (unaudited) and December 31, 1998 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 1999 (unaudited) and June 30, 1998 (unaudited) Notes to Condensed Consolidated Financial Statements (unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk PART II - OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K -2- 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, -------------------------------- -------------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Gross broadcast revenues $ 6,802,937 $ 2,866,077 $ 11,628,861 $ 4,479,282 Less agency commissions 487,634 267,951 793,568 416,079 ------------ ------------ ------------ ------------ Net broadcast revenues 6,315,303 2,598,126 10,835,293 4,063,203 Station operating expenses 4,358,220 1,599,738 8,146,685 2,698,649 Depreciation and amortization 1,047,147 396,388 1,818,856 686,936 Corporate general and administrative expenses 544,109 734,542 1,159,130 860,070 ------------ ------------ ------------ ------------ Operating income (loss) 365,827 (132,542) (289,378) (182,452) Interest expense 624,341 582,838 1,486,807 1,086,608 Other income, net 1,904 8,622 85,040 20,773 ------------ ------------ ------------ ------------ Loss before extraordinary item (256,610) (706,758) (1,691,145) (1,248,287) Extraordinary loss from debt extinguishment, net of taxes -- (1,170,080) -- (1,170,080) ------------ ------------ ------------ ------------ Net loss $ (256,610) $ (1,876,838) $ (1,691,145) $ (2,418,367) ============ ============ ============ ============ Loss applicable to common shares: Net loss $ (256,610) $ (1,876,838) $ (1,691,145) $ (2,418,367) Preferred stock dividend requirements and accretion (1,521,808) (4,814,846) (2,561,000) (5,093,639) ------------ ------------ ------------ ------------ Loss applicable to common shares $ (1,778,418) $ (6,691,684) $ (4,252,145) $ (7,512,006) ============ ============ ============ ============ Basic and diluted net loss per common share: Before extraordinary item $ (7.41) $ (23.00) $ (17.72) $ (26.42) Extraordinary item -- (4.88) -- (4.88) ------------ ------------ ------------ ------------ Net loss per common share $ (7.41) $ (27.88) $ (17.72) $ (31.30) ============ ============ ============ ============ Weighted average number of common shares used in basic and diluted calculations 240,000 240,000 240,000 240,000
The accompanying notes are an integral part of these financial statements. -3- 4 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1999 December 31, 1998 ------------- ----------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,760,004 $ 478,545 Accounts receivable, less allowance for doubtful accounts of $249,000 in 1999 and $268,000 in 1998 4,282,758 3,439,372 Other current assets 297,708 200,828 Assets held for sale 14,713,163 7,500,000 ------------ ------------ Total current assets 21,053,633 11,618,745 Property and equipment, net 9,268,558 9,303,975 Intangibles, net 48,910,286 45,023,940 Other assets, net 1,715,185 1,671,210 ------------ ------------ Total assets $ 80,947,662 $ 67,617,870 ============ ============ LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 501,948 $ 1,005,327 Accrued expenses 1,479,091 2,772,612 Interest payable 309,840 769,367 Notes payable 6,000,000 7,500,000 Current portion of long-term debt 8,990,000 980,000 ------------ ------------ Total current liabilities 17,280,879 13,027,306 ------------ ------------ Long-term debt, less current portion 32,410,000 34,617,500 Warrants and other long-term liabilities 2,391,452 2,643,579 ------------ ------------ Total liabilities 52,082,331 50,288,385 Commitments and contingencies Redeemable preferred stock: Series A convertible preferred stock, $5.00 stated value, 620,000 shares authorized; 620,000 shares issued and outstanding-liquidation value: $3,540,717 3,540,717 3,433,109 Series B senior convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding-liquidation value: $5,595,205 5,595,205 5,372,054 Series D convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding-liquidation value: $5,405,003 5,405,003 5,231,441 Series F convertible preferred stock, $5.00 stated value, 4,100,000 shares authorized; 4,100,000 shares issued and outstanding-liquidation value: $21,931,700 21,931,700 12,839,454 Series G convertible preferred stock, $5.00 stated value, 2,000,000 shares authorized; 372,406 shares issued and outstanding-liquidation value: $1,949,265 1,949,265 0 Series H convertible preferred stock, $5.50 stated value, 2,000,000 shares authorized; 636,363 shares issued and outstanding-liquidation value: $3,509,315 3,509,315 0 ------------ ------------ Total redeemable preferred stock 41,931,205 26,876,058 Shareholders' deficit: Preferred stock: Series C convertible preferred stock, $5.00 stated value, 4,000,000 shares authorized; 3,729,080 shares issued and outstanding-liquidation value: $19,962,400 1,584,905 1,584,820 Series E convertible preferred stock, $5.00 stated value, 5,000,000 shares authorized; 447,842 shares issued and outstanding-liquidation value: $2,402,626 2,239,210 2,239,210 Common stock, $.01 par value, 30,000,000 shares authorized; 240,000 shares issued and outstanding 2,400 2,400 Additional paid-in capital 2,120,145 3,948,384 Retained deficit (19,012,534) (17,321,387) ------------ ------------ Total shareholders' deficit (13,065,874) (9,546,573) ------------ ------------ Total liabilities and shareholders' deficit $ 80,947,662 $ 67,617,870 ============ ============
The accompanying notes are an integral part of these financial statements. -4- 5 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, -------------------------------- 1999 1998 ------------ ------------ Net cash used in operating activities $ (1,825,876) $ (898,400) ------------ ------------ Cash flows from investing activities: Acquisitions of radio stations, net of cash acquired (13,339,872) (29,089,991) Capital expenditures (986,727) (62,120) Proceeds from sale of radio station 1,600,000 -- ------------ ------------ Net cash used in investing activities (12,726,599) (29,152,111) ------------ ------------ Cash flows from financing activities: Proceeds from long-term debt 9,300,000 35,500,000 Proceeds from issuance of Series A, B, D, F, G & H Convertible Preferred Stock 13,621,390 18,150,000 Principal payments on long-term debt (3,497,500) (20,716,660) Payment of notes payable (1,500,000) -- Payments for deferred financing costs (274,558) (1,292,042) Payment for issuance costs (1,815,398) (1,356,393) ------------ ------------ Net cash provided by financing activities 15,833,934 30,284,905 ------------ ------------ Net increase in cash and cash equivalents 1,281,459 234,394 Cash at beginning of period 478,545 535,312 ------------ ------------ Cash at end of period $ 1,760,004 $ 769,706 ============ ============ Supplemental schedule of non-cash investing and financing activities: Conversion of Faircom Inc.'s convertible subordinated promissory notes to Faircom Inc. common stock $ 10,000,000 Liabilities assumed in acquisitions $ 11,680,322 Series E convertible preferred stock issued in conjunction with the acquisition of Alta California Broadcasting, Inc. and Topaz Broadcasting, Inc. $ 2,239,210 Series C convertible preferred stock issued in conjunction with the merger between Faircom Inc. and the Company $ 1,618,681 Series A and B convertible preferred stock warrants $ 310,000
The accompanying notes are an integral part of these financial statements. -5- 6 REGENT COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Regent Communications, Inc. (including its wholly-owned subsidiaries, the "Company") was formed to acquire, own and operate radio stations in small and medium-sized markets in the United States. The Company acquired on June 15, 1998, pursuant to an agreement of merger, all of the outstanding common stock of Faircom Inc. ("Faircom") for 3,720,620 shares of the Company's Series C Convertible Preferred Stock. Approximately 400,000 of those shares, upon conversion to common stock and subject to certain other conditions, may be put back to the Company at the option of the holder subsequent to June 15, 2003. The acquisition has been treated for accounting purposes as the acquisition of the Company by Faircom under the purchase method of accounting, with Faircom as the accounting acquirer. Consequently, the historical financial statements prior to June 15, 1998 are those of Faircom. Faircom operated radio stations through its wholly-owned subsidiaries in Flint, Michigan and, in Mansfield, Ohio. As a result of the Faircom merger, Faircom's historical shareholder deficit and earnings per share information have been retroactively restated to reflect the number of common shares outstanding subsequent to the merger, with the difference between the par value of the Company's and Faircom's common stock recorded as an offset to additional paid-in capital. The condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown. All adjustments are of a normal and recurring nature except for those outlined in Notes 2 and 3. 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, 1998 condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-K filed March 31, 1999. 2. CONSUMMATED AND PENDING ACQUISITIONS AND DIVESTITURES On June 15, 1998, concurrent with the Faircom merger, the following acquisitions (the "June 15 Acquisitions") were consummated: The Company acquired all of the outstanding capital stock of The Park Lane Group ("Park Lane") for approximately $24,038,000 in cash and assumed liabilities. Park Lane owned 16 radio stations in California and Arizona. At the time of the acquisition, the Company entered into a one-year consulting and non-competition agreement with the President of Park Lane, providing for the payment of a fee of $200,000. The Company acquired the licenses issued by the Federal Communications Commission ("FCC") and related assets used in the operation of radio stations KIXW(AM) and KZXY(FM) in Apple Valley, California from Ruby Broadcasting, Inc. ("Ruby") for $5,985,000 in cash. The Company acquired the FCC licenses and related assets used in the operation of radio stations KFLG(AM) and KFLG(FM) in Bullhead City, Arizona from Continental Radio Broadcasting, L.L.C. for -6- 7 approximately $3,747,000 in cash. The Company separately acquired the accounts receivables of these stations for an additional purchase price of approximately $130,000. The Company acquired all of the outstanding capital stock of Alta California Broadcasting, Inc. ("Alta") for $2,635,000 in cash and assumed liabilities and 205,250 shares of the Company's Series E Convertible Preferred Stock. Alta owned four radio stations in California. The Company acquired all of the outstanding capital stock of Topaz Broadcasting, Inc. ("Topaz"), an affiliate of Ruby, for 242,592 shares of the Company's Series E Convertible Preferred Stock. Immediately following the acquisition of Topaz, the Company acquired the FCC licenses and operating assets of radio station KIXA(FM) in Lucerne Valley, California for $215,000 in cash and assumed liabilities, pursuant to an Asset Purchase Agreement between Topaz and RASA Communications Corp. The June 15 Acquisitions were accounted for under the purchase method of accounting and the fair value of the acquired assets were determined by independent valuations. The Company allocated the aggregate purchase price for the June 15 Acquisitions as follows: Accounts receivable $ 143,000 Broadcasting equipment and furniture and fixtures 6,503,000 FCC licenses 30,328,000 Goodwill 1,853,000 Other 360,000 ------------ $ 39,187,000 ============
Goodwill and FCC licenses related to the June 15 Acquisitions are being amortized over a 40-year period. The sources for the cash portion of the consideration paid by the Company for the June 15 Acquisitions and the Faircom merger, aggregating approximately $52,900,000 (including approximately $21,100,000 of assumed debt refinanced with borrowings under the Company's senior reducing revolving credit facility and $3,700,000 of transaction costs), were $34,400,000 borrowed under the Company's senior reducing revolving credit facility, $18,150,000 in additional equity from the sale of the Company's convertible preferred stock and approximately $350,000 of the Company's funds. On November 30, 1998, the Company purchased substantially all of the assets of radio station KOSS(FM) (formerly KAVC(FM)) located in Lancaster, California from Oasis Radio, Inc. for $1,600,000 in cash. The acquisition was financed through the issuance of additional shares of Series F convertible preferred stock. On March 1, 1999, the Company sold the FCC licenses and related assets used in the operations of WSSP(FM) in Charleston, South Carolina for approximately $1,600,000 in cash. The Company had previously issued a note for $1,500,000 to a third party which was collateralized by the assets of the station. Upon consummation of the sale, the note was repaid. The sale resulted in a $100,000 gain to the Company which has been included in other income in the accompanying condensed consolidated statement of operations. On May 6, 1999, the Company purchased FCC licenses and related assets used in the operations of radio stations WJON(AM), WWJO(FM) and KMXK(FM) (the "St. Cloud Stations") in the St. Cloud, Minnesota market from WJON Broadcasting Company for approximately $12,700,000 in cash. The purchase was financed by approximately $5,082,000 in proceeds from the issuance of Series F Convertible Preferred Stock (See Note 3) and borrowings under the Company's senior reducing credit -7- 8 facility. Approximately $10,700,000 of the purchase price has been allocated to the FCC licenses and is being amortized over a 40-year period. The remaining $2,000,000 was allocated to property and equipment. An independent valuation is currently being completed and may result in adjustments being made to the original purchase price allocation. The results of operations of the acquired businesses are included in the Company's financial statements since the respective dates of acquisition. The following unaudited pro forma data summarizes the combined results of operations of the Company, Faircom, the stations acquired as part of the June 15 Acquisitions and KOSS(FM), as though the acquisitions had occurred at the beginning of 1998, and the St. Cloud Stations, as though their acquisition had occurred at the beginning of each period. The Company's 1999 disposition of WSSP(FM) is not material to the results of the Company.
1999 1998 ---- ---- Net broadcast revenues $11,862,006 $10,988,999 Net loss before extraordinary item $(1,702,894) $(2,414,770) Net loss $(1,702,894) $(3,584,850) Net loss per common share before extraordinary item: Basic and diluted $ (18.55) $ (39.99) Net loss per common share: Basic and diluted $ (18.55) $ (44.86)
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 on the indicated dates. On March 5, 1999, the Company entered into an agreement to sell the FCC licenses and related assets used in the operations of radio stations KAAA(AM) and KZZZ(FM) in Kingman, Arizona and KFLG(AM) and KFLG(FM) in Bullhead City, Arizona (the "Kingman Stations") for approximately $5,400,000 in cash to an unrelated third party. Approximately $5,138,000 of FCC licenses and related long-lived assets have been reclassified to assets held for sale in the accompanying June 30, 1999 condensed consolidated balance sheet. The transaction is subject to FCC consent. On March 30, 1999, the Company entered into an agreement to sell the FCC licenses and related assets used in the operation of radio stations KZGL(FM), KVNA(AM) and KVNA(FM) in Flagstaff, Arizona (the "Flagstaff Stations") for approximately $2,425,000 in cash to an unrelated third party. Approximately $2,375,000 of FCC licenses and related long-lived assets have been reclassified to assets held for sale in the accompanying June 30, 1999 condensed consolidated balance sheet. The transaction is subject to FCC consent. On May 18, 1999, the Company entered into an agreement to purchase from an unrelated third party the FCC licenses and related assets used in the operations of radio stations WXKC(FM) and WRIE(AM) licensed to Erie, Pennsylvania and WXTA(FM) licensed to Edinboro, Pennsylvania for approximately $13,500,000 in cash. The Company provided a $675,000 letter of credit as an escrow deposit in this transaction. On July 9, 1999, the Company entered into an agreement to sell the FCC licenses and related assets used in the operation of radio stations KRLT(FM) AND KOWL(AM) in Lake Tahoe, California (the "Lake Tahoe Stations") for approximately $1,250,000 in cash to an unrelated third party. Approximately $1,200,000 of FCC licenses and related long-lived assets have been reclassified to assets held for sale in the accompanying June 30, 1999 condensed consolidated balance sheet. The transaction is subject to FCC consent. On July 29, 1999, the Company entered into an agreement to purchase from an unrelated third party the FCC licenses and related assets used in the operations of radio stations WODZ-FM, WLZW-FM, WFRG-FM, WIBX-AM and WRUN-AM licensed to Utica/Rome, New York and WCIZ-FM, WFRY-FM, WTNY-AM, and WUZZ-AM licensed to Watertown, New York for approximately $44,000,000 in cash and 100,000 shares of the Company's $7.50 Series I Convertible Preferred Stock. -8- 9 The transaction is subject to FCC consent. The Company provided a $2,200,000 letter of credit as an escrow deposit in this transaction. On August 1, 1999, the Company sold the FCC licenses and related assets used in the operations of KCBQ(AM) in San Diego, California for approximately $6,000,000 in cash. The Company had previously issued a note for $6,000,000 to a third party which was collateralized by the assets of the station. Upon consummation of the sale, the note was repaid. 3. CAPITAL STOCK In January 1999, the Company issued 372,406 shares of Series G Convertible Preferred Stock for $5.00 per share to certain executive officers of the Company and Blue Chip Capital Fund II Limited Partnership, an existing holder of Series C Convertible Preferred Stock. The proceeds were used to pay down existing debt under the Credit Agreement and fund working capital needs of the Company. In February 1999, the Company issued 633,652 shares of Series F Convertible Preferred Stock for $5.00 per share to existing Series F holders. The proceeds were used to finance certain capital improvements, fund deferred transaction costs related to the June 15 Acquisitions and the Faircom merger and fund working capital needs of the Company. In April 1999, the Company issued 1,016,348 shares of Series F Convertible Preferred Stock at $5.00 per share to fund its purchase of the St. Cloud Stations. (See Note 2) In April 1999, the Company shareholders voted to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000 and increase the number of authorized shares of preferred stock from 20,000,000 to 40,000,000. These increases have not yet been implemented by an amendment to the Company's Certificate of Incorporation, and the additional shares of preferred stock have not been designated as a specific series. In June 1999, the Company issued 636,363 shares of Series H Convertible Preferred Stock at $5.50 per share to certain existing preferred stockholders to fund a reduction in bank debt and working capital requirements. The Series H Convertible Preferred Stock was issued with similar terms as the Series G Convertible Preferred Stock. In addition, holders of the Series H Convertible Preferred Stock were granted the right to elect one individual to the Company's Board of Directors upon and subject to certain conditions. 4. ASSETS HELD FOR SALE As of June 30, 1999, the Company had signed definitive agreements to sell the Kingman Stations, the Flagstaff Stations and the Lake Tahoe Stations (See Note 2). Pursuant to the terms of its credit agreement, when debt is above certain levels, Regent is required to reduce its outstanding borrowings under its credit agreement by an amount equal to the net proceeds received from any stations sold. The Company expects these dispositions to be completed within one year of June 30, 1999. As a result, the Company has reclassified approximately $8,925,000 of long-term debt to current debt and approximately $8,713,000 in long-term assets to assets held for sale in the accompanying June 30, 1999 condensed consolidated balance sheet. The assets classified as assets held for sale as of June 30, 1999 have been recorded at the lower of their carrying value or estimated fair market value less anticipated disposition costs. The results from operations related to these properties are immaterial. In addition, the assets of KCBQ (AM), which were sold on August 1, 1999, also have been classified as assets held for sale in the accompanying June 30, 1999 condensed consolidated balance sheet. 5. EARNINGS PER SHARE SFAS 128 calls for the dual presentation of basic and diluted earnings per share ("EPS"). Basic EPS is based upon the weighted average common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur if common stock equivalents were exercised. The effects of the assumed conversion of the Company's convertible preferred stock and the assumed exercise of outstanding options and warrants would not be dilutive for all periods presented. Therefore, basic EPS and diluted EPS are the same for all periods presented. -9- 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements. Results for the interim periods may not be indicative of the results for the full years. On June 15, 1998, Regent consummated a number of mergers, acquisitions, borrowings and issuances of additional equity. See Notes 1 and 2 to Regent's Condensed Consolidated Financial Statements included as part of this Form 10-Q. The historical financial statements of Faircom Inc., which was deemed the "accounting acquirer" in the merger between Faircom and Regent completed June 15, 1998, became the historical financial statements of Regent, and accordingly, the results of operations of Regent and of the other entities which merged with or were acquired by Regent as part of the June 15, 1998 transactions have been included in Regent's Condensed Consolidated Financial Statements only from June 15, 1998. On the closing date of the June 15, 1998 transactions, Regent expanded from being a small broadcaster (represented, from an accounting standpoint, by Faircom's six stations in two markets) to a group broadcaster operating 33 stations in ten different markets. This significant change in size of Regent's operations led directly to substantial increases in revenue, operating expenses, depreciation and amortization, corporate general and administrative expenses, and interest expense in 1999 as compared to 1998. Because of the June 15, 1998 transactions, and to a lesser extent the acquisition of the St. Cloud stations, the results of Regent's operations in 1999 are not comparable to those of 1998, nor are they necessarily indicative of results in the future. The key focus from the consummation of the June 15, 1998 transactions into 1999 was developing the platform from which Regent could carry out its operating strategies as a much larger radio company. Development of the platform required significant expenditures. These costs are viewed by Regent as investment costs which will provide returns to Regent in future years. Operationally, Regent replaced general managers in eight of its markets and added or replaced general sales managers in six markets in order to implement aggressive sales programs. Regent invested significantly in the hiring and training of sales personnel and in increased promotional spending in all markets. While many of these changes took place prior to 1999, the operational improvements take some time to manifest even though the cost increases were immediate. In addition, Regent developed a corporate staff which it believes is capable of supporting a much larger operation and now maintains primary executive and administrative offices located in Covington, Kentucky, as well as the New York corporate office utilized by Faircom at the time of its merger with Regent. The cost of executive personnel and administrative expense amounted to approximately $544,000 in the three months ended June 30, 1999, versus approximately $735,000 in the comparable period in 1998. The 1998 costs include $530,000 in one-time compensation expense for stock options granted June 15, 1998 to two officers of Faircom pursuant to the terms of the merger between Faircom and Regent. Corporate general and administrative expense of $1,160,000 increased for the six months ended June 30, 1999 versus $860,000 for the comparable period in 1998 due to the increase in corporate staff and facilities partially offset by the one-time compensation charge in 1998. Operating income of $515,000 for the three months ended June 30, 1999 compared favorably with an operating loss of $132,000 for the same period in 1998. Additionally, the operating loss of $140,000 for the six months ended June 30, 1999 compared favorably with an operating loss of $182,000 for the same period in 1998. -10- 11 Interest expense of $624,000 for the three months ended June 30, 1999 and $1,487,000 for the six months ended June 30, 1999 increased versus the comparable periods in 1998 as a result of the June 15 transactions, and to a lesser extent, the acquisition of the St. Cloud stations. This increase in interest expense was partially offset by a $311,000 reduction in the carrying value of the "put" warrants classified as a long-term liability in the accompanying June 30, 1999 condensed consolidated balance sheet. LIQUIDITY AND CAPITAL RESOURCES In the six months ended June 30, 1999, net cash used in operating activities was $1,826,000 compared with net cash used in operating activities of $898,000 for 1998. In the six months ended June 30, 1999, proceeds from the issuance of preferred stock provided substantially all of the funds used in operating activities, as well as funds used for capital expenditures, principal payments on long-term debt, payment of professional fees, which were mostly incurred in connection with the June 15, 1998 transactions, and other investing and financing activity cash requirements (with the exception of the borrowing of $8,500,000 which was used to help finance the purchase of the St. Cloud stations). As a result, there was a net increase in cash of $1,281,000 in the six months ended June 30, 1999 compared with a net increase of $234,000 in the same period in 1998. Regent's borrowings are made under a credit agreement with a group of lenders which provides for a senior reducing revolving credit facility with an original commitment of up to $55,000,000 expiring March 31, 2005 (the commitment was $53,625,000 at June 30, 1999). Regent's credit agreement permits the borrowing of available credit for working capital and acquisitions, including related acquisition expenses. In addition, Regent may request from time to time that the lenders issue letters of credit in accordance with the same provisions as the credit facility. At June 30, 1999, Regent had borrowed $40,735,000 under its credit agreement. The remaining unused portion of the credit facility of $12,890,000 was available to finance other acquisitions, subject to restrictions contained in the credit agreement. Beginning January 1, 1999, Regent is required to maintain an interest rate coverage ratio (EBITDA, defined as earnings before interest, taxes, depreciation and amortization, to annual interest rate cost); a fixed charge coverage ratio (EBITDA to annual fixed charges); and a financial leverage ratio (total debt to Adjusted EBITDA, as defined in the credit agreement). To maintain compliance with these covenants, Regent must reduce its outstanding borrowings during the third quarter of 1999. It intends to do this through proceeds from the sales of the Arizona stations and the Lake Tahoe stations. The sale of four of the seven Arizona stations is expected to close during the third quarter of 1999. Sale of the others could be delayed into the fourth quarter, depending on the timing of FCC consent. If these sales were to be delayed, Regent will request waivers from its lenders to allow more time for the sales to close or will raise additional equity to reduce its debt. Interest under the credit agreement is payable, at the option of Regent, at alternative rates equal to the LIBOR rate (established June 3, 1999 at 8.63% and May 21, 1999 at 8.56% and effective at those same rates at June 30, 1999) plus 1.50% to 3.50%, or the base rate announced by the Bank of Montreal (7.75% at June 30, 1999) plus .25% to 2.25%. The spreads over the LIBOR rate and such base rate vary from time to time, depending upon Regent's financial leverage. Regent will pay quarterly commitment fees equal to 3/8% to 1/2% per annum, depending upon Regent's financial leverage, on the unused portion of the commitment under its credit agreement. Regent also is required to pay certain other fees to the agent and the lenders for the administration and use of the credit facility. In the first quarter of 1999, Regent received approximately $5,030,000 in gross proceeds from the issuance of shares of its Series F and G convertible preferred stock at $5.00 per share. In the second -11- 12 quarter of 1999, the holders of the Series F convertible preferred stock purchased an additional 1,016,348 shares of Regent's Series F convertible preferred stock at $5.00 per share, to finance a portion of the acquisition price of the St. Cloud stations. In May 1999, Regent borrowed $8,500,000 in funds under the credit agreement to finance the balance of the purchase price of the St. Cloud stations and related transaction fees. In June 1999, three existing shareholders purchased an additional $3,500,000 of a new series of convertible preferred stock, Series H convertible preferred stock, at $5.50 per share. The proceeds were used to reduce bank debt and fund working capital requirements. Additionally, an existing investor and a new investor have committed to purchase an additional $8,500,000 of Series H convertible preferred stock in August 1999. Of the proceeds, $1,000,000 will be used to pay down borrowings under Regent's credit facility. The balance of the proceeds, along with additional borrowings under its credit agreement, will be used to finance the acquisition and initial capital expenditure and working capital needs of the Erie stations. Based on current interest rates and accrued interest expense as of June 30, 1999, Regent believes its interest payments for the remainder of 1999 will be approximately $1,925,000. Scheduled debt principal payments are expected to be $33,000 for the remainder of 1999. Corporate general and administrative expense and capital expenditures for the remainder of 1999 are estimated to be approximately $1,030,000 and $530,000, respectively. Most of the planned capital expenditures are required to be made in 1999 under the terms of the credit agreement. During the first and second quarters of 1999, Regent paid approximately $1,421,000 of professional fees which were mostly incurred in connection with the June 15, 1998 transactions. Regent has paid the remaining balance of approximately $65,000 in the third quarter. For these payments to be made over the balance of 1999, aggregating $3,583,000, Regent has used or will utilize net cash provided by operations, current cash balances, proceeds from the issuance of Series F and G convertible preferred stock received in the first quarter of 1999 and the $3,500,000 of proceeds from the sale of the Series H convertible preferred stock received in the second quarter of 1999. Pursuant to the terms of its credit agreement, Regent is required to reduce its outstanding borrowings under its credit agreement by an amount equal to the net proceeds received from the sales of its Arizona and Lake Tahoe stations. Regent believes net cash from operations, cash balances, and the net proceeds from the sales of its Arizona stations and Lake Tahoe stations will be sufficient to reduce borrowings under its credit agreement to allow Regent to maintain compliance with all covenants and to meet Regent's interest expense and any required principal payments, corporate expenses and capital expenditures in the foreseeable future, based on its projected operations and indebtedness. In addition to the pending acquisition of stations in Utica-Rome and Watertown, New York, Regent is actively pursuing a number of acquisitions of radio stations in a number of markets. This pending acquisition and any such additional acquisitions would be financed from borrowings against the unused portion of the credit agreement (less any utilization of such portion for working capital needs), and through additional equity or high yield debt offerings. There can be no assurance, however, that any of such acquisitions will be consummated or that all or any portion of such financing will be available. MARKET RISK Regent is exposed to the impact of interest rate changes because of borrowings under its Credit Agreement. It is Regent's policy to enter into interest rate transactions only to the extent considered necessary to meet its objectives and to comply with the requirements of its credit agreement. Regent has not entered into interest rate transactions for trading purposes. To satisfy the requirements of its credit agreement, Regent entered into a two-year collar agreement with the Bank of Montreal effective August 17, 1998 for a notional amount of $34,400,000 to mitigate the risk of increasing interest rates created by the borrowing under its credit agreement. This agreement is based on the three-month LIBOR rate and has a Cap Rate, as defined, of 6.50% and a Floor -12- 13 Rate, as defined, of 5.28%. These rates are exclusive of additional spreads over the LIBOR rate depending upon Regent's financial leverage. Of the $40,735,000 principal amount outstanding under Regent's credit facility at June 30, 1999, the annual interest expense would fluctuate by a maximum of $420,000 on the $34,400,000 based on the defined Cap and Floor rates. Fluctuation in interest expense on the remaining $6,335,000 would not be material. YEAR 2000 COMPUTER SYSTEM COMPLIANCE The "Year 2000" issue results from the fact that many computer programs were written with date-sensitive codes that utilize only the last two digits (rather than all four digits) to refer to a particular year. As the year 2000 approaches, these computer programs may be unable to process accurately certain date-based information, as the program may interpret the year 2000 as 1900. Regent utilizes various information technology (IT) systems in the operation of its business, including accounting and financial reporting systems and local and wide area networking infrastructure. In addition to IT systems, Regent is also reliant on several non-information technology (non-IT) systems, which could potentially pose Year 2000 issues, including traffic scheduling and billing systems and digital audio systems providing automated broadcasting. Finally, in addition to the risks posed by Year 2000 issues involving its own IT and non-IT systems, Regent could also be affected by any Year 2000 problems experienced by its key business partners, which include local and national advertisers, suppliers of communications services, financial institutions and suppliers of utilities. Regent is addressing the Year 2000 issue in its existing properties in four phases: (a) assessment of the existence, nature and risk of Year 2000 problems affecting Regent's systems; (b) remediation of Regent's systems, whether through repair, replacement or upgrade, based on the findings of the assessment phase; (c) testing of the enhanced or upgraded systems; and (d) contingency planning. In the fourth quarter of 1998, Regent engaged the services of an independent Year 2000 consultant in order to analyze the scope of Regent's Year 2000 compliance issues and to initiate formal communications with its advertisers, suppliers, lenders and other key business partners to determine their exposure to the Year 2000 issue. During the first quarter of 1999, the assessment phase was completed with respect to the IT-systems and non-IT systems at Regent's currently owned properties. Based on the findings of the assessment phase, a detailed plan was developed for the remaining phases (remediation, testing and contingency planning). The following is a summary of the status of Regent's Year 2000 plans in the IT and non-IT areas relative to the stations Regent currently owns and expects to still own on January 1, 2000. IT Systems During the assessment phase, Regent evaluated the level of Year 2000 compliance of IT systems and hardware in its executive offices and all markets. All financial and networking systems which have been determined to be non-compliant will be upgraded and tested by the end of the third quarter of 1999. Costs associated with the upgrades were immaterial. Regent has assessed several of its personal computers to be non-compliant. Several of the non-compliant personal computers are either upgradable at a minimal cost or are used for tasks where non-compliance will not impact their functionality. There are personal computers which will need to be replaced in 1999 and the cost of replacement is included in Regent's capital plan. All necessary upgrades will occur by the end of the third quarter of 1999. Most of the replacements will take place by the end of the third quarter; however, a portion will occur in the fourth quarter. -13- 14 Non-IT Systems Regent acquired all but one of its radio stations on or after June 15, 1998 from several independent operators. As part of Regent's ongoing plan to provide its stations with a standardized digital audio broadcast system and, thus, to realize certain of the efficiencies of operating as a larger broadcast group, Regent has been systematically upgrading the broadcast systems and other technical equipment at its stations. Although this upgrading plan has had a business purpose independent of the Year 2000 compliance issue, Regent has required, as a matter of course, written assurance from its suppliers that the new broadcast systems are Year 2000 compliant. With respect to those properties which Regent currently owns and expects to continue to own on January 1, 2000, the upgrading project is 90% complete, with the installation of new Year 2000 compliant broadcast systems having been completed for Regent's stations in all of its markets except the Redding, California market, which will occur in the third quarter in conjunction with an expansion of Regent's facility in the market. The costs of the upgrade project have been included in capital expenditures. Regent plans to conduct and complete its own testing of the broadcast systems at all of its stations by the end of the third quarter of 1999. The cost associated with this testing is expected to be immaterial. The traffic scheduling and billing systems currently utilized at Regent's stations are provided by two suppliers on a Year 2000 compliant basis, with the exception of Regent's stations located in the Victorville, California market. To confirm Year 2000 compliance of its traffic and billing systems, Regent tested these systems during the second quarter of 1999. By the third quarter of 1999, Regent intends to have replaced its traffic and billing systems at the Victorville stations with a system provided by suppliers utilized by Regent's other stations. During the first quarter of 1999, Regent compiled a detailed inventory of key business partners and prioritized the list based on potential impact to Regent in the event that the business partners experienced severe operational or financial hardship as a result of Year 2000 non-compliance. Each business partner was contacted and asked to fill out a detailed questionnaire regarding its own Year 2000 assessment. Follow-up on responses has begun and is ongoing. With respect to the stations which Regent has agreed to acquire, the Year 2000 assessment phase has been commenced and is continuing. Regent expects its acquisition of the Erie stations to be consummated on August 31, 1999 and believes that it will be able to complete its assessment of Year 2000 compliance and perform all remediation and testing on those stations in the third and fourth quarters of 1999. Regent's agreement to acquire stations in Utica-Rome and Watertown, New York was signed on July 29, 1999 and will not be consummated until after January 1, 2000. The Year 2000 assessment of these stations is underway, and Regent will be monitoring all remediation and testing activities, which the seller has agreed to complete. Regent has no reason to believe that all systems at these stations will not be able to be brought into Year 2000 compliance in a timely manner. Regent has budgeted $100,000 in 1999 for capital expenditures and $50,000 for expenses involved in Year 2000 remediation of its existing stations. Regent does not expect total expenditures to exceed the total budgeted amount. Required capital expenditures, if any, for remediation of non-compliant systems at the Erie stations will be funded out of the initial capital budget. Expenses related to remediation at the Erie stations, if any, are not expected to be material. To the extent that any material Year 2000 problems are discovered at the Utica-Rome or Watertown stations, Regent will have a contractual claim against the seller for any losses suffered as a result. Although Regent has not received any information to date that would lead it to believe its internal Year 2000 compliance issues will not be able to be resolved on a timely basis or that the related costs will have a material adverse effect on Regent's operations, cash flows or financial condition, Regent's work relative to its business partner interfaces is ongoing. Accordingly, unexpected costs associated with the interruption of operation of Regent's stations could occur and, if significant, could have a material adverse effect on Regent's operations, cash flows and financial condition. The most reasonably likely worst-case scenarios include loss of power and communications links. The impact of these uncertainties on Regent's results of operations, liquidity and financial condition, is not determinable. Based on the assessment of -14- 15 external and non-IT system risks and the testing to be undertaken by Regent, contingency plans will be developed for all critical systems by the end of the third quarter of 1999. Testing of contingency plans will occur in the third and fourth quarters of 1999. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Form 10-Q includes certain forward-looking statements with respect to Regent that involve risks and uncertainties. Such statements are influenced by Regent's financial position, business strategy, budgets, projected costs, and plans and objectives of management for future operations, and are expressed with words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project" and other similar expressions. Although Regent believes its expectations reflected in such forward-looking statements are based on reasonable assumptions, readers are cautioned that no assurance can be given that such expectations will prove correct and that actual results and developments may differ materially from those conveyed in such forward-looking statements. For these statements, Regent claims 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 herein 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 Regent operates, including, in particular, increased competition for attractive radio properties and advertising dollars, fluctuations in the cost of operating radio properties, and changes in the regulatory climate affecting radio broadcast companies. Such forward-looking statements speak only as of the date on which they are made, and Regent undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q. If Regent does update or correct one or more forward-looking statements, readers should not conclude that Regent will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information required by this Item 3 is presented above under Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, and is incorporated herein by this reference. PART II - OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS (c) During the second quarter of 1999, Regent issued additional shares of its preferred stock as follows: On April 29, 1999, Regent's stockholders voted to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000 and increase the number of authorized shares of preferred stock from 20,000,000 to 40,000,000. On April 28, 29 and 30, 1999, Regent sold 1,016,348 shares of Series F convertible preferred stock to existing Series F holders at $5.00 per share to fund the purchase by Regent of FCC licenses and other assets from WJON Broadcasting Company. -15- 16 On June 21 and 23, 1999, Regent issued a total of 636,363 shares of Series H convertible preferred stock at $5.50 per share to certain existing preferred stockholders to fund a reduction in bank debt and working capital requirements. These issuances of securities were privately-negotiated transactions based upon exemptions from registration under the Securities Act of 1933, as amended (the "1933 Act"), claimed pursuant to Section 4(2) of the 1933 Act and the rules and regulations promulgated thereunder. Both the Series F Convertible Preferred Stock and the Series H Convertible Preferred Stock are convertible into shares of Regent's common stock on a one-for-one basis at any time at the option of the holder and under certain circumstances at the option of Regent. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Regent Communications, Inc. 1999 Annual Meeting of Stockholders was held on April 29, 1999. At the annual meeting, the stockholders were asked to vote upon (1) the election of directors, and (2) a proposal to amend Regent's Amended and Restated Certificate of Incorporation to increase the number of authorized shares of preferred stock from 20,000,000 to 40,000,000 and the number of authorized shares of common stock from 30,000,000 to 60,000,000. The results of the voting were as follows: (1) Regent's seven incumbent directors were re-elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. The directors were elected as follows:
Shares Voted Shares Name of Director "FOR Withheld ---------------- ------------- -------- Terry S. Jacobs 6,251,157 0 William L. Stakelin 6,251,157 0 Joel M. Fairman 6,251,017 140 R. Glen Mayfield 6,251,157 0 William H. Ingram 6,251,157 0 Richard H. Patterson 6,251,157 0 John H. Wyant 6,251,157 0
(2) The proposal to amend Regent's Amended and Restated Certificate of Incorporation to increase the number of authorized shares of preferred stock from 20,000,000 to 40,000,000 and the number of authorized shares of common stock from 30,000,000 to 60,000,000 was adopted by the affirmative vote of more than the required vote necessary for approval by Regent's outstanding shares entitled to vote thereon. The results of the voting were as follows: Shares Voted "FOR" - 7,249,920 Shares Voted "AGAINST" - 182 Shares "ABSTAINING" - 1,055
-16- 17 ITEM 5. OTHER INFORMATION On May 18, 1999, Regent entered into an agreement to purchase WXKC(FM), WRIE(AM) and WXTA(FM), serving the Erie, Pennsylvania area, for a purchase price of approximately $13.5 million payable in cash. The completion of this transaction is subject to a number of conditions, including FCC consent, and is expected to occur during the third quarter of 1999. On July 29, 1999, Regent entered into an agreement to acquire WODZ(FM), WLZW(FM), WFRG(FM), WIBX(AM), and WRUN(AM) serving the Utica-Rome, New York area and WCIZ(FM), WFRY(FM), WTNY(AM), and WUZZ(AM) in Watertown, New York for a purchase price of $44 million in cash and 100,000 shares of Regent's preferred stock. The completion of this transaction is subject to a number of conditions, including FCC consent, and is expected to occur during the first quarter of 2000. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The following is filed herewith as an exhibit to Part I of this Form 10-Q: Exhibit No. 27 Financial Data Schedule The exhibits identified as Part II Exhibits in 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 Regent did not file a Report on Form 8-K during the second quarter of 1999. -17- 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. REGENT COMMUNICATIONS, INC. Date: August 16, 1999 By: /s/ TERRY S. JACOBS -------------------------------------------- Terry S. Jacobs, Chairman of the Board and Chief Executive Officer Date: August 16, 1999 By: /s/ ANTHONY A. VASCONCELLOS ------------------------------------------- Anthony A. Vasconcellos, Chief Financial Officer and Vice President (Chief Accounting Officer) S-1 19 EXHIBIT INDEX The following exhibits are filed, or incorporated by reference where indicated, as part of Part II of this Quarterly Report on Form 10-Q: EXHIBIT NUMBER EXHIBIT DESCRIPTION 2(a) Asset Purchase Agreement dated as of May 18, 1999 by and among Media One Group-Erie, Ltd., Cuzco LLC, James T. Embrescia and Thomas J. Embrescia, Regent Broadcasting of Erie, Inc. and Regent Licensee of Erie, Inc. The following exhibits and schedules to the foregoing Asset Purchase Agreement are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Schedules: 1.2.8 Miscellaneous Excluded Assets 7.4 Stations Licenses, Etc. 7.7 Tangible Personal Property 7.8 Real Property 7.9 Contracts (including identification of Material Contracts) 7.11 Environmental Matters 7.12 Intellectual Property 7.13 Financial Statements 7.14 Personnel Information 7.15 Litigation 7.16 Compliance With Laws 7.17 Employee Benefit Plans Exhibits: A Form of Indemnification Escrow Agreement B Form of Letter of Credit C Form of Deposit Escrow Agreement D Form of Assignment and Assumption Agreement E Form of Non-Competition Agreement F Form of Lease Agreement 2(b) Asset Purchase Agreement dated as of July 29, 1999 by and among Forever of NY, Inc., Forever of NY, LLC and Forever Broadcasting, as sellers, and Regent Broadcasting of Utica/Rome, Inc., Regent Licensee of Utica/Rome, Inc., Regent Broadcasting of Watertown, Inc., Regent Licensee of Watertown, Inc., as buyers, and Regent Communications, Inc. E-1 20 The following exhibits and schedules to the foregoing Asset Purchase Agreement are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Schedules: 1.2.8 Excluded Real Property 6.4 Third Party Consents 7.4 Stations Licenses, Etc. 7.7 Tangible Personal Property 7.8 Real Property 7.9 Contracts (including identification of Material Contracts) 7.11 Environmental Matters 7.12 Intellectual Property 7.13 Financial Statements 7.14 Personnel Information 7.15 Litigation 7.16 Compliance With Laws 7.17 Employee Benefit Plans Exhibits: A Form of Certificate of Designation B Form of Indemnification Escrow Agreement C Form of Deposit Escrow Agreement D Form of Assignment and Assumption Agreement E Form of Opinion Letter of Sellers' Corporate Counsel F Form of Opinion Letter of Sellers' FCC Counsel G Form of Non-Competition Agreement H Form of Opinion Letter of Counsel for Buyers and Regent I Form of Lease Agreement 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 year ended December 31, 1998 and incorporated herein by this reference) 3(b)* 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(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 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 E-2 21 amending the Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended 4(a)* Second Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among Regent Communications, Inc., Terry S. Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P., William H. Ingram, WGP Corporate Development Associates V, L.L.C., WGP Corporate Development Associates (Overseas) V, L.P., River Cities Capital Fund Limited Partnership, BMO Financial, Inc., General Electric Capital Corporation, Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, and Blue Chip Capital Fund II Limited Partnership (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(c) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(b)* Stock Purchase Agreement dated June 15, 1998 among Regent Communications, Inc., Waller-Sutton Media Partners, L.P., WPG Corporate Development Associates V, L.C.C., WPG Corporate Development Associates (Overseas) V, L.P., General Electric Capital Corporation, River Cites Capital Fund Limited Partnership and William H. Ingram (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(d) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(c)* Registration Rights Agreement dated June 15, 1998 among Regent Communications, Inc., PNC Bank, N.A., Trustee, Waller-Sutton Media Partners, L.P., WPG Corporate Development Associates V, L.C.C., WPG Corporate Development Associates (Overseas) V, L.P., BMO Financial, Inc., General Electric Capital Corporation, River Cites Capital Fund Limited Partnership, Terry S. Jacobs, William L. Stakelin, William H. Ingram, Blue Chip Capital Fund II Limited Partnership, Miami Valley Venture Fund L.P. and Thomas Gammon (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(e) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(d)* Warrant for the Purchase of 650,000 Shares of Common Stock issued by Regent Communications, Inc. to Waller-Sutton Media Partners, L.P. dated June 15, 1998 (See Note 1 below) (previously filed as Exhibit 4(f) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(e)* Warrant for the Purchase of 50,000 Shares of Common Stock issued by Regent Communications, Inc. to General Electric Capital Corporation dated June 15, 1998 (previously filed as Exhibit 4(g) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(f)* Agreement to Issue Warrant dated as of June 15, 1998 between Regent Communications, Inc. and General Electric Capital Corporation (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(h) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(g)* Warrant for the Purchase of 80,000 Shares of Common Stock issued by Regent Communications, Inc. to River Cities Capital Fund Limited Partnership dated June 15, 1998 (previously filed as Exhibit 4(k) to the Form 10-Q for the Quarter Ended June 30, 1998, as amended, and incorporated herein by this reference). E-3 22 4(h)* Stock Purchase Agreement dated as of May 20, 1997 between Terry S. Jacobs and Regent Communications, Inc. (previously filed as Exhibit 4(b) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(i)* Stock Purchase Agreement dated as of May 20, 1997 between River Cities Capital Fund Limited Partnership and Regent Communications, Inc. (previously filed as Exhibit 4(c) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(j)* Stock Purchase Agreement dated as of November 26, 1997 and Terry S. Jacobs and Regent Communications, Inc. (previously filed as Exhibit 4(d) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(k)* Stock Purchase Agreement dated as of December 1, 1997 between William L. Stakelin and Regent Communications, Inc. (previously filed as Exhibit 4(e) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(l)* Stock Purchase Agreement dated as of December 8, 1997 between Regent Communications, Inc. and General Electric Capital Corporation (previously filed as Exhibit 4(f) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(m)* Stock Purchase Agreement dated as of December 8, 1997 between Regent Communications, Inc. and BMO Financial, Inc. (previously filed as Exhibit 4(g) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(n)* Credit Agreement dated as of November 14, 1997 among Regent Communications, Inc., the lenders listed therein, as Lenders, General Electric Capital Corporation, as Documentation Agent and Bank of Montreal, Chicago Branch, as Agent (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(j) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(o)* Revolving Note issued by Regent Communications, Inc. to Bank of Montreal, Chicago Branch dated November 14, 1997 in the principal amount of $20,000,000 (See Note 2 below) (previously filed as Exhibit 4(k) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(p)* Agreement to Issue Warrant dated as of March 25, 1998 between Regent Communications, Inc. and River Cities Capital Fund Limited Partnership (previously filed as Exhibit 4(1) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference) 4(q)* First Amendment to Credit Agreement dated as of February 16, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch as E-4 23 Agent (previously filed as Exhibit 4(w) to the Registrant's Form 8-K/A (date of report June 15, 1998) filed September 3, 1998 and incorporated herein by reference) 4(r)* Second Amendment and Limited Waiver to Credit Agreement dated as of June 10, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent (previously filed as Exhibit 4(x) to the Registrant's Form 8-K/A (date of report June 15, 1998) filed September 3, 1998 and incorporated herein by reference) 4(s)* Third Amendment to Credit Agreement dated as of August 14, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent (previously filed as Exhibit 4(y) to the Registrant's Form 10-Q for the Quarter Ended September 30, 1998, as amended, and incorporated herein by this reference) 4(t)* Amendment to Second Amended and Restated Stockholders' Agreement, dated as of January 11, 1999, among Regent Communications, Inc., Terry S. Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P., William H. Ingram, WGP Corporate Development Associates V, L.L.C., WGP Corporate Development Associates (Overseas) V, L.P., River Cities Capital Fund Limited Partnership, BMO Financial, Inc., General Electric Capital Corporation, Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, and Blue Chip Capital Fund II Limited Partnership (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(t) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(u)* Stock Purchase Agreement dated January 11, 1999 between Regent Communications, Inc. and Blue Chip Capital II Limited Partnership relating to the purchase of 315,887 shares of Regent Communications, Inc. Series G Convertible Preferred Stock (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(u) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(v)* Stock Purchase Agreement dated January 11, 1999 between Regent Communications, Inc. and Terry S. Jacobs relating to the purchase of 50,000 shares of Regent Communications, Inc. Series G Convertible Preferred Stock (See Note 3) (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(v) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(w)* Fourth Amendment, Limited Consent and Limited Waiver to Credit Agreement, First Amendment to Subsidiary Guaranty and First Amendment to Pledge and Security Agreement, dated as of October 16, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously filed as Exhibit 4(w) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(x)* Fifth Amendment to Credit Agreement, dated as of November 23, 1998, among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric E-5 24 Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously filed as Exhibit 4(x) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(y)* Sixth Amendment and Limited Consent to Credit Agreement, dated as of February 24, 1999, among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously filed as Exhibit 4(y) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(z) Second Amendment to Second Amended and Restated Stockholders' Agreement, dated as of June 21, 1999, among Regent Communications, Inc., Terry S. Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P., Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, Blue Chip Capital Fund II Limited Partnership and PNC Bank, N.A., Trustee (excluding exhibits not deemed material or filed separately in executed form) 4(aa) Stock Purchase Agreement dated June 21, 1999 between Regent Communications, Inc. and Waller-Sutton Media Partners, L.P. relating to the purchase of 90,909 shares of Regent Communications, Inc. Series H Convertible Preferred Stock (See Note 4) (excluding exhibits not deemed material or filed separately in executed form) 4(bb) Stock Purchase Agreement dated June 21, 1999 between Regent Communications, Inc. and WPG Corporate Development Associates V, L.L.C. and WPG Corporate Development Associates V (Overseas), L.L.C. relating to the purchase of 1,180,909 and 182,727 shares, respectively, of Regent Communications, Inc. Series H Convertible Preferred Stock (excluding exhibits not deemed material or filed separately in executed form) 4(cc) Seventh Amendment to Credit Agreement, dated as of June 30, 1999, among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent The following exhibit is filed as part of Part I of this Quarterly Report on Form 10-Q: 27 Financial Data Schedule - -------------------- * Incorporated by reference. 1. Six substantially identical Warrants for the purchase of shares of Registrant's common stock were issued as follows: Waller-Sutton Media Partners, L.P. 650,000 WPG Corporate Development Associates V, L.P. 112,580 WPG Corporate Development Associates (Overseas) V, L.P. 17,420 General Electric Capital Corporation 50,000 River Cities Capital Fund Limited Partnership 20,000 William H. Ingram 10,000
E-6 25 2. Two substantially identical notes were issued to Bank of Montreal, Chicago Branch, in the principal amounts of $15,000,000 and $20,000,000. 3. Two substantially identical Stock Purchase Agreements were entered into for the purchase of Series G Convertible Preferred Stock as follows: Joel M. Fairman 3,319 shares William L. Stakelin 3,200 shares
4. Two substantially identical Stock Purchase Agreements were entered into for the purchase of Series H Convertible Preferred Stock as follows: Blue Chip Capital Fund II Limited Partnership 363,636 shares PNC Bank, N.A., Trustee 181,818 shares
E-7 EX-2.A 2 EXHIBIT 2(A) 1 Exhibit 2(a) ASSET PURCHASE AGREEMENT by and among MEDIA ONE GROUP-ERIE, LTD., CUZCO LLC, JAMES T. EMBRESCIA, THOMAS J. EMBRESCIA, REGENT BROADCASTING OF ERIE, INC. and REGENT LICENSEE OF ERIE, INC. 2 TABLE OF CONTENTS
Page ---- ARTICLE I - PURCHASE OF ASSETS 1.1 Transfer of Assets..............................................................................1 1.2 Excluded Assets.................................................................................2 ARTICLE 2 ASSUMPTION OF OBLIGATIONS 2.1 Assumption of Obligations.......................................................................4 2.2 Retained Liabilities............................................................................4 ARTICLE 3 CONSIDERATION 3.1 Delivery of Consideration.......................................................................5 3.2 Escrow Deposit..................................................................................5 3.3 Proration of Income and Expenses................................................................6 3.4 Allocation of Purchase Price....................................................................6 3.5 Collection of Accounts Receivable...............................................................7 ARTICLE 4 CLOSING 4.1 Closing.........................................................................................8 ARTICLE 5 GOVERNMENTAL CONSENTS 5.1 FCC Consent.....................................................................................8 5.2 FCC Application.................................................................................8 ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS 6.1 Organization and Standing.......................................................................9 6.2 Authorization and Binding Obligation............................................................9 6.3 Qualification As Assignee.......................................................................9 6.4 Absence of Conflicting Agreements or Required Consents..........................................9 6.5 Commissions or Finder's Fees...................................................................10
-i- 3 6.6 Litigation.....................................................................................10 ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER 7.1 Organization and Standing......................................................................10 7.2 Authorization and Binding Obligation...........................................................10 7.3 Absence of Conflicting Agreements or Required Consents.........................................10 7.4 Government Authorizations......................................................................11 7.5 Compliance with FCC Regulations................................................................12 7.6 Taxes ......................................................................................12 7.7 Personal Property..............................................................................13 7.8 Real Property..................................................................................13 7.9 Contracts......................................................................................14 7.10 Status of Contracts, etc.......................................................................14 7.11 Environmental..................................................................................14 7.12 Intellectual Property..........................................................................15 7.13 Financial Statements...........................................................................15 7.14 Personnel Information..........................................................................15 7.15 Litigation.....................................................................................16 7.16 Compliance With Laws...........................................................................16 7.17 Employee Benefit Plans.........................................................................16 7.18 Commissions or Finder's Fees...................................................................17 7.19 Conduct of Business in Ordinary Course; Adverse Change.........................................17 7.20 Instruments of Conveyance; Good Title..........................................................17 7.21 Undisclosed Liabilities........................................................................17 7.22 Full Disclosure................................................................................17 ARTICLE 8 COVENANTS OF BUYERS 8.1 Closing........................................................................................18 8.2 Notification...................................................................................18 8.3 No Inconsistent Action.........................................................................18 8.4 Other Erie Transactions........................................................................18 ARTICLE 9 COVENANTS OF SELLER 9.1 Pre-Closing Covenants............................................................................18 9.2 Notification.....................................................................................20 9.3 No Inconsistent Action...........................................................................20 9.4 Closing ......................................................................................21 9.5 Other Items......................................................................................21 9.6 Exclusivity......................................................................................21
-ii- 4 9.7 Supplements to Schedules.........................................................................21 ARTICLE 10 JOINT COVENANTS 10.1 Confidentiality................................................................................22 10.2 Cooperation....................................................................................22 10.3 Control of Stations............................................................................22 10.4 Consents to Assignment.........................................................................23 10.5 Filings ......................................................................................23 10.6 Bulk Sales Laws................................................................................23 10.7 Employee Matters...............................................................................23 ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS 11.1 Representations, Warranties and Covenants......................................................24 11.2 Governmental Consents..........................................................................24 11.3 Governmental Authorizations....................................................................24 11.4 Adverse Proceedings............................................................................25 11.5 Third-Party Consents...........................................................................25 11.6 Closing Documents..............................................................................25 11.7 Satisfactory Investigation of Station Facilities...............................................25 11.8 Environmental Studies..........................................................................25 11.9 No Adverse Change..............................................................................26 ARTICLE 12 CONDITIONS OF CLOSING BY SELLER 12.1 Representations, Warranties and Covenants......................................................26 12.2 Governmental Consents..........................................................................26 12.3 Adverse Proceedings............................................................................26 12.4 Closing Documents..............................................................................27 ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES 13.1 Expenses.......................................................................................27 13.2 Specific Charges...............................................................................27 ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING 14.1 Seller's Documents.............................................................................27 14.2 Buyers' Documents..............................................................................28
-iii- 5 ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC. 15.1 Survival of Representations, Etc...............................................................29 15.2 Indemnification................................................................................30 15.3 Procedures: Third Party and Direct Indemnification Claims......................................30 ARTICLE 16 TERMINATION RIGHTS 16.1 Termination....................................................................................31 16.2 Liability......................................................................................33 16.3 Monetary Damages, Specific Performance and Other Remedies......................................33 16.4 Seller's Liquidated Damages....................................................................33 ARTICLE 17 MISCELLANEOUS PROVISIONS 17.1 Risk of Loss...................................................................................33 17.2 Certain Interpretive Matters and Definitions...................................................34 17.3 Further Assurances.............................................................................34 17.4 Preservation of Records........................................................................34 17.5 Benefit and Assignment.........................................................................34 17.6 Amendments.....................................................................................35 17.7 Headings.......................................................................................35 17.8 Governing Law..................................................................................35 17.9 Notices........................................................................................35 17.10 Counterparts...................................................................................36 17.11 No Third Party Beneficiaries...................................................................36 17.12 Severability...................................................................................36 17.13 Entire Agreement...............................................................................36
-iv- 6 LIST OF SCHEDULES AND EXHIBITS Schedule 1.2.8 Miscellaneous Excluded Assets 7.4 Stations Licenses, Etc. 7.7 Tangible Personal Property 7.8 Real Property 7.9 Contracts (including identification of Material Contracts) 7.11 Environmental Matters 7.12 Intellectual Property 7.13 Financial Statements 7.14 Personnel Information 7.15 Litigation 7.16 Compliance With Laws 7.17 Employee Benefit Plans Exhibit A Indemnification Escrow Agreement B Form Letter of Credit C Deposit Escrow Agreement D Assignment and Assumption Agreement E Non-Competition Agreement F Lease Agreement -v- 7 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered this 18th day of May, 1999 by and among MEDIA ONE GROUP-ERIE, LTD., an Ohio limited liability company (hereinafter referred to as " Seller "), REGENT BROADCASTING OF ERIE, INC., a Delaware corporation ("RBI"), and REGENT LICENSEE OF ERIE, INC., a Delaware corporation ("RLI") (RBI and RLI collectively referred to as "Buyers"), and CUZCO LLC, an Ohio limited liability company, and JAMES T. EMBRESCIA AND THOMAS J. EMBRESCIA. RECITALS WHEREAS, Seller owns and operates radio stations WXKC-FM and WRIE-AM licensed to Erie, Pennsylvania, and WXTA-FM, licensed to Edinboro, Pennsylvania (together the "Stations" and each individually, a "Station") pursuant to licenses issued by the Federal Communications Commission ("FCC"), and WHEREAS, Seller desires to sell, and Buyers desire to purchase, certain assets and assume certain obligations associated with the ownership and operation of the Stations, all on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I PURCHASE OF ASSETS 1.1 Transfer of Assets. On the terms and subject to the conditions hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined), Seller shall sell, assign, transfer, convey and deliver to Buyers, Buyers shall purchase and assume from Seller (provided that RLI shall only assume Seller's rights and obligations under the Stations Licenses, as defined below), all of the right, title and interest of Seller in and to all of the assets, properties, interests and rights of Seller of whatsoever kind and nature, real and personal, tangible and intangible, owned or leased (to the extent of Seller's leasehold interest) by Seller as the case may be, wherever situated, which are used or useful in the operation of the Stations (the "Stations Assets"), including but not limited to all of Seller's right, title and interest in and to the assets, properties, interests and rights described in this Section 1. 1: 1.1.1 all licenses, permits and other authorizations issued to Seller by any governmental or regulatory authority including without limitation those issued by the FCC (the licenses, permits and authorizations issued by the FCC are hereafter referred to as the "Stations Licenses") used or useful in connection with the operation of the Stations, including but not 8 limited to those described in Schedule 7.4, along with renewals or modifications of such items, and all applications pertaining thereto, between the date hereof and the Closing Date; 1.1.2 all equipment, electrical devices, broadcast towers, antennae, cables, buildings and other improvements on real property, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and all other tangible personal property of every kind and description, and Seller's rights therein, owned, leased (to the extent of Seller's leasehold interest) or held by Seller and used or useful in connection with the operations of the Stations, including but not limited to those items described or listed in Schedule 7.7, together with any replacements thereof and additions thereto, made between the date hereof and the Closing Date, and less any retirements or dispositions thereof made between the date hereof and the Closing Date in the ordinary course of business and consistent with past practices of Seller; provided, however, Seller agrees that the value of all such assets retired or disposed of and not replaced with an asset of like kind and quality shall not exceed $10,000 in the aggregate unless Seller has obtained the prior written approval of RBI which shall not be unreasonably withheld; 1.1.3 all contracts, agreements, leases and legally binding contractual rights of any kind, written or oral, relating to the operation of the Stations and which are listed in Schedule 7.8 and Schedule 7.9, together with (a) such additional existing contracts as may be added to Schedule 7.9 within fourteen (14) days following the execution of this Agreement with the prior written consent of Buyers, (b) all advertising contracts entered into or acquired by Seller between the date hereof and the Closing Date in the ordinary course of business, consistent with past practices of Seller, and (c) any other contracts, agreements, leases and legally binding contractual rights entered into or acquired by Seller between the date hereof and the Closing Date, which RBI specifically agrees at Closing to assume (collectively the "Contracts"); provided, however, that the parties acknowledge that the Seller currently has Barter Payables (the aggregate value of time owed pursuant to contracts for the sale of advertising in exchange, in whole or in part, for merchandise or services ("Trade Agreements")) of approximately $170,000 in connection with the Trade Agreements listed on Schedule 7.9. Seller shall use its best efforts to reduce the Barter Payables by as much as reasonably possible between the date hereof and the Closing Date. 1.1.4 all of Seller's rights in and to the call letters of the Stations, and any variation thereof, as well as all of Seller's rights in and to all trademarks, trade names, service marks, franchises, copyrights, including registrations and applications for registration of any of them, computer software, programs and programming material of whatever form or nature, jingles, slogans, the Stations' logos and all other logos or licenses to use same and all other intangible property rights of Seller, which are used or useful in connection with the operation of the Stations, including but not limited to those listed in Schedule 7.12 (collectively, the "Intellectual Property") together with any associated goodwill and any additions thereto between the date hereof and the Closing Date; 1.1.5 all programming materials and elements of whatever form or nature owned by Seller, whether recorded on tape or other medium or intended for live performance, and all copyrights owned by or licensed to Seller that are used or useful in connection with the operation -2- 9 of the Stations, including all such programs, materials, elements and copyrights acquired by Seller between the date hereof and the Closing Date; 1.1.6 all of Seller's rights in and to all the files, documents, records, and books of account relating to the operation of the Stations or to the Stations Assets, including, without limitation, the Stations' local public files, programming information and studies, blueprints, technical information and engineering data, news and advertising studies or consulting reports, marketing and demographic data, sales correspondence, lists of advertisers, promotional materials, credit and sales reports and filings with the FCC and all written Contracts to be assigned hereunder, logs, software programs and books and records relating to employees, financial, accounting and operation matters, but excluding records relating solely to any Excluded Asset (as hereinafter defined); 1.1.7 all of Seller's rights under manufacturers' and vendors' warranties relating to items included in the Stations Assets and all similar rights against third parties relating to items included in the Stations Assets; and 1.1.8 except for Excluded Assets, such other assets, properties, interests and rights owned by Seller that are used or useful in connection with the operation of the Stations. The Stations Assets shall be transferred to RBI (except for the Stations' Licenses which shall be transferred to RLI) free and clear of all debts, security interests, mortgages, trusts, claims, pledges or other liens, liabilities, encumbrances or rights of third parties whatsoever ("Encumbrances"), except for Assumed Liabilities and except as set forth in Schedule 7.7. and Schedule 7.8. 1.2 Excluded Assets. Notwithstanding anything to the contrary contained herein, it is expressly understood and agreed that the Stations Assets shall not include the following assets along with all rights, title and interest therein (the "Excluded Assets"): 1.2.1 all cash and cash equivalents of Seller on hand and/or in banks, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; 1.2.2 all investment securities and accounts receivable or notes receivable for services performed by Seller in connection with the operation of the Stations prior to the Closing Date and all security deposits paid and held under any contract or lease agreement; 1.2.3 subject to the limitation set forth in Section 1.1.2 of this Agreement, all tangible and intangible personal property of Seller disposed of or consumed in the ordinary course of business consistent with the past practices of Seller between the date of this Agreement and the Closing Date; 1.2.4 all Contracts that have terminated or expired prior to the Closing Date in the ordinary course of business consistent with the past practices of Seller and any contract not listed on Schedule 7.8, or 7.9 unless RBI agrees, in writing, to assume such contract; -3- 10 1.2.5 Seller's governing books and records and such other books and records as pertain to the organization, existence or capitalization of Seller and duplicate copies of such records as are necessary to enable Seller to file its tax returns and reports, as well as any other records or materials relating to Seller generally and not involving or relating to the Stations Assets or the operation or operations of the Stations; 1.2.6 contracts of insurance, and any insurance proceeds or claims made by, Seller relating to property or equipment repaired, replaced or restored by Seller prior to the Closing Date; 1.2.7 all pension, profit sharing or cash or deferred (Section 401 (k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Seller; and 1.2.8 any right, property or asset described in Schedule 1.2.8. ARTICLE 2 ASSUMPTION OF OBLIGATIONS 2.1 Assumption of Obligations. Subject to the provisions of this Section 2.1, Section 2.2 and Section 3.3, on the Closing Date, RBI shall assume the obligations of Seller arising or to be performed on or after the Closing Date (except to the extent such obligations represent liabilities for activities, events or transactions occurring, or conditions existing, on or prior to the Closing Date): (a) under the Contracts; (b) for operating expenses and other liabilities of the Stations; (c) for accrued vacations of those of Sellers' employees who become employees of RBI; and (d) all property taxes and other governmental charges on the Stations Assets; and RLI shall assume the obligations of Seller arising or to be performed on or after the Closing Date (except to the extent such obligations represent liabilities for activities, events or transactions occurring on or prior to the Closing Date) under the Stations Licenses. All of the foregoing liabilities and obligations shall be referred to herein collectively as the "Assumed Liabilities." 2.2 Retained Liabilities. Notwithstanding anything contained in this Agreement to the contrary, Buyers expressly do not, and shall not, assume or agree to pay, satisfy, discharge or perform and will not be deemed by virtue of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of or in connection with the consummation of the transactions contemplated hereby or thereby, to have assumed or to have agreed to pay, satisfy, discharge or perform, any liabilities, obligations or commitments of Seller of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Buyers, other than the Assumed Liabilities. Seller will retain all liabilities and obligations of the Seller, other than the Assumed Liabilities, including but not limited to, the obligation to perform, satisfy or pay any liability, obligation, agreement, debt, charge, claim, judgment or expense incurred by or asserted against Seller related to taxes, environmental matters, pension or retirement plans or trusts, -4- 11 profit-sharing plans, employee benefits, severance of employees, product liability or warranty, negligence, contract breach or default, or other obligations, claims or judgments asserted against Buyers as successor in interest to Seller. All of such liabilities, obligations and commitments of Seller described in this Section 2.2 shall be referred to herein collectively as the "Retained Liabilities." ARTICLE 3 CONSIDERATION 3.1 Delivery of Consideration. In consideration for the sale of the Stations Assets to Buyers, in addition to the assumption of certain obligations of Seller pursuant to Section 2.1 above, Buyers shall, at the Closing (as hereinafter defined), deliver to Seller Thirteen Million Five Hundred Thousand Dollars ($13,500,000.00), subject to adjustment pursuant to the provisions of Sections 3.2 and 3.3 below (the "Purchase Price"). The Purchase Price shall be paid in cash by wire transfer of immediately-available funds to Seller, pursuant to wire instructions provided by Seller. Notwithstanding the foregoing, the parties agree that at the Closing, Buyers, Seller and Bank One Trust Company, NA, Columbus, Ohio, as Escrow Agent (the "Indemnification Escrow Agent"), shall enter into an Indemnification Escrow Agreement in the form of Exhibit A hereto (the "Indemnification Escrow Agreement") pursuant to which Seller shall deposit with the Indemnification Escrow Agent a letter of credit substantially in the form attached as Exhibit B hereto in the amount of Three Hundred Thousand Dollars ($300,000.00), which funds shall be held in escrow for a period of at least one year from the Closing Date and will be used to satisfy indemnification claims of Buyers pursuant to Section 15.2.1 hereof, and which funds shall otherwise be administered and released as specifically provided for in the Indemnification Escrow Agreement. 3.2 Escrow Deposit. (a) Within five (5) business days of the execution and delivery of this Agreement, Buyers, Seller and Bank One Trust Company, NA, Columbus, Ohio, as Escrow Agent (the "Deposit Escrow Agent"), shall enter into a Deposit Escrow Agreement in the form of Exhibit C hereto (the "Deposit Escrow Agreement") pursuant to which Buyers shall deposit the amount described below as a deposit on the amount of the Purchase Price. Such amounts held in escrow shall be applied as set forth herein and in the Deposit Escrow Agreement. (b) Pursuant to the terms of the Deposit Escrow Agreement, Buyers shall wire transfer Six Hundred Seventy-Five Thousand Dollars ($675,000.00), or alternatively, deliver an irrevocable, stand-by letter of credit for such amount in form and substance acceptable to Seller, to an escrow account established pursuant to the Deposit Escrow Agreement (the "Escrow Deposit"). At the Closing, the Escrow Deposit if, in the form of cash, shall be applied to the Purchase Price to be paid to Seller and the interest accrued thereon shall be paid to Buyers, or if in the form of a letter of credit, shall be returned to Buyers. As more fully described in the Deposit Escrow Agreement: (a) in the event this Agreement is terminated because of Buyers' material breach of this Agreement and all other conditions to Closing are at such time satisfied or waived (other than such conditions as can reasonably be expected to be satisfied by the Closing), the Escrow Deposit shall be paid to or delivered for draw thereon to Seller as liquidated damages -5- 12 as provided in Section 16.4 hereto for Buyers' material breach of this Agreement (the payment of such sum to Seller thereby discharging in full any liability Buyers may have to Seller), and the interest accrued on the Escrow Deposit shall be paid to Buyers; and (b) in the event this Agreement is terminated under any circumstances other than those set forth in the immediately preceding clause (a), the Escrow Deposit and the interest accrued thereon shall be paid or returned to Buyers. 3.3 Proration of Income and Expenses. 3.3.1 Except as otherwise provided herein, all items of income and expense, deposits, reserves and prepaid and deferred income and expenses relating to the Stations Assets or the Assumed Liabilities and arising from the conduct of the business and operations of the Stations shall be prorated between Buyers and Seller in accordance with generally accepted accounting principles as of 11:59 p.m. local Erie, Pennsylvania time, on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate, property taxes and other governmental charges on the Stations Assets (but excluding taxes arising by reason of the transfer of the Stations Assets as contemplated hereby which shall be paid as set forth in Section 13.2), business and license fees, frequency discounts, music and other license fees (including any retroactive adjustments thereof, which retroactive adjustments shall not be subject to the ninety-day limitation set forth in Section 3.3.2), utility expenses, amounts due or to become due under Contracts, rents and similar prepaid and deferred items, but shall exclude any prorations for accrued vacation and sick leave. 3.3.2 Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days after the Closing Date. 3.3.3 In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid at the time provided in Section 3.3.2 and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Seller and one-half by Buyers. 3.4 Allocation of Purchase Price. The parties shall in good faith attempt to agree prior to Closing upon an allocation of the Purchase Price among the Stations Assets. If the parties cannot agree upon an allocation, such allocation shall be based upon an appraisal prepared by BIA Consulting, Inc. or another appraiser mutually satisfactory to the parties, and such appraisal and allocation shall be completed post-Closing unless otherwise agreed to by the parties. Any costs of such appraisal shall be paid one-half by Buyers and one-half by Sellers. Seller and Buyers agree to use the agreed upon allocation, if any, for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended. Notwithstanding the foregoing, the allocation to any covenant not to compete shall not exceed One Hundred Thousand Dollars ($100,000.00). -6- 13 3.5 Collection of Accounts Receivable. The accounts receivable of Seller for the sale of advertising time on the Stations are not included among the Stations Assets. Nevertheless, at Closing, Seller shall supply RBI with a list of Seller's accounts receivable as of the Closing Date (the "Accounts"), and RBI shall use such efforts as are reasonable and in the ordinary course of business to collect the Accounts on Seller's behalf for a period of ninety (90) days from the Closing Date (the "Collection Period"). This obligation, however, shall not extend to the institution of litigation, employment of counsel, or any other extraordinary means of collection. During the Collection Period, Seller shall not solicit any monies from an account debtor who, after Closing, continues to do business with the Stations, provided that during such period Seller may act to preserve its rights against a bankrupt debtor or commence suit or otherwise take action against any debtor that disputes the amount of, or liability for, an Account. If Seller receives a payment from an account debtor during the Collection Period, it shall so notify RBI. RBI may endorse and deposit in its own name and collect any and all checks and other instruments for the payment of money that RBI may receive in payment of Accounts. RBI shall receive no remuneration for its services and shall not be liable for non-collection, or failure of any such collection, except due to its own gross negligence or intentional misconduct. Upon termination of its duties hereunder, RBI shall deliver to Seller all of its correspondence and files concerning the collection of the Accounts and all reports of attempts to collect the same. Except as otherwise provided herein, amounts collected by RBI on account of Seller's Accounts shall be remitted in full to Seller by the 15th day of each month following the month during which such collections occurred. Buyer shall deliver to Seller an accounting showing the amount it received during each monthly period on each account. If both Seller and RBI are entitled to accounts receivable from the same account debtor, all payments received during the Collection Period shall be first applied to Seller's Accounts from such account debtor until the same are paid in full, unless such account debtor has disputed such account receivable in writing to the Seller or has specifically indicated payment is intended to be to its account with RBI, in which event RBI shall be entitled to apply the payment made by the account debtor to RBI's account receivable, but RBI shall immediately return the disputed account to Seller for collection. At the conclusion of the Collection Period and after remittance of all amounts collected, RBI will thereafter have no further responsibility with respect to the collection of the Accounts, and RBI may apply all collections received by RBI from any Account party who continues business with RBI to obligations owing to RBI, except for any payment received by RBI which such Account party specifies is for amounts owed to Seller, in which event such specified amounts shall be paid over to Seller. RBI shall not have the right to compromise, settle or adjust the amounts of any one of the Accounts without Seller's prior written consent. Seller shall promptly pay all sales commissions relating to all of its accounts receivable whenever Seller receives payment thereon. ARTICLE 4 CLOSING 4.1 Closing. Except as otherwise mutually agreed upon by Buyers and Seller, the consummation of the transactions contemplated herein (the "Closing") shall occur within ten (10) business days after the later to occur of (a) the satisfaction or waiver of each condition to closing contained herein, other than such conditions as are reasonably anticipated to be satisfied at -7- 14 Closing (provided that each party hereto shall use its reasonable best efforts to cause each condition to closing to be satisfied so that the Closing may occur at the earliest possible date), and (b) the issuance of the Final Order (as defined below); or such other date as may be mutually agreed by the parties hereto (the "Closing Date"); provided, however, that Buyers may in their sole discretion waive the requirement that a Final Order be issued and elect (subject to clause (a) above) to close at any time (upon not less than ten (10) business days' notice to Seller) after the release of a public notice of initial FCC approval consenting to the transaction contemplated hereby (the "Initial Approval"). For purposes of this Agreement, "Final Order" means an order or grant by the FCC which is no longer subject to reconsideration or review by the FCC or a court of competent jurisdiction and pursuant to which the FCC consents to the assignments of the FCC Licenses contemplated by this Agreement, such order or grant being without the imposition of any conditions materially adverse to Buyers or any Affiliate (as hereinafter defined) of Buyers with respect to the assignment of the FCC Licenses to RLI or the continued operation by Buyers of the Stations or the Stations Assets, other than conditions applicable to the radio broadcast industry as a whole. In the event that the parties close before the Initial Approval has become a Final Order, the parties shall enter into a mutually acceptable Unwind Agreement. The Closing shall be held by the exchange of documents by overnight delivery or in the offices of Strauss & Troy, The Federal Reserve Bank Building, East Fourth Street, Cincinnati, Ohio, or at such place and in such manner as the parties hereto may agree. ARTICLE 5 GOVERNMENTAL CONSENTS 5.1 FCC Consent. It is specifically understood and agreed by Buyers and Seller that the Closing and the assignment of the Stations Licenses and the transfer of the Stations Assets are expressly conditioned on and are subject to the prior consent and approval of the FCC without the imposition of any conditions materially adverse to Buyers or any Affiliate of Buyers other than conditions applicable to the radio broadcast industry as a whole (the "FCC Consent"). 5.2 FCC Application. Within five (5) business days after the delivery of the Escrow Deposit to the Escrow Agent, Buyers and Seller shall file an application with the FCC for the FCC Consent (the "FCC Application"). Buyers and Seller shall prosecute the FCC Application with all reasonable diligence and otherwise use their best efforts to obtain the FCC Consent as expeditiously as practicable (but neither Buyers nor Seller shall have any obligation to satisfy complainants or the FCC by taking any steps which would have a material adverse effect upon Buyers or Seller or upon any of their respective Affiliates). If the FCC Consent imposes any condition on Buyers or Seller or any of their respective Affiliates, such party shall use its best efforts to comply with such condition; provided, however, that neither Buyers nor Seller shall be required hereunder to comply with any condition that would have a material adverse effect upon it or any of its Affiliates. If reconsideration or judicial review is sought with respect to the FCC Consent, the party affected shall vigorously oppose such efforts for reconsideration or judicial review; provided, however, that nothing herein shall be construed to limit either party's right to terminate this Agreement pursuant to Article 16 hereof. -8- 15 ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS Buyers hereby make the following representations and warranties to Seller, each of which is true and correct on the date hereof, shall survive the Closing and shall be unaffected by any investigation heretofore or hereafter made by Seller: 6.1 Organization and Standing. Buyers are corporations duly organized validly existing and in good standing under the laws of the State of Delaware, and by the Closing Date RBI will be authorized to conduct business within the State of Pennsylvania. 6.2 Authorization and Binding Obligations. Buyers have all necessary corporate power and authority to enter into and perform this Agreement and the transactions contemplated hereby, and to own or lease the Stations Assets and to carry on the business of the Stations upon the consummation of the transactions contemplated by this Agreement. Buyers' execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary action on their part and, assuming the due authorization, execution and delivery of this Agreement by Seller, this Agreement will constitute the legal, valid and binding obligation of Buyers, enforceable against them in accordance with its terms, except as limited by laws affecting creditors' rights or equitable principles generally. 6.3 Qualification As Assignee. There are no facts which, under the Communications Act of 1934, as amended, or the existing rules and regulations of the FCC, would disqualify RLI as an assignee of the Stations Licenses. 6.4 Absence of Conflicting Agreements or Required Consents. Except as set forth in Article 5 hereof with respect to governmental consents, the execution, delivery and performance of this Agreement by Buyers: (a) do not conflict with the provisions of the articles of incorporation or by-laws of Buyers; (b) do not require the consent of any third party not affiliated with Buyers; (c) will not violate any applicable law, judgment, order, injunction, decree, rule, regulation or ruling of any governmental authority to which either Buyer is a party; and (d) will not, either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination of or result in a breach of the terms, conditions or provisions of, or constitute a default under, any agreement, instrument, license or permit to which either Buyer is now subject. 6.5 Commissions or Finder's Fees. Neither Buyers nor any person or entity acting on behalf of Buyers has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity. 6.6 Litigation. Buyers are not subject to any judgment, award, order, writ, injunction, arbitration decision or decree prohibiting the consummation of the transactions contemplated by this Agreement, and there are no suits, legal proceedings or investigations of any nature pending, -9- 16 or to the best knowledge of Buyers, threatened against or affecting Buyers that would affect Buyers' ability to carry out the transactions contemplated by this Agreement. 6.7 Financial Qualifications. Buyers have sufficient financial ability on their own or from committed sources (subject to customary closing conditions) to complete the transactions contemplated by this Agreement. ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER Seller makes the following representations and warranties to Buyers, each of which is true and correct on the date hereof, shall survive the Closing and shall be unaffected by any investigation heretofore or hereafter made by Buyers: 7.1 Organization and Standing. Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Ohio, is authorized to conduct business within the State of Pennsylvania, and has the requisite power and authority to own, lease and operate the Stations Assets owned or leased by it and to carry on the business of the Stations as now being conducted by it and as proposed to be conducted by it between the date hereof and the Closing Date. 7.2 Authorization and Binding Obligation. Seller has the power and authority, and has taken all necessary and proper action to enter into and perform this Agreement and to consummate the actions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Seller and, assuming the due authorization, execution and delivery of this Agreement by Buyers, constitutes the legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, except as limited by laws affecting the enforcement of creditors' rights or equitable principles generally. 7.3 Absence of Conflicting Agreements or Required Consents. Except as set forth in Article 5 with respect to governmental consents and in Schedule 7.9 with respect to consents required in connection with the assignment of certain Contracts, the execution, delivery and performance of this Agreement by Seller: (a) do not require the consent of any third party (including, without limitation, the consent of any governmental, regulatory, administrative or similar authority); (b) will not conflict with, result in a breach of, or constitute a violation of or default under, the provisions of Seller's articles of organization or operating agreement (or other charter or organizational documents), or any applicable judgment, order, injunction, decree, rule, regulation or ruling of any governmental authority to which Seller is a party or by which Seller or any of the Stations Assets are bound; (c) will not either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination of or result in a breach of the terms, conditions or provisions of, or constitute a default under, any Contract, agreement, instrument, license or permit to which Seller or any of the Stations Assets is now subject; and (d) will not result in the creation of any lien, charge or encumbrance on any of the Stations Assets. -10- 17 7.4 Government Authorizations. 7.4.1 Schedule 7.4 hereto contains a true and complete list of the Stations Licenses and other licenses, permits or other authorizations from governmental and regulatory authorities which are required for the lawful conduct of the business and operations of the Stations in the manner and to the full extent they are presently conducted (including, without limitation, auxiliary licenses associated with each Station). Seller has delivered to Buyers true and complete copies of the Stations Licenses and the other licenses, permits and authorizations listed in Schedule 7.4, including any and all amendments and other modifications thereto. 7.4.2 Seller is the authorized legal holder of the Stations Licenses and other licenses, permits and authorizations listed in Schedule 7.4. Except as set forth Schedule 7.4, none of the Stations Licenses and other licenses, permits and authorizations listed in Schedule 7.4 is subject to any restrictions or conditions which would materially limit the full operation of the Stations as now operated. 7.4.3 Except as set forth in Schedule 7.4, and except for matters affecting the radio broadcast industry generally, there are no applications, complaints, petitions or proceedings pending or, to the best of Seller's knowledge, threatened as of the date hereof before the FCC or any other governmental or regulatory authority relating to the business or operations of the Stations. Except as set forth in Schedule 7.4, the Stations Licenses and the other licenses, permits and authorizations listed in Schedule 7.4 are in good standing, are in full force and effect and are unimpaired by any act or omission of Seller or its members, managers, officers, or employees. The operations of the Stations are in accordance in all material respects with the Stations Licenses and the underlying construction permits and the other licenses, permits and authorizations listed in Schedule 7.4. No proceedings are pending or, to the best of Seller's knowledge, threatened, and to the best of Seller's knowledge there has not been any act or omission of Seller or any of its members, managers, officers, or employees, which may result in the revocation, modification, non-renewal or suspension of any of the Stations Licenses or the other licenses, permits and authorizations listed in Schedule 7.4, the denial of any pending applications, the issuance of any cease and desist order, the imposition of any administrative actions by the FCC or any other governmental or regulatory authority with respect to the Stations Licenses or the other licenses, permits and authorizations listed in Schedule 7.4 or which may affect Buyers' ability to continue to operate the Stations as they are currently operated. 7.4.4 Each Station is operating at the authorized power level specified in the respective Station License. 7.4.5 To the best of Seller's knowledge: (i) none of the Stations is causing objectionable interference to the transmissions of any other broadcast station or communications facility nor has any of the Stations received any complaints with respect thereto; and (ii) no other broadcast station or communications facility is causing objectionable interference to respective transmissions of any Station or the public's reception of such transmissions. -11- 18 7.4.6 Seller has no reason to believe that the Stations Licenses and the other licenses, permits, or authorizations listed in Schedule 7.4 will not be renewed in their ordinary course. 7.4.7 All reports, forms, and statements required to be filed by Seller with the FCC with respect to the Stations since the grant of the last renewal of the Stations Licenses have been filed and are substantially complete and accurate. 7.4.8 The operation of the Stations and all of the Stations Assets are in compliance in all respects with ANSI Radiation Standards C95.1-1992. 7.5 Compliance with FCC Regulations. Except as specified in Schedule 7.4, the operation of the Stations and all of the Stations Assets are in compliance in all material respects with: (a) all applicable engineering standards required to be met under applicable FCC rules; and (b) all other applicable federal, state and local rules, regulations, requirements and policies, including, but not limited to, any applicable equal employment opportunity policies of the FCC, and all applicable painting and lighting requirements of the FCC and the Federal Aviation Administration to the extent required to be met under applicable FCC rules and regulations, and to the best of Seller's knowledge, there are no filed claims to the contrary. 7.6 Taxes. Seller has filed all federal, state, local and foreign income, franchise, sales, use, property, excise, payroll and other tax returns required by law to be filed by it and has paid in full all taxes, estimated taxes, interest, assessments, and penalties due and payable by it. All returns and forms which have been filed have been true and correct in all material respects and no tax or other payment in an amount other than as shown on such returns and forms is required to be paid by Seller and has not been paid by Seller. There are no present disputes as to taxes of any nature payable by Seller which in any event could adversely affect any of the Stations Assets or the operation of the Stations by Buyers. Seller has not been advised that any of its tax returns, federal, state, local or foreign, have been or are being audited. Seller does not and will not in the future have any liability, fixed or contingent, for any unpaid federal, state or local taxes or other governmental or regulatory charges whatsoever (including without limitation withholding and payroll taxes) which could result in a lien on the Stations Assets after conveyance thereof to Buyers or in any other form of transferee liability to Buyers. 7.7 Personal Property. Schedule 7.7 hereto contains a list of all material items of tangible personal property owned by Seller and used or useful in the conduct of the business and operations of the Stations. Schedule 7.7 also separately lists any material tangible personal property leased by Seller pursuant to leases included within the Contracts. Except as disclosed in Schedule 7.7, Seller has, and following the Closing, RBI will have, good and marketable title to all of the items of tangible personal property which are included in the Stations Assets (other than those subject to lease) and none of such Stations Assets is, or at the Closing will be, subject to any security interest, mortgage, pledge, lease, license, lien, encumbrance, title defect or other charge, except for the Assumed Liabilities. The properties listed in Schedule 7.7, along with those properties subject to lease and included among the Contracts, constitute all material tangible personal property necessary to operate the Stations as the same are now being operated. Except as set forth in Schedule 7.7, all items of tangible personal property included in the -12- 19 Stations Assets are in good operating condition (considering their age), are free from all material defect and damage, are suitable for the purposes for which they are now being used, and have been properly maintained in a manner consistent with generally accepted standards of good engineering practice. 7.8 Real Property . 7.8.1 Seller owns no real property although it does own improvements on real property, such as transmitter buildings. Schedule 7.8 hereto contains a complete and accurate list and description of all real property (including without limitation, real property on which is situated the towers, transmitters, transmitter buildings, studio and offices of the Stations) used by Seller in connection with the operations of the Stations, stating which of the improvements thereon are leased and which are owned by Seller (the "Real Estate"). 7.8.2 Seller enjoys quiet possession of all Real Estate. There are no present disputes or claims with respect to offsets or defenses by any party against the other under any of the Contracts relating to the Real Estate. Seller has delivered to Buyers true and complete copies of all Contracts relating to the Real Estate. Except as set forth in Schedule 7.9 hereto, the assignment of the Contracts relating to the Real Estate to RBI will not permit the other party to accelerate the rent, cause the terms thereof to be renegotiated or constitute a default thereunder, and will not require the consent of any such party to the assignment thereof to RBI. 7.8.3 Seller has full legal and practical access to all of the Real Estate, and all easements, rights of way, and real property licenses relating to Seller's use thereof have been properly recorded in the appropriate public recording offices. The Real Estate includes all the real property, easements, rights of way, and other real property interests necessary to conduct the business and operations of the Stations as they are now conducted. Except as described in Schedule 7.8, none of the buildings, structures, improvements or fixtures constructed on any Real Estate, in connection with the operation of the Stations, including, but not limited to, all towers, guy wires and guy anchors and ground radials, encroach upon adjoining real property, and all such buildings, structures, improvements and fixtures are constructed and are operated and used in conformance with all "set back" lines, easements, covenants, restrictions and all applicable building, fire, zoning, health and safety laws and codes. No utility lines serving such Real Estate pass over the lands of a third party except where appropriate easements have been obtained. Except as described in Schedule 7.8, all buildings, structures, towers, antennae, improvements and fixtures used or useful in the operation of the Stations and situated on the Real Estate are in good and technically sound operating condition, ordinary wear and tear excepted, have no latent structural mechanical or other defects of material significance, are reasonably suitable for the purposes for which they are being used and each has adequate rights of ingress and egress, utility service for water and sewer, telephone, electric and/or gas, and sanitary service for the conduct of the business and operations of the Stations as presently conducted. There is no pending or, to the best knowledge of Seller, threatened condemnation or other legal proceeding or action of any kind relating to such real property and/or title thereto. 7.9 Contracts. Schedule 7.9 lists all Contracts to which Seller is a party, or which are binding on Seller, as of the date of this Agreement. Those Contracts listed on Schedule 7.9, if -13- 20 any, requiring the consent of a third party to assignment are identified by an asterisk in the left margin of Schedule 7.9. Those Contracts, if any, that Seller and Buyers have agreed are material to the operation of the Stations Assets and the valid assignment of which and receipt by Buyers of consents thereto (along with appropriate estoppel certificates for the leases related to the Real Estate) is a condition to the consummation of the transactions contemplated hereby (the "Material Contracts") are identified by an "M" in the left margin of Schedule 7.9. 7.10 Status of Contracts, etc. Seller has delivered to Buyers true and complete copies of all written Contracts and true and complete memoranda of all oral Contracts, including any and all amendments and other modifications thereto. All of the Contracts are in full force and effect and are valid, binding and enforceable in accordance with their respective terms, except as limited by laws affecting creditors' rights or equitable principles generally. Seller has complied in all material respects with all Contracts and is not in material default beyond any applicable grace periods under any thereof and, to the best of Seller's knowledge, no other contracting party is in default under any thereof. All advertising time committed under Trade Agreements is preemptible for cash sales and none is subject to any guaranteed fixed position. 7.11 Environmental. Except as set forth in Schedule 7.11, Seller has complied with all federal, state and local environmental laws, rules and regulations as in effect on the date hereof applicable to each of the Stations and its operations, including but not limited to the FCC's guidelines regarding RF radiation. To the best of the Seller's knowledge, the technical equipment included in the Stations Assets does not contain any PCBs. No hazardous or toxic waste, substance, material or pollutant (as those or similar terms are defined under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq., Toxic Substances Control Act. 15 U. S. C. Section Section 2601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq. or any other applicable federal, state and local environmental law, statute, ordinance, order, judgment rule or regulation relating to the environment or the protection of human health ("Environmental Laws")), including but not limited to, any asbestos or asbestos-related products, oils, or petroleum-derived compounds, CFCs, PCBs, or underground storage tanks (collectively Hazardous Materials"), have been released, emitted or discharged in violation of applicable laws or regulations, or are currently located in quantities in violation of applicable laws and regulations in, on, or under or about the real property on which the Stations Assets are situated, including without limitation the transmitter sites, or contained in the tangible personal property included in the Stations Assets. The Stations Assets and Seller's use thereof are not in violation of any Environmental Laws or any occupational, safety and health or other applicable law now in effect. With respect to Buyers, Seller shall be as of the Closing Date and thereafter solely responsible for all environmental liabilities, of whatsoever kind and nature, arising out of or attributable to the operation or ownership of the Stations Assets prior to the Closing Date. 7.12 Intellectual Property. Schedule 7.12 hereto is a true and complete list of all material Intellectual Property applied for, registered or issued to, and owned by Seller or under which Seller is a licensee and which is used in the conduct of Seller's business and operations with regard to the Stations. Except as set forth on Schedule 7.12, to the best of Seller's knowledge: (a) Seller's right, title and interest in the Intellectual Property as owner or licensee, as applicable, is free and clear of all liens, claims, encumbrances, rights, or equities whatsoever of any third party and, to the extent -14- 21 any of the Intellectual Property is licensed to Seller, such interest is valid and uncontested by the licensor thereof or any third party; (b) all computer software located at the Stations' facilities or used in the Stations' business or operations is properly licensed to Seller, and all of Seller's uses of such computer software are authorized under such licenses; (c) all of Seller's right, title and interest in and to the Intellectual Property and computer software shall be assignable to RBI at Closing, and upon such assignment, RBI shall receive complete and exclusive right, title, and interest in and to all tangible and intangible property rights existing in the Intellectual Property; and (d) there are no infringements or unlawful use of such Intellectual Property by Seller in connection with Seller's business or operations. 7.13 Financial Statements. Set forth in Schedule 7.13 are complete copies of the financial statements of Seller relating to the Stations for the years ended December 31, 1997 and 1998, together with monthly income statements for the Stations for each month ended after January 1, 1999 (collectively, the "Financial Statements"). The Financial Statements are prepared in accordance with the books and records of Seller and in accordance with generally accepted accounting principles consistently applied and maintained throughout the periods indicated except for the absence of footnotes, standard year-end adjustments, and as has been disclosed in Schedule 7.13. The Financial Statements present fairly the financial condition, results of operations and cash flow of the Stations for the periods indicated. None of the Financial Statements materially understates the true costs and expenses of conducting the business and operations of the Stations, fails to disclose any material liability, or materially inflates (or will inflate) the revenues of the Stations for any reason. 7.14 Personnel Information. 7.14.1 Schedule 7.14 contains a true and complete list of all persons employed at the Stations, including date of hire, a description of material compensation arrangements (other than employee benefit plans set forth in Schedule 7.17) and a list of other material terms of any and all agreements affecting such persons and their employment by Seller. Seller, as of the date of this Agreement, has received no notice that any employee intends to terminate his or her employment relationship with the Stations upon the execution of this Agreement or after the Closing. 7.14.2 Seller, with respect to the Stations, is not a party to any contract or agreement with any labor organization, nor has Seller agreed to recognize any union or other collective bargaining unit, nor has any union or other collective bargaining unit been certified as representing any employees of Seller at the Stations. Seller has no knowledge of any organization effort currently being made or threatened by or on behalf of any labor union with respect to employees of Seller at the Stations. 7.14.3 Except as disclosed in Schedule 7.14, Seller, with respect to the Stations, has complied in all material respects with all laws relating to the employment of labor, including, without limitation, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and those laws relating to wages, hours, collective bargaining, unemployment insurance, workers' compensation, equal employment opportunity and payment and withholding of taxes. -15- 22 7.15 Litigation. Except as set forth in Schedule 7.15, Seller is not subject to any judgment, award, order, writ, injunction, arbitration decision or decree relating to the conduct of the business or the operation of the Stations or any of the Stations Assets, and there is no litigation, administrative action, arbitration, proceeding or investigation pending or, to the best knowledge of Seller, threatened against Seller with respect to, related to or in connection with the operation of the Stations in any federal, state or local court, or before any administrative agency or arbitrator (including, without limitation, any proceeding which seeks the forfeiture of, or opposes the renewal of, any of the Stations Licenses), or before any other tribunal duly authorized to resolve disputes. In particular, but without limiting the generality of the foregoing, to the best knowledge of Seller, there are no applications, complaints or proceedings pending or threatened before the FCC or any other governmental organization with respect to the business or operations of the Stations. 7.16 Compliance With Laws. Except as set forth in Schedule 7.16: (i) Seller is not in material violation of, nor has Seller received any notice asserting any non-compliance by it in connection with the operation of the Stations or use or ownership of any of the Stations Assets with, any applicable statute, rule or regulation, whether federal, state or local; (ii) Seller is not in default with respect to any judgment, order, injunction or decree of any court administrative agency or other governmental authority or any other tribunal duly authorized to resolve disputes which relates to the transactions contemplated hereby; and (iii) Seller is in compliance in all material respects with all laws, regulations and governmental orders applicable to the conduct of the business and operations of the Stations, and its present use of the Stations Assets does not violate any of such laws, regulations or orders. 7.17 Employee Benefit Plans. Schedule 7.17 contains a true and complete list as of the date of this Agreement of all employee benefit plans applicable to the employees of Seller employed at the Stations, and a brief description thereof. Seller does not maintain any other employee benefit plan as the term is defined in Section 3 of the Employee Retirement Income Security Act of 1974, as amended, applicable to the employees of Seller employed at the Stations. 7.18 Commissions or Finder's Fees. Neither Seller nor any person or entity acting on behalf of Seller has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, with the exception of Bergner & Co., whose fees shall be paid by Seller. 7.19 Conduct of Business in Ordinary Course; Adverse Changes. Since December 31, 1998: (a) Seller has conducted the business of the Stations only in the ordinary course consistent with Seller's past practices; (b) there has not been any material adverse change in the business, assets, properties, prospects or condition (financial or otherwise) of the Stations, or any damage, destruction, or loss affecting any of the Stations Assets; and (c) Seller has not created, assumed, or suffered any mortgage, pledge, lien or encumbrance on any of the Stations Assets. 7.20 Instruments of Conveyance: Good Title. The instruments to be executed by Seller and delivered to Buyers at the Closing, conveying the Stations Assets to Buyers, will transfer -16- 23 good and marketable title to the Assets free and clear of all liabilities (absolute or contingent), security interests, mortgages, pledges, liens, obligations and encumbrances, except for Assumed Liabilities and except as set forth in Schedule 7.7 and Schedule 7.8 hereto. 7.21 Undisclosed Liabilities. Excepting only for the Assumed Liabilities, no liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, relating to Seller, the Stations or the Stations Assets exists which could, after the Closing result in any form of transferee liability against Buyers or subject the Stations Assets to any lien, encumbrance, claim, charge, security interest or imposition whatsoever or otherwise affect the full, free and unencumbered use of the Stations Assets by Buyers. 7.22 Full Disclosure. No representation or warranty made by Seller contained in this Agreement nor any certificate, document or other instrument furnished or to be furnished by Seller pursuant hereto contains or will contain any untrue statement of a material fact, or omits or shall omit to state any material fact required to make any statement contained herein or therein not misleading. To the best of Seller's knowledge, there is no impending or contemplated event or occurrence that would cause any of the foregoing representations not to be true and complete on the date of such event or occurrence as if made on that date. Whenever in this Article 7 a warranty or representation is qualified by a word or phrase referring to the best of Seller's knowledge (or similar terms), it shall mean to the actual knowledge of James T. Embrescia after having made due inquiry of the employees, representatives and agents of Seller who would be expected to have knowledge of the matter, and with respect to the condition of any Stations Assets, records or other object, after having inspected it. ARTICLE 8 COVENANTS OF BUYERS 8.1 Closing. Subject to Article 11 hereof, on the Closing Date, Buyers shall purchase the Stations Assets from Seller as provided in Article I hereof and Buyers shall assume the Assumed Liabilities of Seller as provided in Article 2 hereof. 8.2 Notification. Buyers will provide Seller prompt written notice of any change in any of the information contained in the representations and warranties made in Article 6. Buyers shall also notify Seller of any litigation, arbitration or administrative proceeding pending or, to its knowledge, threatened against Buyers which challenges the transactions contemplated hereby. 8.3 No Inconsistent Action. Neither Buyers nor their Affiliates shall take any action which is materially inconsistent with Buyers' obligations under this Agreement or take any action which would cause any representation or warranty of Buyers contained herein to be or become false or invalid or which could hinder or delay the consummation of the transactions contemplated by this Agreement. -17- 24 8.4 Other Erie Transactions. Between the date hereof and the Closing Date or the earlier termination of this Agreement in accordance with its terms, except with the prior written consent of Seller, neither Buyer nor any of Buyer's Affiliates shall enter into any legally binding agreement to purchase or enter into any legally binding local marketing agreement with, any radio station licensed to Erie, Pennsylvania. ARTICLE 9 COVENANTS OF SELLER 9.1 Pre-Closing Covenants. Seller covenants and agrees with respect to the Stations that, between the date hereof and the Closing Date or the earlier termination of this Agreement in accordance with its terms, except as expressly permitted by this Agreement or with the prior written consent of Buyers, Seller shall act in accordance with the following: 9.1.1 Seller shall use its reasonable best efforts to conduct the business and operations of the Stations in the ordinary and prudent course of business consistent with past practice and with the intent of preserving the ongoing operations and assets of the Stations, including but not limited to maintaining the independent identity of the Stations, retaining the current format and programming (including the content thereof) of the Stations, continuing at historical levels and frequencies spending for promotions, advertising, and survey testing, and using its reasonable best efforts to retain at the Stations the services of all active employees, consultants and agents of the Stations. 9.1.2 Seller shall use its reasonable best efforts to: (i) preserve the operation of the Stations intact; (ii) preserve the business of the Stations' advertisers, customers, suppliers and others having business relations with the Stations; and (iii) continue to conduct financial operations of the Stations, including without limitation, their credit and collection and pricing policies and practices, all in the ordinary course of business consistent with past practices. 9.1.3 Seller shall operate the Stations in all material respects in accordance with FCC rules and regulations and the Stations Licenses and with all other laws, regulations, rules and orders, and shall not cause or permit by any act, or failure to act, any of the Stations Licenses or other licenses, permits or authorizations listed in Schedule 7.4 to expire, be surrendered, adversely modified, or otherwise terminated, or the FCC to institute any proceedings for the suspension, revocation or adverse modification of any of the Stations Licenses, or fail to prosecute with due diligence any pending applications to the FCC. 9.1.4 Should any fact relating to Seller which would cause the FCC to deny its consent to the transactions contemplated by this Agreement come to Seller's attention, Seller will promptly notify Buyers thereof and will use its reasonable best efforts to take such steps as may be necessary to remove any such impediment to the FCC's consent to the transactions contemplated by this Agreement. -18- 25 9.1.5 Except for changes or actions in the ordinary course of business consistent with past practices, Seller shall not: (a) sell broadcast time on a prepaid basis (other than in the course of existing credit practices); (b) except as required by the applicable law or written agreements currently in effect, grant or agree to grant any general or specific increases in the rates of salaries or compensation payable to employees of the Stations (that shall in the aggregate exceed 5 % of such employee's compensation as set forth on Schedule 7.14 hereto), (c) except as required by written agreements currently in effect, grant or agree to grant any specific bonus or increase in compensation to any executive management employee of the Stations (that shall in the aggregate exceed 5 % of such employee's compensation as set forth on Schedule 7.14 hereto), (d) provide for any new pension, retirement or other employment benefits for employees of the Stations or any increases in any existing benefits, (e) modify, change or terminate any Contract, (f) decrease the advertising rates in effect as of the date hereof, or (g) enter into any Trade Agreements. For purposes of obtaining the consent of Buyers for the matters described in Sections 1.1.3 and 9.1.5, Seller shall give Buyers written notice by facsimile of the proposed barter agreement or operational change and if Seller does not receive an objection within 72 hours of the giving of such notice, then Buyers will be deemed to have consented to the matter covered by such notice. 9.1.6 Seller shall give or cause the Stations to give Buyers and Buyers' counsel, accountants, engineers and other representatives, at Buyers' reasonable request and upon reasonable notice, full and reasonable access during normal business hours to all of Seller's personnel, properties, books, Contracts, reports and records (including, without limitation, financial information and tax returns relating to the Stations, and environmental audits in existence with respect to the Stations Assets), real estate, buildings and equipment relating to the Stations and to the Stations' employees, and to furnish Buyers with information and copies of all documents and agreements relating to the Stations and the operation thereof (including but not limited to financial and operating data and other information concerning the financial condition, results of operations and business of the Stations to enable Buyers' representatives to audit the Financial Statements or for any other purpose) that Buyers may reasonably request. The rights of Buyers under this Section 9.1.6 shall not be exercised in such a manner as to interfere unreasonably with the business of the Stations. 9.1.7 Seller shall use its reasonable best efforts to obtain any third party consents necessary for the assignment of any Contract (which shall not require any payment to any such third party except for such amounts contemplated by the Contract to be assigned and any amount then owing by Seller to such third party). 9.1.8 Not less than ten (10) business days prior to the Closing Date, Seller, at its expense, shall provide to Buyers (a) title insurance commitments, issued by a title insurance company reasonably satisfactory to Buyers, agreeing to issue to Buyers and its senior lender, on the most current standard ALTA form, leasehold owners and lenders policies of title insurance with respect to all Real Estate which is used as a tower/antenna site, together with a copy of each document to which reference is made in such commitments, insuring title in full accordance with the representations and warranties set forth herein and subject only to such conditions and exceptions, and with such endorsements, as Buyers or its senior lenders may approve or require, and (b) where needed to obtain title insurance commitments, up-to-date surveys of all Real Estate -19- 26 which is used as a tower/antenna site, each prepared in accordance with ALTA/ASCM standards and each detailing the legal description, the perimeter boundaries, all improvements thereon, all easements and encroachments affecting each parcel, and such other matters as may be reasonably requested by Buyers or the title insurance company, each containing a surveyor certificate of recent date reasonably acceptable to Buyer and the title insurance company, and each prepared by a registered land surveyor. 9.2 Notification. Seller will provide Buyers prompt written notice of any change in any of the information contained in the representations and warranties made in Article 7 or any Schedule. Seller agrees to notify Buyers of any litigation, arbitration or administrative proceeding pending or, to the best of its knowledge, threatened, which challenges the transactions contemplated hereby. Seller shall promptly notify Buyers if any of the normal broadcast transmissions of any Station are interrupted, interfered with or in any way impaired, and shall provide Buyers with prompt written notice of the problem and the measures being taken to correct such problem. If such Station is not restored so that operation is resumed within 72 hours or operations are returned to full licensed power and antenna height within thirty (30) days of such event, or if more than five (5) such events occur within any thirty (30) day period, or if any of the Stations shall be off the air for more than seventy-two (72) consecutive hours, then Buyers shall have the right to terminate this Agreement. 9.3 No Inconsistent Action. Seller shall not take any action which is materially inconsistent with its obligations under this Agreement nor take any action which would cause any representation or warranty of Seller contained herein to be or become false or invalid or which could hinder or delay the consummation of the transactions contemplated by this Agreement. 9.4 Closing. Subject to Article 12 hereof, on the Closing Date, Seller shall transfer, convey, assign and deliver to Buyers the Stations Assets and the Assumed Liabilities as provided in Articles 1 and 2 and Section 7.20 of this Agreement. 9.5 Other Items. Until the Closing Date or the earlier termination of this Agreement in accordance with the terms hereof, Seller shall not: (a) waive or release any right relating to the business or operations of the Stations, except for adjustments or settlements made in the ordinary course of business consistent with its past practices; (b) transfer or grant any rights under any of the Stations Licenses; (c) enter into any commitment for capital expenditures for which Buyers would become liable after the Closing Date; (d) introduce any material changes in the broadcast hours or in the format of the Stations or any other material change in the Stations' programming policies; (e) change the call letters of any Station; and (f) enter into any transaction or make or enter into any contract or commitment with respect to any of the Stations or the Stations Assets which by reason of its size or otherwise is not in the ordinary course of business consistent with past practices. 9.6 Exclusivity. Seller agrees that, commencing on the date hereof through the Closing or earlier termination of this Agreement, Buyers shall have the exclusive right to consummate the transactions contemplated herein, and during such exclusive period, Seller agrees that neither Seller, nor any member, manager, officer, employee or other representative of -20- 27 Seller: (a) will initiate, solicit or encourage, directly or indirectly, any inquiries, or the making or implementation of any proposal or offer with respect to a merger, acquisition, consolidation or similar transaction involving, or any purchase of, all or any portion of the Stations Assets (any such inquiry, proposal or offer being hereinafter referred to as an "Acquisition Proposal" and any such transaction being hereinafter referred to as an "Acquisition"); (b) will engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; or (c) will continue any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal or Acquisition and will take the necessary steps to inform the individuals or entities referred to above of the obligations undertaken by them in this Section 9.6. Notwithstanding the foregoing, in the event that Buyers default in any material respect in the observance or in the due and timely performance of any of its covenants or agreements herein contained and such default shall not be cured within ten (10) business days of notice of default served by Seller, Seller's obligations under this Section 9.6 shall be null and void. 9.7 Supplements to Schedules. Seller shall have the right within fourteen (14) days following the date of this Agreement to submit to Buyers supplements to Schedules 7.7, 7.9, and 7.14, to submit complete copies of all Contracts, and to asterisk those which require consent to assignment. Buyers shall have ten (10) days thereafter to review copies of all Contracts, to identify on Schedule 7.9 those Contracts which are "material", and to accept such Schedules, as supplemented, in whole or in part, and to the extent modified and accepted by Buyers, such Schedules, as accepted, shall become a part of this Agreement. To the extent any Contract or the content of any supplement, or part thereof, is rejected by Buyers, such Contract and/or the portion rejected shall not become a part of the Schedules; provided, however, Buyers may not reject any Contract on Schedule 7.9 which was entered into by Seller in the ordinary course of business, would be terminable by RBI after Closing at no cost on not more than thirty (30) days' notice, and which involves the expenditure of no more than $10,000 annually. ARTICLE 10 JOINT COVENANTS Buyers and Seller each covenant and agree that between the date hereof and the Closing Date, they shall act in accordance with the following: 10.1 Confidentiality. Subject to the requirements of applicable law, Buyers and Seller shall each keep confidential all information obtained by it with respect to the other parties hereto in connection with this Agreement and the negotiations preceding this Agreement, and will use such information solely in connection with the transactions contemplated by this Agreement, and if the transactions contemplated hereby are not consummated for any reason, each shall return to each other party hereto, without retaining a copy thereof, any schedules, documents or other written information obtained from such other party in connection with this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, no party shall be required to keep confidential or return any information which: (a) is known or available through other lawful sources, not bound by a confidentiality agreement with the disclosing party; (b) is or becomes -21- 28 publicly known through no fault of the receiving party or its agents; (c) is required to be disclosed pursuant to an order or request of a judicial or governmental authority (provided the non-disclosing party is given reasonable prior notice of the order or request and the purpose of the disclosure); or (d) is developed by the receiving party independently of the disclosure by the disclosing party. Notwithstanding anything to the contrary herein, either party may in accordance with its legal obligations, including but not limited to filings permitted or required by the Securities Act of 1933 and the Securities and Exchange Act of 1934, make such press releases and other public statements and announcements as it deems necessary and appropriate in connection with this Agreement and the transactions contemplated hereby; provided, however, that prior to making any such unilateral press release or announcement, such party shall first communicate the same in writing to the other. 10.2 Cooperation. Subject to express limitations contained elsewhere herein, Buyers and Seller agree to cooperate fully with one another in taking any reasonable actions (including without limitation, reasonable actions to obtain the required consent of any governmental instrumentality or any third party) necessary or helpful to accomplish the transactions contemplated by this Agreement, including but not limited to the satisfaction of any condition to closing set forth herein. 10.3 Control of Stations. Buyers shall not, directly or indirectly, control, supervise or direct the operations of the Stations prior to the Closing. Such operations, including complete control and supervision of all Station programs, employees and policies, shall be the sole responsibility of Seller. 10.4 Consents to Assignment. To the extent that any Contract identified in the Schedules is not capable of being sold, assigned, transferred, delivered or subleased without the waiver or consent of any third person (including a government or governmental unit), or if such sale, assignment, transfer, delivery or sublease or attempted sale, assignment, transfer, delivery or sublease would constitute a breach thereof or a violation of any law or regulation, this Agreement and any assignment executed pursuant hereto shall not constitute a sale, assignment, transfer, delivery or sublease or an attempted sale, assignment, offer, delivery or sublease thereof. Subject to the provisions of Section 11.5, in those cases where consents, assignments, releases and/or waivers have not been obtained at or prior to the Closing relating to the assignment to RBI of the Contracts, this Agreement and any assignment executed pursuant hereto, to the extent permitted by law, shall constitute an equitable assignment by Seller to RBI of all of Seller's rights, benefits, title and interest in and to the Contracts, and where necessary or appropriate, RBI shall be deemed to be Seller's agent for the purpose of completing, fulfilling and discharging all of Seller's rights and liabilities arising after the Closing Date under such Contracts. Seller shall use its reasonable best efforts to provide RBI with the financial and business benefits of such Contracts (including, without limitation, permitting RBI to enforce any rights of Seller arising under such Contracts), and RBI shall, to the extent RBI is provided with the benefits of such Contracts, assume, perform and in due course pay and discharge all debts, obligations and liabilities of Seller under such Contracts to the extent that RBI was to assume those obligations pursuant to the terms hereof. -22- 29 10.5 Filings. In addition to the covenants of the parties set forth in Article 5 hereto, as promptly as practicable after the execution of this Agreement, Buyers and Seller shall use their reasonable best efforts to obtain, and to cooperate with each other in obtaining, all authorizations, consents, orders and approvals of any governmental authority that may be or become necessary in connection with the consummation of the transactions contemplated by this Agreement, and to take all reasonable actions to avoid the entry of any order or decree by any governmental authority prohibiting the consummation of the transactions contemplated hereby, including without limitation, any reports or notifications that may be required to be filed with the FCC, and each shall furnish to one another all such information in its possession as may be necessary for the completion of the reports or notifications to be filed by the other. 10.6 Bulk Sales Laws. Buyers hereby waive compliance by Seller with the provisions of the "bulk sales" or similar laws of any state. Seller agrees to indemnify Buyers and hold them harmless from any and all loss, cost, damage and expense (including but not limited to, reasonable attorney's fees) sustained by Buyers as a result of any failure of Seller to comply with any "bulk sales" or similar laws. 10.7 Employee Matters. Seller shall be responsible for the payment of all compensation and accrued employee benefits payable to all employees up to the Closing Date. Seller acknowledges and agrees that it, and not Buyers, is and shall be solely responsible for any and all severance, insurance, supplemental pension, deferred compensation, retirement and any other benefits, and related costs, premiums and claims, due, to become due, committed or otherwise promised to any person who, as of the Closing Date, is a retiree, former employee, or current employee of Seller, relating to the period up to the Closing Date. Buyers, as purchaser of the Stations Assets, shall assume no employee benefit plans, programs or practices, whether or not set forth in writing, maintained by Seller at any time. ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS The obligations of Buyers hereunder are, at their option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions: 11.1 Representations, Warranties and Covenants. 11.1.1 All representations and warranties of Seller made in this Agreement or in any Exhibit, Schedule or document delivered pursuant hereto, shall be true and complete if limited by materiality, in accordance with the terms thereof in all respects and if not so limited by materiality, in all material respects, as of the date hereof and on and as of the Closing Date as if made on and as of that date, except for changes (a) expressly permitted or contemplated by the terms of this Agreement; or (b) in the ordinary course of business which are not, either individually or in the aggregate, material and adverse. -23- 30 11.1.2 All of the terms, covenants and conditions to be complied with and performed by Seller on or prior to the Closing Date shall have been complied with or performed in all material respects. 11.1.3 Buyers shall have received a certificate, dated as of the Closing Date, from Seller, executed by the Manager of Seller to the effect that: (a) the representations and warranties of Seller contained in this Agreement are true and complete in all respects on and as of the Closing Date as if made on and as of that date except for changes (i) expressly permitted or contemplated by the terms of this Agreement; or (ii) in the ordinary course of business which are not, either individually or in the aggregate, material and adverse; and (b) Seller has complied with or performed in all material respects all terms, covenants and conditions to be complied with or performed by it on or prior to the Closing Date. 11.2 Governmental Consents. The FCC Consent shall have been obtained and, subject to the provisions of Section 4. 1 hereof, shall have become a Final Order. 11.3 Governmental Authorizations. Seller shall be the holder of the Stations Licenses and all other licenses, permits and other authorizations listed in Schedule 7.4, and there shall not have been any modification of any of such licenses, permits and other authorizations which has a material adverse effect on any of the Stations or the operations thereof. No application shall be pending for the renewal of any of the Stations Licenses. No proceeding shall be pending which seeks, or the effect of which reasonably could be, to revoke, cancel, fail to renew, suspend or adversely modify any of the Stations Licenses or any other licenses, permits or other authorizations listed in Schedule 7.4. 11.4 Adverse Proceedings. No suit, action, claim or governmental proceeding shall be pending or threatened against, and no order, decree or judgment of any court, agency or other governmental authority shall have been rendered (and remain in effect) against, any party hereto which: (a) would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms; (b) questions the validity or legality of any transaction contemplated hereby; (c) seeks to enjoin any transaction contemplated hereby; (d) seeks material damages on account of the consummation of any transaction contemplated hereby; or (e) is a petition of bankruptcy by or against Seller, an assignment by Seller for the benefit of its creditors, or other similar proceeding. 11.5 Third-Party Consents. All Material Contracts shall be in full force and effect on the Closing Date, and Seller shall have obtained and shall have delivered to RBI all appropriate third-party consents in form and substance acceptable to RBI (including estoppel certificates for the leases related to the Real Estate) in connection with the assignment of the Material Contracts to RBI. 11.6 Closing Documents. Seller shall have delivered or caused to be delivered to Buyers, on the Closing Date, all bills of sale, general warranty deeds, endorsements, assignments and other instruments of conveyance reasonably satisfactory in form and substance to Buyers, effecting the sale, transfer, assignment and conveyance of the Stations Assets to Buyers, -24- 31 including, without limitation, each of the documents required to be delivered by it pursuant to Article 14. 11.7 Satisfactory Investigation of Station Facilities. Buyers shall have conducted such examination and investigation of the Real Estate and title thereto, studios, transmitter facilities, and other Stations Assets and personnel on matters as Buyers deem advisable or appropriate and shall have determined that the findings and results of such examination and investigation are satisfactory in its sole discretion. If Buyers do not advise Seller in writing within thirty (30) days after the date of this Agreement of any unsatisfactory findings or results, this condition shall be deemed waived. If Buyers do advise Seller of any unsatisfactory findings or results involving costs to cure the same in excess of $5,000 in the aggregate, and such are capable of being cured by Seller to Buyers' reasonable satisfaction, Seller shall cause the same to be cured to Buyers' reasonable satisfaction prior to Initial Approval; provided, however, if the costs to cure are in excess of $175,000 in the aggregate, Seller may instead terminate this Agreement. 11.8 Environmental Studies. Buyers shall have obtained within forty-five (45) days following the date of this Agreement Phase I environmental assessment reports on the Real Estate confirming the representations and warranties of Seller on environmental matters; provided, however, if Buyers elect not to obtain such environmental reports, Buyers shall be deemed to have waived the condition of Closing contained in this Section 11.8. 11.9 Revenue Decline. The cash advertising sales of the Stations for the current year through the end of the month preceding the Closing Date shall be no less than 90% of the amount of cash revenue for the corresponding period of 1998. ARTICLE 12 CONDITIONS OF CLOSING BY SELLER The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions: 12.1 Representations, Warranties and Covenants. 12.1.1 All representations and warranties of Buyers made in this Agreement or in any Exhibit, Schedule or document delivered pursuant hereto, shall be true and complete in all material respects as of the date hereof and on and as of the Closing Date as if made on and as of that date, except for changes expressly permitted or contemplated by the terms of this Agreement. 12.1.2 All the terms, covenants and conditions to be complied with and performed by Buyers on or prior to the Closing Date shall have been complied with or performed in all material respects. -25- 32 12.1.3 Seller shall have received a certificate, dated as of the Closing Date, executed by the President of Buyers, to the effect that: (a) the representations and warranties of Buyers contained in this Agreement are true and complete in all material respects on and as of the Closing Date as if made on and as of that date; and (b) Buyers have complied with or performed in all material respects all terms, covenants and conditions to be complied with or performed by it on or prior to the Closing Date. 12.2 Governmental Consents. The FCC Consent shall have been obtained and, subject to the provisions of Section 4.1 hereof, shall have become a Final Order. 12.3 Adverse Proceedings. No suit, action, claim or governmental proceeding shall be pending or threatened against, and no other decree or judgment of any court, agency or other governmental authority shall have been rendered (and remain in effect) against, any party hereto which: (a) would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms; (b) questions the validity or legality of any transaction contemplated hereby; (c) seeks to enjoin any transaction contemplated hereby; or (d) seeks material damages on account of the consummation of any transaction contemplated hereby. 12.4 Closing Documents. Buyers shall have delivered or caused to be delivered to Seller, on the Closing Date, the Purchase Price and each of the documents required to be delivered by them pursuant to Article 14. ARTICLE 13 TRANSFER TAXES: FEES AND EXPENSES 13.1 Expenses. Except as set forth in Section 13.2 hereof or otherwise expressly set forth in this Agreement, each party hereto shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement including, but not limited to, the costs and expenses incurred pursuant to Article 5 hereof and the fees and disbursements of counsel and other advisors. 13.2 Specific Charges. All costs of transferring the Stations Assets in accordance with this Agreement, including recordation, transfer and documentary taxes and fees, and any excise, sales or use taxes, shall be shall be paid one-half by Buyers and one-half by Seller. The filing or grant fees for the FCC Application shall be paid one-half by Buyers and one-half by Seller. Each party shall pay any other filing or grant fees imposed upon it by any governmental authority the consent of which or the filing with which is required for the consummation of the transactions contemplated hereby. Any fees or commission due Bergner & Co. as a result of this transaction shall be paid by Seller. -26- 33 ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING 14.1 Seller's Documents. At the Closing, Seller shall deliver or cause to be delivered to Buyers the following: 14.1.1 Certified resolutions of all requisite action of the members and manager of Seller approving the execution and delivery of this Agreement and authorizing the consummation of the transactions contemplated hereby; 14.1.2 A certificate of Seller, dated the Closing Date, in the form described in Section 11.1.3; 14.1.3 Governmental certificates showing that Seller: (a) is duly organized and in good standing in the State of Ohio; and (b) has filed all returns, paid all taxes due thereon and is currently subject to no assessment and is in good standing in the State of Pennsylvania, each certified as of a date not more than thirty (30) days before the Closing Date; 14.1.4 Such certificates, bills of sale, general warranty deeds, assignments, documents of title and other instruments of conveyance, assignment and transfer (including without limitation any necessary consents to conveyance, assignment or transfer required to be delivered hereunder), and lien releases, all in form satisfactory to Buyers and Buyers' counsel, as shall be effective to vest in Buyers good and marketable title in and to the Stations Assets in accordance with the terms of this Agreement, free, clear and unencumbered except for Assumed Liabilities or as set forth on Schedule 7.7 and Schedule 7.8. 14.1.5 An Assignment and Assumption Agreement in the form of Exhibit D effectuating the assignment and assumption of the Assumed Liabilities (the "Assignment and Assumption Agreement"); 14.1.6 The Indemnification Escrow Agreement; 14.1.7 At the time and place of Closing, originals and all copies of all program, operations, transmission or maintenance logs and all other records required by the FCC to be maintained with respect to the Stations, including the public files of the Stations, shall be left at the Stations and thereby delivered to Buyers; 14.1.8 A written opinion of Seller's corporate counsel, on which Buyers' lenders shall be entitled to rely, in a form reasonably acceptable to Buyers, dated as of the Closing Date; 14.1.9 A written opinion of Seller's FCC counsel, on which Buyers' lenders shall be entitled to rely, in a form reasonably acceptable to Buyers, dated as of the Closing Date; -27- 34 14.1.10 A Non-Competition Agreement in the form of Exhibit E (the "Non-Competition Agreement") executed by Seller and Seller's Affiliates, including James T. Embrescia and Thomas J. Embrescia; 14.1.11 A Lease Agreement in the form of Exhibit F (the "Lease Agreement") executed by CUZCO LLC; and 14.1.12 Such additional information, materials, agreements, documents and instruments as Buyers and their counsel may reasonably request in order to consummate the Closing. 14.2 Buyers' Documents. At the Closing, Buyers shall deliver or cause to be delivered to Seller the following: 14.2.1 Certified resolutions of the Board of Directors of Buyers approving the execution and delivery of this Agreement and authorizing the consummation of the transactions contemplated hereby; 14.2.2 A certificate of Buyers, dated the Closing Date, in the form described in Section 12.1.3; 14.2.3 The Assignment and Assumption Agreement; 14.2.4 The Indemnification Escrow Agreement; 14.2.5 A written opinion of Buyer's counsel in a form reasonably acceptable to Seller, dated as of the Closing Date; 14.2.6 The Purchase Price in accordance with Section 3. 1 hereof; 14.2.7 The Non-Competition Agreement; 14.2.8 The Lease Agreement; and 14.2.9 Such additional information, materials, agreements, documents and instruments as Seller and its counsel may reasonably request in order to consummate the Closing. ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC. 15.1 Survival of Representations, Etc. It is the express intention and agreement of the parties to this Agreement that all covenants and agreements (together, "Agreements") and all representations and warranties (together, "Warranties") made by Buyers and Seller in this -28- 35 Agreement shall survive the Closing (regardless of any knowledge, investigation, audit or inspection at any time made by or on behalf of Buyers or Seller) as follows: 15.1.1 All Agreements and the Warranties in Sections 6.2, 6.5, 7.2, the third sentence of 7.7, 7.18 and 7.20 shall survive the Closing for a period from the Closing Date equal to the statute of limitations for written contracts in Pennsylvania. 15.1.2 The Warranties in Section 7.11 relating to environmental matters and in Section 7.6 or otherwise relating to the federal, state, local or foreign tax obligations of Seller shall survive the Closing for the period of the applicable statute of limitations plus any extensions or waivers granted or imposed with respect thereto. 15.1.3 All other Warranties shall survive for a period of one (1) year from the Closing Date. 15.1.4 The right of any party to recover Damages (as defined in Section 15.2.1) pursuant to Section 15.2 shall not be affected by the expiration of any Warranties as set forth herein, provided that notice of the existence of any Damages (but not necessarily the fixed amount of any such Damages) has been given by the indemnified party to the indemnifying party prior to such expiration. 15.1.5 Notwithstanding any provision hereof to the contrary, there shall be no contractual time limit in which Buyers or Seller may bring any action for actual fraud (a "Fraud Action"), regardless of whether such actual fraud also included a breach of any Agreement or Warranty; provided, however, that any Fraud Action must be brought within the period of the applicable statute of limitations plus any extensions or waivers granted or imposed with respect thereto. 15.2 Indemnification. 15.2.1 Seller shall defend, indemnify and hold harmless Buyers from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses ("Damages") incurred by Buyers arising out of or related to: (a) any breach of the Warranties given or made by Seller in this Agreement; (b) any breach of the Agreements made by Seller in the Agreement; (c) the Retained Liabilities; (d) any failure of the parties to comply with any "bulk sales" laws applicable to the transactions contemplated hereby; and (e) the conduct of the business and operations of the Stations or any portion thereof or the use or ownership of any of the Stations Assets prior to the Closing Date. 15.2.2 Each Buyer shall defend, indemnify and hold harmless Seller from and against any and all Damages incurred by Seller arising out of or related to: (a) any breach of the Agreements and Warranties given or made by it in this Agreement; (b) those Assumed Liabilities assumed by it, and (c) the conduct of the business and operations of the Stations or any portion thereof or the use or ownership of any of the Stations Assets on or after the Closing Date. -29- 36 15.3 Procedures: Third Party and Direct Indemnification Claims. The indemnified party agrees to give written notice within a reasonable time to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (hereinafter collectively "Claims," and individually a "Claim"), it being understood that the failure to give such notice shall not affect the indemnified party's right to indemnification and the indemnifying party's obligation to indemnify as set forth in this Agreement, unless the indemnifying party's ability to contest, defend or settle with respect to such Claim is thereby demonstrably and materially prejudiced. The parties also agree that any claim for Damages arising directly between the parties relating to this Agreement may be brought at any time within the applicable survival period specified in Section 15.1, and that the only notice required with respect thereto shall be as specified in Section 15.1.5. The obligations and liabilities of the parties hereto with respect to their respective indemnities pursuant to Section 15.2 resulting from any Claim shall be subject to the following additional terms and conditions: 15.3.1 The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim. 15.3.2 In the event that the indemnifying party shall elect not to undertake such defense or opposition, or within (10) days after notice of any such Claim from the indemnified party shall fail to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof). 15.3.3 Anything contained in this Section 15.3 to the contrary notwithstanding: (a) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (b) the indemnifying party shall not, without the indemnified party's written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim, and (c) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party, and their respective counsel or other representatives, shall cooperate in good faith with respect to such Claim. 15.3.4 No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims. -30- 37 15.3.5 Notwithstanding the provisions in Section 15.2, neither Seller nor Buyers shall have the obligation to defend, indemnify and hold harmless under Section 15.2.1(a) and 15.2.2(a) until the aggregate Damages on account thereof exceed $25,000.00, but then the indemnification shall apply to all Damages. ARTICLE 16 TERMINATION RIGHTS 16.1 Termination. This Agreement may be terminated at any time prior to Closing as follows: 16.1.1 Upon the mutual written consent of Buyers and Seller, this Agreement may be terminated on such terms and conditions as so agreed; or 16.1.2 By written notice of Buyers to Seller if Seller breaches in any material respect any of its representations or warranties or defaults in any material respect in the observance or in the due and timely performance of any of its covenants or agreements herein contained and such breach or default shall not be cured within thirty (30) days of the date of notice of breach or default served by Buyers; or 16.1.3 By written notice of Seller to Buyers if either Buyer breaches in any material respect any of its representations or warranties or defaults in any material respect in the observance or in the due and timely performance of any of its covenants or agreements herein contained and such breach or default shall not be cured within thirty (30) days of the date of notice of breach or default served by Seller; or 16.1.4 By written notice of Buyers to Seller or by Seller to Buyers if the FCC denies the FCC Application or designates the FCC Application for evidentiary hearing; or 16.1.5 By written notice of Buyers to Seller, or by Seller to Buyers, if any court of competent jurisdiction shall have issued an order, decree or ruling (which then remains in effect) or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, or by Buyers, if any court, legislative body or governmental or regulatory authority has taken, or is reasonably expected to take, action that would make the consummation of the transactions contemplated hereby inadvisable or undesirable as determined by Buyers in their sole discretion reasonably exercised; or 16.1.6 By written notice of Buyers to Seller, or by Seller to Buyers, if the Closing shall not have been consummated on or before November 30, 1999; or 16.1.7 By written notice of Buyers to Seller if it shall become apparent in both Seller's and Buyers' judgment reasonably exercised that any condition to Buyers' obligation to close as set forth in Article 11 hereof will not be satisfied on or before November 30, 1999; or -31- 38 16.1.8 By written notice of Buyers to Seller under the conditions set forth in Section 9.2 hereof; 16.1.9 By written notice of Seller to Buyers under the conditions set forth in Section 11.7 hereof; OR 16.1.10 By written notice of Seller to Buyers if the Escrow Deposit has not been timely delivered by Buyers in accordance with Section 3.2 hereof by reason of a default by Buyers. Notwithstanding the foregoing, no party hereto may effect a termination hereof if such party is in material default or breach of this Agreement. 16.2 Liability. Except as set forth in Section 16.4 below, the termination of this Agreement under Section 16.1 shall not relieve any party of any liability for breach of this Agreement prior to the date of termination. 16.3 Monetary Damages, Specific Performance and Other Remedies. The parties recognize that if Seller refuses to perform under the provisions of this Agreement, monetary damages alone will not be adequate to compensate Buyers for their injury. Buyers shall therefore be entitled to obtain specific performance of the terms of this Agreement in addition to any other remedies, including but not limited to monetary damages, that may be available to it. If any action is brought by Buyers to enforce this Agreement, Seller shall waive the defense that there is an adequate remedy at law. In the event of a default by Seller, which results in the filing of a lawsuit for damages, specific performance, or other remedy, Buyers shall be entitled to reimbursement by Seller of reasonable legal fees and expenses incurred by Buyers. 16.4 Seller's Liquidated Damages. As more fully described in the Deposit Escrow Agreement, in the event this Agreement is terminated because of Buyers' material breach of this Agreement, and all other conditions to Closing are at such time satisfied or waived (other than such conditions as can reasonably be satisfied by Closing), then the Escrow Deposit shall be delivered to Seller, and the proceeds thereof shall constitute liquidated damages. It is understood and agreed that such liquidated damages amount represents Buyers' and Seller's reasonable estimate of actual damages and does not constitute a penalty. Recovery of liquidated damages shall be the sole and exclusive remedy of Seller against Buyers for failing to consummate this Agreement as a result of Buyers' material breach hereof, and shall be applicable regardless of the actual amount of damages sustained and all other remedies are deemed waived by Seller. ARTICLE 17 MISCELLANEOUS PROVISIONS -32- 39 17.1 Risk of Loss. The risk of loss or damage to any of the Stations Assets prior to the Closing Date shall be upon Seller. Seller shall repair, replace and restore any such damaged or lost Stations Asset to its prior condition as soon as possible following the loss or damage; provided, however, that in the event any such loss or damage of the Stations Assets exists on the Closing Date, then notwithstanding any other provision hereto, Buyers at their option may extend the Closing Date for a period of up to sixty (60) days until such time as Seller shall have repaired, replaced and restored any such damaged or lost Stations Asset to its prior condition or deduct from the Purchase Price that amount which Buyers and Seller reasonably determine to be sufficient to cover any such loss or damage and close the transaction on the Closing Date. 17.2 Certain Interpretive Matters and Definitions. Unless the context otherwise requires: (a) all references to Sections, Articles, Schedules or Exhibits are to Sections, Articles, Schedules or Exhibits of or to this Agreement; (b) each term defined in this Agreement has the meaning assigned to it; (c) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with generally accepted accounting principles as in effect on the date hereof, (d) "or" is disjunctive but not necessarily exclusive; (e) words in the singular include the plural and vice versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g) all references to "$" or dollar amounts will be to lawful currency of the United States of America. 17.3 Further Assurances. After the Closing, Seller shall from time to time, at the request of and without further cost or expense to Buyers, execute and deliver such other instruments of conveyance and transfer and take such other actions as may reasonably be requested in order more effectively to consummate the transactions contemplated hereby to vest in Buyers good and marketable title to the Stations Assets being transferred hereunder in accordance with the terms hereof, and RBI shall from time to time, at the request of and without further cost or expense to Seller, execute and deliver such other instruments and take such other actions as may reasonably be requested in order more effectively to relieve Seller of any obligations being assumed by RBI hereunder. 17.4 Preservation of Records. Subject to Section 10.1 hereof, RBI hereby agrees that it will preserve and make available to Seller and its attorneys and accountants (including the right to inspect and copy at Seller's cost), during normal business hours and upon reasonable advance notice, for three (3) years after the Closing Date, such of the books, records, files, correspondence, memoranda and other documents referred to in this Agreement as Seller may reasonably require for the preparation of tax reports and returns, the preparation of financial statements, or the preparation of a response to any claim by a third party against Seller. 17.5 Benefit and Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Seller may not voluntarily or involuntarily assign its interest under this Agreement without the prior written consent of Buyers. Buyers shall have the right to assign and/or delegate all or any portion of its rights and obligations under this Agreement, including without limitation, assignments as collateral, provided that no such assignment and/or delegation shall relieve Buyers of their obligations hereunder in the event that its assignee fails to perform the obligations delegated. All -33- 40 covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and permitted assigns of the parties hereto. In the event Buyers find it necessary or are required to provide to a third party a collateral assignment of the Buyers' interest in this Agreement and/or any related documents, Seller shall cooperate with the Buyers and any third party requesting such assignment including but not limited to signing a consent and acknowledgment of such assignment. 17.6 Amendments. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. 17.7 Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. 17.8 Governing Law. The construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the choice of law provisions thereof. 17.9 Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, including by facsimile, and shall be deemed to have been duly delivered and received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery or when dispatched by facsimile transmission (with the facsimile transmission confirmation being deemed conclusive evidence of such dispatch) and shall be addressed to the following addresses, or to such other address as any party may request, in the case of Seller, by notifying Buyers, and in the case of Buyers, by notifying Seller: To Seller: Media One Group-Erie, Ltd. Four Commerce Park Square, Suite 600 23200 Chagrin Boulevard Cleveland, Ohio 44122 Fax: (216) 464-7609 Attn: Mr. James T. Embrescia Copy to: Fisher Wayland Cooper Leader & Zargoza L.L.P. 2001 Pennsylvania Avenue, N.W. Suite 400 Washington, D.C. 20006-1851 Fax: (202) 296-6518 Attn: David D. Oxenford, Esq. To Buyers: Regent Broadcasting of Erie, Inc. -34- 41 c/o Regent Communications, Inc. 50 East RiverCenter Blvd. Suite 180 Covington, KY 41011 Fax: (606) 292-0352 Attn: Mr. Terry S. Jacobs Copy to: Strauss & Troy The Federal Reserve Building 150 East Fourth Street Cincinnati, OH 45202 Fax: (513) 241-8289 Attn: Alan C. Rosser, Esq. For purposes of obtaining the consent of Buyers for the matters discussed in Section 9.1.5, Seller shall give Buyers written notice by facsimile of the proposed action and, if Seller does not receive an objection by 6:00 p.m., local Pennsylvania time, on the sixth (6th) business day after the date on which such notice is sent, then Buyers will be deemed to have consented to the matter which is the subject of such notice. 17.10 Counterparts. This Agreement may be executed in one or more counterparts and by facsimile, each of which will be deemed an original and all of which together will constitute one and the same instrument. 17.11 No Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns any rights or remedies under or by reason of this Agreement. 17.12 Severability. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. 17.13 Entire Agreement. This Agreement and the schedules and exhibits hereto embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. -35- 42 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. REGENT BROADCASTING OF ERIE, INC. By: /s/ Terry S. Jacobs Name: /s/ Terry S. Jacobs Title: Chairman and Chief Financial Officer REGENT LICENSEE OF ERIE, INC. By: /s/ Terry S. Jacobs Name: /s/ Terry S. Jacobs Title: Chairman and Chief Financial Officer MEDIA ONE GROUP-ERIE, LTD. By: /s/ James T. Embrescia Name: /s/ James T. Embrescia Title: Manager CUZCO LLC, solely for the purpose of agreeing to execute and deliver the Lease Agreement at the Closing By: /s/ James T. Embrescia Name: /s/ James T. Embrescia Title: Manager and, Solely for the purpose of agreeing to execute and deliver the Non-Competition Agreement: /s/ James T. Embrescia JAMES T. EMBRESCIA /s/ Thomas J. Embrescia THOMAS J. EMBRESCIA -36- EX-2.B 3 EXHIBIT 2(B) 1 Exhibit 2(b) ASSET PURCHASE AGREEMENT by and among FOREVER OF NY, INC., FOREVER OF NY, LLC, and FOREVER BROADCASTING, LLC (collectively, "Sellers") and REGENT BROADCASTING OF UTICA/ROME, INC., REGENT BROADCASTING OF WATERTOWN, INC., REGENT LICENSEE OF UTICA/ROME, INC. and REGENT LICENSEE OF WATERTOWN, INC. (collectively, "Buyers") and REGENT COMMUNICATIONS, INC. ("Regent") 2 TABLE OF CONTENTS Page ---- ARTICLE I - PURCHASE OF ASSETS 1.1 Transfer of Assets.............................................1 1.2 Excluded Assets................................................3 ARTICLE 2 ASSUMPTION OF OBLIGATIONS 2.1 Assumption of Obligations......................................4 2.2 Retained Liabilities...........................................4 ARTICLE 3 CONSIDERATION 3.1 Delivery of Consideration......................................5 3.2 Escrow Deposit.................................................5 3.3 Proration of Income and Expenses...............................6 3.4 Allocation of Purchase Price...................................7 3.5 Adjustment for Barter..........................................7 3.6 Collection of Accounts Receivable..............................7 ARTICLE 4 CLOSING 4.1 Closing........................................................8 ARTICLE 5 GOVERNMENTAL CONSENTS 5.1 FCC Consent....................................................8 5.2 FCC Application................................................9 5.3 Antitrust......................................................9 ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS 6.1 Organization and Standing......................................9 6.2 Authorization and Binding Obligation...........................9 6.3 Qualification As Assignee......................................10 6.4 Absence of Conflicting Agreements or Required Consents.........10 6.5 Commissions or Finder's Fees...................................10 6.6 Litigation.....................................................10 - i - 3 Page ---- ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLERS 7.1 Organization and Standing......................................10 7.2 Authorization and Binding Obligation...........................11 7.3 Absence of Conflicting Agreements or Required Consents.........11 7.4 Government Authorizations......................................11 7.5 Compliance with FCC Regulations................................12 7.6 Taxes..........................................................12 7.7 Personal Property..............................................13 7.8 Real Property..................................................13 7.9 Contracts......................................................14 7.10 Status of Contracts, etc.......................................14 7.11 Environmental..................................................15 7.12 Intellectual Property..........................................15 7.13 Financial Statements...........................................16 7.14 Personnel Information..........................................16 7.15 Litigation.....................................................16 7.16 Compliance With Laws...........................................17 7.17 Employee Benefit Plans.........................................17 7.18 Commissions or Finder's Fees...................................17 7.19 Conduct of Business in Ordinary Course; Adverse Change.........17 7.20 Instruments of Conveyance; Good Title..........................17 7.21 Undisclosed Liabilities........................................17 7.22 Acquisition of Preferred Stock.................................18 7.23 Full Disclosure................................................19 ARTICLE 8 COVENANTS OF BUYERS 8.1 Closing........................................................19 8.2 Notification...................................................19 8.3 No Inconsistent Action.........................................20 8.4 Preferred Stock................................................20 ARTICLE 9 COVENANTS OF SELLERS 9.1 Pre-Closing Covenants..........................................20 9.2 Notification...................................................22 9.3 No Inconsistent Action.........................................23 9.4 Closing........................................................23 9.5 Other Items....................................................23 9.6 Exclusivity....................................................23 - ii - 4 Page ---- ARTICLE 10 JOINT COVENANTS 10.1 Confidentiality................................................24 10.2 Cooperation....................................................24 10.3 Control of Stations............................................24 10.4 Consents to Assignment.........................................24 10.5 Filings........................................................25 10.6 Bulk Sales Laws................................................25 10.7 Employee Matters...............................................25 ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS 11.1 Representations, Warranties and Covenants......................26 11.2 Governmental Consents..........................................26 11.3 Governmental Authorizations....................................26 11.4 Adverse Proceedings............................................27 11.5 Third-Party Consents...........................................27 11.6 Closing Documents..............................................27 11.7 Environmental Site Assessments.................................27 11.8 Investigation of Station Facilities............................28 ARTICLE 12 CONDITIONS OF CLOSING BY SELLERS 12.1 Representations, Warranties and Covenants......................29 12.2 Governmental Consents..........................................29 12.3 Adverse Proceedings............................................29 12.4 Closing Documents..............................................29 ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES 13.1 Expenses.......................................................30 13.2 Specific Charges...............................................30 - iii - 5 Page ---- ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING 14.1 Sellers' Documents.............................................30 14.2 Buyers' Documents..............................................31 ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC. 15.1 Survival of Representations, Etc...............................32 15.2 Indemnification................................................33 15.3 Procedures: Third Party and Direct Indemnification Claims......33 ARTICLE 16 TERMINATION RIGHTS 16.1 Termination....................................................34 16.2 Liability......................................................35 16.3 Monetary Damages, Specific Performance and Other Remedies......35 16.4 Sellers' Liquidated Damages....................................35 ARTICLE 17 MISCELLANEOUS PROVISIONS 17.1 Risk of Loss...................................................36 17.2 Certain Interpretive Matters and Definitions...................36 17.3 Further Assurances.............................................36 17.4 Preservation of Records........................................36 17.5 Benefit and Assignment.........................................37 17.6 Amendments.....................................................37 17.7 Headings.......................................................37 17.8 Governing Law..................................................37 17.9 Notices........................................................37 17.10 Counterparts...................................................38 17.11 No Third Party Beneficiaries...................................38 17.12 Severability...................................................38 17.13 Entire Agreement...............................................38 - iv - 6 LIST OF SCHEDULES AND EXHIBITS Schedule 1.2.8 Excluded Real Property 6.4 Third Party Consents 7.4 Stations Licenses, Etc. 7.7 Tangible Personal Property 7.8 Real Property 7.9 Contracts (including identification of Material Contracts) 7.11 Environmental Matters 7.12 Intellectual Property 7.13 Financial Statements 7.14 Personnel Information 7.15 Litigation 7.16 Compliance With Laws 7.17 Employee Benefit Plans Exhibit A Form of Certificate of Designation B Indemnification Escrow Agreement C Deposit Escrow Agreement D Assignment and Assumption Agreement E Opinion Letter of Sellers' Corporate Counsel F Opinion Letter of Sellers' FCC Counsel G Non-Competition Agreement H Opinion Letter of Counsel for Buyers and Regent I Lease Agreement - v - 7 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered this 29th day of July, 1999 by and among FOREVER OF NY, INC., a Georgia corporation ("Forever, Inc."), FOREVER OF NY, LLC, a Delaware limited liability company ("Forever, LLC"), and FOREVER BROADCASTING, LLC, a Delaware limited liability company ("Forever Broadcasting") (Forever, Inc., Forever, LLC, and Forever Broadcasting collectively referred to as "Sellers") and REGENT BROADCASTING OF UTICA/ROME, INC., a Delaware corporation ("RBU"), REGENT LICENSEE OF UTICA/ROME, INC., a Delaware corporation ("RLU"), REGENT BROADCASTING OF WATERTOWN, INC., a Delaware corporation ("RBW"), and REGENT LICENSEE OF WATERTOWN, INC., a Delaware corporation ("RLW") (RBU, RLU, RBW, and RLW collectively referred to as "Buyers"), and REGENT COMMUNICATIONS, INC. ("Regent"). RECITALS WHEREAS, Sellers own and operate radio stations WODZ-FM, WLZW-FM, WFRG-FM, WIBX-AM and WRUN-AM, licensed to Utica/Rome, New York (the "Utica/Rome Stations"), and WCIZ-FM, WFRY-FM, WTNY-AM, and WUZZ-AM, licensed to Watertown, New York (the "Watertown Stations") (together the "Stations" and each individually, a "Station") pursuant to licenses issued by the Federal Communications Commission ("FCC"), and WHEREAS, Sellers desire to sell, and Buyers desire to purchase, certain assets and assume certain obligations associated with the ownership and operation of the Stations, all on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I PURCHASE OF ASSETS 1.1 Transfer of Assets. On the terms and subject to the conditions hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined), Sellers shall sell, assign, transfer, convey and deliver to Buyers, Buyers shall purchase, and RBU and RBW shall assume from Sellers, all of the right, title and interest of Sellers in and to the assets, properties, interests and rights of Sellers of whatsoever kind and nature, real and personal, tangible and intangible, owned or leased (to the extent of Sellers' leasehold interest) by Sellers as the case may be, wherever situated, which are used or useful in the operation of the Stations (the "Stations Assets"), as described in this Section 1. 1: 1.1.1 all licenses, permits and other authorizations issued to Sellers by any governmental or regulatory authority including without limitation those issued by the FCC (the 8 licenses, permits and authorizations issued by the FCC are hereafter referred to as the "Stations Licenses") used or useful in connection with the operation of the Stations, including but not limited to those described in Schedule 7.4, along with renewals or modifications of such items, and all applications pertaining thereto, between the date hereof and the Closing Date; 1.1.2 all equipment, electrical devices, antennae, cables, tools, hardware, office furniture and fixtures, office materials and supplies, inventory, motor vehicles, spare parts and all other tangible personal property of every kind and description, and Sellers' rights therein, owned, leased (to the extent of Sellers' leasehold interest) or held by Sellers and used or useful in connection with the operations of the Stations, including but not limited to those items described or listed in Schedule 7.7, together with any replacements thereof and additions thereto, made between the date hereof and the Closing Date, and less any retirements or dispositions thereof made between the date hereof and the Closing Date in the ordinary course of business and consistent with past practices of Sellers; provided, however, Sellers agree that the value of all such assets retired or disposed of and not replaced with an asset of like kind and quality shall not exceed $10,000 in the aggregate unless Sellers have obtained the prior written approval of RBU and RBW which shall not be unreasonably withheld; 1.1.3 all contracts, agreements, leases and legally binding contractual rights of any kind, written or oral, relating to the operation of the Stations and which are listed in Schedule 7.8 or Schedule 7.9, together with (a) all advertising contracts entered into or acquired by Sellers between the date hereof and the Closing Date in the ordinary course of business, consistent with past practices of Sellers; and (b) any other contracts, agreements, leases and legal binding contractual rights entered into or acquired by Sellers between the date hereof and the Closing Date, which RBU or RBW specifically agrees at Closing to assume (collectively the "Contracts"); provided, however, Buyers shall be entitled to a credit against the Purchase Price for the amount, if any, by which the aggregate net value of the Stations' Barter Payable as of the Closing Date exceeds the aggregate net value of the Stations' Barter Receivable as of the Closing Date by more than $40,000. 1.1.4 subject to the limitation set forth in Schedule 7.12, all of Sellers' rights in and to the call letters of the Stations, and any variation thereof, and in and to all trademarks, trade names, service marks, franchises, copyrights, including registrations and applications for registration of any of them, computer software programs and programming material of whatever form or nature, jingles, slogans, the Stations' logos and all other logos or licenses to use same and all other intangible property rights of Sellers, which are used or useful in connection with the operation of the Stations, including but not limited to those listed in Schedule 7.12 (collectively, the "Intellectual Property") together with any associated goodwill and any additions thereto between the date hereof and the Closing Date; 1.1.5 all programming materials and elements of whatever form or nature owned by Sellers, whether recorded on tape or other medium or intended for live performance, and all copyrights owned by or licensed to Sellers that are used or useful in connection with the operation of the Stations, including all such programs, materials, elements and copyrights acquired by Sellers between the date hereof and the Closing Date; - 2 - 9 1.1.6 all of Sellers' rights in and to all the files, documents, records, and books of account relating to the operation of the Stations or to the Stations Assets, including, without limitation, the Stations' local public files, programming information and studies, blueprints, technical information and engineering data, news and advertising studies or consulting reports, marketing and demographic data, sales correspondence, lists of advertisers, promotional materials, credit and sales reports and filings with the FCC and all written Contracts to be assigned hereunder, logs, software programs and books and records relating to employees, financial, accounting and operation matters, but excluding records relating solely to any Excluded Asset (as hereinafter defined); 1.1.7 all of Sellers' rights under manufacturers' and vendors' warranties relating to items included in the Stations Assets and all similar rights against third parties relating to items included in the Stations Assets; and 1.1.8 the real property and fixtures thereon described in Section 7.8. The Stations Assets for the Utica/Rome Stations shall be transferred to RBU and the Stations Assets for the Watertown Stations shall be transferred to RBW (except for the Stations Licenses which shall be transferred to RLU and RLW, respectively) free and clear of all debts, security interests, mortgages, trusts, claims, pledges or other liens, liabilities, encumbrances or rights of third parties whatsoever ("Encumbrances"), except for Permitted Encumbrances, if any, as provided for in Section 7.8.2. 1.2 Excluded Assets. Notwithstanding anything to the contrary contained herein, it is expressly understood and agreed that the Stations Assets shall not include the following assets along with all rights, title and interest therein (the "Excluded Assets"): 1.2.1 all cash and cash equivalents of Sellers on hand and/or in banks, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments; 1.2.2 all investment securities and accounts receivable or notes receivable for services performed by Sellers in connection with the operation of the Stations prior to the Closing Date; 1.2.3 subject to the limitation set forth in Section 1.1.2 of this Agreement, all tangible and intangible personal property of Sellers disposed of or consumed in the ordinary course of business consistent with the past practices of Sellers between the date of this Agreement and the Closing Date; 1.2.4 all Contracts that have terminated or expired prior to the Closing Date in the ordinary course of business consistent with the past practices of Sellers; 1.2.5 Sellers' corporate minute books and records, tax returns, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Sellers and duplicate copies of such records as are necessary to enable Sellers to - 3 - 10 file their tax returns and reports, as well as any other records or materials relating to Sellers generally and not involving or relating to the Stations Assets or the operation or operations of the Stations; 1.2.6 contracts of insurance, and any insurance proceeds or claims made by, Sellers relating to property or equipment repaired, replaced or restored by Sellers prior to the Closing Date; 1.2.7 all pension, profit sharing or cash or deferred (Section 401 (k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Sellers; and 1.2.8 the real property identified as "Excluded Real Property" on Schedule 1.2.8. ARTICLE 2 ASSUMPTION OF OBLIGATIONS 2.1 Assumption of Obligations. Subject to the provisions of this Section 2.1, Section 2.2 and Section 3.3, on the Closing Date, RBU, with respect to the Utica/Rome Stations, and RBW, with respect to the Watertown Stations, shall assume the obligations of Sellers arising or to be performed on and after the Closing Date (except to the extent such obligations represent liabilities for activities, events or transactions occurring, or conditions existing, on or prior to the Closing Date) under: (a) the Contracts, (b) all property taxes and other governmental charges on the Stations Assets, and (c) the obligations relating to vacation and sick pay identified on Schedule 7.14 to be assumed by RBU and RBW. All of the foregoing liabilities and obligations shall be referred to herein collectively as the "Assumed Liabilities." 2.2 Retained Liabilities. Notwithstanding anything contained in this Agreement to the contrary, Buyers expressly do not, and shall not, assume or agree to pay, satisfy, discharge or perform and will not be deemed by virtue of the execution and delivery of this Agreement or any agreement, instrument or document delivered pursuant to or in connection with this Agreement or otherwise by reason of or in connection with the consummation of the transactions contemplated hereby or thereby, to have assumed or to have agreed to pay, satisfy, discharge or perform, any liabilities, obligations or commitments of Sellers of any nature whatsoever whether accrued, absolute, contingent or otherwise and whether or not disclosed to Buyer, other than as to RBU and RBW the Assumed Liabilities. Sellers will retain and pay, satisfy, discharge and perform in accordance with the terms thereof, all liabilities and obligations of the Sellers, other than the Assumed Liabilities, including but not limited to, the obligation to assume, perform, satisfy or pay any liability, obligation, agreement, debt, charge, claim, judgment or expense incurred by or asserted against Sellers related to taxes, environmental matters, pension or retirement plans or trusts, profit-sharing plans, employment contracts, employee benefits, severance of employees, product liability or warranty, negligence, contract breach or default, or other obligations, claims or judgments asserted against Buyers as successor in interest to Sellers. - 4 - 11 All of such liabilities, obligations and commitments of Sellers described in this Section 2.2 shall be referred to herein collectively as the "Retained Liabilities." ARTICLE 3 CONSIDERATION 3.1 Delivery of Consideration. In consideration for the sale of the Stations Assets to Buyers, in addition to the assumption of certain obligations of Sellers pursuant to Section 2.1 above, Buyers shall, at the Closing (as hereinafter defined), deliver to Sellers consideration (the "Purchase Price"), subject to cash adjustment pursuant to the provisions of Sections 3.2 and 3.3 below with the payment by Buyers of $44,000,000 in cash by wire transfer and the issuance by Regent of 100,000 fully-paid and nonassessable shares of the $7.50 Series I Convertible Preferred Stock of Regent (the "Preferred Stock"), having such express terms as are set forth in the form of the Certificate of Designation attached as Exhibit A, to the following designees (upon their submission to Regent of such documentation as may reasonably be required for compliance with applicable securities laws) in the number of shares specified: (a) The Kerby Eugene Confer Grantor Retained Annuity Trust -- 40,000; (b) The Donald J. Alt Grantor Retained Annuity Trust -- 40,000; (c) Carol B. O'Leary -- 15,000; and (d) Lynn A. Deppen -- 5,000. In the event, however, that on or prior to the Closing Date Regent shall issue in a public offering equity securities of Regent and in preparation for or upon such offering Regent shall require conversion of all shares of Regent's outstanding Series E Convertible Preferred Stock into shares of Regent Common Stock, then Regent shall have the option to issue at the Closing in lieu of the Preferred Stock 100,000 fully-paid and nonassessable shares of Common Stock of Regent (in which event all representations and warranties with respect to the Preferred Stock shall mean with reference to such Common Stock). Notwithstanding the foregoing, the parties agree that at the Closing, Buyers, Sellers and Capers, Dunbar, Sanders & Bruckner, as Escrow Agent (the "Indemnification Escrow Agent"), shall enter into an Indemnification Escrow Agreement in the form of Exhibit B hereto (the "Indemnification Escrow Agreement") pursuant to which Sellers shall deposit with the Indemnification Escrow Agent $1,118,750.00, which funds shall be held in escrow for a period of eighteen (18) months beginning with the first full month following the Closing Date, subject to the use of such funds to satisfy indemnification claims of Buyers and Regent pursuant to Section 15.2.1 hereof, and their administration and release as specifically provided for in the Indemnification Escrow Agreement. Pursuant to the Indemnification Escrow Agreement, (i) on the first anniversary of the Closing Date, $559,375 of the Escrow Deposit together with the earnings on such portion less the amount of any then unresolved pending claims by the Buyer shall be released from the Escrow Deposit and paid to Seller; and (ii) eighteen (18) months after the Closing Date, the balance of the Escrow Deposit together with earnings thereon less the amount of any then unresolved pending claims by Buyer shall be released from Escrow and paid to the Seller. 3.2 Escrow Deposit. (a) Within five (5) business days after the execution and delivery of this Agreement, Buyers, Sellers and Capers, Dunbar, Sanders & Bruckner, as Escrow Agent (the "Deposit Escrow Agent"), shall enter into a Deposit Escrow Agreement in the form of Exhibit C hereto (the "Deposit Escrow Agreement") pursuant to which Buyers shall deposit the - 5 - 12 amount described below as a deposit on the amount of the Purchase Price. Such amounts held in escrow shall be applied as set forth herein and in the Deposit Escrow Agreement. (b) Pursuant to the terms of the Deposit Escrow Agreement, Buyers shall wire transfer $2,200,000.00, or alternatively, deliver an irrevocable, stand-by letter of credit for such amount in form and substance acceptable to Sellers, to an escrow account established pursuant to the Deposit Escrow Agreement (the "Escrow Deposit"). At the Closing, the Escrow Deposit, if in the form of cash, shall be applied to the Purchase Price to be paid to Sellers and the interest accrued thereon shall be paid to Buyers, or if in the form of a letter of credit, shall be returned to Buyers. As more fully described in the Deposit Escrow Agreement: (a) in the event this Agreement is terminated solely because of Buyers' material breach of this Agreement as set forth in Section 16.1.3 hereof, the Escrow Deposit shall be paid to or delivered for draw thereon to Sellers as liquidated damages as provided in Section 16.4 hereto for Buyers' material breach of this Agreement (the payment of such sum to Sellers shall discharge any liability Buyers may have to Sellers), and the interest accrued on the Escrow Deposit shall be paid to Buyers; and (b) in the event this Agreement is terminated under any circumstances other than those set forth in the immediately preceding clause (a), the Escrow Deposit and any interest accrued thereon shall be paid or returned to Buyers. 3.3 Proration of Income and Expenses. 3.3.1 Except as otherwise provided herein, all deposits, reserves and prepaid and deferred income and expenses relating to the Stations Assets or the Assumed Liabilities and arising from the conduct of the business and operations of the Stations shall be prorated between Buyers and Sellers in accordance with generally accepted accounting principles as of 11:59 p.m. local time, on the date immediately preceding the Closing Date. Such prorations shall include, without limitation, all ad valorem, real estate, property taxes and other governmental charges on the Stations Assets (but excluding taxes arising by reason of the transfer of the Stations Assets as contemplated hereby which shall be paid as set forth in Section 13.2), business and license fees, frequency discounts, music and other license fees (including any retroactive adjustments thereof, which retroactive adjustments shall not be subject to the ninety-day limitation set forth in Section 3.3.2), utility expenses, wages, salaries, and other employee benefits (excluding vacation and sick pay obligations to be assumed by RBU and RBW, as provided in Schedule 7.14) for employees hired by RBU or RBW, amounts due or to become due under Contracts, any negative barter balance in excess of $40,000, rents and similar prepaid and deferred items. 3.3.2 Except as otherwise provided herein, the prorations and adjustments contemplated by this Section 3.3, to the extent practicable, shall be made on the Closing Date. As to those prorations and adjustments not capable of being ascertained on the Closing Date, an adjustment and proration shall be made within ninety (90) calendar days after the Closing Date. 3.3.3 In the event of any disputes between the parties as to such adjustments, the amounts not in dispute shall nonetheless be paid at the time provided in Section 3.3.2 and such disputes shall be determined by an independent certified public accountant mutually acceptable to the parties, and the fees and expenses of such accountant shall be paid one-half by Sellers and one-half by Buyers. - 6 - 13 3.4 Allocation of Purchase Price. The parties shall in good faith attempt to agree prior to Closing upon an allocation of the Purchase Price among the Stations Assets. If after good faith negotiations, the parties cannot reach agreement on the allocation in connection with jointly completing Form 8594, the parties agree that there will be no further obligation on the part of any party to jointly complete the application and the parties may file From 8594 without any input from the other. Sellers and Buyers agree to use the agreed upon allocation, if any, for all tax purposes, including without limitation, those matters subject to Section 1060 of the Internal Revenue Code of 1986, as amended. 3.5 Adjustment for Barter. As of the Closing Date, Buyers shall be entitled to a credit against the Purchase Price for the amount, if any, by which the aggregate net value of the Stations' Barter Payable (as defined below) as of the Closing Date exceeds the aggregate net value of the Stations' Barter Receivable (as defined below) as of the Closing Date by more than $40,000.00 with respect to Contracts for the sale of advertising in exchange, in whole or in part, for merchandise or services ("Trade Agreements"). "Barter Payable" means the aggregate value of time owed pursuant to each of the Trade Agreements. "Barter Receivable" means the aggregate value of goods and services to be received pursuant to each of the Trade Agreements. 3.6 Collection of Accounts Receivable. The accounts receivable of Sellers are not included among the Stations Assets. Nevertheless, at Closing, Sellers shall supply RBU and RBW with a list of Sellers' accounts receivable as of the Closing Date (the "Accounts"), and RBU and RBW shall use such efforts as are reasonable and in the ordinary course of business (including but not limited to transmittal of periodic statements of amounts due and owing) to collect the Accounts on Sellers' behalf for a period beginning with the Closing Date and ending with the last day of the fourth full calendar month following the Closing Date (the "Collection Period"). This obligation, however, shall not extend to the institution of litigation, employment of counsel, or any other extraordinary means of collection. During the Collection Period, Sellers shall not solicit any monies from an account debtor who, after Closing, continues to do business with the Stations, provided that during such period Sellers may act to preserve their rights against a bankrupt debtor or commence suit or otherwise take action against any debtor that disputes or refuses to pay the amount of, or liability for, an Account. If Sellers receive a payment from an account debtor during the Collection Period, they shall so notify RBU and RBW. RBU and RBW may endorse and deposit in their own names and collect any and all checks and other instruments for the payment of money that RBU or RBW may receive in payment of Accounts. RBU and RBW shall receive no remuneration for their services and shall not be liable for non-collection, or failure of any such collection, except due to their own gross negligence or intentional misconduct. Upon termination of their duties hereunder, RBU and RBW shall deliver to Sellers all of their correspondence and files concerning the collection of the Accounts and all reports of attempts to collect the same. Except as otherwise provided herein, amounts collected by RBU and RBW on account of Sellers' Accounts shall be remitted in full to Sellers on the tenth day of each calendar month following the Closing Date, for amounts received during the preceding calendar month during the Collection Period. RBU and RBW Buyer shall deliver to Sellers an accounting showing the amount they received during each 30-day period on each - 7 - 14 account. If both Sellers and RBU or RBW are entitled to accounts receivable from the same account debtor, all payments received during the Collection Period shall be first applied to Sellers' Accounts from such account debtor until the same are paid in full, unless such account debtor has disputed such account receivable in writing to the Sellers or has specifically indicated payment is intended to be to its account with RBU or RBW, in which event RBU or RBW shall be entitled to apply the payment made by the account debtor to RBU's or RBW's account receivable. At the conclusion of the Collection Period and after remittance of all amounts collected, RBU and RBW will thereafter have no further responsibility with respect to the collection of the Accounts, and RBU and RBW may apply all collections received by them from any Account party who continues business with RBU or RBW to obligations owing to RBU or RBW, except for any payment received by RBU or RBW which such Account party specifies is for amounts owed to Sellers, in which event such specified amounts shall be paid over to Sellers. RBU and RBW shall not have the right to compromise, settle or adjust the amounts of any one of the Accounts without Sellers' prior written consent. Sellers shall promptly pay all sales commissions relating to all of their accounts receivable whenever Sellers receive payment thereon; provided, however, RBU and RBW may do so on Sellers' behalf for employees who are hired by them and pay the net commission to Sellers. ARTICLE 4 CLOSING 4.1 Closing. Except as otherwise mutually agreed upon by Buyers and Sellers, the consummation of the transactions contemplated herein (the "Closing") shall occur within ten (10) business days after the later to occur of (a) the satisfaction or waiver of each condition to closing contained herein, other than such conditions as are reasonably anticipated to be satisfied at Closing (provided that each party hereto shall use its reasonable best efforts to cause each condition to closing to be satisfied so that the Closing may occur at the earliest possible date), (b) the issuance of the Final Order (as defined below), (c) December 22, 1999; or (d) such other date as may be mutually agreed by the parties hereto (the "Closing Date"). For purposes of this Agreement, "Final Order" means an order or grant by the FCC which is no longer subject to reconsideration or review by the FCC or a court of competent jurisdiction and pursuant to which the FCC consents, as the case may be, to the assignments of the FCC Licenses contemplated by this Agreement, each such order or grant being without the imposition of any conditions adverse to Buyers or any Affiliate (as hereinafter defined) of Buyers with respect to the assignment of the FCC Licenses to RLU or RLW or the continued operation by Buyers of the Stations or the Stations Assets. The Closing shall be held in the offices of Strauss & Troy, The Federal Reserve Building, 150 East Fourth Street, Cincinnati, Ohio, or at such place and in such manner as the parties hereto may agree. ARTICLE 5 GOVERNMENTAL CONSENTS 5.1 FCC Consent. It is specifically understood and agreed by Buyers and Sellers that the Closing and the assignment of the Stations Licenses and the transfer of the Stations Assets - 8 - 15 are expressly conditioned on and are subject to the prior consent and approval of the FCC without the imposition of any conditions adverse to Buyers or any Affiliate of Buyers (the "FCC Consent"). 5.2 FCC Application. Within five (5) business days after the execution of this Agreement, Buyers and Sellers shall file an application with the FCC for the FCC Consent (the "FCC Application"). Buyers and Sellers shall prosecute the FCC Application with all reasonable diligence and otherwise use their best efforts to obtain the FCC Consent as expeditiously as practicable (but neither Buyers nor Sellers shall have any obligation to satisfy complainants or the FCC by taking any steps which would have a material adverse effect upon Buyers or Sellers or upon any of their respective Affiliates). If the FCC Consent imposes any condition on Buyers or Sellers or any of their respective Affiliates, such party shall use its best efforts to comply with such condition; provided, however, that neither Buyers nor Sellers shall be required hereunder to comply with any condition that would have a material adverse effect upon it or any of its Affiliates. If reconsideration or judicial review is sought with respect to the FCC Consent, the party affected shall vigorously oppose such efforts for reconsideration or judicial review; provided, however, that nothing herein shall be construed to limit either party's right to terminate this Agreement pursuant to Article 16 hereof. 5.3 Antitrust. Sellers and Buyers shall cooperate in preparing and filing any necessary notification and report forms and related material that may be required to be filed with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and each will use its best efforts to obtain an early termination of the applicable waiting period and will make any further filings pursuant thereto that may be necessary, proper or advisable. ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS Buyers hereby make the following representations and warranties to Sellers, each of which is true and correct on the date hereof, shall survive the Closing and shall be unaffected by any investigation heretofore or hereafter made by Sellers: 6.1 Organization and Standing. Regent and Buyers are corporations duly organized validly existing and in good standing under the laws of the State of Delaware, and by the Closing Date RBU and RBW will be authorized to conduct business within the State of New York. 6.2 Authorization and Binding Obligations. Regent and Buyers have all necessary corporate power and authority to enter into and perform this Agreement and the transactions contemplated hereby, and to own or lease the Stations Assets and to carry on the business of the Stations upon the consummation of the transactions contemplated by this Agreement. Regent and Buyers,execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all necessary action on their part and, assuming the due authorization, execution and delivery of this Agreement by Sellers, this Agreement will constitute the legal, valid and binding obligation of Regent and Buyers, - 9 - 16 enforceable against them in accordance with its terms, except as limited by laws affecting creditors' rights or equitable principles generally. 6.3 Qualification As Assignee. To the best of Buyers' knowledge, there are no facts which, under the Communications Act of 1934, as amended, or the existing rules and regulations of the FCC, would disqualify RLU or RLW as an assignee of the Stations Licenses. 6.4 Absence of Conflicting Agreements or Required Consents. Except as set forth in Article 5 hereof with respect to governmental consents or on Schedule 6.4, the execution, delivery and performance of this Agreement by Regent and Buyers: (a) do not conflict with the provisions of the articles of incorporation or by-laws of Regent or Buyers; (b) do not require the consent of any third party; (c) will not violate any applicable law, judgment, order, injunction, decree, rule, regulation or ruling of any governmental authority to which Regent or either Buyer is a party; and (d) will not, either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination of or result in a breach of the terms, conditions or provisions of, or constitute a default under, any agreement, instrument, license or permit to which Regent or either Buyer is now subject. 6.5 Commissions or Finder's Fees. Neither Regent or Buyers nor any person or entity acting on behalf of Regent or Buyers has agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity. 6.6 Litigation. Neither Regent nor Buyers is subject to any judgment, award, order, writ, injunction, arbitration decision or decree prohibiting the consummation of the transactions contemplated by this Agreement, and there are no suits, legal proceedings or investigations of any nature pending, or to the best knowledge of Buyers, threatened against or affecting Regent or Buyers that would affect Regent's or Buyers' ability to carry out the transactions contemplated by this Agreement. ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLERS Sellers make the following representations and warranties to Regent and Buyers, each of which is true and correct on the date hereof, shall survive the Closing and shall be unaffected by any investigation heretofore or hereafter made by Regent or Buyers: 7.1 Organization and Standing. Forever, Inc. is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia. Forever, LLC and Forever Broadcasting are each limited liability companies duly organized, validly existing and in good standing under the laws of the State of Delaware. Forever, Inc. is authorized to conduct business within the State of New York, and has the requisite power and authority to own, lease and operate the Stations Assets owned or leased by it and to carry on the business of the Stations as now being conducted by it and as proposed to be conducted by it between the date hereof and the Closing Date. - 10 - 17 7.2 Authorization and Binding Obligation. Each of Sellers has the power and authority, and has taken all necessary and proper action to enter into and perform this Agreement and to consummate the actions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Sellers and, assuming the due authorization, execution and delivery of this Agreement by Regent and Buyers, constitutes the legal, valid and binding obligation of Sellers enforceable against them in accordance with its terms, except as limited by laws affecting the enforcement of creditors' rights or equitable principles generally. 7.3 Absence of Conflicting Agreements or Required Consents. Except as set forth in Article 5 with respect to governmental consents and in Schedule 7.9 with respect to consents required in connection with the assignment of certain Contracts, the execution, delivery and performance of this Agreement by Sellers: (a) do not require the consent of any third party (including, without limitation, the consent of any governmental, regulatory, administrative or similar authority); (b) will not conflict with, result in a breach of, or constitute a violation of or default under, the provisions of Sellers' articles of incorporation or organization or bylaws (or other charter or organizational documents), or any applicable law, judgment, order, injunction, decree, rule, regulation or ruling of any governmental authority by which Sellers or any of the Stations Assets are bound; (c) will not either alone or with the giving of notice or the passage of time, or both, conflict with, constitute grounds for termination of or result in a breach of the terms, conditions or provisions of, or constitute a default under, any Contract, agreement, instrument, license or permit to which Sellers or any of the Stations Assets is now subject; and (d) will not result in the creation of any lien, charge or encumbrance on any of the Stations Assets. 7.4 Government Authorizations. 7.4.1 Schedule 7.4 hereto contains a true and complete list of the Stations Licenses and other licenses, permits or other authorizations from governmental and regulatory authorities which are required for the lawful conduct of the business and operations of the Stations in the manner and to the full extent they are presently conducted (including, without limitation, auxiliary licenses associated with each Station). Sellers have delivered to Buyers true and complete copies of the Stations Licenses and the other licenses, permits and authorizations listed in Schedule 7.4, including any and all amendments and other modifications thereto. 7.4.2 Sellers are the authorized legal holders of the Stations Licenses and other licenses, permits and authorizations listed in Schedule 7.4. Except as set forth Schedule 7.4, none of the Stations Licenses and other licenses, permits and authorizations listed in Schedule 7.4 is subject to any restrictions or conditions which would limit the full operation of the Stations. 7.4.3 Except as set forth in Schedule 7.4, and except for matters affecting the radio broadcast industry generally, there are no applications, complaints, petitions or proceedings pending or, to the best of Sellers' knowledge, threatened as of the date hereof before the FCC or any other governmental or regulatory authority relating to the business or operations of the Stations. Except as set forth in Schedule 7.4, the Stations Licenses and the other licenses, permits and authorizations listed in Schedule 7.4 are in good standing, are in full force and effect - 11 - 18 and are unimpaired by any act or omission of Sellers or their members, managers, officers, or employees. The operations of the Stations are in accordance with the Stations Licenses and the underlying construction permits and the other licenses, permits and authorizations listed in Schedule 7.4. No proceedings are pending or, to the best of Sellers' knowledge, threatened, and to the best of Sellers' knowledge there has not been any act or omission of Sellers or any of their members, managers, officers, or employees, which may result in the revocation, modification, non-renewal or suspension of any of the Stations Licenses or the other licenses, permits and authorizations listed in Schedule 7.4, the denial of any pending applications, the issuance of any cease and desist order, the imposition of any administrative actions by the FCC or any other governmental or regulatory authority with respect to the Stations Licenses or the other licenses, permits and authorizations listed in Schedule 7.4 or which may affect Buyers' ability to continue to operate the Stations as they are currently operated. 7.4.4 Except as set forth in Schedule 7.4, each Station is operating with the maximum facilities specified in the respective Station License. 7.4.5 None of the Stations is causing objectionable interference to the transmissions of any other broadcast station or communications facility nor has any of the Stations received any complaints with respect thereto, and no other broadcast station or communications facility is causing objectionable interference to respective transmissions of any Station or the public's reception of such transmissions. 7.4.6 Sellers have no reason to believe that the Stations Licenses and the other licenses, permits, or authorizations listed in Schedule 7.4 will not be renewed in their ordinary course. 7.4.7 All reports, forms, and statements required to be filed by Sellers with the FCC with respect to the Stations since the grant of the last renewal of the Stations Licenses have been filed and are complete and accurate in all material respects. 7.4.8 The operation of the Stations and all of the Stations Assets are in compliance in all respects with ANSI Radiation Standards C95.1-1992. 7.5 Compliance with FCC Regulations. Except as specified in Schedule 7.4, the operation of the Stations and all of the Stations Assets are in compliance in all respects with: (a) all applicable engineering standards required to be met under applicable FCC rules and (b) all other applicable federal, state and local rules, regulations, requirements and policies, including, but not limited to, equal employment opportunity policies of the FCC, and all applicable painting and lighting requirements of the FCC and the Federal Aviation Administration to the extent required to be met under applicable FCC rules and regulations, and to the best of Sellers' knowledge, there are no filed claims to the contrary. 7.6 Taxes. Sellers have filed all federal, state, local and foreign income, franchise, sales, use, property, excise, payroll and other tax returns required by law to be filed by them, and have paid in full all taxes, estimated taxes, interest, assessments, and penalties due and payable by them. All returns and forms which have been filed have been true and correct in all material - 12 - 19 respects and no tax or other payment in an amount other than as shown on such returns and forms is required to be paid by Sellers and has not been paid by Sellers. There are no present disputes as to taxes of any nature payable by Sellers which in any event could adversely affect any of the Stations Assets or the operation of the Stations by Buyers. Sellers have not been advised that any of their tax returns, federal, state, local or foreign, have been or are being audited. Sellers do not and will not in the future have any liability, fixed or contingent, for any unpaid federal, state or local taxes or other governmental or regulatory charges whatsoever (including without limitation withholding and payroll taxes) which could result in a lien on the Stations Assets after conveyance thereof to Buyers or in any other form of transferee liability to Buyers. 7.7 Personal Property. Without material omission, Schedule 7.7 hereto contains a list of all items of tangible personal property owned by Sellers and used or useful in the conduct of the business and operations of the Stations. Schedule 7.7 also separately lists any material tangible personal property leased by Sellers pursuant to leases included within the Contracts. Except as disclosed in Schedule 7.7, Sellers have, and following the Closing, RBU and RBW will have, good and marketable title to all of the items of tangible personal property which are included in the Stations Assets (other than those subject to lease) and none of such Stations Assets is, or at the Closing will be, subject to any security interest, mortgage, pledge, lease, license, lien, encumbrance, title defect or other charge, except for (a) liens for taxes not yet due and payable, (b) liens described in Schedule 7.7 which will be released and discharged on or prior to the Closing Date, and (c) the Assumed Liabilities. The properties listed in Schedule 7.7, along with those properties subject to lease and included among the Contracts, constitute all tangible personal property necessary to operate the Stations as the same are now being operated. Except as set forth in Schedule 7.7, all items of tangible personal property included in the Stations Assets are in good and technically sound operating condition and repair (ordinary wear and tear excepted), are free from all material defect and damage, are suitable for the purposes for which they are now being used, and have been properly maintained in a manner consistent with generally accepted standards of good engineering practice. 7.8 Real Property . 7.8.1 Schedule 7.8 hereto contains a complete and accurate list and description of all real property (including without limitation, real property relating to the towers, transmitters, studio sites and offices of the Stations) used or contemplated for use by Sellers in connection with the operations of the Stations, identifying thereon the real property that is owned by Sellers (the "Owned Real Estate") or leased by Sellers (the "Leased Real Estate") (collectively, the "Real Estate"). 7.8.2 Sellers have good and marketable title in fee simple to all of the Owned Real Estate, free and clear of all liens, mortgages, security interests, charges and encumbrances, except for (i) liens for taxes and other governmental charges which are not yet due and payable, and (ii) restrictions and easements of record common for properties of such nature which do not detract from or impair the existing or future use of the property affected as a radio broadcasting facility ("Permitted Encumbrances") and except for such liens as will be released and discharged on or prior to the Closing Date. - 13 - 20 7.8.3 Sellers enjoy quiet possession of all Real Estate. There are no present disputes or claims with respect to offsets or defenses by any party against the other under any of the Contracts relating to the Leased Real Estate. Sellers have delivered to Buyers true and complete copies of all Contracts relating to the Real Estate. Except as set forth in Schedule 7.9 hereto, the assignment of the Contracts relating to the Leased Real Estate to RBU or RBW will not permit the other party to accelerate the rent, cause the terms thereof to be renegotiated or constitute a default thereunder, and will not require the consent of any such party to the assignment thereof to RBU or RBW. 7.8.4 To the best of Sellers' knowledge, Sellers have full legal and practical access to all of the Real Estate, and all easements and rights of way relating to Sellers' use thereof have been properly recorded in the appropriate public recording offices. The Real Estate (exclusive of the Excluded Real Estate) includes all the real property, easements, rights of way, and other real property interests necessary to conduct the business and operations of the Stations as they are now conducted. Except as described in Schedule 7.8, to the best of Sellers' knowledge, none of the buildings, structures, improvements or fixtures constructed on any Real Estate, in connection with the operation of the Stations, including, but not limited to, all towers, guy wires and guy anchors and ground radials, encroach upon adjoining real property, and all such buildings, structures, improvements and fixtures are constructed and are operated and used in conformance with all "set back" lines, easements, covenants, restrictions and all applicable building, fire, zoning, health and safety laws and codes. To the best of Sellers' knowledge, no utility lines serving such Real Estate from a public right-of-way pass over the lands of a third party except where appropriate easements have been obtained. Except as described in Schedule 7.8, all buildings, structures, towers, antennae, improvements and fixtures situated on the Real Estate are in good and technically sound operating condition, ordinary wear and tear excepted, have no latent structural mechanical or other defects of material significance, are reasonably suitable for the purposes for which they are being used and each has adequate rights of ingress and egress, utility service for water and sewer, telephone, electric and/or gas, and sanitary service for the conduct of the business and operations of the Stations as presently conducted. There is no pending or, to the best knowledge of Sellers, threatened condemnation or other legal proceeding or action of any kind relating to such real property and/or title thereto. 7.9 Contracts. Schedule 7.9 lists all Contracts to which Sellers are parties, or which are binding on Sellers, as of the date of this Agreement. Those Contracts listed on Schedule 7.9, if any, requiring the consent of a third party to assignment are identified by an asterisk in the left margin of Schedule 7.9. Those Contracts, if any, that Sellers and Buyers have agreed are material to the operation of the Stations Assets and the valid assignment of which and receipt by Buyers of consents thereto (along with appropriate estoppel certificates for the leases related to the Leased Real Estate) is a condition to the consummation of the transactions contemplated hereby (the "Material Contracts") are identified by an "M" in the left margin of Schedule 7.9. 7.10 Status of Contracts, etc. Sellers have delivered to Buyers true and complete copies of all written Contracts and true and complete memoranda of all oral Contracts, including any and all amendments and other modifications thereto. All of the Contracts are in full force and effect and are valid, binding and enforceable in accordance with their respective terms, except as limited by laws affecting creditors' rights or equitable principles generally. Sellers - 14 - 21 have complied in all respects with all Contracts and are not in default beyond any applicable grace periods under any thereof and, to the best of Sellers' knowledge, no other contracting party is in default under any thereof. 7.11 Environmental. Except as set forth in Schedule 7.11, Sellers have complied with all federal, state and local environmental laws, rules and regulations as in effect on the date hereof applicable to each of the Stations and its operations, including but not limited to the FCC's guidelines regarding RF radiation. Other than PCBs contained in operating equipment as permitted by the Environmental Laws, to the best of Sellers' knowledge, the technical equipment included in the Stations Assets does not contain any PCBs. No hazardous or toxic waste, substance, material or pollutant (as those or similar terms are defined under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et seq., Toxic Substances Control Act. 15 U. S. C. Section Section 2601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq. or any other applicable federal, state and local environmental law, statute, ordinance, order, judgment rule or regulation relating to the environment or the protection of human health ("Environmental Laws")), including but not limited to, any asbestos or asbestos-related products, oils, or petroleum-derived compounds, CFCs, PCBs, or underground storage tanks (collectively Hazardous Materials"), have been released, emitted or discharged by Sellers, or to Sellers' best knowledge any predecessor in interest to Sellers, in violation of applicable laws or regulations, or are currently located in quantities in violation of applicable laws and regulations in, on, under or about the real property on which the Stations Assets are situated, including without limitation the transmitter sites, or contained in the tangible personal property included in the Stations Assets. The Stations Assets and Sellers' use thereof are not in violation of any Environmental Laws or any occupational, safety and health or other applicable law now in effect. Sellers shall be as of the Closing Date and thereafter solely responsible for all environmental liabilities, of whatsoever kind and nature, arising out of or attributable to the operation or ownership of the Stations Assets by Sellers prior to the Closing Date. 7.12 Intellectual Property. Schedule 7.12 hereto is a true and complete list of all material Intellectual Property applied for, registered or issued to, and owned by Sellers or under which Sellers are licensees and which is used in the conduct of Sellers' business and operations with regard to the Stations. Except as set forth on Schedule 7.12, to the best of Sellers' knowledge: (a) Sellers' right, title and interest in the Intellectual Property as owner or licensee, as applicable, are free and clear of all liens, claims, encumbrances, rights, or equities whatsoever of any third party and, to the extent any of the Intellectual Property are licensed to Sellers, such interest is valid and uncontested by the licensor thereof or any third party; (b) all computer software located at the Stations' facilities or used in the Stations' business or operations is properly licensed to Sellers, and all of Sellers' uses of such computer software are authorized under such licenses; (c) all of Sellers' right, title and interest in and to the Intellectual Property shall be assignable to RBU and RBWat Closing, and upon such assignment, except as set forth in Schedule 7.12, RBI shall receive complete and exclusive right, title, and interest in and to all tangible and intangible property rights existing in the Intellectual Property; and (d) there are no infringements or unlawful use of such Intellectual Property by Sellers in connection with Sellers' business or operations. All material hardware and software products used by Sellers in the operation of the Stations will be able to accurately process date data (including, but not limited to calculating, comparing and sequencing) - 15 - 22 from, into and between the twentieth century (through the year 1999), the year 2000 and the twenty-first century, including leap year calculations when used in accordance with the product documentation accompanying such hardware and software products. 7.13 Financial Statements. Set forth in Schedule 7.13 (to be supplemented for periods up to the Closing Date) is a listing of the balance sheets and income statements of Sellers relating to the Stations which have been provided to Buyers (collectively, the "Financial Statements"). The Financial Statements are prepared in accordance with the books and records of Sellers and in accordance with generally accepted accounting principles consistently applied and maintained throughout the periods indicated except for the absence of footnotes, standard year-end adjustments, and as has been disclosed in Schedule 7.13. The Financial Statements present fairly the financial condition, results of operations and cash flows of the Stations for the periods indicated. None of the Financial Statements understates the true costs and expenses of conducting the business and operations of the Stations, fails to disclose any material liability, or inflates (or will inflate) the revenues of the Stations for any reason. 7.14 Personnel Information. 7.14.1 A true and complete list of all persons employed at the Stations, including date of hire and job title has been delivered to Buyers, and Buyers acknowledge receipt thereof. Sellers have received no notice that, and Sellers are not aware of, any individual employee who intends or is likely to terminate his or her employment relationship with the Stations upon the execution of this Agreement or after the Closing. 7.14.2 Except as set forth in Schedule 7.14, Sellers, with respect to the Stations, are not parties to any contract or agreement with any labor organization, nor have Sellers agreed to recognize any union or other collective bargaining unit, nor has any union or other collective bargaining unit been certified as representing any employees of Sellers at the Stations. Sellers have no knowledge of any organization effort currently being made or threatened by or on behalf of any labor union with respect to employees of Sellers at the Stations. 7.14.3 Except as disclosed in Schedule 7.14, Sellers, with respect to the Stations, have complied in all material respects with all laws relating to the employment of labor, including, without limitation, the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and those laws relating to wages, hours, collective bargaining, unemployment insurance, workers' compensation, equal employment opportunity and payment and withholding of taxes. 7.15 Litigation. Except as set forth in Schedule 7.15, Sellers are not subject to any judgment, award, order, writ, injunction, arbitration decision or decree relating to the conduct of the business or the operation of the Stations or any of the Stations Assets, and there is no litigation, administrative action, arbitration, proceeding or investigation pending or, to the best knowledge of Sellers, threatened against Sellers with respect to, related to or in connection with the operation of the Stations in any federal, state or local court, or before any administrative agency or arbitrator (including, without limitation, any proceeding which seeks the forfeiture of, or opposes the renewal of, any of the Stations Licenses), or before any other tribunal duly - 16 - 23 authorized to resolve disputes. In particular, but without limiting the generality of the foregoing, to the best knowledge of Sellers, there are no applications, complaints or proceedings pending or threatened before the FCC or any other governmental organization with respect to the business or operations of the Stations. 7.16 Compliance With Laws. Except as set forth in Schedule 7.16: (a) Sellers are not in material violation of, nor have Sellers received any notice asserting any non-compliance by them in connection with the operation of the Stations or use or ownership of any of the Stations Assets with, any applicable statute, rule or regulation, whether federal, state or local; (b) Sellers are not in default with respect to any judgment, order, injunction or decree of any court administrative agency or other governmental authority or any other tribunal duly authorized to resolve disputes which relates to the transactions contemplated hereby; and (c) Sellers are in all material respects in compliance with all laws, regulations and governmental orders applicable to the conduct of the business and operations of the Stations, and their present use of the Stations Assets does not violate any of such laws, regulations or orders. 7.17 Employee Benefit Plans. Schedule 7.17 contains a true and complete list as of the date of this Agreement of all employee benefit plans applicable to the employees of Sellers employed at the Stations, and a brief description thereof. Sellers do not maintain any other employee benefit plan as the term is defined in Section 3 of the Employee Retirement Income Security Act of 1974, as amended, applicable to the employees of Sellers employed at the Stations. 7.18 Commissions or Finder's Fees. Neither Sellers nor any person or entity acting on behalf of Sellers have agreed to pay a commission, finder's fee or similar payment in connection with this Agreement or any matter related hereto to any person or entity, with the exception of Bergner & Co., whose fees shall be paid entirely by Sellers. 7.19 Conduct of Business in Ordinary Course; Adverse Changes. Since December 31, 1998: (a) Sellers have conducted the business of the Stations only in the ordinary course consistent with Sellers' past practices; (b) there has not been any material adverse change in the business, assets, properties, prospects or condition (financial or otherwise) of any of the Stations, or any damage, destruction, or loss affecting any of the Stations Assets; and (c) Sellers have not created, assumed, or suffered any mortgage, pledge, lien or encumbrance on any of the Stations Assets. 7.20 Instruments of Conveyance: Good Title. The instruments to be executed by Sellers and delivered to Buyers at the Closing, conveying the Stations Assets to Buyers, will transfer good and marketable title to the Assets free and clear of all liabilities (absolute or contingent), security interests, mortgages, pledges, liens, obligations and encumbrances, except for Permitted Encumbrances and those obligations referred to in the first sentence of Section 2.1 hereof. 7.21 Undisclosed Liabilities. Excepting only for the Assumed Liabilities, no liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, relating to Sellers, the Stations or the Stations Assets exists which could, after the Closing, result in any - 17 - 24 form of transferee or successor liability against Buyers or subject the Stations Assets to any lien, encumbrance, claim, charge, security interest or imposition whatsoever or otherwise affect the full, free and unencumbered use of the Stations Assets by Buyers. 7.22 Acquisition of Preferred Stock. (a) Non-Registration. Sellers understand that the offering and sale of the Preferred Stock is intended to be exempt from registration under the Securities Act of 1933, as amended (the "1933 Act"), by virtue of Section 4(2) of the Act and the provisions of Regulation D promulgated thereunder, that the Preferred Stock has not been registered under the 1933 Act or under the securities laws of any state, and that Regent will be under no obligation to effect any such registration. (b) Investment Intent. Sellers are acquiring the Preferred Stock for their own account, for investment and not with a view to resale, distribution, or other disposition, and Sellers have no present plans to enter into any contract, undertaking, agreement or arrangement for any such resale, distribution or other disposition. Sellers understand that the Preferred Stock and the shares of common stock into which the Preferred Stock is convertible (the "Conversion Stock") have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Sellers' representations as expressed herein. Sellers will not sell or otherwise transfer the Preferred Stock without registration under the 1933 Act and applicable state securities laws, or pursuant to an exemption from the registration requirements thereof which, in the opinion of counsel reasonably acceptable to Regent, is available for the transaction. (c) Rule 144. Sellers acknowledge that the Preferred Stock and the Conversion Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. Sellers are aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about Regent, the resale occurring not less than one year after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in transactions directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. (d) No Public Market. Sellers understand that no public market now exists for the Preferred Stock and that neither Regent nor the Buyers have made any assurances that a public market will ever exist for the Preferred Stock. (e) Status of Sellers. Each of Sellers: (i) is an "accredited investor," as that term is defined in Rule 501(a) of Regulation D promulgated under the 1933 Act, inasmuch as Sellers meet the requirements of subparagraph (a)(3) of Rule 501; and (ii) was not formed for the primary purpose of evading federal or state securities laws. - 18 - 25 (f) Opportunity to Review Books and Records. Sellers have had a reasonable opportunity to inspect all documents, books and records pertaining to Regent and the Preferred Stock and confirm that the Preferred Stock is being purchased without Sellers' receipt of any offering literature. (g) Opportunity for Questions. Sellers have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of Regent concerning Regent, its business and operations, the terms of the Preferred Stock and all other aspects of investment in Regent, and all such questions have been answered to the full satisfaction of Sellers. (h) Manner of Purchase. Sellers are not subscribing for the Preferred Stock as a result of or pursuant to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by a person other than a representative of Regent. 7.23 Full Disclosure. No representation or warranty made by Sellers contained in this Agreement nor any certificate, document or other instrument furnished or to be furnished by Sellers pursuant hereto contains or will contain any untrue statement of a material fact, or omits or shall omit to state any material fact required to make any statement contained herein or therein not misleading. To the best of Sellers' knowledge, there is no impending or contemplated event or occurrence that would cause any of the foregoing representations not to be true and complete on the date of such event or occurrence as if made on that date. Whenever in this Article 7 a warranty or representation is qualified by a word or phrase referring to the best of Sellers' knowledge (or similar terms), it shall mean to the actual knowledge of the President, chief financial officer and chief engineer of Forever, Inc., after having made due inquiry of the employees, representatives and agents of Sellers who would be expected to have knowledge of the matter, and with respect to the condition of any Stations Assets, records or other object, after having inspected it. ARTICLE 8 COVENANTS OF BUYERS 8.1 Closing. Subject to Article 11 hereof, on the Closing Date, Buyers shall purchase the Stations Assets from Sellers as provided in Article I hereof and RBU and RBW shall assume the Assumed Liabilities of Sellers as provided in Article 2 hereof. 8.2 Notification. Buyers will provide Sellers prompt written notice of any change in any of the information contained in the representations and warranties made in Article 6. Buyers shall also notify Sellers of any litigation, arbitration or administrative proceeding pending or, to their knowledge, threatened against Buyers which challenges the transactions contemplated hereby. - 19 - 26 8.3 No Inconsistent Action. Buyers shall not take any action which is materially inconsistent with their obligations under this Agreement or take any action which would cause any representation or warranty of Buyers contained herein to be or become false or invalid or which could hinder or delay the consummation of the transactions contemplated by this Agreement. 8.4 Preferred Stock. The Preferred Stock, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The Preferred Stock will be free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the holders thereof through no action of Regent or Buyers; provided, however, that the Preferred Stock and common stock issued upon any conversion thereof will be subject to restrictions on transfer under state and/or federal securities laws. The issuance of the Preferred Stock will not violate any preemptive rights available to the holders of any of Regent's securities. The Preferred Stock shall have the rights, preferences, privileges and restrictions set forth in the Certificate attached as Exhibit A. ARTICLE 9 COVENANTS OF SELLERS 9.1 Pre-Closing Covenants. Sellers covenant and agree with respect to the Stations that, between the date hereof and the Closing Date or the earlier termination of this Agreement in accordance with its terms, except as expressly permitted by this Agreement or with the prior written consent of Buyers, Sellers shall act in accordance with the following: 9.1.1 Sellers shall conduct the business and operations of the Stations in the ordinary and prudent course of business consistent with past practice and with the intent of preserving the ongoing operations and assets of the Stations, including but not limited to its books and records in accordance with prior practice, maintaining the present condition of the Stations Assets, maintaining the independent identity of the Stations, retaining the current format and programming (including the content thereof) of the Stations, continuing at historical levels and frequencies spending for promotions, advertising, and survey testing, and using their reasonable best efforts to retain at the Stations the services of all active employees, consultants and agents of the Stations. 9.1.2 Sellers shall use their reasonable best efforts to: (i) preserve the operation of the Stations intact; (ii) preserve the business of the Stations' advertisers, customers, suppliers and others having business relations with the Stations; and (iii) continue to conduct financial operations of the Stations, including without limitation, their credit and collection and pricing policies and practices, all in the ordinary course of business consistent with past practices. 9.1.3 Sellers shall operate the Stations in all respects in accordance with FCC rules and regulations and the Stations Licenses and with all other laws, regulations, rules and orders, and shall not cause or permit by any act, or failure to act, any of the Stations Licenses or other licenses, permits or authorizations listed in Schedule 7.4 to expire, be surrendered, adversely modified, or otherwise terminated, or the FCC to institute any proceedings for the - 20 - 27 suspension, revocation or adverse modification of any of the Stations Licenses, or fail to prosecute with due diligence any pending applications to the FCC. 9.1.4 Should any fact relating to Sellers which would cause the FCC to deny its consent to the transactions contemplated by this Agreement come to Sellers' attention, Sellers will promptly notify Buyers thereof and will use their reasonable best efforts to take such steps as may be necessary to remove any such impediment to the FCC's consent to the transactions contemplated by this Agreement. 9.1.5 Except for actions in the ordinary course of business consistent with past practices and incentives granted to employees in connection with the sale of the Stations, Sellers shall not: (a) sell broadcast time on a prepaid basis (other than in the course of existing credit practices); (b) except as required by the applicable law or written agreements currently in effect, grant or agree to grant any general increases in the rates of salaries or compensation payable to employees of the Stations (provided that no such increases to any employee shall in the aggregate exceed 5 % of such employee's compensation as set forth on Schedule 7.14 hereto), (c) except as required by written agreements currently in effect, grant or agree to grant any specific bonus or increase in compensation to any executive management employee of the Stations (provided that no such increases to any employee shall in the aggregate exceed 5 % of such employee's compensation as set forth on Schedule 7.14 hereto); (d) provide for any new pension, retirement or other employment benefits for employees of the Stations or any increases in any existing benefits, (e) modify, change or terminate any Contract or waive any default or breach thereunder; or (f) change the advertising rates in effect as of the date hereof. 9.1.6 Sellers shall give or cause the Stations to give Buyers and Buyers' counsel, accountants, auditors, engineers and other representatives, at Buyers' reasonable request and upon reasonable notice, full and reasonable access to all of Sellers' personnel, properties, books, Contracts, reports and records (including, without limitation, financial information and tax returns relating to the Stations, and environmental audits in existence with respect to the Stations Assets), real estate, buildings and equipment relating to the Stations and to the Stations' employees, and to furnish Buyers with information and copies of all documents and agreements relating to the Stations and the operation thereof (including but not limited to financial and operating data and other information concerning the financial condition, results of operations and business of the Stations to enable Buyers' representatives to audit the Financial Statements, or for any other purpose) that Buyers may reasonably request. Sellers shall execute and deliver any consents reasonably requested by Buyers or Buyers' auditors in connection with an audit of the Financial Statements for the Stations. The rights of Buyers under this Section 9.1.6 shall not be exercised in such a manner as to interfere unreasonably with the business of the Stations. 9.1.7 Sellers shall use their reasonable best efforts to obtain any third party consents necessary for the assignment of any Contract (which shall not require any payment to any such third party except for such amounts contemplated by the Contract to be assigned, and any amount then owing by Sellers to such third party). 9.1.8 Sellers shall: - 21 - 28 (a) refrain from making any sale, lease, transfer or other disposition of any of the Stations Assets having a value in excess of $10,000 in the aggregate, other than in the normal course of business at fair market value in connection with replacements of equal or greater value without the prior approval of Buyers, which approval will not be unreasonably withheld; (b) maintain insurance on the Stations Assets for loss or damage by fire and all other hazards and risks for full replacement cost and for comprehensive liability coverage in amounts consistent with prudent business practices; (c) if requested by Buyers, with respect to any Contract which can be terminated or not renewed by Sellers in compliance with the terms thereof, notify the other parties to such Contract that Sellers elect to terminate (or, if applicable, elect not to renew) such Contract; and (d) achieve cash advertising sales of the Stations in the Utica/Rome market and in the Watertown market, respectively, which shall, for the trailing twelve (12) months through the end of the month preceding the Closing Date, be no less than 95% of the amount of such sales, in each of such markets, for the corresponding twelve-month period in the prior year; and (e) within thirty (30) days following the end of each calendar month, provide Buyers with a statement of income for each Station for such month and for the year-to-date period then ended (including a comparison to budget). 9.1.9 Within sixty (60) days after the date of this Agreement, Sellers, at their expense, shall provide to Buyers title insurance commitments, issued by a title insurance company reasonably satisfactory to Buyers, agreeing to issue to Buyers and their senior lender, on the most current standard ALTA form, leasehold, owners and lenders policies of title insurance with respect to all Real Estate, together with a copy of each document to which reference is made in such commitments, for insuring title in full accordance with the representations and warranties set forth herein and subject only to standard survey exceptions and exceptions for Permitted Encumbrances, and with such standard form endorsements, as Buyers' senior lenders may reasonably require. 9.2 Notification. Sellers will provide Buyers prompt written notice of any change in any of the information contained in the representations and warranties made in Article 7 or any Schedule. Sellers agree to notify Buyers of any litigation, arbitration or administrative proceeding pending or, to the best of their knowledge, threatened, which challenges the transactions contemplated hereby. Other than conditions already disclosed on Schedule 7.4, Sellers shall promptly notify Buyers if any of the normal broadcast transmissions of any Station are interrupted, interfered with or in any way impaired, and shall provide Buyers with prompt written notice of the problem and the measures being taken to correct such problem. If such Station is not restored so that operation is resumed to a licensed power and antenna height so that its signal substantially covers the applicable market within five (5) days of such event and to full licensed power and antenna height within thirty (30) days of such event, or if more than five (5) - 22 - 29 such events occur within any thirty (30) day period, or if any of the Stations shall be off the air for more than seventy-two (72) consecutive hours, then Buyers shall have the right to terminate this Agreement. 9.3 No Inconsistent Action. Sellers shall not take any action which is materially inconsistent with their obligations under this Agreement nor take any action which would cause any representation or warranty of Sellers contained herein to be or become false or invalid or which could hinder or delay the consummation of the transactions contemplated by this Agreement. 9.4 Closing. Subject to Article 12 hereof, on the Closing Date, Sellers shall transfer, convey, assign and deliver to Buyers the Stations Assets and the Assumed Liabilities as provided in Articles 1 and 2 and Section 7.20 of this Agreement. 9.5 Other Items. Until the Closing Date or the earlier termination of this Agreement in accordance with the terms hereof, Sellers shall not: (a) waive or release any right relating to the business or operations of the Stations, except for adjustments or settlements made in the ordinary course of business consistent with their past practices; (b) transfer or grant any rights under any of the Stations Licenses; (c) enter into any commitment for capital expenditures for which Buyers would become liable after the Closing Date; (d) introduce any material changes in the broadcast hours or in the format of the Stations or any other material change in the Stations' programming policies; (e) change the call letters of any Station; and (f) enter into any transaction or make or enter into any contract or commitment with respect to any of the Stations or the Stations Assets which is not in the ordinary course of business consistent with past practices. 9.6 Exclusivity. Sellers agree that, commencing on the date hereof through the Closing or earlier termination of this Agreement, Buyers shall have the exclusive right to consummate the transactions contemplated herein, and during such exclusive period, Sellers agree that neither Sellers, nor any shareholders, members, manager, director, officer, employee or other representative of Sellers: (a) will initiate, solicit or encourage, directly or indirectly, any inquiries, or the making or implementation of any proposal or offer with respect to a merger, acquisition, consolidation or similar transaction involving, or any purchase of, all or any portion of the Stations Assets (any such inquiry, proposal or offer being hereinafter referred to as an "Acquisition Proposal" and any such transaction being hereinafter referred to as an "Acquisition"); (b) will engage in any negotiations concerning, or provide any confidential information or data to, or have any discussions with, any person relating to an Acquisition Proposal, or otherwise facilitate any effort or attempt to make or implement an Acquisition Proposal; or (c) will continue any existing activities, discussions or negotiations with any parties conducted heretofore with respect to any Acquisition Proposal or Acquisition and Sellers will take the necessary steps to inform the individuals or entities referred to above of the obligations undertaken by them in this Section 9.6. Notwithstanding the foregoing, in the event that Buyers default in any material respect in the observance or in the due and timely performance of any of their covenants or agreements herein contained and such default shall not be cured within fifteen (15) business days of notice of default served by Sellers, Sellers' obligations under this Section 9.6 shall be null and void. - 23 - 30 ARTICLE 10 JOINT COVENANTS Regent, Buyers and Sellers each covenant and agree that between the date hereof and the Closing Date, they shall act in accordance with the following: 10.1 Confidentiality. Subject to the requirements of applicable law, Regent, Buyers and Sellers shall each keep confidential all information obtained by them with respect to the other parties hereto in connection with this Agreement and the negotiations preceding this Agreement, and will use such information solely in connection with the transactions contemplated by this Agreement, and if the transactions contemplated hereby are not consummated for any reason, each shall return to each other party hereto, without retaining a copy thereof, any schedules, documents or other written information obtained from such other party in connection with this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, no party shall be required to keep confidential or return any information which: (a) is known or available through other lawful sources, not bound by a confidentiality agreement with the disclosing party; (b) is or becomes publicly known through no fault of the receiving party or its agents; (c) is required to be disclosed pursuant to an order or request of a judicial or governmental authority (provided the non-disclosing party is given reasonable prior notice of the order or request and the purpose of the disclosure); or (d) is developed by the receiving party independently of the disclosure by the disclosing party. Notwithstanding anything to the contrary herein, each party may in accordance with its legal obligations, including but not limited to filings permitted or required by the Securities Act of 1933 and the Securities and Exchange Act of 1934, make such press releases and other public statements and announcements as it deems necessary and appropriate in connection with this Agreement and the transactions contemplated hereby; provided, however, that prior to making any such unilateral press release or announcement, such party shall first communicate the same in writing to the others. 10.2 Cooperation. Subject to express limitations contained elsewhere herein, Regent, Buyers and Sellers agree to cooperate fully with one another in taking any reasonable actions (including without limitation, reasonable actions to obtain the required consent of any governmental instrumentality or any third party) necessary or helpful to accomplish the transactions contemplated by this Agreement, including but not limited to the satisfaction of any condition to closing set forth herein. 10.3 Control of Stations. Regent and Buyers shall not, directly or indirectly, control, supervise or direct the operations of the Stations prior to the Closing. Such operations, including complete control and supervision of all Station programs, employees and policies, shall be the sole responsibility of Sellers. 10.4 Consents to Assignment. To the extent that any Contract identified in the Schedules is not capable of being sold, assigned, transferred, delivered or subleased without the waiver or consent of any third person (including a government or governmental unit), or if such sale, assignment, transfer, delivery or sublease or attempted sale, assignment, transfer, delivery - 24 - 31 or sublease would constitute a breach thereof or a violation of any law or regulation, this Agreement and any assignment executed pursuant hereto shall not constitute a sale, assignment, transfer, delivery or sublease or an attempted sale, assignment, offer, delivery or sublease thereof. Subject to the provisions of Section 11.5, in those cases where consents, assignments, releases and/or waivers have not been obtained at or prior to the Closing relating to the assignment to RBU and RBW of the Contracts, this Agreement and any assignment executed pursuant hereto, to the extent permitted by law, shall constitute an equitable assignment by Sellers to RBU and RBW of all of Sellers' rights, benefits, title and interest in and to the Contracts, and where necessary or appropriate, RBU and RBW shall be deemed to be Sellers' agent for the purpose of completing, fulfilling and discharging all of Sellers' rights and liabilities arising after the Closing Date under such Contracts. Sellers shall use their reasonable best efforts to provide RBU and RBW with the financial and business benefits of such Contracts (including, without limitation, permitting RBU and RBW to enforce any rights of Sellers arising under such Contracts), and RBU and RBW shall, to the extent they are provided with the benefits of such Contracts, assume, perform and in due course pay and discharge all debts, obligations and liabilities of Sellers under such Contracts to the extent that RBU and RBW were to assume those obligations pursuant to the terms hereof. 10.5 Filings. In addition to the covenants of the parties set forth in Article 5 hereto, as promptly as practicable after the execution of this Agreement, Buyers and Sellers shall use their reasonable best efforts to obtain, and to cooperate with each other in obtaining, all authorizations, consents, orders and approvals of any governmental authority that may be or become necessary in connection with the consummation of the transactions contemplated by this Agreement, and to take all reasonable actions to avoid the entry of any order or decree by any governmental authority prohibiting the consummation of the transactions contemplated hereby, including without limitation, any reports or notifications that may be required to be filed with the FCC, and each shall furnish to one another all such information in its possession as may be necessary for the completion of the reports or notifications to be filed by the other. 10.6 Bulk Sales Laws. Buyers hereby waive compliance by Sellers with the provisions of the "bulk sales" or similar laws of any state. Sellers agree to indemnify Buyers and hold them harmless from any and all loss, cost, damage and expense (including but not limited to, reasonable attorney's fees) sustained by Buyers as a result of any failure of Sellers to comply with any "bulk sales" or similar laws. 10.7 Employee Matters. Sellers shall be responsible for the payment of all compensation and accrued employee benefits (excluding obligations relating to vacation and sick pay identified in Schedule 7.14 to be assumed by RBU and RBW) payable to all employees up to the Closing Date. Sellers acknowledge and agree that they, and not Buyers, are and shall be solely responsible for any and all severance, insurance, supplemental pension, deferred compensation, retirement and any other benefits, and related costs, premiums and claims, due, to become due, committed or otherwise promised to any person who, as of the Closing Date, is a retiree, former employee, or current employee of Sellers, relating to the period up to the Closing Date, with the exception of those obligations to current employees of Sellers who are hired by RBU or RBW relating to vacation and sick pay, which are identified in Schedule 7.14 to be assumed by RBU or RBW. Sellers acknowledge and agree that they, and not Buyers, are and - 25 - 32 shall be solely responsible for any and all COBRA obligations existing or arising as a result of this transaction. Buyers, as purchaser of the Stations Assets, shall assume no employee benefit plans, programs or practices, whether or not set forth in writing, maintained by Sellers at any time. ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS The obligations of Buyers and Regent hereunder are, at their option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions: 11.1 Representations, Warranties and Covenants. 11.1.1 All representations and warranties of Sellers made in this Agreement or in any Exhibit, Schedule or document delivered pursuant hereto, shall be true and complete in all material respects as of the date hereof and on and as of the Closing Date as if made on and as of that date, except for changes (a) expressly permitted or contemplated by the terms of this Agreement; or (b) in the ordinary course of business which are not, either in individually or in the aggregate, material and adverse. 11.1.2 All of the terms, covenants and conditions to be complied with and performed by Sellers on or prior to the Closing Date shall have been complied with or performed strictly with respect to Section 9.1.8(d) and in all other cases in all material respects. 11.1.3 Buyers shall have received a certificate, dated as of the Closing Date, from Sellers, executed by the President of Sellers to the effect that: (a) the representations and warranties of Sellers contained in this Agreement are true and complete in all material respects on and as of the Closing Date as if made on and as of that date; and (b) Sellers have complied with or performed in all material respects all terms, covenants and conditions to be complied with or performed by them on or prior to the Closing Date. 11.2 Governmental Consents. The FCC Consent shall have been obtained and shall have become a Final Order, and all other consents or approvals required from governmental authorities shall have been obtained. 11.3 Governmental Authorizations. Sellers shall be the holders of the Stations Licenses and all other licenses, permits and other authorizations listed in Schedule 7.4, and there shall not have been any modification of any of such licenses, permits and other authorizations which has a material adverse effect on any of the Stations or the operations thereof. No application shall be pending for the renewal of any of the Stations Licenses. No proceeding shall be pending which seeks, or the effect of which reasonably could be, to revoke, cancel, fail to renew, suspend or adversely modify any of the Stations Licenses or any other licenses, permits or other authorizations listed in Schedule 7.4. - 26 - 33 11.4 Adverse Proceedings. No suit, action, claim or governmental proceeding shall be pending or threatened against, and no order, decree or judgment of any court, agency or other governmental authority shall have been rendered (and remain in effect) against, any party hereto which: (a) would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms; (b) questions the validity or legality of any transaction contemplated hereby; (c) seeks to enjoin any transaction contemplated hereby; (d) seeks material damages on account of the consummation of any transaction contemplated hereby; or (e) is a petition of bankruptcy by or against Sellers, an assignment by Sellers for the benefit of its creditors, or other similar proceeding. 11.5 Third-Party Consents. All Material Contracts shall be in full force and effect on the Closing Date, and Sellers shall have obtained and shall have delivered to RBU and RBW all appropriate third-party consents in form and substance acceptable to RBU and RBW (including estoppel certificates for the leases related to the Leased Real Estate) in connection with the assignment of the Material Contracts to RBU and RBW. 11.6 Closing Documents. Sellers shall have delivered or caused to be delivered to Buyers, on the Closing Date, all bills of sale, general warranty deeds, endorsements, assignments and other instruments of conveyance reasonably satisfactory in form and substance to Buyers, effecting the sale, transfer, assignment and conveyance of the Stations Assets to Buyers, including, without limitation, each of the documents required to be delivered by them pursuant to Article 14. 11.7 Environmental Site Assessments. 11.7.1 Following execution of this Agreement, at Buyers' expense, Buyers may engage an engineering environmental assessment firm, to perform a Phase I Environmental Assessment for any or all of the Real Estate (the "Environmental Assessment") and Sellers shall cooperate with Buyers and such firm in performing such Environmental Assessment, and, upon completion, a copy thereof shall immediately be provided Sellers. Delivery of the Environmental Assessment to Buyers shall not relieve Sellers of any obligation with respect to any representation, warranty or covenant of Sellers in this Agreement or waive any condition to Buyers' obligations under this Agreement. If the Environmental Assessment reveals the existence of Environmental Conditions or Environmental Noncompliance (each as defined below) at any of the Real Estate, Buyers shall have the right, exercisable by giving written notice to Sellers within fifteen (15) days of the receipt by Buyers of the Environmental Assessment (which specifies the nature of the Environmental Conditions or Environmental Noncompliance revealed by the assessment) to terminate this Agreement; provided, however, that Buyers' right to terminate this Agreement based upon the findings of the Environmental Assessment will expire if the Environmental Assessment has not been completed within sixty (60) days after the date of this Agreement and a copy thereof delivered to Sellers. 11.7.2 Notwithstanding the foregoing, in the event the Environmental Assessment discloses an Environmental Condition or Environmental Noncompliance ("Environmental Problem") that can be remedied by the expenditure of Twenty Five Thousand ($25,000) Dollars or less, Sellers will either remedy the problem, at their expense, prior to the - 27 - 34 Closing Date or, failing that, the Purchase Price will be reduced by the amount, as estimated in the Environmental Assessment, that will be required to remedy the Environmental Problem, and the Closing will otherwise take place in the manner, and at the time, provided for herein, and Sellers will not be responsible for any remediation. In the event that the cost of remedying the Environmental Problem will exceed Twenty Five Thousand ($25,000) Dollars, Sellers shall have the option to reduce the Purchase Price by the full amount of the estimated cost to remedy the problem, in which event the Closing will take place and the Purchase Price will be so reduced, or to terminate this Agreement, unless Buyers agree to be responsible for the remediation costs in excess of Twenty Five Thousand ($25,000) Dollars. 11.7.3 For purposes of this Agreement and Section 11.7.1 above: (i) "Hazardous Materials" means the definition set forth in Section 7.11 hereof. (ii) "Environmental Conditions" means conditions of the environment, including the ocean, natural resources (including flora and fauna), soil, surface water, ground water, any present or potential drinking water supply, subsurface strata or the ambient air, relating to or arising out of the use, handling, storage, treatment, recycling, generation, transportation, release, spilling, leaking, pumping, pouring, emptying, discharging, injecting, escaping, leaching, disposal, dumping or threatened release of Hazardous Materials by Sellers or Sellers' predecessors in interest. (iii) "Environmental Noncompliance" means, but is not limited to: (1) the release or threatened release of any Hazardous Materials into the environment, any storm drain, sewer, septic system or publicly owned treatment works, in violation of any effluent or emission limitations, standards or other criteria or guidelines established by any federal, state or local law, regulation, rule, ordinance, plan or order; and (2) any facility operations, procedures, designs, etc., which do not conform to the New York or federal statutory or regulatory requirements, or any other Environmental Laws intended to protect public health, welfare and the environment. 11.8 Investigation of Station Facilities. Buyers shall conduct such examination and investigation of the Real Estate and title thereto, studios, transmitter facilities, and other Stations Assets and personnel on matters as Buyers deem advisable or appropriate . This investigation may include the obtaining of surveys of all Real Estate, each prepared in accordance with ALTA/ASCM standards and each detailing the legal description, the perimeter boundaries, all improvements thereon, all easements and encroachments affecting each parcel, and such other matters as may be reasonably required by Buyers or the title insurance company, each containing a surveyor certificate reasonably acceptable to Buyers and the title insurance company, and each prepared by a registered land surveyor satisfactory to Buyers. If, within sixty (60) days after the date of this Agreement, Buyers advise Seller of any findings or results which are inconsistent with the substance of Sellers' representations and warranties and which involve costs to cure the same in excess of $5,000 in the aggregate, and such are capable of being cured by Sellers to Buyers' reasonable satisfaction, Sellers shall have caused the same to be cured to Buyers' - 28 - 35 reasonable satisfaction prior to the Closing Date; provided, however, if the costs to cure are in excess of $175,000 in the aggregate, Sellers may instead terminate this Agreement. ARTICLE 12 CONDITIONS OF CLOSING BY SELLERS The obligations of Sellers hereunder are, at their option, subject to satisfaction, at or prior to the Closing Date, of each of the following conditions: 12.1 Representations, Warranties and Covenants. 12.1.1 All representations and warranties of Buyers made in this Agreement or in any Exhibit, Schedule or document delivered pursuant hereto, shall be true and complete in all material respects as of the date hereof and on and as of the Closing Date as if made on and as of that date, except for changes expressly permitted or contemplated by the terms of this Agreement. 12.1.2 All the terms, covenants and conditions to be complied with and performed by Buyers and Regent on or prior to the Closing Date shall have been complied with or performed in all material respects. 12.1.3 Sellers shall have received a certificate, dated as of the Closing Date, executed by the President of Buyers and Regent, to the effect that: (a) the representations and warranties of Buyers contained in this Agreement are true and complete in all material respects on and as of the Closing Date as if made on and as of that date except for changes expressly permitted or contemplated by the terms of this Agreement; and (b) Buyers and Regent have complied with or performed in all material respects all terms, covenants and conditions to be complied with or performed by them on or prior to the Closing Date. 12.2 Governmental Consents. The FCC Consent shall have been obtained and shall have become a Final Order, and all other consents or approvals required from governmental authorities shall have been obtained. 12.3 Adverse Proceedings. No suit, action, claim or governmental proceeding shall be pending or threatened against, and no other decree or judgment of any court, agency or other governmental authority shall have been rendered (and remain in effect) against, any party hereto which: (a) would render it unlawful, as of the Closing Date, to effect the transactions contemplated by this Agreement in accordance with its terms; (b) questions the validity or legality of any transaction contemplated hereby; (c) seeks to enjoin any transaction contemplated hereby; or (d) seeks material damages on account of the consummation of any transaction contemplated hereby. 12.4 Closing Documents. Buyers shall have delivered or caused to be delivered to Sellers, on the Closing Date, the Purchase Price and each of the documents required to be delivered by them pursuant to Article 14. - 29 - 36 ARTICLE 13 TRANSFER TAXES: FEES AND EXPENSES 13.1 Expenses. Except as set forth in Section 13.2 hereof or otherwise expressly set forth in this Agreement, each party hereto shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement including, but not limited to, the costs and expenses incurred pursuant to Article 5 hereof and the fees and disbursements of counsel and other advisors. 13.2 Specific Charges. All costs of transferring the Stations Assets in accordance with this Agreement, including recordation, transfer and documentary taxes and fees, and any excise, sales or use taxes, shall be paid by Sellers. Each party shall pay any filing or grant fees imposed upon it by any governmental authority the consent of which or the filing with which is required for the consummation of the transactions contemplated hereby, except that any filing fees with the FCC shall be shared equally by the Sellers, on the one hand, and Buyers, on the other hand, and any fees payable pursuant to the Hart-Scott-Rodino Act, if applicable, shall be paid by Buyers. Any fees or commission due Bergner & Co. as a result of this transaction shall be paid by Sellers. ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING 14.1 Sellers' Documents. At the Closing, Sellers shall deliver or cause to be delivered to Buyers the following: 14.1.1 Certified resolutions of all requisite corporate or other action of Sellers approving the execution and delivery of this Agreement and authorizing the consummation of the transactions contemplated hereby; 14.1.2 A certificate of Sellers, dated the Closing Date, in the form described in Section 11.1.3; 14.1.3 Governmental certificates showing that: (a) Sellers are duly organized and in good standing in the states of their respective incorporation or organization; (b) Sellers have filed all returns, paid all taxes due thereon and are currently subject to no assessment; and Forever, Inc. is in good standing in the State of New York, each certified as of a date not more than thirty (30) days before the Closing Date; 14.1.4 Such certificates, bills of sale, general warranty deeds, assignments, documents of title and other instruments of conveyance, assignment and transfer (including without limitation any necessary consents to conveyance, assignment or transfer required to be delivered hereunder), and lien releases, all in form reasonably satisfactory to Buyers and Buyers' - 30 - 37 counsel, as shall be effective to vest in Buyers good and marketable title in and to the Stations Assets in accordance with the terms of this Agreement, free, clear and unencumbered except for Permitted Encumbrances, if any, as set forth on Schedule 7.7 and Schedule 7.8. 14.1.5 An Assignment and Assumption Agreement in the form of Exhibit D effectuating the assignment and assumption of the Assumed Liabilities (the "Assignment and Assumption Agreement"); 14.1.6 The Indemnification Escrow Agreement; 14.1.7 At the time and place of Closing, originals and all copies of all program, operations, transmission or maintenance logs and all other records required to be maintained by the FCC with respect to the Stations, including the public files of the Stations, shall be left at the Stations and thereby delivered to Buyers; 14.1.8 A written opinion of Sellers' corporate counsel, on which Buyers' lenders shall be entitled to rely, in substantially the form attached as Exhibit E, dated as of the Closing Date; 14.1.9 A written opinion of Sellers' FCC counsel, in substantially the form attached as Exhibit F, dated as of the Closing Date; 14.1.10 A Non-Competition Agreement in the form of Exhibit G (the "Non-Competition Agreement") executed by Sellers, Donald J. Alt, Kerby E. Confer, Carol O' Leary, Lynn A. Deppen, Thomas Yourchak, and Christine Hillard; 14.1.11 If required as provided in Schedule 1.2.8, a Lease Agreement in the form of Exhibit I (the "Lease Agreement") executed by Forever, Inc.; and 14.1.12 Such additional information, materials, agreements, documents and instruments as Buyers and their counsel may reasonably request in order to consummate the Closing. 14.2 Buyers' Documents. At the Closing, Buyers shall deliver or cause to be delivered to Sellers the following: 14.2.1 Certified resolutions of the Board of Directors of Buyers and Regent approving the execution and delivery of this Agreement and authorizing the consummation of the transactions contemplated hereby; 14.2.2 A certificate of Buyers and Regent, dated the Closing Date, in the form described in Section 12.1.3; 14.2.3 The Assignment and Assumption Agreement; 14.2.4 The Indemnification Escrow Agreement; - 31 - 38 14.2.5 A written opinion of Buyers' and Regent's counsel in substantially the form attached as Exhibit H, dated as of the Closing Date; 14.2.6 The cash portion of the Purchase Price in accordance with Section 3.1 hereof; 14.2.7 The Preferred Stock; 14.2.8 The Non-Competition Agreement executed by Buyers; 14.2.9 The Lease Agreement executed by RBW; and 14.2.10 Such additional information, materials, agreement, documents and instruments as Sellers and their counsel may reasonably request in order to consummate the Closing. ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC. 15.1 Survival of Representations, Etc. It is the express intention and agreement of the parties to this Agreement that all covenants and agreements (together, "Agreements") and all representations and warranties (together, "Warranties") made by Regent, Buyers and Sellers in this Agreement shall survive the Closing (regardless of any knowledge, investigation, audit or inspection at any time made by or on behalf of Regent, Buyers or Sellers) as follows: 15.1.1 The Agreements shall survive the Closing for a period from the Closing Date equal to the statute of limitations for written contracts in New York. 15.1.2 The Warranties in Sections 6.2, 6.5, 7.2, the third sentence of 7.7, 7.18 and 7.20 shall survive the Closing without limitation. 15.1.3 The Warranties in Section 7.11 in Section 7.6 or otherwise relating to the federal, state, local or foreign tax obligations of Sellers shall survive the Closing for the period of the applicable statute of limitations plus any extensions or waivers granted or imposed with respect thereto. 15.1.4 The Warranties in Section 7.11 relating to environmental matters shall terminate on the Closing Date. 15.1.5 All other Warranties shall survive for a period of eighteen (18) months from the Closing Date. 15.1.5 The right of any party to recover Damages (as defined in Section 15.2.1) pursuant to Section 15.2 shall not be affected by the expiration of any Warranties as set forth herein, provided that notice of the existence of any Damages (but not necessarily the fixed - 32 - 39 amount of any such Damages) has been given by the indemnified party to the indemnifying party prior to such expiration. 15.1.6 Notwithstanding any provision hereof to the contrary, there shall be no contractual time limit in which Regent, Buyers or Sellers may bring any action for actual fraud (a "Fraud Action"), regardless of whether such actual fraud also included a breach of any Agreement or Warranty; provided, however, that any Fraud Action must be brought within the period of the applicable statute of limitations plus any extensions or waivers granted or imposed with respect thereto. 15.2 Indemnification. 15.2.1 Sellers shall defend, indemnify and hold harmless Regent and Buyers from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys' fees and expenses ("Damages") incurred by Regent or Buyers arising out of or related to: (a) any breach of the Warranties given or made by Sellers in this Agreement; (b) any breach of the Agreements made by Sellers in the Agreement; (c) the Retained Liabilities; (d) any failure of the parties to comply with any "bulk sales" laws applicable to the transactions contemplated hereby; and (e) the conduct of the business and operations of the Stations or any portion thereof or the use or ownership of any of the Stations Assets prior to the Closing Date. 15.2.2 RBU, RBW and Regent shall defend, indemnify and hold harmless Sellers from and against any and all Damages incurred by Sellers arising out of or related to: (a) any breach of the Agreements and Warranties given or made by Buyers in this Agreement; (b) the Assumed Liabilities, and (c) the conduct of the business and operations of the Stations or any portion thereof or the use or ownership of any of the Stations Assets on or after the Closing Date. 15.3 Procedures: Third Party and Direct Indemnification Claims. The indemnified party agrees to give written notice within a reasonable time to the indemnifying party of any demand, suit, claim or assertion of liability by third parties or other circumstances that could give rise to an indemnification obligation hereunder against the indemnifying party (hereinafter collectively "Claims," and individually a "Claim"), it being understood that the failure to give such notice shall not affect the indemnified party's right to indemnification and the indemnifying party's obligation to indemnify as set forth in this Agreement, unless the indemnifying party's ability to contest, defend or settle with respect to such Claim is thereby demonstrably and materially prejudiced. The parties also agree that any claim for Damages arising directly between the parties relating to this Agreement may be brought at any time within the applicable survival period specified in Section 15.1, and that the only notice required with respect thereto shall be as specified in Section 15.1.5. The obligations and liabilities of the parties hereto with respect to their respective indemnities pursuant to Section 15.2 resulting from any Claim shall be subject to the following additional terms and conditions: 15.3.1 The indemnifying party shall have the right to undertake, by counsel or other representatives of its own choosing, the defense or opposition to such Claim. - 33 - 40 15.3.2 In the event that the indemnifying party shall elect not to undertake such defense or opposition, or written (10) days after notice of any such Claim from the indemnified party shall fail to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof). 15.3.3 Anything this Section 15.3 to the contrary notwithstanding: (a) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim; (b) the indemnifying party shall not, without the indemnified party's written consent, settle or compromise any Claim or consent to entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release from all liability in respect of such Claim, and (c) in the event that the indemnifying party undertakes defense of or opposition to any Claim the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party, and their respective counsel or other representatives, shall cooperate in good faith with respect to such Claim. 15.3.4 No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims. 15.3.5 Notwithstanding the provisions in Section 15.2, no party shall have the obligation to defend, indemnify and hold harmless under Section 15.2.1(a) and 15.2.2(a) until the aggregate Damages on account thereof exceed $25,000.00. ARTICLE 16 TERMINATION RIGHTS 16.1 Termination. This Agreement may be terminated at any time prior to Closing as follows: 16.1.1 Upon the mutual written consent of Buyers and Sellers, this Agreement may be terminated on such terms and conditions as so agreed; or 16.1.2 By written notice of Buyers to Sellers if Sellers breach in any material respect any of their representations or warranties or defaults in any material respect in the observance or in the due and timely performance of any of their covenants or agreements herein contained and such breach or default shall not be cured within thirty (30) days of the date of notice of breach or default served by Buyers; or - 34 - 41 16.1.3 By written notice of Sellers to Buyers if Regent or either Buyer breaches in any material respect any of its representations or warranties or defaults in any material respect in the observance or in the due and timely performance of any of its covenants or agreements herein contained and such breach or default shall not be cured within thirty (30) days of the date of notice of breach or default served by Sellers; or 16.1.4 By written notice of Buyers to Sellers or by Sellers to Buyers if the FCC denies the FCC Application; or 16.1.5 By written notice of Buyers to Sellers, or by Sellers to Buyers, if any court of competent jurisdiction, legislative body or governmental or regulatory agency shall have issued an order, decree or ruling (which then remains in effect) or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or 16.1.6 By written notice of Buyers to Sellers, or by Sellers to Buyers, if the Closing shall not have been consummated on or before June 30, 2000; or 16.1.7 By written notice of Buyers to Sellers under the conditions set forth in Section 9.2 hereof. Notwithstanding the foregoing, no party hereto may effect a termination hereof if such party is in material default or breach of this Agreement. 16.2 Liability. Except as set forth in Section 16.4 below, the termination of this Agreement under Section 16.1 shall not relieve any party of any liability for breach of this Agreement prior to the date of termination. 16.3 Monetary Damages, Specific Performance and Other Remedies. The parties recognize that if Sellers refuse to perform under the provisions of this Agreement, monetary damages alone will not be adequate to compensate Buyers for their injury. Buyers shall therefore be entitled to obtain specific performance of the terms of this Agreement in addition to any other remedies, including but not limited to monetary damages, that may be available to it. If any action is brought by Buyers to enforce this Agreement, Sellers shall waive the defense that there is an adequate remedy at law. In the event of a default by Sellers, which results in the filing of a lawsuit for damages, specific performance, or other remedy, Buyers shall be entitled to reimbursement by Sellers of reasonable legal fees and expenses incurred by Buyers. 16.4 Sellers' Liquidated Damages. As more fully described in the Deposit Escrow Agreement, in the event this Agreement is terminated solely because of Buyers' or Regent's material breach of this Agreement, and all other conditions to Closing are at such time satisfied or waived (other than such conditions as can reasonably be satisfied by Closing), then the Escrow Deposit shall be delivered to Sellers, and the proceeds thereof shall constitute liquidated damages. It is understood and agreed that such liquidated damages amount represents Regent's, Buyers' and Sellers' reasonable estimate of actual damages and does not constitute a penalty. - 35 - 42 Recovery of liquidated damages shall be the sole and exclusive remedy of Sellers against Buyers and Regent for failing to consummate this Agreement as a result of Buyers' or Regent's material breach hereof, and shall be applicable regardless of the actual amount of damages sustained and all other remedies are deemed waived by Sellers. ARTICLE 17 MISCELLANEOUS PROVISIONS 17.1 Risk of Loss. The risk of loss or damage to any of the Stations Assets prior to the Closing Date shall be upon Sellers. Sellers shall repair, replace and restore any such damaged or lost Stations Asset to its prior condition as soon as possible and in no event later than forty-five (45) days following the loss or damage; provided, however, that in the event any such loss or damage of the Stations Assets exists on the Closing Date, then notwithstanding any other provision hereto, Buyers at their option may extend the Closing Date for a period of up to sixty (60) days until such time as Sellers shall have repaired, replaced and restored any such damaged or lost Stations Asset to its prior condition or deduct from the Purchase Price that amount which Buyers and Sellers reasonably determine to be sufficient to cover any such loss or damage and close the transaction on the Closing Date. 17.2 Certain Interpretive Matters and Definitions. Unless the context otherwise requires: (a) all references to Sections, Articles, Schedules or Exhibits are to Sections, Articles, Schedules or Exhibits of or to this Agreement; (b) each term defined in this Agreement has the meaning assigned to it; (c) each accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with generally accepted accounting principles as in effect on the date hereof, (d) "or" is disjunctive but not necessarily exclusive; (e) words in the singular include the plural and vice versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g) all references to "$" or dollar amounts will be to lawful currency of the United States of America. 17.3 Further Assurances. After the Closing, Sellers shall from time to time, at the request of and without further cost or expense to Buyers or Regent, execute and deliver such other instruments of conveyance and transfer and take such other actions as may reasonably be requested in order more effectively to consummate the transactions contemplated hereby to vest in Buyers good and marketable title to the Stations Assets being transferred hereunder in accordance with the terms hereof, and RBU and RBW shall from time to time, at the request of and without further cost or expense to Sellers, execute and deliver such other instruments and take such other actions as may reasonably be requested in order more effectively to relieve Sellers of any obligations being assumed by RBU and RBW hereunder. 17.4 Preservation of Records. Subject to Section 10.1 hereof, RBU and RBW hereby agree that they will preserve and make available to Sellers and their attorneys and accountants (including the right to inspect and copy at Sellers' cost), during normal business hours and upon reasonable advance notice, for three (3) years after the Closing Date, such of the books, records, files, correspondence, memoranda and other documents referred pursuant to this Agreement as - 36 - 43 Sellers may reasonably require for the preparation of tax reports and returns, the preparation of financial statements, or the preparation of a response to any claim by a third party against Sellers. 17.5 Benefit and Assignment. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Sellers may not voluntarily or involuntarily assign their interest under this Agreement without the prior written consent of Buyers. Buyers shall have the right to assign and/or delegate all or any portion of their rights and obligations under this Agreement, including without limitation, assignments as collateral, provided that no such assignment and/or delegation shall relieve Buyers of their obligations hereunder in the event that its assignee fails to perform the obligations delegated. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind and inure to the benefit of their respective successors and permitted assigns of the parties hereto. In the event Buyers find it necessary or are required to provide to a third party a collateral assignment of the Buyers' interest in this Agreement and/or any related documents, Sellers shall cooperate with the Buyers and any third party requesting such assignment including but not limited to signing a consent and acknowledgment of such assignment. 17.6 Amendments. No amendment, waiver of compliance with any provision or condition hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of any waiver, amendment, change, extension or discharge is sought. 17.7 Headings. The headings set forth in this Agreement are for convenience only and will not control or affect the meaning or construction of the provisions of this Agreement. 17.8 Governing Law. The construction and performance of this Agreement shall be governed by the laws of the State of New York, without giving effect to the choice of law provisions thereof. 17.9 Notices. Any notice, demand or request required or permitted to be given under the provisions of this Agreement shall be in writing, including by facsimile, and shall be deemed to have been duly delivered and received on the date of personal delivery, on the third day after deposit in the U.S. mail if mailed by registered or certified mail, postage prepaid and return receipt requested, on the day after delivery to a nationally recognized overnight courier service if sent by an overnight delivery service for next morning delivery or when dispatched by facsimile transmission (with the facsimile transmission confirmation being deemed conclusive evidence of such dispatch) and shall be addressed to the following addresses, or to such other address as any party may request, in the case of Sellers, by notifying Buyers, and in the case of Buyers, by notifying Sellers: To Sellers: Forever of NY, Inc. One Forever Drive Hollidaysburg, PA 16648 Fax: (814) 943-2754 Attn: Ms. Carol B. O'Leary, President - 37 - 44 Copy to: Robert F. Wright, Jr. First Union Bank Bldg. 699 Broad Street Augusta, GA 30901 Fax: (706) 724-7776 To Regent or Buyers: c/o Regent Communications, Inc. 50 East RiverCenter Blvd. Suite 180 Covington, KY 41011 Fax: (606) 292-0352 Attn: Mr. Terry S. Jacobs Copy to: Strauss & Troy The Federal Reserve Building 150 East Fourth Street Cincinnati, OH 45202 Fax: (513) 241-8259 Attn: Alan C. Rosser, Esq. 17.10 Counterparts. This Agreement may be executed in one or more counterparts and by facsimile, each of which will be deemed an original and all of which together will constitute one and the same instrument. 17.11 No Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity other than the parties hereto and their successors or permitted assigns any rights or remedies under or by reason of this Agreement. 17.12 Severability. The parties agree that if one or more provisions contained in this Agreement shall be deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby. 17.13 Entire Agreement. This Agreement and the schedules and exhibits hereto embody the entire agreement and understanding of the parties hereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein. [SIGNATURES ON FOLLOWING PAGE] - 38 - 45 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. REGENT BROADCASTING OF UTICA/ROME, INC. By: /s/ Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF UTICA/ROME, INC. By: /s/ Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT BROADCASTING OF WATERTOWN, INC. By: /s/ Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT LICENSEE OF WATERTOWN, INC. By: /s/ Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman REGENT COMMUNICATIONS, INC. By: /s/ Terry S. Jacobs Name: Terry S. Jacobs Title: Chairman - 39 - 46 FOREVER OF NY, INC. By: /s/ Donald J. Alt Name: Donald J. Alt Title: Secretary FOREVER OF NY, LLC By: /s/ Donald J. Alt Name: Donald J. Alt Title: Member FOREVER BROADCASTING, LLC By: /s/ Donald J. Alt Name: Donald J. Alt Title: Member - 40 - EX-3.C 4 EXHIBIT 3(C) 1 Exhibit 3(c) CERTIFICATE OF DECREASE OF SHARES DESIGNATED AS SERIES G CONVERTIBLE PREFERRED STOCK OF REGENT COMMUNICATIONS, INC. Regent Communications, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: That the Certificate of Incorporation of said corporation was filed in the office of the Secretary of State of Delaware on November 4, 1996, a Certificate of Amendment was filed on May 16, 1997, a Certificate of Designation was filed on November 26, 1997, an Amended and Restated Certificate of Incorporation was filed on December 5, 1997, a Certificate of Designation was filed on March 31, 1998, a Certificate of Decrease was filed on June 8, 1998, an Amended and Restated Certificate of Incorporation was filed on June 11, 1998, and a Certificate of Designations, Preferences and Rights of the Series G Convertible Preferred Stock was filed in said office of the Secretary of State on January 21, 1999. That in a writing signed by all of the members of the Board of Directors of said corporation, the Board of Directors duly adopted a resolution authorizing and directing a decrease in the number of shares designated as Series G Convertible Preferred Stock of the corporation, from 4,000,000 shares to 2,000,000 shares, in accordance with the provisions of section 151 of the General Corporation Law of the State of Delaware. The 2,000,000 shares eliminated from the Series G Convertible Preferred Stock shall revert to the status of authorized and unissued shares of Preferred Stock of the corporation, undesignated as any series of Preferred Stock. IN WITNESS WHEREOF, the said Regent Communications, Inc. has caused this consent to be executed by its Chairman/Chief Executive Officer this 18th day of June, 1999. REGENT COMMUNICATIONS, INC. By: /s/ Terry S. Jacobs Terry S. Jacobs, Chairman and Chief Executive Officer EX-3.D 5 EXHIBIT 3(D) 1 Exhibit 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. It is hereby certified that: 1. The name of the corporation (hereinafter called the "corporation") is REGENT COMMUNICATIONS, INC. 2. The certificate of incorporation (as amended) of the corporation authorizes the issuance of 20,000,000 shares of Preferred Stock (of a par value of $.01 each) and expressly vests in the Board of Directors of the corporation the authority provided therein to issue any or all of said shares in one or more series and by resolution or resolutions, the designation, number, full or limited voting powers, or the denial of voting powers, preferences and relative, participating, optional, and other special rights and the qualifications, limitations, restrictions, and other distinguishing characteristics of each series to be issued. 3. The Board of Directors of the corporation, pursuant to the authority expressly vested in it as aforesaid, has adopted the following resolutions designating a new series of Preferred Stock as Series H Preferred Stock: "RESOLVED, that the Board of Directors hereby designates a new series of Preferred Stock to be known as "Series H Convertible Preferred Stock", the number, amount, stated value, voting powers, preferences and relative, participating, optional and other special rights of which, and the qualifications, limitations or restrictions thereon, are set forth on Exhibit A attached hereto; RESOLVED FURTHER, that the statements contained in the foregoing resolution designating the said Series H Preferred Stock shall, upon the effective date of said series, be deemed to be included in and be a part of the certificate of incorporation of the Company pursuant to the provisions of Sections 104 and 151 of the General Corporation Law of the State of Delaware; RESOLVED FURTHER, that the officers of the Company and each of them individually hereby are authorized to execute and deliver, for and on behalf of the Company a Certificate of Designation to be filed with the Delaware Secretary of State and any other documents or filings required by applicable law required to amend the Company's Certificate and to otherwise effectuate the intent of the foregoing resolutions." The effective time and date of the series herein certified shall be the filing of this certificate. 2 IN WITNESS WHEREOF, the undersigned officer has executed this document the 18th day of June, 1999. /s/ Terry S. Jacobs Terry S. Jacobs, Chairman and Chief Executive Officer COMMONWEALTH OF KENTUCKY ) )SS: COUNTY OF KENTON ) BE IT REMEMBERED, that on this 18th day of June, 1999, before me, the subscriber, a Notary Public in and for said county, personally came Terry S. Jacobs, the Chairman and Chief Executive Officer of Regent Communications, Inc., and acknowledged that he signed the foregoing instrument on behalf of said corporation and that the signing thereof is his voluntary act and deed and the voluntary act and deed of said corporation. IN TESTIMONY THEREOF, I have hereunto subscribed my name and affixed my seal on this day and year aforesaid. /s/ Peggy Hammons Alig Notary Public 3 EXHIBIT A SECTION 1. DESIGNATION, AMOUNT AND STATED VALUE. The shares of such series shall be designated as Series H Convertible Preferred (the "Series H Preferred") and the number of shares constituting such series shall be 2,000,000 shares. The stated value of the Series H Preferred shall be $5.50 per share, the original per share issue price (the "Stated Value"). SECTION 2. DIVIDENDS AND DISTRIBUTIONS. The holders of shares of the Series H Preferred shall be entitled to receive, when, as and if declared by the Board of Directors of the Corporation out of funds legally available for such purpose, cumulative dividends payable quarterly in cash on the first business day of January, April, July and October (each such date being referred to herein as a "Quarterly Dividend Payment Date"), accruing commencing with the date of issue of such shares, on shares of the Series H Preferred at the rate of $.55 per share per annum; provided, however, that if and to the extent that the holder of a share of the Series H Preferred does not receive a cash dividend on any given Quarterly Dividend Payment Date in full payment of the accrued and unpaid dividend on such share of the Series H Preferred or any previously cumulated dividend on such share for the period ending on such Quarterly Dividend Payment Date and beginning on the immediately preceding Quarterly Dividend Payment Date (or, if such share was first issued during such period, beginning on the date of such issuance), such unpaid portion of such dividend shall be cumulative and shall itself accrue, whether or not declared and whether or not the Corporation has at the time funds legally available for such purpose, from and after such date, until the date so paid in full, dividends on a daily basis at a rate of 10% per annum, compounded quarterly. No interest shall be paid on accrued but unpaid dividends. SECTION 3. VOTING RIGHTS. In addition to voting rights required by law or by the Company's Amended and Restated Certificate of Incorporation, as amended or restated from time to time (the "Certificate of Incorporation"), subject to restrictions contained in the Certificate of Incorporation the holders of Series H Preferred shall be entitled to vote on all matters submitted to a vote of the Corporation's stockholders. Except as otherwise required by law or provided by the Certificate of Incorporation or by the Board of Directors pursuant to Subpart C of Article Fourth of the Certificate of Incorporation, the holders of the Series H Preferred shall vote together with the holders of all other series of the Corporation's voting preferred stock and the holders of the Corporation's Common Stock as one class with one vote per share (in the case of Preferred Stock, subject to adjustments as provided in Section 7 below and if convertible into Common Stock, one vote per share of Common Stock into which such convertible Preferred Stock is then convertible) on all matters submitted to a vote of the Corporation's stockholders. 4 SECTION 4. CERTAIN RESTRICTIONS. Whenever dividends payable on the Series H Preferred as provided in Section 2 are in arrears, thereafter and until dividends, including all accrued dividends, on shares of the Series H Preferred outstanding shall have been paid in full or declared and set apart for payment, the Corporation shall not (A) pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series H Preferred, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any such junior stock, (B) pay dividends on or make any other distributions on any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series H Preferred, except dividends paid ratably on the Series H Preferred and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled, (C) redeem or purchase or otherwise acquire for consideration any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series H Preferred, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior to the Series H Preferred or in satisfaction of contractual obligations to do so entered into with the written consent of the holders of a majority of outstanding shares of Series F Preferred, Series G Preferred and Series H Preferred, voting together as one class on the matter (including, without limitation, in satisfaction of the provisions contained in the Stockholders' Agreement), or (D) purchase or otherwise acquire for consideration any shares of the Series H Preferred, or any shares of stock ranking on a parity with the Series H Preferred except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall unanimously determine in good faith will result in fair and equitable treatment among the respective series of classes or except pursuant to the provisions of the Stockholders' Agreement. SECTION 5. REACQUIRED SHARES. Any shares of the Series H Preferred which have been converted to Common Stock or have been purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, or otherwise in accordance with Delaware General Corporation Law. SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (A) to the holders of the Series H Preferred unless, prior thereto, the holders of the Series B Preferred shall have received the Stated Value per share, plus an amount equal to unpaid dividends thereon, including accrued dividends, whether or not declared, to the date of such payment, or (B) to the holders of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series H Preferred unless, prior thereto, the holders of Series H Preferred shall have received the Stated Value per share, plus an amount equal to unpaid dividends thereon, including accrued dividends, whether or not declared, to the date of such payment, or (C) to the holders of stock ranking on a parity 5 (either as to dividends or upon liquidation, dissolution or winding up) with the Series H Preferred, except distributions made ratably on the Series H Preferred and all other such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. SECTION 7. CONVERSION. [a] Optional Conversion. Subject to the provisions for adjustment hereinafter set forth, each share of the Series H Preferred shall be convertible at any time at the option of the holder thereof, in the manner hereinafter set forth, into one (1) fully paid and nonassessable share of Common Stock of the Corporation. [b] Mandatory Conversion. Subject to the provisions for adjustment set forth in this Section 7, each share of the Series H Preferred shall be convertible at the option of the Board of Directors into one (1) fully paid and nonassessable share of Common Stock of the Corporation in the event of, and concurrently with the closing of, a public offering of Common Stock of the Corporation at a per share price of at least $12.00 (subject to adjustment for stock splits, stock dividends, reverse stock splits and the like) with gross proceeds to the Corporation of at least $25,000,000 (excluding the effect of any over-allotment option). [c] The number of shares of Common Stock into which each share of the Series H Preferred is convertible shall be adjusted from time to time as follows: [i] In case the Corporation shall at any time or from time to time after the issuance of such share of Series H Preferred declare or pay any dividend on its Common Stock payable in its Common Stock or effect a subdivision of the outstanding shares of its Common Stock into a greater number of shares of Common Stock (by reclassification or otherwise), then, and in each such case, the number of shares of Common Stock into which each share of the Series H Preferred is convertible shall be adjusted so that the holder of each share thereof shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (a) the number of shares of Common Stock into which such share was convertible immediately prior to the occurrence of such event by (b) a fraction, the numerator of which is the sum of (I) the number of shares of Common Stock into which such share was convertible immediately prior to the occurrence of such event plus (II) the number of shares of Common Stock which such holder would have been entitled to receive in connection with the occurrence of such event had such share been converted immediately prior thereto, and the denominator of which is the number of shares of Common Stock determined in accordance with clause (I) above. An adjustment made pursuant to this subparagraph [c][i] shall become effective (a) in the case of any such dividend, immediately after the close of business on the record date for the determination of holders of Common Stock entitled to receive such dividend, or (b) in the case of any such subdivision, at the close of business on the day immediately prior to the day upon which such corporate action becomes effective. [ii] In case the Corporation at any time or from time to time after the issuance of such share of Series H Preferred shall combine or consolidate the 6 outstanding shares of its Common Stock into a lesser number of shares of Common Stock, by reclassification or otherwise, then, and in each such case, the number of shares of Common Stock into which each share of the Series H Preferred is convertible shall be adjusted so that the holder of each share thereof shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (a) the number of shares of Common Stock into which such share was convertible immediately prior to the occurrence of such event by (b) a fraction, the numerator of which is the number of shares which the holder would have owned after giving effect to such event had such share been converted immediately prior to the occurrence of such event and the denominator of which is the number of shares of Common Stock into which such share was convertible immediately prior to the occurrence of such event. An adjustment made pursuant to this subparagraph b[ii] shall become effective at the close of business on the date immediately prior to the day upon which such corporate action becomes effective. [iii] In case the Corporation after the issuance of such share of Series H Preferred shall: (A) issue any options, warrants, or other rights (excluding options to purchase Common Stock issued to management of the Corporation exercisable for up to the lesser of 2,000,000 shares of Common Stock (subject to adjustment pursuant to provisions applicable to the options in the case of stock splits, reverse stock splits and the like) or that number of shares of Common Stock equal to fifteen percent (15%) of the aggregate number of outstanding shares of Common Stock and other equity securities of the Corporation exercisable for the purchase of, or convertible into, Common Stock, computed on a fully-diluted basis) entitling the holder thereof to subscribe for, or purchase, Common Stock at a price per share which, when added to the amount of consideration received or receivable by the Corporation for such options, warrants, or other rights, is less than the then fair market value per share of the Common Stock at the date of such issuance; (B) issue or sell securities of the Corporation convertible into, or exchangeable for, Common Stock at a price per share which, when added to the amount of consideration received or receivable, from the Corporation for such exchangeable or convertible securities, is less than the then fair market value of a share of Common Stock at the date of such issuance; or (C) issue or sell additional shares of Common Stock for consideration representing less than the then fair market value of the Common Stock at the date of such issuance; then the number of shares of Common Stock into which each share of the Series H Preferred is convertible shall be adjusted so that, thereafter, until further adjusted, the holder of each share thereof shall be entitled to receive, upon the conversion thereof, the number of shares of Common Stock determined by multiplying (w) the number of shares of Common Stock into which such shares are convertible immediately prior to the occurrence of such event by (x) a fraction, the numerator of which shall be the number of shares of Common Stock outstanding prior to such issuance plus the number of additional shares of Common Stock issuable upon exercise of such options, warrants, or rights, or exchangeable or convertible securities, or the additional number of shares of Common Stock issued at such time, and the denominator of which shall be the number of shares of Common Stock outstanding prior to such issuance plus the number of shares of Common Stock that either (y) the sum of the aggregate exercise price of the total number of shares of Common Stock issuable upon exercise of such options, 7 warrants, or rights, or upon conversion or exchange of such convertible securities, and the aggregate amount of consideration, if any, received or receivable by the Corporation for such options, warrants, or rights, or convertible or exchangeable securities, or (z) the aggregate consideration received in connection with the sale of shares of its Common Stock for less than the then fair market value, as the case may be, would purchase at the then fair market value. [iv] In the event that, at any time, or from time to time, after the issuance of such share of the Series H Preferred, the Common Stock issuable upon conversion of the Series H Preferred is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification, or otherwise (other than a subdivision or combination of shares or stock dividend, or a reorganization, merger, consolidation or sale of assets, provided for elsewhere in this Section 7), then, and in any such event, each holder of Series H Preferred shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification, or other change, by holders of the number of shares of Common Stock into which such shares of Series H Preferred could have been converted immediately prior to such recapitalization, reclassification, or change, all subject to further adjustment as provided herein. [v] If at any time, or from time to time after the issuance of such share of the Series H Preferred, there is a capital reorganization of the Common Stock other than a recapitalization, subdivision, combination, reclassification, or exchange of shares provided for elsewhere in this Section 7) or a merger or consolidation of the Corporation with or into another corporation, or the sale of all, or substantially all, of the Corporation's properties and assets to any other person, then, as a part of such reorganization, merger, consolidation, or sale, provision shall be made so that the holders of the Series H Preferred shall thereafter be entitled to receive upon conversion of the Series H Preferred the number of shares of stock or other securities or property to which a holder of the number of shares of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 7 with respect to the rights of the holders of Series H Preferred after the reorganization, merger, consolidation, or sale to the end that the provisions of this Section 7 shall be applicable after that event and be as nearly equivalent as may be practicable. [vi] Upon the expiration of any rights, options, warrants or conversion or exchange privileges which caused an adjustment pursuant to this Section 7 to be made, if any thereof shall not have been exercised, the number of shares of Common Stock into which each share of the Series H Preferred is convertible shall, upon such expiration, be readjusted and shall thereafter be such as it would have been had it been originally adjusted (or had the original adjustment not been required, as the case may be) as if (a) the only shares of Common Stock so issued were the shares of Common Stock, if any, actually issued or sold upon the exercise of such rights, options, warrants or conversion or exchange privileges and (b) such shares of Common Stock, if 8 any, were issued or sold for the consideration actually received by the Company upon such exercise plus the aggregate consideration, if any, actually received by the Company for the issuance, sale or grant of all such rights, options, warrants or conversion or exchange privileges, whether or not exercised. [vii] In addition to any other adjustment pursuant to this Section 7 [c], if WPG Corporate Development Associates V, L.L.C. ("WPG"), WPG Corporate Development Associates V (Overseas), L.P., or any affiliate or assignee thereof does not purchase at least 1,363,636 shares in the aggregate of Series H Preferred on or before the earliest to occur of (i) August 31, 1999, (ii) such earlier date as is mutually agreed upon by the Company and WPG, and (iii) the date of the closing of the purchase by the Corporation of the assets of radio stations WXKC-FM, WRIE-AM and WXTA-FM pursuant to that certain Asset Purchase Agreement dated May 18, 1999 relating thereto, then Section 7 [a] and [b] above shall be modified to provide that each share of Series H Preferred shall be convertible into a number of shares of Common Stock equal to the greater of (x) one (1) and (y) a fraction, the numerator of which is $5.50 and the denominator of which is the effective conversion price per share of Common Stock of the next subsequent issuance of Common Stock or any series of convertible Preferred Stock by the Corporation in which the gross proceeds to the Corporation are not less than $2,000,000. [d] If any adjustment in the number of shares of Common Stock into which each share of the Series H Preferred may be converted required pursuant to this Section 7 would result in an increase or decrease of less than 1% in the number of shares of Common Stock into which each share of the Series H Preferred is then convertible, the amount of any such adjustment shall be carried forward and adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate at least 1% of the number of shares of Common Stock into which each share of the Series H Preferred is then convertible; provided that any such adjustments carried forward shall be made immediately following receipt of notice from a holder of the intent to convert all or a portion of the Series H Preferred such that upon conversion the holder shall receive such number of shares of Common Stock as such holder is entitled, taking into account all adjustments required by this Section 7. All calculations under this paragraph [d] shall be made to the nearest one-hundredth of a share. [e] The holder of any shares of the Series H Preferred may convert such shares into shares of Common Stock pursuant to paragraph [a] of this Section 7 by surrendering for such purpose to the Corporation, at its principal office or at such other office or agency maintained by the Corporation for that purpose, a certificate or certificates representing the shares of Series H Preferred to be converted (or if such certificate or certificates cannot be found, an affidavit of lost securities in form and substance acceptable to the Corporation) accompanied by a written notice stating that such holder elects to convert all or a specified number of such shares in accordance with the provisions of this Section 7 and specifying the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. In case such notice shall specify a name or names other than that of such holder, such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of shares of Common Stock in such name or names. As promptly as practicable, and in any event within 9 five business days after the surrender of such certificates and the receipt of such notice relating thereto and, if applicable, payment of all transfer taxes, the Corporation shall deliver or cause to be delivered (i) certificates representing the number of validly issued, fully paid and nonassessable shares of Common Stock of the Corporation to which the holder of the Series H Preferred so converted shall be entitled and (ii) if less than the full number of shares of the Series H Preferred evidenced by the surrendered certificate or certificates are being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares converted. Such conversions shall be deemed to have been made at the close of business on the date of giving of such notice and of such surrender of the certificate or certificates representing the shares of the Series H Preferred to be converted so that the rights of the holder thereof shall cease except for the right to receive Common Stock of the Corporation in accordance herewith and any accumulated, accrued or unpaid dividends pursuant to paragraph [g] below, and the converting holder shall be treated for all purposes as having become the record holder of such Common Stock of the Corporation at such time. [f] The Series H Preferred shall convert to Common Stock of the Corporation pursuant to paragraph [b] of this Section 7 automatically upon notice in writing to the stockholders, including all holders of the Series H Preferred, setting forth the date of such conversion and the material terms of the triggering public offering. As promptly as practicable after such notice, and in any event within five business days after the surrender of certificates for the Series H Preferred (if required by the Board of Directors), the Corporation shall deliver or cause to be delivered to each holder of Series H Preferred certificates representing the number of validly issued, fully paid and nonassessable shares of Common Stock of the Corporation to which such holder of the Series H Preferred so converted shall be entitled. Such conversion shall be deemed to have been made at the close of business on the date set forth in such notice of mandatory conversion so that the rights of the holder thereof shall cease with or without surrender of certificates for the Series H Preferred, except for the right to receive Common Stock of the Corporation in accordance herewith and any accumulated, accrued or unpaid dividends pursuant to paragraph [g] below, and the converting holder shall be treated for all purposes as having become the record holder of such Common Stock of the Corporation at such time. [g] Upon conversion of any shares of the Series H Preferred pursuant to paragraph [a] or [b] of this Section 7, the holder thereof shall be entitled to receive any accumulated, accrued or unpaid dividends in respect of the shares so converted (whether or not declared or otherwise payable as of such date of conversion), including any dividends on such shares of the Series H Preferred declared prior to such conversion if such holder held such shares on the record date fixed for the determination of holders of the Series H Preferred entitled to receive payment of such dividend. [h] The Corporation shall at all times reserve and keep available out of its authorized Common Stock the full number of shares of Common Stock of the Corporation issuable upon the conversion of all outstanding shares of the Series H Preferred. [i] For purposes of this Section, "fair market value" shall be as determined by the Board of Directors in such manner as they shall deem appropriate in their discretion, unless the holder(s) of more than twenty-five percent (25%) of the outstanding shares of Preferred Stock 10 of the Corporation demand in good faith and in writing that "fair market value" be determined by an appraiser, who shall be mutually acceptable to the Board of Directors and such holders, whose determination shall be binding and whose fees and expenses shall be paid by the Corporation. SECTION 8. REPORTS AS TO ADJUSTMENTS. Whenever the number of shares of Common Stock into which the shares of the Series H Preferred are convertible is adjusted as provided in Section 7, the Corporation will (A) promptly compute such adjustment and furnish to each transfer agent for the Series H Preferred a certificate, signed by a principal financial officer of the Corporation, setting forth the number of shares of Common Stock into which each share of the Series H Preferred is convertible as a result of such adjustment, a brief statement of the facts requiring such adjustment and the computation thereof and when such adjustment will become effective and (B) promptly mail to the holders of record of the outstanding shares of the Series H Preferred a notice stating that the number of shares into which the shares of Series H Preferred are convertible has been adjusted and setting forth the new number of shares into which each share of the Series H Preferred is convertible as a result of such adjustment and when such adjustment will become effective. Notwithstanding the foregoing, the Corporation shall incur no liability for its failure to take any action set forth in this Section 8, nor shall such failure affect the validity, rights or preferences of any shares of the Series H Preferred. SECTION 9. RANKING. The Series H Preferred shall rank senior to the Common Stock and any other series of Preferred Stock of the Corporation hereafter created (except for the Series B Preferred, which shall rank senior to the Series H Preferred, and except for the Series A Preferred, the Series C Preferred, the Series D Preferred, the Series E Preferred, the Series F Preferred, the Series G Preferred, and any other series of Preferred Stock which the Board of Directors shall establish and designate to rank equal therewith pursuant to Subpart C of Article Fourth of the Company's Certificate of Incorporation, with which it shall rank equal), as to the payment of dividends and the distribution of assets and rights upon liquidation, dissolution or winding up of the Corporation. SECTION 10. DIRECTORSHIP. Upon and subject to the purchase of at least 1,750,000 shares in the aggregate of the Series H Preferred, the holders of the Series H Preferred, as a class, shall be entitled to be represented on the Board of Directors by one Director (the "Series H Director") who, upon nomination by such holders, as a class, will stand for election by voting by the holders of the Preferred Stock entitled to vote for the election of directors (subject to limitations in Article Fourth of the Certificate of Incorporation or established by the Board of Directors pursuant to Section C of Article Fourth of the Certificate of Incorporation) and holders of Common Stock together, except under circumstances where the number of individuals nominated for election exceeds the number of Directors to be elected. In the event the number of individuals nominated for election exceeds the number of Directors to be elected, then the holders of the Series H Preferred shall have the sole right to vote for, elect and remove the individual nominated by them, as a class, to serve as the Series H Director, and in such event the further right to vote for, elect or remove any of the other Directors who are not to be elected solely by the holders of 11 another class or series of Preferred Stock. The Series H Director, upon being elected, will serve for the same term and have the same voting powers as other Directors. The right to elect the Series H Director pursuant to the terms hereof shall be exercisable by the holders of a majority of the Series H Preferred at their option upon at least 60 days notice to the Corporation; provided, however, if the Corporation is subject to the reporting requirements of the Securities Exchange Act of 1934, such notice must be provided on or before the date established by the Corporation for the submission of proposals pursuant to the proxy rules promulgated under the Securities Exchange Act of 1934. The Series H Director shall serve as a member of the Acquisitions Committee of the Board of Directors (or any other Committee of the Board performing such functions). EX-4.Z 6 EXHIBIT 4(Z) 1 Exhibit 4(z) SECOND AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this "Second Amendment") is made and entered into as of June 21, 1999 and amends that certain Second Amended and Restated Stockholders' Agreement among Regent Communications, Inc. and certain of its stockholders, as amended (the "Stockholders' Agreement"). Capitalized terms used herein without definition shall have the same meanings as set forth in the Stockholders' Agreement. W I T N E S S E T H: THAT, WHEREAS, the Company intends to designate and issue shares of a new series of convertible preferred stock entitled Series H Convertible Preferred Stock (the "Series H Preferred Stock"); and WHEREAS, in conjunction with the issuance of the Series H Preferred Stock, certain amendments to the Stockholders' Agreement are desired; and WHEREAS, the Stockholders signing this Amendment hold more than fifty percent (50%) of the Common Stock Beneficially Owned by all Stockholders, thereby permitting the Company and Stockholders signing below to amend the Stockholders' Agreement pursuant to Section 16 thereof. NOW, THEREFORE, in consideration of the premises and the agreements contained herein, it is agreed as follows: 1. Amendments. The Stockholders' Agreement is hereby amended as follows: (a) The definition of "Eligible Put Shares" is expanded to include the Series H Preferred Stock, and accordingly, subpart (v) of the definition is changed to state "(v) any series of preferred stock first created by the Board of Directors after the date hereof other than the Company's 10% Series G Convertible Preferred Stock, $.01 par value and the Company's 10% Series H Convertible Preferred Stock, $.01 par value." (b) The definition of "Preferred Stock" is amended to state in its entirety as follows: "'Preferred Stock' means any or all of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, or Series H Preferred Stock." (c) The following definitions shall be added to the Stockholders' Agreement: "'Series H Director" means the one director entitled to be nominated to serve by the holders of Series H Preferred Stock, voting as a class, 2 pursuant to the provisions of Article FOURTH, Paragraph F, Section 11, of the Amended and Restated Charter." "'Series G Preferred Stock' means the Company's 10% Series G Convertible Preferred Stock, $.01 par value, together with all shares of Common Stock issued upon conversion of such shares." "'Series H Preferred Stock' means the Company's 10% Series H Convertible Preferred Stock, $.01 par value, together with all shares of Common Stock issued upon conversion of such shares." (d) Section 2(a)(ii) shall be expanded to include a Series H Director to be designated by WP&G and, accordingly, subparagraph (7) is renumbered as "(8)" and a new subparagraph (7) is added to Section 2(a)(ii) as follows: "(7) one person designated by WP&G, who shall initially be Kenneth Hanau (and who shall constitute the Series H Director); and" (e) Section 30 of the Stockholders' Agreement is expanded to include the Series H Preferred Stock, and accordingly, is amended to state in its entirety as follows: "30. Automatic Amendment to Series G and Series H Preferred Stock. In the event any of the terms of the Series F Preferred Stock (other than amendments which provide the holders of the Series F Preferred Stock with increased or additional voting or consent rights or board representation), as set forth in the Amended and Restated Charter, are amended, the corresponding terms of the Series G Preferred Stock and Series H Preferred Stock shall be similarly amended automatically and without the necessity of a vote of the holders of the Series G Preferred Stock or Series H Preferred Stock so as to keep the terms of the three Series consistent (or, in the case of a change in the stated value or dividend rate of the Series F Preferred Stock, to keep such corresponding terms of the Series G Preferred Stock and the Series H Preferred Stock proportionately similar), purchase and acceptance of delivery of the Series G Preferred Stock and Series H Preferred Stock being deemed consent to any such automatic amendment." 2. Termination of Certain Provisions. Notwithstanding the provisions of Section 10 of the Certificate of Designation filed with the Delaware Secretary of State on behalf of the Company on June 21, 1999 designating the Series H Preferred Stock (the "Certificate of Designation"), in the event WP&G does not purchase at least 1,363,636 shares of the Series H Preferred Stock on or before August 31, 1999 pursuant to the terms of that certain Stock Purchase Agreement between the Company and WP&G as originally executed on June 22, 1999, the definition of "Series H Director" shall be deleted from the Stockholders' Agreement and the provisions of Paragraph 1(d) above and the provisions of Section 10 of the Certificate of Designation shall terminate and be of no further force or effect and from and after such date, no holder of Series H Preferred Stock shall claim or assert any right to nominate, approve, or elect a director under such sections. 3 3. Remainder of Agreement. Except as specifically amended hereby, the terms, conditions and provisions of Stockholders' Agreement remain in full force and effect. 4. Counterparts. This Second Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. IN WITNESS WHEREOF, the signatories below have caused this Second Amendment to be executed and delivered as of the date first above written. REGENT COMMUNICATIONS, INC. WALLER-SUTTON MEDIA PARTNERS, L.P. By: /s/ Terry S. Jacobs By: Waller-Sutton Media, L.L.C., --------------------------- Its: Chairman and CEO Its: /s/ William H. Ingram --------------------------- -------------------------------- /s/ Terry S. Jacobs - ------------------------------- TERRY S. JACOBS BLUE CHIP CAPITAL FUND II LIMITED PARTNERSHIP /s/ William L. Stakelin By: Blue Chip Venture Company, Ltd., - ------------------------------- its General Partner WILLIAM L. STAKELIN By: /s/ John H. Wyant -------------------------------- /s/ Joel M. Fairman Its: Manager - ------------------------------- -------------------------------- JOEL M. FAIRMAN MIAMI VALLEY VENTURE FUND, L.P. PNC BANK, N.A., TRUSTEE By: Blue Chip Venture Company of Dayton, Ltd., By: /s/ Louis E. Valker its Special Limited Partner -------------------------------- Its: Vice President ------------------------------- By: /s/ John H. Wyant --------------------------- John H. Wyant, Manager EX-4.AA 7 EXHIBIT 4(AA) 1 Exhibit 4(aa) STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (this "Agreement") dated as of the 21st day of June, 1999 between REGENT COMMUNICATIONS, INC., a Delaware corporation (the "Company") and WALLER-SUTTON MEDIA PARTNERS, L.P., a Delaware limited partnership (the "Buyer"). 1. Authorization. The Company will authorize the sale and issuance under this Agreement of 90,909 shares (the "Shares") of its Series H Convertible Preferred Stock (the "Series H Preferred Stock"), having the rights, privileges and preferences as set forth in the Certificate of Designation (the "Certificate") in the form attached to this Agreement as Exhibit A. The shares of Common Stock into which the Shares will be convertible are referred to herein as the "Conversion Stock." 2. Sale and Purchase of the Series H Preferred Stock. On and subject to the terms and conditions set forth herein, the Company agrees that it will sell, issue and deliver to Buyer, and Buyer agrees that it will purchase from the Company on the Closing Date, 90,909 shares of the Series H Convertible Preferred Stock. 3. Closing Date. The closing of the purchase and sale of the Series H Preferred Stock hereunder shall be on June 21, 1999 (the "Closing") or at such other time upon which the Company and Buyer shall agree (the date of the Closing is hereinafter referred to as the "Closing Date"). 4. Purchase Price. The purchase price for the Series H Preferred Stock is Four Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine and 50/100 Dollars ($499,999.50) ($5.50 per share) (the "Purchase Price"), which sum Buyer will pay to the Company by wire transfer of immediately available funds on the Closing Date. 5. Deliveries by the Company. At the Closing, the Company will deliver to Buyer the following: (a) a stock certificate or certificates representing the Series H Preferred Stock duly issued in the name of Buyer and bearing the legends set forth in Section 7(j) hereof; and (b) an opinion of Strauss & Troy, as counsel to the Company, in the form attached as Exhibit B; and (c) a certificate, dated as of the Closing Date, signed by the Chairman of the Board, the President of the Company or the Company's Chief Financial Officer, certifying that the representations and warranties of the Company contained herein are true and correct in all material respects at and as of the Closing Date. 6. Representations and Warranties of the Company. The Company represents and warrants to Buyer as follows: 2 (a) Organization and Qualification. The Company is a corporation duly organized and existing under, and by virtue of, the laws of the State of Delaware and is in good standing under such laws. The Company has requisite power and authority to own and operate its properties and assets, and to carry on its business as presently conducted. The Company is authorized to transact business as a foreign corporation in good standing in those jurisdictions in which the nature of its activities or the property owned by it make such qualification necessary. (b) Authorization. All corporate action on the part of the Company necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of (i) the Shares and (ii) the Conversion Stock and the performance of all of the Company's obligations hereunder has been taken or will be taken prior to the Closing. This Agreement, when executed and delivered by the Company, shall constitute the valid and binding obligation of the Company, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement is subject to general principles of equity regardless of whether enforcement is considered in a proceeding at law or in equity. The Shares, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The Conversion Stock has been duly and validly reserved and, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The Shares and the Conversion Stock will be free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the holders thereof through no action of the Company; provided, however, that the Shares and the Conversion Stock will be subject to restrictions on transfer under state and/or federal securities laws as set forth herein and under certain other restrictions as set forth in that certain Second Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among the Company, Waller-Sutton Media Partners, L.P. et al., as amended. The issuance of the Shares will not violate any preemptive rights available to the holders of any of the Company's securities. The Series H Preferred Stock shall have the rights, preferences, privileges and restrictions set forth in the Certificate. (c) Compliance with Laws. The Company is not in violation of (i) any applicable order, judgment, injunction, award or decree, or (ii) any federal, state, local or foreign law, statute, rule, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator applicable to the business of the Company except for violations which reasonably could not have a material adverse effect on the business or properties of the Company. The Company has obtained all licenses, permits, orders and approvals of any federal, state, local or foreign governmental regulatory body (collectively, "Permits") that are material to or necessary for the conduct of the business of the Company. All of such Permits are in full force and effect, no violations are or have been recorded in respect of any Permit and no proceeding is pending or, to the best of the Company's knowledge, threatened to revoke or limit any such Permit. (d) Compliance with Other Instruments, None Burdensome, etc. The Company is not in violation of any term of its Amended and Restated Certificate of Incorporation or By-Laws, or of any term or provision of any material mortgage, indebtedness, indenture, contract, agreement, instrument, judgment or decree. The execution, delivery and performance of and compliance with this -2- 3 Agreement and the issuance of the Series H Preferred Stock and the Conversion Stock have not resulted and will not result in any violation of, or conflict with, or constitute a default under, the Company's existing Amended and Restated Certificate of Incorporation or By-Laws or any of its agreements or result in the creation of, any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company. (e) Litigation. Except as set forth on Schedule 1 hereto, there are no actions, suits, proceedings or investigations pending against the Company or its properties before any court or governmental agency (nor, to the best of the Company's knowledge, is there any reasonable basis therefor or threat thereof). (f) Governmental Consent, etc. No consent, approval or authorization of (or designation, declaration of filing with) any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement, or the offer, sale or issuance of the Series H Preferred Stock and the Conversion Stock, or the consummation of any other transaction contemplated hereby, except (i) filing of the Certificate in the office of the Secretary of State of the State of Delaware, and (ii) qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Series H Preferred Stock and the Conversion Stock under applicable state securities laws, which filings and qualifications, if required, will be accomplished in a timely manner. (g) Offering. Subject to the accuracy of the Buyer's representations in Section 7 hereof, the offer, sale and issuance of the Series H Preferred Stock to be issued in conformity with the terms of this Agreement, and the issuance of the Conversion Stock upon conversion of the Series H Preferred Stock, constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act"). (h) Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement. (i) Disclosure. No representations or warranty by the Company in this Agreement, nor any statement, document, or certificate, furnished or to be furnished, to the Buyer in connection herewith, or pursuant hereto, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make any statement herein or therein not misleading. (j) No Material Adverse Change. Between the date of the financial statements filed as part of the Company's 1999 first quarter 10-Q and the Closing Date, there has not been any change in the assets, liabilities, financial condition or operations of the Company from that reflected in such financial statements, except changes in the ordinary course of business which have not been, either in any case or in the aggregate, materially adverse. (k) Financial Condition. The financial statements of the Company filed as part of the Company's 1999 first quarter 10-Q ("the Financial Statements") fairly present, in all material -3- 4 respects, the financial position of the Company and its subsidiaries as of the dates thereof, and the results of operations and cash flows of the Company and its subsidiaries as of the dates or for the periods set forth therein, all in conformity with GAAP consistently applied during the period involved, except as otherwise set forth in the notes thereto and subject, in the case of the unaudited financial statements, to the absence of footnotes and normal year-end audit adjustments. (l) Securities and Exchange Commission Documents. The Company has filed all registration statements, proxy statements, reports and other documents required to be filed by it under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, and all amendments thereto (collectively, the "Commission Documents"). Each Commission Document when filed with the Securities and Exchange Commission was true and accurate in all material respects and in compliance in all material respects with the requirements of its respective report form. (m) Credit Agreement. The Company is not in default and no event has occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in that certain Credit Agreement between the Company, certain lenders and The Bank of Montreal, dated as of November 14, 1997, as amended (the "Credit Agreement"). In the event, however, the Company does not consummate the pending sale of its Kingman and Flagstaff stations as required by the Credit Agreement (which sales are subject to receipt of FCC approval), the Company will require a waiver from its lenders. 7. Representations and Warranties of Buyer. Buyer hereby represents and warrants to the Company with respect to the purchase of the Shares as follows: (a) Non-Registration. Buyer understands that the offering and sale of the Series H Preferred Stock is intended to be exempt from registration under the Securities Act of 1933, as amended (the "1933 Act"), by virtue of Section 4(2) of the Act and the provisions of Regulation D promulgated thereunder, that the Series H Preferred Stock has not been registered under the 1933 Act or under the securities laws of any state, and that the Company will be under no obligation to effect any such registration. (b) Investment Intent. Buyer is purchasing the Series H Preferred Stock and the Conversion Stock for its own account, for investment and not with a view to resale, distribution, or other disposition, and Buyer has no present plans to enter into any contract, undertaking, agreement or arrangement for any such resale, distribution or other disposition. It understands that the Shares and the Conversion Stock have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Buyer's representations as expressed herein. Buyer will not sell or otherwise transfer the Series H Preferred Stock without registration under the 1933 Act and applicable state securities laws, or pursuant to an exemption from the registration requirements thereof which, in the opinion of counsel reasonably acceptable to the Company, is available for the transaction. -4- 5 (c) Rule 144. Buyer acknowledges that the Shares and the Conversion Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. It is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than one year after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in transactions directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. (d) No Public Market. Buyer understands that no public market now exists for the Shares and that the Company has made no assurances that a public market will ever exist for the Shares. (e) Status of Buyer. Buyer: (i) is an "accredited investor," as that term is defined in Rule 501(a) of Regulation D promulgated under the 1933 Act, inasmuch as Buyer meets the requirements of subparagraph (a)(3) of Rule 501; (ii) was not formed for the primary purpose of evading federal or state securities laws, and (iii) is a "Qualified Institutional Buyer" as defined in 17 CFR .144A(a). (f) Opportunity to Review Books and Records. Buyer has had a reasonable opportunity to inspect all documents, books and records pertaining to the Company and the Series H Preferred Stock and confirms that the Series H Preferred Stock is being purchased without Buyer's receipt of any offering literature. (g) Opportunity for Questions. Buyer has had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Company, its business and operations, the terms of the Series H Preferred Stock and all other aspects of investment in the Company, and all such questions have been answered to the full satisfaction of Buyer. (h) Manner of Purchase. Buyer is not subscribing for the Series H Preferred Stock as a result of or pursuant to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by a person other than a representative of the Company. (i) Brokers or Finders. Buyer has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement. (j) Legends. Buyer understands that the certificate(s) representing the Series H Preferred Stock shall bear legends in substantially the following forms, and Buyer shall not transfer any -5- 6 of the shares of Series H Preferred Stock, or any shares of common stock that may be issued on conversion thereof, or any interest therein, except in accordance with the terms of such legends: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state (the "Securities Laws"). These securities may not be offered, sold, transferred, pledged or hypothecated in the absence of registration under applicable Securities Laws, or the availability of an exemption therefrom. This certificate will not be transferred on the books of the Corporation or any transfer agent acting on behalf of the Corporation except upon the receipt of an opinion of counsel, satisfactory to the Corporation, that the proposed transfer is exempt from the registration requirements of all applicable Securities Laws, or the receipt of evidence, satisfactory to the Corporation, that the proposed transfer is the subject of an effective registration statement under all applicable Securities Laws." "The issuer is subject to restrictions contained in the Federal Communications Act, as amended. The securities evidenced by this certificate may not be sold, transferred, assigned or hypothecated if, as a result thereof, the issuer would be in violation of that act." "The securities represented by this certificate are subject to the terms and entitled to the benefits of that certain Registration Rights Agreement dated as of June 15, 1998 among the Company and certain of its stockholders, as the same may be amended from time to time, and that certain Second Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among the Company and certain of its stockholders, as the same may be amended from time to time." (k) Authority of Buyer. This Agreement, when executed and delivered by the Buyer will constitute the legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement is subject to general principles of equity regardless of whether enforcement is considered in a proceeding at law or in equity. (l) No Conflicts. The execution, delivery and performance of this Agreement by Buyer will not violate in any material respect any provision of law or any rule or regulation of any federal, state or local governmental authority to which Buyer is subject, nor result in a breach or violation by Buyer of any of the terms or provisions of, or constitute an event of default under, any material indenture, mortgage, trust (constructive or otherwise), loan agreement, lease or other agreement or instrument to which Buyer is a party or by which Buyer or its assets are bound. Buyer is not a party to, or subject to, or bound by, any judgment, award, injunction, order or decree of any court or governmental authority, or any arbitration award which may restrict or interfere with the performance by Buyer of this Agreement or such other documents as may be delivered by Buyer in connection herewith. -6- 7 (m) Legal Proceedings. There is no action, suit, proceeding or investigation pending (or, to the knowledge of Buyer, threatened) against Buyer in, before or by any court, administrative agency or arbitrator affecting the ability of Buyer to carry out the provisions of this Agreement and the transactions contemplated hereby. 8. Buyer's Conditions to Closing. The Buyer's obligation to purchase the Shares at the Closing is subject to the fulfillment of the following conditions: (a) Representations and Warranties Correct. The representations and warranties made by the Company in Section 6 hereof shall be true and correct, if limited by materiality, in accordance with the terms thereof in all respects, and if not so limited by materiality, in all material respects, as of the Closing Date. (b) Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with in all material respects. (c) Compliance with State Securities Laws. The Company shall have obtained all permits and qualifications required by any state for the offer and sale of the Shares and the Conversion Stock, or shall have the availability of exemptions therefrom. (d) Legal Matters. All material matters of a legal nature which pertain to this Agreement and the transactions contemplated hereby shall have been reasonably approved by counsel to Buyer. (e) WPG Stock Purchase Agreement and Closing of Additional Shares of Series H Preferred Stock. WPG Corporate Development Associates V, L.L.C. ("WPG")and WPG Corporate Development Associates V (Overseas), L.P. ("WPG Overseas") shall have executed and delivered to the Company a Stock Purchase Agreement pursuant to which WPG and WPG Overseas shall have agreed to purchase from the Company an aggregate of 1,363,636 shares of the Series H Preferred Stock on or before the earliest of (i) August 31, 1999, (ii) such earlier date as is mutually agreed upon by the Company and WPG, and (iii) the closing of the purchase by the Company of the Erie, Pennsylvania radio stations, and the Company shall have sold an aggregate of 545,454 shares of the Series H Preferred Stock prior to or concurrently with the Closing hereunder. 9. Company's Conditions to Closing. The Company's obligation to sell and issue the Shares at the Closing Date is, at the option of the Company, subject to the fulfillment as of the Closing Date of the following conditions: (a) Representations and Warranties Correct. The representations and warranties made by Buyer in Section 7 hereof shall be true and correct when made, and shall be true and correct on the Closing Date. -7- 8 (b) Compliance with State Securities Laws. The Company shall have obtained all permits and qualifications required by any state for the offer and sale of the Shares and the Conversion Stock, or shall have the availability of exemptions therefrom. (c) Legal Matters. All material matters of a legal nature which pertain to this Agreement, and the transactions contemplated hereby, shall have been reasonably approved by counsel to the Company. 10. Reimbursement of Legal Fees. The Company hereby agrees to reimburse Buyer for its legal fees incurred in connection with the negotiation, execution and performance of this Agreement. 11. Miscellaneous. (a) Notices. Any notice, request or other document to be given hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telecopy or certified or registered mail, postage prepaid: (i) if to the Company, addressed to: Regent Communications, Inc. 50 East RiverCenter Boulevard, Suite 180 Covington, KY 41011 Attn: Terry S. Jacobs, Chairman of the Board Facsimile: (606) 292-0352 with a copy to: Strauss & Troy The Federal Reserve Building 150 East Fourth Street Cincinnati, Ohio 45202-4018 Attn: Alan C. Rosser, Esq. Facsimile: (513) 241-8289 -8- 9 (ii) if to Buyer, addressed to: Waller-Sutton Media Partners, L.P. c/o Waller-Sutton Management Group, Inc. 1 Rockefeller Plaza, Suite 3300 New York, N.Y. 10020 Attn: Cathy M. Brienza Facsimile: (212) 218-4355 with copies to: Rubin Baum Levin Constant & Friedman 30 Rockefeller Plaza New York, N.Y. 10112 Attn: Ronald Greenberg, Esq. Facsimile: (212) 698-7825 or to such other address or telecopy number as any party shall have specified by notice given to the other parties in the manner specified above. (b) Entire Agreement; Amendment. This Agreement, including the Exhibits and Schedules hereto, and the other agreements expressly contemplated by this Agreement, contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior oral and written agreements, memoranda, term sheets, understandings and undertakings among the parties hereto relating to the subject matter hereof. This Agreement may be modified or amended only by a written instrument executed by or on behalf of the parties hereto. (c) Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Ohio without regard to the application of its conflicts of laws principles. The parties hereby waive all right to trial by jury in any action, suit or proceeding brought to enforce or defend any rights or remedies under this Agreement or the transactions contemplated hereby. (d) Severability. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. (e) Construction. The section and subsection headings used herein are for convenience of reference only, are not a part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, any provision of this Agreement. As used in this Agreement, the masculine, feminine and neuter gender each includes the other, unless the context otherwise dictates. Any and all schedules and exhibits referred to in this Agreement and attached hereto are and shall be deemed to be incorporated in this Agreement as if fully set forth herein. -9- 10 (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. (g) Specific Performance. The parties hereto acknowledge that damages may be an inadequate remedy for any breach of the provisions of this Agreement and agree that the obligations of the parties hereunder may be specifically enforceable, and no party will take any action to impede the other from seeking to enforce such right of specific performance after any such breach. (h) Successors and Assigns: Assignability. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns; provided, however, that the right of the Buyer to purchase the Series H Preferred Stock shall not be assignable without the consent of the Company. This Agreement (i) shall not confer upon any person other than the parties hereto and their respective successors and permitted assigns any rights or remedies hereunder; and (ii) shall not be assignable by either party without the prior written consent of the other. (i) Further Assurances. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary proper or advisable to consummate and make effective the transactions contemplated by this Agreement. (j) Survival. The representations and warranties of the parties contained herein shall survive execution and delivery of this Agreement and issuance and delivery of the Series H Preferred Stock hereunder. [SIGNATURES ON FOLLOWING PAGE] -10- 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered, as of the day and year first above written. COMPANY: REGENT COMMUNICATIONS, INC. By: /s/ William L. Stakelin ------------------------------------------------ Its: President ------------------------------------------------ BUYER: WALLER-SUTTON MEDIA PARTNERS, L.P. By: Waller-Sutton Media, L.L.C., its General Partner By: /s/ William H. Ingram ------------------------------------------ Its: Chairman ------------------------------------------ -11- EX-4.BB 8 EXHIBIT 4(BB) 1 Exhibit 4(bb) STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (this "Agreement") dated as of the 21st day of June, 1999 among REGENT COMMUNICATIONS, INC., a Delaware corporation (the "Company"), WPG CORPORATE DEVELOPMENT ASSOCIATES V, L.L.C., a Delaware limited liability company ("WPG") and WPG CORPORATE DEVELOPMENT ASSOCIATES V (OVERSEAS), L.P., a Delaware limited partnership ("WPG Overseas") (WPG and WPG Overseas collectively referred to as the "Buyers"). 1. Authorization. The Company will authorize the sale and issuance under this Agreement of 1,363,636 shares (the "Shares") of its Series H Convertible Preferred Stock (the "Series H Preferred Stock"), having the rights, privileges and preferences as set forth in the Certificate of Designation (the "Certificate") in the form attached to this Agreement as Exhibit A. The shares of Common Stock into which the Shares will be convertible are referred to herein as the "Conversion Stock." 2. Sale and Purchase of the Series H Preferred Stock. On and subject to the terms and conditions set forth herein, the Company agrees that it will sell, issue and deliver to Buyers, and each of the Buyers agrees that it will purchase from the Company on the Closing Date, shares of the Series H Convertible Preferred Stock, as follows: WPG 1,180,909 shares WPG Overseas 182,727 shares
3. Closing Date. The closing of the purchase and sale of the Series H Preferred Stock hereunder (the "Closing") shall be the earliest of (i) August 31, 1999, (ii) such earlier date as is mutually agreed upon by the Company and WPG, and (iii) the date of the closing of the purchase by the Company of the assets of radio stations WXKC-FM, WRIE-AM and WXTA-FM pursuant to that certain Asset Purchase Agreement dated May 18, 1999 among the Company, Media One Group-Ltd., Regent Broadcasting of Erie, Inc., Regent Licensee of Erie, Inc., CUZCO LLC, James T Embrecia and Thomas J. Embrecia. (the date of the Closing is hereinafter referred to as the "Closing Date"). 4. Purchase Price. The purchase price for the Series H Preferred Stock is Seven Million Four Hundred Ninety-Nine Thousand Nine Hundred Ninety-Eight Dollars ($7,499,998.00) ($5.50 per share) (the "Purchase Price"), which sum Buyers will pay to the Company by wire transfer of immediately available funds on the Closing Date. 5. Deliveries by the Company. At the Closing, the Company will deliver to Buyers the following: (a) stock certificates representing the Series H Preferred Stock duly issued in the names of Buyers and bearing the legends set forth in Section 7(j) hereof; (b) an opinion of Strauss & Troy, as counsel to the Company, in the form attached as Exhibit B; and 2 (c) a certificate, dated as of the Closing Date, signed by the Chairman of the Board, the President of the Company or the Company's Chief Financial Officer, certifying that the representations and warranties of the Company contained herein are true and correct in all material respects at and as of the Closing Date. 6. Representations and Warranties of the Company. The Company represents and warrants to Buyers as follows: (a) Organization and Qualification. The Company is a corporation duly organized and existing under, and by virtue of, the laws of the State of Delaware and is in good standing under such laws. The Company has requisite power and authority to own and operate its properties and assets, and to carry on its business as presently conducted. The Company is authorized to transact business as a foreign corporation in good standing in those jurisdictions in which the nature of its activities or the property owned by it make such qualification necessary. (b) Authorization. All corporate action on the part of the Company necessary for the authorization, execution, delivery and performance of this Agreement by the Company, the authorization, sale, issuance and delivery of (i) the Shares and (ii) the Conversion Stock and the performance of all of the Company's obligations hereunder has been taken or will be taken prior to the Closing. This Agreement, when executed and delivered by the Company, shall constitute the valid and binding obligation of the Company, enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement is subject to general principles of equity regardless of whether enforcement is considered in a proceeding at law or in equity. The Shares, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The Conversion Stock has been duly and validly reserved and, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable. The Shares and the Conversion Stock will be free of any liens or encumbrances, other than any liens or encumbrances created by or imposed upon the holders thereof through no action of the Company; provided, however, that the Shares and the Conversion Stock will be subject to restrictions on transfer under state and/or federal securities laws as set forth herein and under certain other restrictions as set forth in that certain Second Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among the Company, Waller-Sutton Media Partners, L.P. et al., as amended. The issuance of the Shares will not violate any preemptive rights available to the holders of any of the Company's securities. The Series H Preferred Stock shall have the rights, preferences, privileges and restrictions set forth in the Certificate. (c) Compliance with Laws. The Company is not in violation of (i) any applicable order, judgment, injunction, award or decree, or (ii) any federal, state, local or foreign law, statute, rule, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator applicable to the business of the Company except for violations which reasonably could not have a material adverse effect on the business or properties of the Company. The Company has obtained all licenses, permits, orders and approvals of any federal, state, local or foreign governmental regulatory body (collectively, "Permits") that are material to or necessary for the conduct of the business of the Company. All of such Permits are in full force and effect, no violations are or have 3 been recorded in respect of any Permit and no proceeding is pending or, to the best of the Company's knowledge, threatened to revoke or limit any such Permit. (d) Compliance with Other Instruments, None Burdensome, etc. The Company is not in violation of any term of its Amended and Restated Certificate of Incorporation or By-Laws, or of any term or provision of any material mortgage, indebtedness, indenture, contract, agreement, instrument, judgment or decree. The execution, delivery and performance of and compliance with this Agreement and the issuance of the Series H Preferred Stock and the Conversion Stock have not resulted and will not result in any violation of, or conflict with, or constitute a default under, the Company's existing Amended and Restated Certificate of Incorporation or By-Laws or any of its agreements or result in the creation of, any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company. (e) Litigation. Except as set forth on Schedule 1 hereto, there are no actions, suits, proceedings or investigations pending against the Company or its properties before any court or governmental agency (nor, to the best of the Company's knowledge, is there any reasonable basis therefor or threat thereof). (f) Governmental Consent, etc. No consent, approval or authorization of (or designation, declaration of filing with) any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement, or the offer, sale or issuance of the Series H Preferred Stock and the Conversion Stock, or the consummation of any other transaction contemplated hereby, except (i) filing of the Certificate in the office of the Secretary of State of the State of Delaware, and (ii) qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Series H Preferred Stock and the Conversion Stock under applicable state securities laws, which filings and qualifications, if required, will be accomplished in a timely manner. (g) Offering. Subject to the accuracy of the Buyers' representations in Section 7 hereof, the offer, sale and issuance of the Series H Preferred Stock to be issued in conformity with the terms of this Agreement, and the issuance of the Conversion Stock upon conversion of the Series H Preferred Stock, constitute transactions exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the "Securities Act"). (h) Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement. (i) Disclosure. No representations or warranty by the Company in this Agreement, nor any statement, document, or certificate, furnished or to be furnished, to the Buyers in connection herewith, or pursuant hereto, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make any statement herein or therein not misleading. (j) No Material Adverse Change. Between the date of the financial statements filed as part of the Company's 1999 first quarter 10-Q and the Closing Date, there has not been any change in the assets, liabilities, financial condition or operations of the Company from that reflected in such 4 financial statements, except changes in the ordinary course of business which have not been, either in any case or in the aggregate, materially adverse. (k) Financial Condition. The financial statements of the Company filed as part of the Company's 1999 first quarter 10-Q ("the Financial Statements") fairly present, in all material respects, the financial position of the Company and its subsidiaries as of the dates thereof, and the results of operations and cash flows of the Company and its subsidiaries as of the dates or for the periods set forth therein, all in conformity with GAAP consistently applied during the period involved, except as otherwise set forth in the notes thereto and subject, in the case of the unaudited financial statements, to the absence of footnotes and normal year-end audit adjustments. (l) Securities and Exchange Commission Documents. The Company has filed all registration statements, proxy statements, reports and other documents required to be filed by it under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, and all amendments thereto (collectively, the "Commission Documents"). Each Commission Document when filed with the Securities and Exchange Commission was true and accurate in all material respects and in compliance in all material respects with the requirements of its respective report form. (m) Credit Agreement. The Company is not in default and no event has occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in that certain Credit Agreement between the Company, certain lenders and The Bank of Montreal, dated as of November 14, 1997, as amended (the "Credit Agreement"). In the event, however, the Company does not consummate the pending sale of its Kingman and Flagstaff stations as required by the Credit Agreement (which sales are subject to receipt of FCC approval), the Company will require a waiver from its lenders. 7. Representations and Warranties of Buyers. Buyers hereby represent and warrant to the Company with respect to the purchase of the Shares as follows: (a) Non-Registration. Buyers understand that the offering and sale of the Series H Preferred Stock is intended to be exempt from registration under the Securities Act of 1933, as amended (the "1933 Act"), by virtue of Section 4(2) of the Act and the provisions of Regulation D promulgated thereunder, that the Series H Preferred Stock has not been registered under the 1933 Act or under the securities laws of any state, and that the Company will be under no obligation to effect any such registration. (b) Investment Intent. Buyers are purchasing the Series H Preferred Stock and the Conversion Stock for their own account, for investment and not with a view to resale, distribution, or other disposition, and Buyers have no present plans to enter into any contract, undertaking, agreement or arrangement for any such resale, distribution or other disposition. Buyers understand that the Shares and the Conversion Stock have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Buyers' representations as expressed herein. Buyers will not sell or otherwise transfer the Series H Preferred Stock without registration under the 1933 Act and applicable state securities laws, or 5 pursuant to an exemption from the registration requirements thereof which, in the opinion of counsel reasonably acceptable to the Company, is available for the transaction. (c) Rule 144. Buyers acknowledge that the Shares and the Conversion Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. Buyers are aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than one year after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in transactions directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. (d) No Public Market. Buyers understand that no public market now exists for the Shares and that the Company has made no assurances that a public market will ever exist for the Shares. (e) Status of Buyers. Each of the Buyers: (i) is an "accredited investor," as that term is defined in Rule 501(a) of Regulation D promulgated under the 1933 Act, inasmuch as Buyer meets the requirements of subparagraph (a)(3) of Rule 501; and (ii) was not formed for the primary purpose of evading federal or state securities laws. (f) Opportunity to Review Books and Records. Buyers have had a reasonable opportunity to inspect all documents, books and records pertaining to the Company and the Series H Preferred Stock and confirm that the Series H Preferred Stock is being purchased without Buyers' receipt of any offering literature. (g) Opportunity for Questions. Buyers have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the Company, its business and operations, the terms of the Series H Preferred Stock and all other aspects of investment in the Company, and all such questions have been answered to the full satisfaction of Buyers. (h) Manner of Purchase. Buyers are not subscribing for the Series H Preferred Stock as a result of or pursuant to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by a person other than a representative of the Company. (i) Brokers or Finders. Buyers have not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Company, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement. (j) Legends. Buyers understand that the certificates representing the Series H Preferred Stock shall bear legends in substantially the following forms, and Buyers shall not transfer 6 any of the shares of Series H Preferred Stock, or any shares of common stock that may be issued on conversion thereof, or any interest therein, except in accordance with the terms of such legends: "The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state (the "Securities Laws"). These securities may not be offered, sold, transferred, pledged or hypothecated in the absence of registration under applicable Securities Laws, or the availability of an exemption therefrom. This certificate will not be transferred on the books of the Corporation or any transfer agent acting on behalf of the Corporation except upon the receipt of an opinion of counsel, satisfactory to the Corporation, that the proposed transfer is exempt from the registration requirements of all applicable Securities Laws, or the receipt of evidence, satisfactory to the Corporation, that the proposed transfer is the subject of an effective registration statement under all applicable Securities Laws." "The issuer is subject to restrictions contained in the Federal Communications Act, as amended. The securities evidenced by this certificate may not be sold, transferred, assigned or hypothecated if, as a result thereof, the issuer would be in violation of that act." "The securities represented by this certificate are subject to the terms and entitled to the benefits of that certain Registration Rights Agreement dated as of June 15, 1998 among the Company and certain of its stockholders, as the same may be amended from time to time, and that certain Second Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among the Company and certain of its stockholders, as the same may be amended from time to time." (k) Authority of Buyers. This Agreement, when executed and delivered by the Buyers will constitute the legal, valid and binding obligation of Buyers, enforceable against Buyers in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforcement of creditors' rights generally and except as enforcement is subject to general principles of equity regardless of whether enforcement is considered in a proceeding at law or in equity. (l) No Conflicts. The execution, delivery and performance of this Agreement by Buyers will not violate in any material respect any provision of law or any rule or regulation of any federal, state or local governmental authority to which Buyers are subject, nor result in a breach or violation by Buyers of any of the terms or provisions of, or constitute an event of default under, any material indenture, mortgage, trust (constructive or otherwise), loan agreement, lease or other agreement or instrument to which Buyers are parties or by which Buyers or their respective assets are bound. Buyers are not parties to, or subject to, or bound by, any judgment, award, injunction, order or decree of any court or governmental authority, or any arbitration award which may restrict or interfere with the performance by Buyers of this Agreement or such other documents as may be delivered by Buyers in connection herewith. 7 (m) Legal Proceedings. There is no action, suit, proceeding or investigation pending (or, to the knowledge of Buyers, threatened) against Buyers in, before or by any court, administrative agency or arbitrator affecting the ability of Buyers to carry out the provisions of this Agreement and the transactions contemplated hereby. 8. Buyers' Conditions to Closing. The Buyers' obligation to purchase the Shares at the Closing is subject to the fulfillment of the following conditions: (a) Representations and Warranties Correct. The representations and warranties made by the Company in Section 6 hereof shall be true and correct, if limited by materiality, in accordance with the terms thereof in all respects, and if not so limited by materiality, in all material respects, as of the Closing Date. (b) Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to the Closing Date shall have been performed or complied with in all material respects. (c) Compliance with State Securities Laws. The Company shall have obtained all permits and qualifications required by any state for the offer and sale of the Shares and the Conversion Stock, or shall have the availability of exemptions therefrom. (d) Legal Matters. All material matters of a legal nature which pertain to this Agreement and the transactions contemplated hereby shall have been reasonably approved by counsel to Buyers. 9. Company's Conditions to Closing. The Company's obligation to sell and issue the Shares at the Closing Date is, at the option of the Company, subject to the fulfillment as of the Closing Date of the following conditions: (a) Representations and Warranties Correct. The representations and warranties made by Buyers in Section 7 hereof shall be true and correct when made, and shall be true and correct on the Closing Date. (b) Compliance with State Securities Laws. The Company shall have obtained all permits and qualifications required by any state for the offer and sale of the Shares and the Conversion Stock, or shall have the availability of exemptions therefrom. (c) Legal Matters. All material matters of a legal nature which pertain to this Agreement, and the transactions contemplated hereby, shall have been reasonably approved by counsel to the Company. 10. Reimbursement of Legal Fees. The Company hereby agrees to reimburse Buyers for its legal fees incurred in connection with the negotiation, execution and performance of this Agreement. 8 11. Miscellaneous. (a) Notices. Any notice, request or other document to be given hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telecopy or certified or registered mail, postage prepaid: (i) if to the Company, addressed to: Regent Communications, Inc. 50 East RiverCenter Boulevard, Suite 180 Covington, KY 41011 Attn: Terry S. Jacobs, Chairman of the Board Facsimile: (606) 292-0352 with a copy to: Strauss & Troy The Federal Reserve Building 150 East Fourth Street Cincinnati, Ohio 45202-4018 Attn: Alan C. Rosser, Esq. Facsimile: (513) 241-8289 (ii) if to Buyers, addressed to: WPG Corporate Development Associates V, L.L.C. One New York Plaza New York, N.Y. 10004-1950 Attn: Kenneth J. Hanau Facsimile: (212) 908-0112 9 with copies to: Finn Dixon & Herling LLP One Landmark Square Stamford, CT 06901 Attn: Michael Herling, Esq. Facsimile: (203) 348-5777 or to such other address or telecopy number as any party shall have specified by notice given to the other parties in the manner specified above. (b) Entire Agreement; Amendment. This Agreement, including the Exhibits and Schedules hereto, and the other agreements expressly contemplated by this Agreement, contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior oral and written agreements, memoranda, term sheets, understandings and undertakings among the parties hereto relating to the subject matter hereof. This Agreement may be modified or amended only by a written instrument executed by or on behalf of the parties hereto. (c) Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Ohio without regard to the application of its conflicts of laws principles. The parties hereby waive all right to trial by jury in any action, suit or proceeding brought to enforce or defend any rights or remedies under this Agreement or the transactions contemplated hereby. (d) Severability. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. (e) Construction. The section and subsection headings used herein are for convenience of reference only, are not a part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, any provision of this Agreement. As used in this Agreement, the masculine, feminine and neuter gender each includes the other, unless the context otherwise dictates. Any and all schedules and exhibits referred to in this Agreement and attached hereto are and shall be deemed to be incorporated in this Agreement as if fully set forth herein. (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. (g) Specific Performance. The parties hereto acknowledge that damages may be an inadequate remedy for any breach of the provisions of this Agreement and agree that the obligations of the parties hereunder may be specifically enforceable, and no party will take any action to impede the other from seeking to enforce such right of specific performance after any such breach. (h) Successors and Assigns: Assignability. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties 10 hereto and their respective successors and permitted assigns; provided, however, that the right of the Buyers to purchase the Series H Preferred Stock shall not be assignable without the consent of the Company. This Agreement (i) shall not confer upon any person other than the parties hereto and their respective successors and permitted assigns any rights or remedies hereunder; and (ii) shall not be assignable by either party without the prior written consent of the other. (i) Further Assurances. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary proper or advisable to consummate and make effective the transactions contemplated by this Agreement. (j) Survival. The representations and warranties of the parties contained herein shall survive execution and delivery of this Agreement and issuance and delivery of the Series H Preferred Stock hereunder. [SIGNATURES ON FOLLOWING PAGE] 11 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered, as of the day and year first above written. COMPANY: REGENT COMMUNICATIONS, INC. By: /s/ William L. Stakelin ------------------------------------------------------ Its: /s/ President ------------------------------------------------------ BUYERS: WPG CORPORATE DEVELOPMENT ASSOCIATES V, L.L.C. By: WPG PE Fund Adviser II, L.L.C., the Fund Investment Adviser Member By: /s/ Kenneth Hanau ------------------------------------------------------ Its: Member ------------------------------------------------------ WPG CORPORATE DEVELOPMENT ASSOCIATES V (Overseas), L.P. By: /s/ Kenneth Hanau ------------------------------------------------------ Its: Member ------------------------------------------------------ EX-4.CC 9 EXHIBIT 4(CC) 1 Exhibit 4(cc) EXECUTION REGENT COMMUNICATIONS, INC. SEVENTH AMENDMENT TO CREDIT AGREEMENT This SEVENTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is dated as of June 30, 1999 and entered into by and among Regent Communications, Inc., a Delaware corporation ("COMPANY"), the financial institutions listed on the signature pages hereof ("LENDERS"), General Electric Capital Corporation, as documentation agent ("DOCUMENTATION AGENT") and Bank of Montreal, Chicago Branch, as agent for Lenders ("AGENT"), and the Credit Support Parties (as defined in Section 5 hereof) listed on the signature pages hereof, and is made with reference to that certain Credit Agreement dated as of November 14, 1997, as amended by that certain First Amendment to Credit Agreement dated as of February 16, 1998, that certain Second Amendment and Limited Waiver to Credit Agreement dated as of June 10, 1998, that certain Third Amendment to Credit Agreement dated as of August 14, 1998, that certain Fourth Amendment, Limited Consent and Limited Waiver to Credit Agreement, First Amendment to Subsidiary Guaranty and First Amendment to Pledge and Security Agreement dated as of October 16, 1998, that certain Fifth Amendment to Credit Agreement dated as of November 23, 1998 and that certain Sixth Amendment and Limited Consent to Credit Agreement dated as of February 24, 1999 (as so amended, the "CREDIT AGREEMENT"), by and among Company, Lenders and Agent. Capitalized terms used herein without definition shall have the same meanings herein as set forth in the Credit Agreement. RECITALS WHEREAS, Company and Lenders desire to amend the Credit Agreement to allow Company and its Subsidiaries until September 30, 1999 to consummate certain asset sales and repay the Loans with the proceeds thereof as set forth below. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows: SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT 1.1 AMENDMENTS TO SECTION 6: AFFIRMATIVE COVENANTS Subsection 6.13 of the Credit Agreement is hereby amended and restated in its entirety as follows: "6.13 SALE OF CERTAIN STATIONS. On or before June 30, 1999 (or July 15, 1999 with respect to the Lake Tahoe Stations only), Company and its Subsidiaries shall have entered into definitive sale agreements and made the appropriate filings with the FCC for the sale, for fair market value Cash consideration, of the Flagstaff Stations, the Kingman Stations, the Lake Tahoe Stations or any other Station or combination of Stations 2 the sale of which is reasonably expected to result in aggregate Net Cash Proceeds sufficient (after application of such proceeds in accordance with this Agreement) to achieve a Leverage Ratio of no more than 6.75:1.00 (calculated on a pro forma basis to give effect to such sales). Such sales shall be consummated and the Net Cash Proceeds in respect thereof shall be applied to repay the Loans and reduce the Commitments as soon as practicable but, in any event, no later than September 30, 1999." 1.2 AMENDMENTS TO SECTION 7: NEGATIVE COVENANTS Subsection 7.6 of the Credit Agreement is hereby amended by amending and restating subsection 7.6D(iii) in its entirety as follows: " (iii) Sale of Assets. For purposes of calculating the Consolidated Total Debt Ratio only for any relevant period through September 30, 1999, with respect to Stations which are subject to pending Asset Sales in accordance with subsection 6.13, Company and its Subsidiaries may calculate Consolidated Total Debt and Consolidated Operating Cash Flow on a pro forma basis as if such sales had been consummated and the Net Cash Proceeds which Company in good faith reasonably expects to result from the consummation of such Asset Sales (as certified by Company to Lenders pursuant to an Officers' Certificate no later than June 30, 1999, or July 15, 1999 with respect to the Lake Tahoe Stations only) had been applied to repay Loans as required hereunder, in each case as of the first date of such period." SECTION 2. LIMITATION OF AMENDMENTS Without limiting the generality of the provisions of subsection 10.6 of the Credit Agreement, the amendments set forth above shall be limited precisely as written and relate solely to the matters expressly set forth in Sections 1 and 2 hereof, in the manner and to the extent described above, and nothing in this Amendment shall be deemed to: (a) constitute a waiver of compliance by Company with respect to the Credit Agreement in any other instance or any other term, provision or condition of the Credit Agreement or any other instrument or agreement referred to therein; or (b) prejudice any right or remedy that Agent or any Lender may now have (except to the extent such right or remedy was based upon existing defaults that will not exist after giving effect to this Amendment) or may have in the future under or in connection with the Credit Agreement or any other instrument or agreement referred to therein. Except as expressly set forth herein, the terms, provisions and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect and in all other respects are hereby ratified and confirmed. 2 3 SECTION 3. REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Amendment and to amend the Credit Agreement in the manner provided herein, each Credit Party represents and warrants to each Lender that the following statements are true, correct and complete: A. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT AGREEMENT. The representations and warranties contained in Section 5 of the Credit Agreement are and will be true, correct and complete in all material respects on and as of the Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true, correct and complete in all material respects on and as of such earlier date. B. ABSENCE OF DEFAULT. No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Amendment that would constitute an Event of Default or a Potential Event of Default. SECTION 4. ACKNOWLEDGEMENT AND CONSENT Each of the Company and the Subsidiaries (each individually a "CREDIT SUPPORT PARTY" and collectively, the "CREDIT SUPPORT PARTIES") hereby acknowledges that it has reviewed the terms and provisions of the Credit Agreement and this Amendment and consents to the amendments of the Credit Agreement effected pursuant to this Amendment. The Pledge and Security Agreement, the Collateral Account Agreement and the Subsidiary Guaranty are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS". Each Credit Support Party hereby confirms that each Credit Support Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guaranty or secure, as the case may be, to the fullest extent possible the payment and performance of all "Guarantied Obligations" and "Secured Obligations", as the case may be (in each case as such terms are defined in the applicable Credit Support Document), including without limitation the payment and performance of all such "Guarantied Obligations" and "Secured Obligations", as the case may be, in respect of the Obligations of Company now or hereafter existing under or in respect of the Credit Agreement and the Notes. SECTION 5. RELEASE Each Credit Party, hereby knowingly, voluntarily, intentionally and irrevocably releases and discharges Agent, each Lender and each of their respective officers, directors, agents and counsel (each a "RELEASEE") from any and all actions, causes of action, suits , sums of money, controversies, variances, trespasses, damages, judgements, extents, executions, losses, liabilities, costs, expenses, debts, dues, demands, obligations or other claims of any kind whatsoever, known or unknown, in law, admiralty or equity, which such Credit Party ever had, now have or hereafter can, shall or may have against any Releasee for, upon or by reason of any matter, cause or thing whatsoever from the beginning of the world to and including the date hereof. 3 4 SECTION 6. MISCELLANEOUS A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS. (i) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" "herein" or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Agreement. (ii) Except as specifically amended by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed. (iii) The execution, delivery and performance of this Amendment shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of Agent or any Lender under, the Credit Agreement or any of the other Loan Documents. (iv) All grammatical and technical corrections required in the Credit Agreement and the other Loan Documents in order to effect the substance of the amendments set forth herein shall be deemed made upon the effectiveness of this Amendment. B. FEES AND EXPENSES. Company acknowledges that all costs, fees and expenses as described in subsection 10.2 of the Credit Agreement incurred by Agent and its counsel with respect to this Amendment and the documents and transactions contemplated hereby shall be for the account of Company. C. HEADINGS. Section and subsection headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose or be given any substantive effect. D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are 4 5 physically attached to the same document. This Amendment shall become effective upon the execution of a counterpart hereof by Company, each Credit Support Party and Requisite Lenders and receipt by Agent of written or telephonic notification of such execution and authorization of delivery thereof (the "AMENDMENT EFFECTIVE Date"). [Remainder of page intentionally left blank] 5 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. REGENT COMMUNICATIONS, INC. By: /s/ Anthony A. Vasconcellos -------------------------------------------------- Name: Anthony A. Vasconcellos Title: Vice President and Chief Financial Officer S-1 7 CREDIT SUPPORT PARTIES REGENT BROADCASTING OF LEXINGTON, INC., REGENT BROADCASTING OF SAN DIEGO,INC., REGENT BROADCASTING OF CHICO, INC., REGENT BROADCASTING OF FLAGSTAFF, INC., REGENT BROADCASTING OF KINGMAN, INC., REGENT BROADCASTING OF LAKE TAHOE, INC., REGENT BROADCASTING OF PALMDALE, INC., REGENT BROADCASTING OF REDDING, INC., REGENT BROADCASTING OF VICTORVILLE, INC., REGENT BROADCASTING OF SOUTH CAROLINA, INC., REGENT BROADCASTING MIDWEST, INC., REGENT BROADCASTING OF FLINT, INC., REGENT BROADCASTING OF MANSFIELD, INC., REGENT BROADCASTING OF ST. CLOUD, INC., each a Delaware corporation By: /s/ Anthony A. Vasconcellos --------------------------------------- Name: Anthony A. Vasconcellos Title: Vice President and Chief Financial Officer of each of the forgoing REGENT BROADCASTING WEST COAST, INC., a California corporation By: /s/ Anthony A. Vasconcellos --------------------------------------- Name: Anthony A. Vasconcellos Title: Vice President and Chief Financial Officer S-2 8 REGENT LICENSEE OF SAN DIEGO, INC., REGENT LICENSEE OF KINGMAN, INC, REGENT LICENSEE OF VICTORVILLE, INC., REGENT LICENSEE OF LEXINGTON, INC., REGENT LICENSEE OF LAKE TAHOE, INC., REGENT LICENSEE OF PALMDALE, INC., REGENT LICENSEE OF REDDING, INC., REGENT LICENSEE OF CHICO, INC., REGENT LICENSEE OF FLAGSTAFF, INC., REGENT LICENSEE OF FLINT, INC., REGENT LICENSEE OF MANSFIELD, INC., REGENT LICENSEE OF SOUTH CAROLINA, INC., REGENT LICENSEE OF ST. CLOUD, INC., each a Delaware corporation By: /s/ Anthony A. Vasconcellos --------------------------------------- Name: Anthony A. Vasconcellos Title: Vice President and Chief Financial Officer of each of the foregoing S-3 9 BANK OF MONTREAL, CHICAGO BRANCH, individually and as Agent By: /s/ Christopher T. Young --------------------------------------- Name: Christopher T. Young Title: Director S-4 10 GENERAL ELECTRIC CAPITAL CORPORATION, individually and as Documentation Agent By: /s/ Kenneth M. Gacevich --------------------------------------- Name: Kenneth M. Gacevich Title: Duly Authorized Signatory S-5 11 BANK ONE, INDIANA, NATIONAL ASSOCIATION By: (signature not required) --------------------------------------- Name: Title: S-6 EX-27 10 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGENT COMMUNICATION INC.'S FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1999 JUN-30-1999 1,760,004 0 4,531,758 (249,000) 0 21,053,633 15,813,757 6,545,199 80,947,662 17,280,879 34,801,452 41,931,205 3,824,115 2,400 (16,892,389) 80,947,662 10,835,293 10,835,293 0 11,124,671 (85,040) 0 1,486,807 (1,691,145) 0 (1,691,145) 0 0 0 (1,691,145) (17.72) (17.72)
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