Kixw(am) And KZXY-FM Time Brokerage Agreement

EXECUTION COPY
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KIXW(AM) AND KZXY-FM TIME BROKERAGE AGREEMENT


This Time Brokerage Agreement (the "Agreement"), made as of the 17th day of December, 1997, is between Ruby Broadcasting, Inc., a Delaware corporation ("Licensee"), licensee of radio stations KIXW(AM) and KZXY-FM, Apple Valley, California (the "Stations"), pursuant to authorizations issued by the Federal Communications Commission (the "FCC"), and Regent Communications, Inc., a Delaware corporation ("Programmer").


Licensee is engaged in the business of radio broadcasting and has available broadcasting time on the Stations.


Licensee and Regent Broadcasting of Victorville, Inc. have entered into an Asset Purchase Agreement dated as of December 17, 1997 (the "KIXW/KZXY Purchase Agreement"), by which Programmer will acquire all of the tangible and intangible assets owned by Licensee and used or useful in the operation of the Stations on the terms and subject to the conditions set forth in the KIXW/KZXY Purchase Agreement.


Programmer desires to avail itself of Stations' broadcast time for the presentation of a programming service, including the sale of advertising time, in accordance with the rules, regulations and policies of the FCC.


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, Licensee shall make available broadcast time on each of the Stations 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 consistent with prior practice; (ii) up to three (3) hours per week during which time Licensee may broadcast, at its own expense, programming designed to address the problems, needs, and issues of the Stations' listeners; and (iii) times when Programmer's programs are not accepted or are preempted by Licensee. Additionally, Programmer shall make 30 one-minute time


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segments per week, on a run-of-schedule basis, available to Licensee in the Programming for broadcast of announcements in the public interest relevant to local issues of concern.


(b) Any failure or impairment of facilities or any delay or interruption in broadcasting the Programming, or failure at any time to furnish the facilities, in whole or in part, for broadcasting, due to acts of God, strikes or threats thereof, force majeure or any other causes beyond the control of Licensee, shall not constitute a breach of this Agreement.


1.2. ACCESS TO STUDIO FACILITIES; DELIVERY OF PROGRAMMING. To enable Programmer to fulfill its obligations hereunder, Licensee shall make its office and equipment at its 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 Licensee on the Stations.


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 Stations and to retain all revenues from the sale of such advertising.


1.4. PAYMENTS. Programmer shall pay to Licensee the fees set forth on SCHEDULE 1.4 hereto for the rights granted under this Agreement. Programmer shall receive a credit against any payments otherwise due pursuant to this Agreement for the Programming delivered to the Station but not broadcast by the Station in the event that Licensee preempts more than one hour per day of the Programming in bad faith or for Licensee's commercial advantage. Such credit shall be determined by multiplying the total payment due for the month in which the Programming was delivered and not broadcast by the ratio of the amount of time for Programming not broadcast to the total time of all Programming delivered to the Station for broadcast during that month.


1.5. TERM. The term of this Agreement (the "Term") shall be the period commencing on January 1, 1998 (the "Commencement Date") and terminating on the earliest of: (a) the Closing under the KIXW/KZXY Purchase Agreement; (b) the sale of


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the Stations to a third party; and (c) the termination of this Agreement pursuant to Section 7 hereof.


2. PROGRAMMING AND OPERATING STANDARDS


2.1. RIGHTS AND OBLIGATIONS OF LICENSEE. Licensee shall be responsible for the control of the day-to-day operations of the Stations in conformance with its FCC licenses, permits and authorizations. Without limiting the generality of the foregoing:


2.1.1. LICENSEE'S ABSOLUTE RIGHT TO REJECT PROGRAMMING.
Licensee shall retain the absolute right to accept or reject any
Programming (including advertisements) that Licensee in its sole
discretion deems contrary to the public interest.


2.1.2. LICENSEE'S RIGHT TO PREEMPT PROGRAMMING FOR SPECIAL
EVENTS. Licensee shall have the right, in its sole discretion, to
preempt the Programming in order to broadcast a program deemed by
Licensee to be of greater national, regional, or local interest, and to
use part or all of the hours of operation of the Stations for the
broadcast of events of special importance. In all such cases, Licensee
will use its best efforts to give Programmer reasonable advance notice
of its intention to preempt any regularly scheduled programming.
Licensee expressly agrees that its right of preemption shall not be
exercised in an arbitrary manner or for the commercial advantage of
Licensee.


2.1.3. FCC PUBLIC INTEREST REQUIREMENTS.


(a) The parties agree that Licensee may broadcast its
own public service programming between the hours of 6:00 a.m. and 9:00
a.m. every Sunday and such other public service programming at such
other times as the parties may agree.


(b) The parties acknowledge that Licensee is
ultimately responsible for complying with the FCC's rules and
regulations with respect to (i) the carriage of political
advertisements and programming (including, without limitation, the
rights of candidates and, as appropriate, others to equal
opportunities, lowest unit charge and reasonable access); (ii) the
broadcast and nature of public service programming; (iii) the
maintenance of political and public inspection files and the


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Stations' logs; (iv) the ascertainment of issues of community concern;
and (v) the preparation of all quarterly issues/programs lists.


(c) Licensee reserves the right to refuse to
broadcast any program containing matter that Licensee in good faith
believes to be, or that Licensee in good faith believes may be
determined by the FCC or any court or other regulatory body with
authority over Licensee or the Stations to be, violative of any right
of any third party, a "personal attack" (as that term is defined by the
FCC) or indecent or obscene. Licensee shall further have the right to
take any other actions necessary for compliance with the laws of the
United States, the State of California, the rules, regulations and
policies of the FCC (including the prohibition on unauthorized
transfers of control), and the rules, regulations and policies of other
federal government authorities, including the Federal Trade Commission
and the Department of Justice. If, in the judgment of Licensee or the
Stations' General Manager, any portion of the Programming does not meet
any of the above standards or the requirements of Section 2.2 of this
Agreement, Licensee may suspend, cancel or refuse to broadcast any such
portion of the programming without reduction or offset in the payments
due Licensee under this Agreement.


2.1.4. MAINTENANCE AND REPAIR OF TRANSMISSION FACILITIES.
Licensee shall maintain the Stations' transmission equipment and
facilities, including the antennas, transmitters and transmission
lines, and shall provide for the delivery of electrical power to the
Stations' transmitting facilities at all times in order to ensure
operation of the Stations. Licensee shall undertake such repairs as are
necessary to maintain full-time operation of the Stations with their
maximum authorized facilities as expeditiously as possible following
the occurrence of any such loss or damage.


2.1.5. MAIN STUDIO LOCATION. Licensee shall maintain a main
studio as required under the FCC's rules and regulations.


2.1.6. COMPLIANCE WITH FCC TECHNICAL RULES. Licensee shall
retain, on a full time or part time basis, a qualified engineer who
shall be responsible for maintaining the transmission facilities of the
Stations. Licensee shall employ or retain a Chief Operator, as that
term is defined by the rules and regulations of the FCC, who shall be
responsible for ensuring compliance by the Stations with the technical
operating and reporting requirements established by the FCC.


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2.2. RIGHTS AND OBLIGATIONS OF PROGRAMMER.


2.2.1. COMPLIANCE WITH LAWS AND STATION POLICIES. All
Programming shall conform in all material respects to all applicable
rules, regulations and policies of the FCC, and all other laws or
regulations applicable to the broadcast of programming by the Stations.
All Programming shall be prepared and presented in conformity with the
regulations prescribed in SCHEDULE 2.2.1 hereto.


2.2.2. COOPERATION WITH LICENSEE. Programmer, on behalf of
Licensee, shall furnish within the Programming all station
identification announcements required by the FCC's rules, and shall,
upon request by Licensee, provide information with respect to any of
the Programming which is responsive to the public needs and interests
of the area served by the Stations so as to assist Licensee in the
preparation of any required programming reports, and will provide upon
request other information to enable Licensee to prepare other records,
reports and logs required by the FCC or other local, state or federal
governmental agencies. Programmer shall maintain and deliver to
Licensee all records and information required by the FCC to be placed
in the public inspection files of the Stations pertaining to the
broadcast of political programming and advertisements, in accordance
with the provisions of Sections 73.1940 and 73.3526 of the FCC's rules,
and agrees to broadcast sponsored programming addressing political
issues or controversial subjects of public importance, in accordance
with the provisions of Section 73.1212 of the FCC's rules.


2.2.3. PAYOLA AND PLUGOLA. Programmer shall provide to
Licensee in advance any information known to Programmer regarding any
money or other consideration which has been paid or accepted, or has
been promised to be paid or to be accepted, for the inclusion of any
matter as a part of any programming or commercial material to be
supplied to Licensee by Programmer for broadcast on the Stations,
unless the party making or accepting such payment is identified in the
program as having paid for or furnished such consideration in
accordance with FCC requirements. Commercial matter with obvious
sponsorship identification will not require disclosure beyond the
sponsorship identification contained in the commercial copy. Programmer
shall at all times endeavor to proceed in good faith to comply with the
requirements of Sections 317 and 507 of the Communications Act of 1934,
as amended, and the related rules and regulations of the FCC.


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2.2.4. HANDLING OF MAIL. Programmer shall provide Licensee
with the original or a copy of any correspondence from a member of the
public relating to the Programming to enable Licensee to comply with
FCC rules and policies, including those regarding the maintenance of
the public inspection file. Licensee shall not be required to receive
or handle mail, cables, telegraph or telephone calls in connection with
the Programming unless Licensee has agreed to do so in writing.
Licensee shall promptly forward to Programmer all correspondence,
payments, communications or other information and/or documents which it
receives and which relate to the Programming, including without
limitation, invoices, billing inquiries, checks, money orders, wire
transfers, or other payments for services or advertising.


2.2.5. COMPLIANCE WITH COPYRIGHT ACT. Programmer shall not
broadcast any material on the Stations in violation of the Copyright
Act or the rights of any person. All music supplied by Programmer shall
be (a) licensed by a music licensing agent such as ASCAP, BMI, or
SESAC; (b) in the public domain; or (c) cleared at the source by
Programmer. Programmer shall retain the exclusive right to use and to
authorize the use in any manner of any programming licensed to it.
Licensee shall not be obligated to pay any music licensing fees or
other similar expenses required in connection with the material
broadcast by Programmer on the Stations. Licensee shall be obligated to
pay any music licensing fees and other similar expenses required in
connection with material broadcast by Licensee in accordance with
Section 1.1.


2.2.6. KZXY-FM FORMAT. Programmer shall not change the format
of Station KZXY-FM during the Term of this Agreement.


3. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES


3.1. LICENSEE'S RESPONSIBILITY FOR EMPLOYEES AND EXPENSES.


(a) Licensee will employ a full-time management-level employee for the Stations, who shall report and be solely accountable to Licensee and shall be responsible for the operations of the Stations and a staff-level employee who shall report to and assist the manager in the performance of his and her duties. Licensee will be responsible for the salaries, taxes, insurance and related costs for its Station personnel. Whenever at the Main Studio or otherwise on the Stations' premises, all of Programmer's personnel shall


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be subject to the supervision and the direction of the Stations' General Manager and/or the Stations' Chief Operator.


(b) Licensee shall be responsible for timely paying: lease payments for the Main Studio and transmitter sites and all taxes and other costs incident thereto; all FCC regulatory fees; real estate and personal property taxes, utility costs (telephone, electricity, etc.) relating to the existing transmitting sites, 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 pay for 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 Stations. Programmer shall also reimburse Licensee for all maintenance and repair costs for the studio and studio equipment used in production of the Programming. Licensee shall pay all costs of repair of the transmitting equipment as required in Section 2.1.4.


3.3. CONTINUED EMPLOYMENT OF STATION EMPLOYEES.


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 Licensee's health plan in which the employee was a participant
immediately prior to the Commencement Date and such other benefits as


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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.
Upon consummation of the KIXW/KZXY Purchase Agreement, Programmer shall
offer employment to the employees set forth on Schedule 3.3.1.


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 Licensee, Programmer shall offer
employment to such person at such time the person is capable and ready
to return to active status, provided that such 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 Licensee, 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 Licensee 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, Licensee 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 Licensee'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, Licensee 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 Licensee 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.


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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 Licensee in respect of continued employment (or resumed
employment) with Licensee or with Programmer or in respect of any other
matter.


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


4.1 ACCOUNTS RECEIVABLE.


(a) As of the Commencement Date, Licensee shall assign to Programmer all of Licensee's rights in all accounts receivable from Time Sales Agreements and Trade Agreements relating to the sale of time on the Stations prior to the Commencement Date (the "Accounts Receivable"). As soon after the Commencement Date as practicable, Licensee 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, Licensee 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 KIXW/KZXY Purchase 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 Termi ...