Kixa(fm) Time Brokerage Agreement

Exhibit 10(k)


EXECUTION COPY
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KIXA(FM) TIME BROKERAGE AGREEMENT


This Time Brokerage Agreement (the "Agreement"), made as of the 17th day of December, 1997, is between Topaz Broadcasting, Inc., a Delaware corporation ("Topaz"), programmer of radio station KIXA-FM, Lucerne Valley, California (the "Station"), and Regent Communications, Inc., a Delaware corporation ("Programmer").


Topaz has entered into an Asset Purchase Agreement dated as of August 29, 1997 under which Topaz has agreed to purchase the Station from RASA Communications Corp. ("RASA")(the "RASA Purchase Agreement") and is programming the Station pursuant to a Time Brokerage Agreement dated as of August 29, 1997 between Topaz and RASA, a copy of which is attached hereto as Exhibit A (the "RASA TBA").


Topaz and Programmer have entered into a Merger Agreement dated as of December 17, 1997 (the "Merger Agreement"), pursuant to which Topaz will merge into Programmer on the terms and subject to the conditions set forth in the Merger Agreement.


Topaz wishes to retain Programmer to provide programming for the Station pursuant to the terms and conditions set forth in this Agreement and in conformity with the Station's policies and practices and the rules and regulations of the Federal Communications Commission ("FCC") concerning such arrangements. Programmer desires to avail itself of Station's broadcast time for the presentation of a programming service, including the sale of advertising time.


For and in consideration of the mutual covenants herein contained, the parties agree as follows:


1. SALE OF TIME


1.1. BROADCAST OF PROGRAMMING.


(a) During the Term (as defined below) of this Agreement, Topaz shall make available broadcast time on the Station for the broadcast of Programmer's programs (the "Programming") for up to One Hundred Sixty-Eight (168) hours a week except for: (i) downtime occasioned by routine maintenance, which, except for emergencies, shall be scheduled between 12:00 midnight and 6:00 a.m. and shall otherwise be consistent with prior practice; (ii) up to three (3) hours per week between the hours of 6:00 and 9:00 a.m.


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Sundays during which time RASA may broadcast, at its own expense and pursuant to the terms of the RASA TBA, programming designed to address the problems, needs, and issues of the Station's listeners; (iii) times when Programmer's programs are not accepted or are preempted by RASA in accordance with the provisions of Section 2.1 of the RASA TBA; and (iv) times when broadcasts are prevented for reasons beyond the control of RASA or Topaz.


1.2. ACCESS TO STUDIO FACILITIES; DELIVERY OF PROGRAMMING. To enable Programmer to fulfill its obligations hereunder, Topaz shall make the office and equipment at the main studio (the "Main Studio") available, for no additional consideration, to Programmer for its use for the production of Programming under this Agreement. Programmer accepts complete and full responsibility for the care and maintenance of such equipment during the Term. If Programmer originates the Programming from any place other than the Main Studio, Programmer shall be responsible for delivering the Programming to the Main Studio for broadcast by Topaz on the Station.


1.3. ADVERTISING AND PROGRAMMING REVENUES. During the Term, Programmer shall have the exclusive authority to sell for its own account commercial time on the Station and to retain all revenues from the sale of such advertising. In accordance with the RASA TBA, the fees due hereunder shall be reduced pro rata for any Programming preempted by RASA pursuant to Sections 2.1.1 or 2.1.2 of the RASA TBA for the commercial advantage of RASA, in an arbitrary manner, or otherwise not based on RASA's good faith determination that the broadcast of such Programming is not in the public interest.


1.4. PAYMENTS. Programmer shall pay to Topaz the fees set forth on Schedule 1.4 hereto for the rights granted under this Agreement.


1.5. TERM. The term of this Agreement (the "Term") shall be the period commencing January 1, 1998 (the "Commencement Date") and terminating on the earliest of: (a) the Closing under the Merger Agreement; (b) the termination of the RASA Purchase Agreement in accordance with its terms; (c) the termination of the RASA TBA in accordance with its terms; or (d) the termination of this Agreement pursuant to Section 7 hereof.


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2. PROGRAMMING AND OPERATING STANDARDS


2.1. RIGHTS AND OBLIGATIONS OF RASA. As and to the extent provided by law, RASA shall be responsible for the control of the day-to-day operations of the Station in conformance with its FCC licenses, permits and authorizations. Without limiting the generality of the foregoing, RASA shall have the rights and obligations set forth in Sections 2.1.1 - 2.1.6 of the RASA TBA with respect to programming and technical operations of the Station.


2.2. RIGHTS AND OBLIGATIONS OF PROGRAMMER. Programmer shall not take any action, or omit to take any action, inconsistent with RASA's obligations under law to retain ultimate responsibility for the programming and technical operations of the Station. Without limiting the generality of the foregoing, Programmer shall have the rights and obligations set forth in Sections 2.2.1 - 2.2.5 of the RASA TBA with respect to programming and technical operations of the Station.


3. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES


3.1. LICENSEE'S RESPONSIBILITY FOR EMPLOYEES AND EXPENSES.


(a) As set forth in the RASA TBA, RASA shall employ a full-time managerial-level employee for the Station, who shall report and be solely accountable to RASA and shall be responsible for overseeing the operations of the Station generally, and a full-time staff-level employee, who shall report to and assist the manager in the performance of his and her duties. RASA will be responsible for the salaries, taxes, insurance and related costs for its personnel. Whenever on the Station's premises, all of Programmer's personnel shall be subject to the supervision and the direction of the Station's General Manager and/or the Station's Chief Operator.


(b) As set forth in the RASA TBA, RASA shall also be responsible for timely paying (i) all FCC regulatory fees and related attorneys' fees; (ii) all lease payments, real estate and personal property taxes, insurance premiums and utility costs (telephone, electricity, etc.) relating to the Station's transmitter site, transmitter and antenna; (iii) all rent and costs under the Existing Studio Lease or the New Studio Lease, as defined in the RASA TBA, including the costs of appropriate levels of property insurance; and (iv) all maintenance and repair costs on the transmitting equipment, real estate and personal property taxes, utility costs (telephone, electricity, etc.) relating to the


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existing transmitting site, transmitters and antennas; and maintenance and repair costs on the transmitting equipment.


3.2. PROGRAMMER'S RESPONSIBILITY FOR EMPLOYEES AND EXPENSES.


(a) Programmer shall be responsible for the artistic personnel and material for the production of the Programming to be provided under this Agreement. Programmer shall employ and be responsible for the salaries, taxes, insurance and related costs for all personnel used in the production of the Programming.


(b) Programmer shall also be responsible for timely paying all costs associated with production and listener responses, including telephone costs, fees to ASCAP, BMI and SESAC, any other copyright fees, and all other costs or expenses attributable to the Programming that is delivered by Programmer for broadcast on the Station.


3.3. CONTINUED EMPLOYMENT OF STATION EMPLOYEES.
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3.3.1 TRANSFERRED EMPLOYEES. Except for the employees set
forth in Section 3.1 or on SCHEDULE 3.3.1, on or prior to the
Commencement Date, Programmer shall offer employment to all employees
of the Station (employees accepting such employment on or after the
Commencement Date being herein referred to as the "Transferred
Employees"). The terms and conditions of Programmer's employment of the
Transferred Employees shall be at-will employment in at least the same
positions, for at least the same direct cash compensation, with medical
insurance effective as of the Commencement Date and including coverage
for any preexisting health conditions that would have been covered
under Topaz's health plan in which the employee was a participant
immediately prior to the Commencement Date and such other benefits as
Programmer provides generally for its other employees; PROVIDED,
HOWEVER, that Programmer shall comply with the terms of any Assumed
Contract, as hereafter defined, relating to any Transferred Employee.


3.3.2. EMPLOYEES ON LEAVE. If as of the Commencement Date any
employee of the Station is on a disability or other authorized
temporary leave from employment by Topaz, Programmer shall offer
employment to such person at such time the person is capable and ready
to return to active status, provided that such


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person actually returns to active status within six (6) months after
the Commencement Date. Any such employee who is capable and ready to
return from such a temporary leave from employment by Topaz, who
promptly accepts Programmer's offer of employment and who reports to
work promptly after such acceptance and prior to the expiration of such
six-month period, shall become a Transferred Employee as of the first
day he or she reports to work with Programmer.


3.3.3. VACATION POLICY. For purposes of determining the amount
of any entitlement of any Transferred Employee under Programmer's
vacation policy, Programmer will take into account and credit such
Transferred Employee's length of service with Topaz or RASA as well as
with Programmer, and Programmer will also assume responsibility for the
accrued but unused vacation of all Transferred Employees. As part of
the proration process described in Section 4, Topaz shall make a
payment to Programmer equal to the value of the unused vacation
entitlements of the Transferred Employees as of the Commencement Date.
Programmer shall not assume any obligations under Topaz's sick leave or
severance policies, except for obligations set forth in the Assumed
Contracts.


3.3.4. PRORATION OF SALARIES AND COMPENSATION. Except as
otherwise expressly set forth herein, Topaz shall be solely responsible
for all salaries and other compensation which will or may become
payable to any Transferred Employee in respect of any period of
employment by Topaz prior to the Commencement Date, and Programmer
shall be solely responsible for any salaries and other compensation
which will or may become payable to any Transferred Employee in respect
of any period on and after the Commencement Date.


3.3.5. RESTRICTIONS ON TRANSFER OF TRANSFERRED EMPLOYEES.
During the Term of this Agreement, Programmer shall not hire or
transfer any Transferred Employee to another radio broadcast station
owned or operated by Programmer or an Affiliate (as defined in Section
7.5 hereof) of Programmer.


3.3.6. NO THIRD PARTY BENEFICIARY RIGHTS. No provisions of
this Agreement shall create any third party beneficiary rights of any
employee or former employee (including any beneficiary or dependent
thereof) of Topaz in respect of continued employment (or resumed
employment) with Topaz or with Programmer or in respect of any other
matter.


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4. ASSIGNMENT AND ASSUMPTION OF CERTAIN
AGREEMENTS, RIGHTS AND OBLIGATIONS; PRORATIONS


4.1 ACCOUNTS RECEIVABLE.


(a) As of the Commencement Date, Topaz shall assign to Programmer all of Topaz's rights in all accounts receivable from Time Sales Agreements and Trade Agreements relating to the sale of time on the Station prior to the Commencement Date (the "Accounts Receivable"). As soon after the Commencement Date as practicable, Topaz shall deliver to Programmer a complete and detailed statement (the "Receivable Statement") of the Accounts Receivable. The Receivable Statement shall show all commissions owing with respect to the Accounts Receivable, if any. Prior to the Commencement Date, Topaz shall not engage in the acceleration of customer orders, any grant of any discount to customers other than in the ordinary course of business consistent with past practices or any other changes intended to increase the cash collection of accounts receivable prior to the Commencement Date.


(b) In the event that this Agreement is terminated for any reason other than the occurrence of the Closing under the Merger Agreement, as of the date of such termination (the "Termination Date"), Programmer shall assign to Licensee cash or accounts receivable from Time Sales Agreements and Trade Agreements relating to the sale of time on the Stations prior to the Termination Date (the "Programmer's Accounts Receivable") equal in value to the Accounts Receivable. As soon after the Termination Date as practicable, Programmer shall deliver to Licensee a complete and detailed statement (the "Programmer's Receivable Statement") of the Programmer's Accounts Receivable. The Programmer's Receivable Statement shall show all commissions owing with respect to the Programmer's Accounts Receivable, if any. Prior to the Termination Date, Programmer shall not engage in the acceleration of customer orders, any grant of any discount to customers other than in the ordinary course of business consistent with past practices or any other changes intended to increase the cash collection of accounts receivable prior to the Termination Date. The final determination of any amount owed under this Section 4.1 shall be handled as a proration item in accordance with Section 4.6 hereof. Notwithstanding anything herein to the contrary, liabilities and obligations under Trade Agreements shall be prorated in favor of Licensee as set forth in Section 4.7 hereof.


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4.2. LICENSE TO USE CALL SIGN AND TRADEMARKS. Topaz hereby grants Programmer a license to use the call signs and trademarks and names related to the Station (the "Marks") during the Programming during the Term. Programmer agrees that the nature and quality of all services rendered by it in connection with the Marks shall conform to reasonable quality standards set by and under the control of Topaz. If Topaz becomes aware of any fact which in its opinion indicates that Programmer is using the Marks in connection with Programming which does not conform with Topaz's reasonable quality standards, Topaz may notify Programmer in writing of such facts and request that Programmer conform its use of the Marks to Topaz's reasonable quality standards. If Programmer does not conform its use of the Marks, Topaz may terminate the license granted hereby upon written notice to Programmer. Programmer agrees to cooperate with Topaz to control the nature and quality of use of the Marks, to supply Topaz with audio tapes and uses of the Marks upon Topaz's reasonable request, and to use the Marks only in connection with quality programming services. Programmer further agrees to notify Topaz in writing of any legal action commenced against it which relates to the Marks or to the quality of the Programming, within ten (10) days of notice to Programmer of such action.


4.3. ASSUMPTION OF OBLIGATIONS.


(a) As of the Commencement Date, Topaz shall assign to Programmer, and Programmer shall assume and undertake to pay, satisfy or discharge the liabilities, obligations and commitments of Topaz arising or accruing after the date hereof under the contracts, leases, and other agreements specifically identified on Schedule 4.3 hereto (the "Assumed Contracts").


(b) Topaz shall use reasonable efforts to obtain the consent of any third party necessary for the assignment to Programmer of any of the Assumed Contracts; provided, that Topaz shall not be obligated to pay any money to obtain such consent. In the event a consent or waiver required with respect to the assignment of any of the Assumed Contracts is not obtained, Topaz shall use reasonable efforts to provide Programmer with the benefits of any such Assumed Contract (including, without limitation, permitting Programmer to enforce any rights of Topaz under such Assumed Contract), and Programmer shall, to the extent Programmer is provided with the benefits of such Assumed Contract, perform all obligations of Topaz thereunder.


4.4. STATION VEHICLES. As of the Commencement Date, Topaz shall transfer,


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assign, convey and deliver to Programmer, all motor vehicles owned by Topaz (the "Owned Vehicles").


4.5. LIMITATION. Except as set forth in this Section 4, Programmer expressly does not, and shall not, assume or be deemed to assume, under this Agreement or otherwise by reason of the transactions contemplated hereby, any liabilities, obligations or commitments of Topaz of any nature whatsoever.


4.6 PRORATION OF INCOME AND EXPENSES. All income and expenses arising from the conduct of the business and operation of the Station shall be prorated between Programmer and Topaz as of 12:01 a.m. on the Commencement Date in accordance with GAAP. Such prorations shall be based upon the principle that Topaz shall incur or be entitled to all income earned and shall be responsible for all liabilities and obligations incurred or accruing in connection with the operation of the Station until the Commencement Date, and Programmer shall be entitled to all income earned and (subject to Section 4.3 above) be responsible for such liabilities and obligations incurred by Programmer thereafter. Such prorations shall include, without limitation, all ad valorem, real estate and other property taxes, business and license fees, music and other license fees, wages and salaries of employees (including accruals up to the Commencement Date for bonuses, commissions, sick leave, vacation and severance pay and related payroll taxes), utility expenses, liabilities and obligations under all Assumed Contracts (other than Trade Agreements), rents and similar prepaid and deferred items and all other expenses attributable to the ownership and operation of the Station except for income and expenses under Contracts not assigned and assumed hereunder. Trade Agreements shall be prorated to the extent provided in Section 4.7 of this Agreement.


4.7. TRADE AGREEMENTS. Liabilities and obligations under Trade Agreements shall be prorated in favor of Programmer for the amount, if any, by which the aggregate net value of the Station's Barter Payable (as defined below) for air time under such agreements as of 12:01 a.m. on the Commencement Date in excess of Twenty-Five Thousand Dollars ($25,000) as of the Commencement Date exceeds the aggregate net value of the Station's Barter Receivable (as defined below) as of the Commencement Date. Programmer shall not be obligated to make any proration in favor of Topaz with respect to Trade Agreements, notwithstanding that the fair market value of property to be received by Programmer exceeds the liability for unperformed time. "Barter Payable" means the aggregate value of time owed pursuant to each of the Trade Agreements calculated in accordance with generally accepted accounting principles. "Barter


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Receivable" means the aggregate value of goods and services to be received pursuant to each of the Trade Agreements.


4.8. PAYMENT OF PRORATION ITEMS. Not less than five (5) days after the Commencement Date, Topaz shall deliver to Programmer a schedule setting forth its good faith calculation of the prorations pursuant to Sections 4.6 and 4.7 (which schedule shall set forth in reasonable detail the basis for those determinations) (the "Proration Schedule"), and, to the extent feasible, such prorations and adjustments shall be made as of the Commencement Date. The Proration Schedule shall be conclusive and binding upon Programmer unless Programmer provides Topaz with written notice of objection (the "Notice of Disagreement") within thirty (30) days after Programmer's receipt of the Proration Schedule, which notice shall state the prorations of expenses proposed by Programmer (the "Programmer's Proration Amount"). Topaz shall have fifteen (15) days from receipt of a Notice of Disagreement to accept or reject Programmer's Proration Amount. If Topaz rejects Programmer's Proration Amount, and the amount in dispute exceeds five thousand dollars ($5,000), the dispute shall be submitted within ten (10) days to a mutually agreed upon accounting firm (the "Referee") for resolution of the dispute, such resolution to be made within thirty (30) days after submission to the Referee and to be final, conclusive and binding on Topaz and Programmer. Programmer and Topaz agree to share equally the cost and expenses of the Referee, but each party shall bear its own legal and other expenses, if any. If the amount in dispute is equal to or less than Five Thousand Dollars ($5,000), such amount shall be divided equally between Programmer and Topaz. Payment by Programmer or Topaz, as the case may be, of the proration amounts determined pursuant to this Section 4.8 shall be due fifteen (15) days after the last to occur of (i) Programmer's acceptance of the Proration Schedule or failure to give Topaz a timely Notice of Disagreement; (ii) Topaz's acceptance of Programmer's Proration Amount; (iii) Topaz's rejection of Programmer's Proration Amount in the event the amount in dispute equals or is less than Five Thousand Dollars ($5,000); and (iv) notice to Topaz and Programmer of the resolution of the disputed amount by the Referee in the event that the amount in dispute exceeds Five Thousand Dollars ($5,000). Any payment required by Topaz to Programmer or by Programmer to Topaz, as the case may be, under this Section 4.8 shall be paid by wire transfer of immediately available federal funds to the account of the payee with a financial institution in the United States as designated by Topaz in the Proration Schedule or by Programmer in the Notice of Disagreement (or by separate notice in the event that Topaz does not send a Notice of Disagreement). If either Programmer or Topaz fails to pay when due any amount under this Section 4.8, interest on such amount will accrue from the date payment was due to


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the date such payment is made at a per annum rate equal to the Prime Rate plus three percent (3%), and such interest shall be payable upon demand.


5. INDEMNIFICATION


5.1. INDEMNIFICATION. From and after the Commencement Date, each of Programmer and Topaz shall indemnify, defend, and hold harmless the other its affiliates and their respective officers, directors, employees and representatives, and the successors and assigns of any of them, from and against, and reimburse them for, all claims, damages, costs and expenses, including, without limitation, interest, penalties, court costs and reasonable attorneys' fees and expenses, resulting from (a) any programming provided by such party for broadcast on the Station; and (b) any breach by such party of any representation, warranty, covenant or other agreement contained in this Agreement.


5.2. SURVIVAL. The covenants, indemnities and other agreements contained in this Agreement or in any certificate, document or instrument delivered pursuant to this Agreement shall not survive the Term of this Agreement, except for the covenants of Programmer set forth in Section 7.5 which shall survive for the period set forth therein. No party shall be entitled to indemnification hereunder for any claim arising from the breach by the other party of its representations and warranties unless written notice describing in reasonable detail the nature and basis of such claim is given during the survival period. In the event such notice is given, the right to indemnification with respect thereto shall survive until such claim is finally resolved and any obligations thereto are fully satisfied. Any investigation by or on behalf of any party hereto shall not constitute a waiver as to enforcement of any representation, warranty, covenant or agreement contained herein.


6. EVENTS OF DEFAULT AND CURE PERIODS


6.1. EVENTS OF DEFAULT. The following shall, after the expiration of the applicable cure periods as set forth in Section 6.2, each constitute an "Event of Default" under this Agreement:


6.1.1. NON-PAYMENT. Programmer's failure to pay when due the
fees payable under Section 1.4 of this Agreement;


6.1.2. DEFAULT IN COVENANTS. Either party defaults in the
performance of


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any material covenant, condition or undertaking contained in this
Agreement or the Merger Agreement;


6.1.3. BREACH OF REPRESENTATION. Any material representation
or warranty made by either party to this Agreement or the Merger
Agreement, or in any certificate or document furnished by either party
to the other pursuant to the provisions of this Agreement or the Merger
Agreement, proves to have been false or misleading in any material
respect as of the time made or furnished.


6.1.4. BANKRUPTCY. Either party (a) makes a general assignment
for the benefit of creditors, or (b) files or has filed against it a
petition for bankruptcy, for reorganization or an arrangement, or for
the appointment of a receiver, trustee or similar creditors'
representative for the property or assets of such party under any
federal or state insolvency law, which, if filed against such party,
has not been dismissed or discharged within sixty (60) days thereafter.


6.2. CURE PERIODS. An Event of Default shall not be deemed to have occurred until fifteen (15) days after the non-defaulting party has provided the defaulting party with written notice specifying the event or events that, if not cured, would constitute an Event of Default and specifying the actions necessary to cure the default(s) within such period. This period may be extended for a reasonable period of time if the defaulting party is acting in good faith to cure and such delay is not materially adverse to the other party.


7. TERMINATION


7.1. TERMINATION UPON DEFAULT. Upon the occurrence of an Event of Default, the non-defaulting party may terminate this Agreement, provided that it is not also in material default of this Agreement or the Merger Agreement. If Programmer has defaulted in the performance of its obligations, all amounts accrued or payable to Topaz up to the date of termination which have not been paid shall immediately become due and payable, and Topaz shall be under no further obligation to make available to Programmer any broadcast time or broadca ...