<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Faircom Inc.
_________________________________________________________________
(Name of Issuer)
Common Stock, $.01 par value
_________________________________________________________________
(Title of Class of Securities)
303762-10-8
_________________________________________________________________
(CUSIP Number)
John H. Wyant
2000 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 723-2300
_________________________________________________________________
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 13, 1998
_________________________________________________________________
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box ___.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 6 Pages<PAGE>
CUSIP No. 303762-10-8 13D 2 of 6 pages
_________________________________________________________________
1) Names of Reporting Persons S.S. or I.R.S. Identification
Nos. of Above Persons
Blue Chip Venture Company, Ltd.
31-1480937
_________________________________________________________________
2) Check the Appropriate Box if a Member of a Group (See
Instructions)
(a) ___
(b) X
_________________________________________________________________
3) SEC Use Only
_________________________________________________________________
4) Source of Funds (See Instructions)
WC
_________________________________________________________________
5) Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e) ___
_________________________________________________________________
6) Citizenship or Place of Organization
Ohio
_______________________________________________________________
| | |
| NUMBER OF SHARES | 7) Sole Voting Power 17,049,512 |
| BENEFICIALLY OWNED |_________________________________________|
| BY EACH REPORTING | 8) Shared Voting Power -0- |
| PERSON WITH |_________________________________________|
| | 9) Sole Dispositive Power 17,049,512 |
| |_________________________________________|
| | 10) Shared Dispositive Power -0- |
|_______________________________________________________________|
11) Aggregate Amount Beneficially Owned by Each Reporting Person
17,049,512
_________________________________________________________________
12) Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares (See Instructions) ___
_________________________________________________________________
13) Percent of Class Represented by Amount in Row (11)
69.8
_________________________________________________________________
14) Type of Reporting Person (See Instructions)
PN<PAGE>
Item 1. Security and Issuer
-------------------
This statement relates to the Common Stock, $.01 par
value ("Common Stock"), of Faircom Inc. (the "Issuer"). The name
and address of the principal executive offices of the Issuer are
as follows:
Faircom Inc.
333 Glen Head Road
Old Brookville, New York 11545
Item 2. Identity and Background
-----------------------
The person filing this statement is Blue Chip Venture
Company Ltd., an Ohio limited liability company ("Blue Chip").
Blue Chip's business address is 2000 PNC Center, 201 East Fifth
Street, Cincinnati, Ohio 45202.
The members and managers of Blue Chip and their
principal occupations are set forth below.
Name Principal Occupation
- ---- --------------------
John H. Wyant Manager, Blue Chip and President
Blue Chip Venture Company
Z. David Patterson Manager, Blue Chip and Executive
Vice President, Blue Chip Venture Company
John McIlwraith Manager, Blue Chip
All of such persons are citizens of the United States. The
address of all such persons is c/o Blue Chip at the address set
forth above. During the last five years none of such persons has
been convicted in a criminal proceeding or has been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which he was or is subject
to a judgment, decree or final order enjoining future violations
or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
Blue Chip is the general partner of Blue Chip Capital
Fund II Limited Partnership ("Blue Chip II") and an affiliate of
a special limited partner and portfolio manager of Miami Valley
Venture Fund L.P. ("Miami Valley"). In such capacity, Blue Chip
exercises sole voting and dispositive power over all securities
held by both funds.
<PAGE>
Item 4. Purpose of Transaction.
----------------------
The purpose of the acquisition of the Common Stock is
investment. Blue Chip may acquire additional shares of Common
Stock or dispose of shares if it deems such transaction to be
financially advantageous. Blue Chip also reserves the right to
change such intent if circumstances change. Except as described
below, Blue Chip currently has no plan or proposal which relates
to or would result in:
(a) The acquisition by any person of additional
securities of the Issuer, or the disposition of
securities of the Issuer;
(b) An extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving
the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets
of the Issuer or any of its subsidiaries;
(d) Any change in the present board of directors or
management of the Issuer, including any plans or
proposals to change the number or term of
directors or to fill any existing vacancies on the
board;
(e) Any material change in the present capitalization
or dividend policy of the Issuer;
(f) Any other material change in the Issuer's business
or corporate structure;
(g) Changes in the Issuer's charter, bylaws or
instruments corresponding thereto or other actions
which may impede the acquisition of control of the
Issuer by any person;
(h) Causing a class of securities of the Issuer to be
delisted from a national securities exchange or to
cease to be authorized to be quoted in an inter-
dealer quotation system of a registered national
securities association;
(i) Causing a class of equity securities of the Issuer
becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Act; or
(j) Any action similar to any of those enumerated
above.
The Issuer has agreed to use its best efforts to cause the
shareholders of the Issuer to elect to its Board of Directors two
nominees proposed by Blue Chip II and Miami Valley. The Issuer<PAGE>
has also agreed that, if it does not, on or before January 1,
1998, consummate a merger of the Issuer with another corporation
on terms acceptable to Blue Chip II and Miami Valley, then upon
notice from Blue Chip II and Miami Valley, the Issuer will take
all action necessary to liquidate the Issuer and each of its
subsidiaries on terms and conditions acceptable to Blue Chip II
and Miami Valley, such approval not to be unreasonably withheld.
The Issuer has entered into an Agreement of Merger (the
"Merger Agreement") dated as of December 5, 1997 among the
Issuer, Regent Communications, Inc. ("Regent") and a wholly-owned
subsidiary of Regent. Pursuant to the Merger Agreement, Blue
Chip and Miami have consented to the Merger and agreed to convert
at least $7,500,000 principal amount of the Promissory Notes
described below into Common Stock immediately prior to the
consummation of the merger.
Item 5. Interest in Securities of the Issuer.
------------------------------------
The following table sets forth information with respect
to the shares of Common Stock of which Blue Chip has or shares
beneficial ownership:
Percent of
Record Owner Number of Shares Outstanding
- ------------ ---------------- -----------
Blue Chip II 14,492,085(1)(3) 66.3
Miami Valley 2,557,427(2)(3) 25.7
---------- ----
Total 17,049,512 69.8
(1) As general partner of Blue Chip II, Blue Chip has sole
voting power and dispositive power with respect to these
shares.
(2) As an affiliate of a special limited partner of Miami
Valley, Blue Chip has sole voting power and dispositive
power with respect to these shares.
(3) All of such shares of Common Stock are beneficially owned
pursuant to the right to convert (a) $4,411,765 principal
amount of the Issuer's Class A Convertible Subordinated
Promissory Notes due July 1, 2002, of which $3,750,000
principal amount are held of record by Blue Chip II and
$661,765 are held of record by Miami Valley and (b)
$4,588,235 principal amount of the Issuer's Class B
Convertible Subordinated Promissory Notes due July 1, 2002,
of which $3,900,000 principal amount are held of record by
Blue Chip II and $688,235 are held of record by Miami Valley
(collectively, the "Notes").
<PAGE>
The following table sets forth information with respect
to all transactions with respect to the Common Stock in which
Blue Chip has engaged in the last 60 days.
Date Shares Sold Price Per Share
- ---- ----------- ---------------
February 13, 1998 1,962,488(1) --
(1) Represents sale of $1.0 million principal amount of the
Notes at a price equal to their principal amount.
All of the above Notes were sold to a sophisticated investor in a
private placement pursuant to the Note Purchase Agreement (the
"Note Purchase Agreement") dated as of February 13, 1998 among
Blue Chip II, Miami Valley and PNC Bank, National Association,
Trustee (No. 1061291).
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of Issuer.
--------------------------------------------------
All of the Notes and the Common Stock subject thereto
are subject to the terms of the Securities Purchase Agreement, a
copy of which is attached as Exhibit 1 hereto and which is
incorporated herein by reference, the Merger Agreement, a copy of
which is attached as Exhibit 2 hereto and which is incorporated
herein by reference, and the Note Purchase Agreement, a copy of
which is attached as Exhibit 3 hereto and which is incorporated
herein by reference.
Item 7. Material to be Filed as Exhibits.
--------------------------------
1. Securities Purchase Agreement dated as of June 30,
1997 among Blue Chip II, Miami Valley, the Issuer, Faircom Flint
Inc. and Faircom Mansfield Inc. (previously filed)
2. Agreement of Merger dated as of December 5, 1997
among the Issuer, Regent Communications, Inc. and Regent Merger
Corp.
3. Note Purchase Agreement dated as of February 13,
1998 among Blue Chip II, Miami Valley and PNC Bank, National
Association, Trustee (No. 1061291).
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
BLUE CHIP VENTURE COMPANY LTD.
February 27, 1998 By: /s/ John H. Wyant
- ----------------- --------------------------
Date John H. Wyant
Manager
<PAGE>
Appendix A
AGREEMENT OF MERGER
AMONG
FAIRCOM INC.
AND
REGENT MERGER CORP.
AND
REGENT COMMUNICATIONS, INC.
Dated as of December 5, 1997
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
DEFINITION OF TERMS
<S> <C>
1. Definition of Terms......................2
(a) [Reserved]...............................2
(b) Closing Date and Closing.................2
(c) Commission...............................2
(d) Commission's Order.......................2
(e) Effectiveness............................2
(f) [Reserved]...............................2
(g) Faircom Broadcast Assets.................2
(h) Faircom Budget...........................3
(i) Faircom Financial........................3
(j) Faircom Licenses.........................3
(k) Faircom Senior Debt......................3
(l) Faircom Stations.........................3
(m) Faircom Stock............................4
(n) Faircom Stockholders.....................4
(o) Faircom Subordinated Notes...............4
(p) Faircom Subsidiaries.....................4
(q) Final Order..............................4
(r) [Reserved]...............................4
(s) Intellectual Property....................4
(t) Internal Revenue Code....................4
(u) Optionholders............................4
(u-1)Park Lane................................4
(v) Park Lane Financials.....................4
(w) Park Lane Stations.......................5
(x) Preferred Stock..........................5
(y) Pro-Rata Percentage Interest.............5
(z) Regent Assets............................5
(aa) Regent Financials........................5
(bb) Regent Licenses..........................6
(cc) Regent Projections.......................6
(dd) Regent Station...........................6
(ee) Regent Subsidiaries......................6
(ff) SEC......................................6
(gg) [Reserved]...............................6
(hh) Shelby Station...........................6
(ii) Shelby Station Pro Forma Broadcast
cash Flow................................6
(jj) Trustee..................................6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
AGREEMENT TO MERGE
<S> <C>
2. Agreement................................6
3. Action to Effect Merger..................6
4. Certificate of Incorporation and
By-Laws..................................7
5. Directors................................7
6. Officers.................................7
7. Stockholder Approval; Effectiveness
of Merger................................7
8. Authorized Shares of Surviving
Corporation..............................8
9. Authorized Shares of Disappearing
Corporation..............................8
MODE OF EFFECTING MERGER
10. Conversion and Exchange of Shares........8
11. Funding of Consideration for Faircom
Stock....................................9
12. Issuance of Preferred Stock..............9
12A. SEC Registration.........................9
12B. Affiliates..............................11
12C. Trading Prohibitions....................11
12D. No Solicitation.........................12
12E. Registration Rights.....................12
CONSIDERATION
13. (a) Base Consideration.................17
(b) Consideration After Adjustments....17
(c) Consideration Per Share Before
Appraisal Rights...................19
(d) Distributions by Trustee...........19
14. Surrender of Certificates and Delivery
of Consideration After Adjustments......20
COMMISSION MATTERS
15. Commission Consent to Transfers of
Control.................................21
16. Applications for Consent - Cooperation
of the Parties..........................21
17. Costs and Expenses......................22
18. Operation of Stations Before Closing....22
19. Control and Access......................22
20. [Reserved]..............................22
COVENANTS, REPRESENTATIONS AND WARRANTIES OF FAIRCOM
21. Covenants, Representations and Warranties
of Faircom..............................22
(a) Corporate Standing and Authority...23
(b) Capitalization; Faircom Stock......23
</TABLE>
-ii-<PAGE>
<TABLE>
PAGE
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<S> <C>
(c) Corporate Power....................24
(d) [Reserved].........................24
(e) [Reserved].........................24
(f) Affiliates.........................25
(g) Rights to Acquire Securities.......25
(h) Corporate Records..................25
(i) Title to Faircom Broadcast Assets..25
(j) Financial Statements; Budget.......25
(k) Contracts..........................26
(l) Government Authorizations..........27
(m) Management, Key Employees and
Accounts...........................28
(n) Tax Elections......................28
(o) Related Transactions...............28
(p) Taxes..............................28
(q) Employee Benefit Plans.............29
(r) Compliance with Commission
Regulations........................29
(s) Personal Property..................29
(t) Real Property......................30
(u) Environmental......................31
(v) Insurance..........................31
(w) Accounts and Notes Receivable......31
(x) Laws, Regulations and Instruments..32
(y) Conduct of Faircom Stations........32
(z) Disposition of Assets..............32
(aa) Transmitter Sites..................32
(bb) Litigation.........................32
(cc) No Conflict........................33
(dd) Required Consents..................33
(ee) Intellectual Property..............33
(ff) Qualifications for Transfer of
Control............................34
(gg) Public Inspection File.............34
(hh) Absence of Certain Changes.........34
(ii) Personnel Information..............35
(jj) [Reserved].........................35
(kk) Outstanding Debt...................35
(ll) Negative Covenants.................35
(mm) Affirmative Covenants..............36
(nn) Additional Agreements..............37
(oo) Join in Execution of Documents.....37
(pp) Full Disclosure....................37
(qq) Submission of Material for
Registration Statement.............38
(rr) Fairness and Tax Opinions..........38
</TABLE>
-iii-<PAGE>
<TABLE>
<CAPTION>
COVENANTS, REPRESENTATIONS AND WARRANTIES
OF REGENT AND SUBSIDIARY
PAGE
----
<S> <C>
22. Covenants, Representations and Warranties
of Regent and Subsidiary................38
(a) Corporate Standing and Authority...39
(b) Capitalization; Regent Stock.......39
(c) Corporate Power....................40
(d) [Reserved].........................40
(e) [Reserved].........................40
(f) Affiliates.........................40
(g) Rights to Acquire Securities.......40
(h) Corporate Records..................41
(i) Title to Regent Assets.............41
(j) Financial Statements; Projections..41
(k) Contracts..........................41
(l) Government Authorizations..........43
(m) Management, Key Employees and
Accounts...........................44
(n) Tax Elections......................44
(o) Related Transactions...............44
(p) Taxes..............................44
(q) Employee Benefit Plans.............45
(r) Compliance with Commission
Regulations........................45
(s) Personal Property..................45
(t) Real Property......................46
(u) Environmental......................47
(v) Insurance..........................48
(w) Accounts and Notes Receivable......48
(x) Laws, Regulations and Instruments..48
(y) Conduct of Regent Station and Park
Lane Stations......................49
(z) Disposition of Assets..............49
(aa) Transmitter Sites..................49
(bb) Litigation.........................49
(cc) No Conflict........................49
(dd) Required Consents..................50
(ee) Intellectual Property..............50
(ff) Qualifications for Transfer of
Control............................50
(gg) Public Inspection File.............51
(hh) Absence of Certain Changes.........51
(ii) Personnel Information..............51
(jj) [Reserved].........................52
(kk) Outstanding Debt...................52
(ll) Negative Covenants.................52
(mm) Affirmative Covenants..............53
(nn) Additional Agreements..............54
(oo) Join in Execution of Documents.....54
</TABLE>
- iv-<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
(pp) Full Disclosure...................54
(qq) Issuance of Preferred Stock.......55
(rr) Transferability of Preferred
Stock.............................55
23. [Reserved]..............................55
RISK OF LOSS
24. Risk of Loss............................55
(a) Faircom Broadcast Assets...........55
(b) Regent Assets......................56
(c) Broadcast Transmission of Stations
Prior to Closing...................56
CONDITIONS PRECEDENT TO SUBSIDIARY'S AND REGENT'S
OBLIGATION TO CLOSE
25. Conditions Precedent to Subsidiary's and
Regent's Oligations.....................57
(a) Representations, Warranties and
Covenants..........................57
(b) Delivery of Closing Documents......57
(c) Faircom Licenses...................57
(d) Consents...........................57
(e) Final Order........................58
(f) Adverse Proceedings................58
(g) Examination of Real Property.......58
(h) Dissenters' Rights.................58
(i) Faircom Information................58
(j) Stockholder Approval...............58
(k) Registration Statement.............58
(l) Regent Financing; Acquisitio8
of Park Lane.......................58
(m) Tax Opinion of Regent's Counsel....58
(n) Conversion of Faircom Subordinated
Notes..............................58
CONDITIONS PRECEDENT TO FAIRCOM'S OBLIGATION TO CLOSE
26. Conditions Precedent to Faircom's
Obligations.............................59
(a) Representations, Warranties and
Covenants..........................59
(b) Consideration......................59
(c) Delivery of Closing Documents......59
(d) Regent Licenses....................59
(e) Final Order........................59
(f) Consents...........................59
(g) Adverse Proceedings................59
(h) Issuance of Preferred Stock........60
(i) Examination of Real Property.......60
(j) Regent Financing; Acquisition of
Park Lane..........................60
(k) Stockholder Approval...............60
</TABLE>
-v-<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
(l) Registration Statement.............60
(m) Tax Opinion........................60
(n) Fairness Opinion...................60
(o) Tax Opinion of Regent's Counsel....60
CLOSING DOCUMENTS
27. Closing Documents to be Delivered by
Faircom.................................60
28. Closing Documents to be Delivered by
Regent and Subsidiary...................61
29. [Reserved]..............................62
30. Termination.............................62
31. Remedies on Termination of Agreement
or Default Prior to Closing.............63
32. Brokerage...............................64
33. Survival of Representations and
Warranties..............................64
MISCELLANEOUS PROVISIONS
34. Employment Agreement....................65
35. Headings................................65
36. Execution...............................65
37. Notices.................................65
38. Disclosure..............................66
39. Receipt of Preferred Stock..............66
40. Entire Agreement........................66
41. Governing Laws..........................66
42. Successors and Assigns..................66
</TABLE>
-vi-<PAGE>
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER (this "Agreement") is made and
entered as of this 5th day of December, 1997, by and among
FAIRCOM INC., a Delaware corporation (hereinafter referred to as
"Faircom"), REGENT MERGER CORP., a Delaware corporation
(hereinafter referred to as "Subsidiary"), REGENT COMMUNICATIONS,
INC., a Delaware corporation (hereinafter referred to as
"Regent"), BLUE CHIP CAPITAL FUND II LIMITED PARTNERSHIP
(hereinafter referred to as "Blue Chip"), and MIAMI VALLEY
VENTURE FUND L.P. (hereinafter referred to as "Miami Valley").
PREAMBLE
W I T N E S S E T H:
THAT, WHEREAS, Faircom, through its wholly-owned
subsidiaries, Faircom Flint Inc. and Faircom Mansfield Inc., is
the owner, operator and licensee of radio stations WCRZ-FM, WFNT-
AM, and WWBN-FM in Flint, Michigan, and WYHT-FM and WMAN-AM in
Mansfield, Ohio, respectively; and
WHEREAS, Subsidiary is a wholly-owned subsidiary of
Regent; and
WHEREAS, the Boards of Directors of Faircom and
Subsidiary have approved and adopted this Agreement pursuant to
which Faircom (sometimes referred to as "the Disappearing
Corporation") will be merged into Subsidiary (sometimes referred
to as "the Surviving Corporation") under the laws of the State of
Delaware in the manner provided therefor pursuant to Section 251
and related sections of Title 8 of the Delaware Code and the
terms of this Agreement (the "Merger"); and
WHEREAS, as a result of such merger, immediately after
Effectiveness the Faircom Stockholders will own approximately 57%
or more of the outstanding capital stock of Regent, and Regent
will own all of the outstanding capital stock of Faircom; and
WHEREAS, control of Regent and Faircom may not be
transferred without prior written consent of the Federal
Communications Commission; and
WHEREAS, Regent, Subsidiary, and Faircom have
negotiated the terms and conditions of the Merger, including the
consideration to be paid to the Faircom Stockholders and the
Optionholders.
NOW, THEREFORE, in consideration of the mutual promises
and the conditions hereinafter contained, and subject to the
conditions hereinafter set forth, the parties hereto agree as
follows:
-A1-<PAGE>
DEFINITION OF TERMS
1. DEFINITION OF TERMS. In addition to the words and
terms defined in the recitals and elsewhere in this Agreement,
the following terms shall have the following meanings:
(a) [Reserved]
(b) "Closing Date" means the date, time and place
designated by written notice from Subsidiary to Faircom, which
date shall be as soon as practicable but no later than ten (10)
days after the date of the last to occur of the following: (i)
the Registration Statement (as hereinafter defined) is declared
effective; (ii) the later of the Final Order or the satisfaction
of any condition imposed by the Commission pursuant to the
Commission's Order, or such other date within the effective
period (including any extension thereof) of the Commission's
order as shall be mutually agreed upon by Faircom and Subsidiary;
(iii) the approval of the Merger by the Faircom stockholders; and
(iv) the delivery to Regent of the Closing Worksheet prepared by
Faircom in accordance with the provisions of Paragraph 13(b)
hereof. "Closing" means the exchange of the Faircom Stock for the
Preferred Stock, the delivery of the Preferred Stock to the
Faircom Stockholders, and the execution and delivery of the other
documents as provided herein.
(c) "Commission" means the Federal Communications
Commission.
(d) "Commission's Order" means the action of the
Commission consenting to the transfers of control contemplated
herein.
(e) "Effectiveness" means the date and time at
which the Merger shall become effective, which shall be upon the
due and proper filing of the Certificate of Merger.
(f) [Reserved.]
(g) "Faircom Broadcast Assets" means, with
respect to the Faircom Stations:
(i) The Licenses listed on Exhibit l(j)
and the Public Inspection File maintained in connection
therewith.
(ii) All contracts for the sale of
broadcast time or advertising on the Faircom Stations for cash
which are valid and enforceable as of the Closing Date.
(iii) All contracts for the sale of
broadcast time or advertising on the Faircom Stations in exchange
for merchandise or services (or a combination of merchandise or
services and cash) which are valid and enforceable as of the
Closing Date.
(iv) All other leases, contracts and
agreements relating to the operation of the Faircom Stations and
which are in effect on the Closing Date, including without
limitation those described in Exhibit 21(k-1).
-A2-<PAGE>
(v) All the tangible property, assets,
furniture, fixtures, supplies, materials, goods, transmitters and
equipment used or useful in the operation of the Faircom
Stations, including, without limitation, those listed on Exhibit
21(s) and including replacements thereof or additions thereto
made between the date hereof and the Closing Date, less any
retirements made in the ordinary and usual course of business.
(vi) Goodwill, privileges, permits,
copyrights, logos, jingles, service marks, trademarks and trade
names (including rights in applications in connection therewith),
and other intangible rights (including rights to the call letters
of the Faircom Stations) used or useful in the operation of the
Faircom Stations or in connection therewith.
(vii) The correspondence, files, records,
stock books, minute books, books of account, logs, advertising
lists, copy and other files, books, writings and records of
Faircom and the Faircom Subsidiaries.
(viii) All accounts and notes receivable of
Faircom or the Faircom Subsidiaries as of the Closing Date.
(ix) The real property owned by Faircom or
the Faircom Subsidiaries, including without limitation that which
is described in Exhibit 2l(t).
(x) All other things owned by Faircom or the
Faircom Subsidiaries (including, without limitation, cash on
hand) used or useful in the operation of the Faircom Stations and
not disposed of in the ordinary and usual course of business and
any other assets acquired by Faircom or the Faircom Subsidiaries
prior to Closing.
(h) "Faircom Budget" means the 1997 Consolidated
and Consolidating projected operating statements of Faircom, a
copy of which has been delivered to Regent. Such operating
statements shall contain pro forma statements for the entire year
for stations acquired or managed for partial periods of 1997.
(i) "Faircom Financials" means the audited
financial statements of Faircom for the years ended December 31,
1994, 1995 and 1996, and the unaudited financial statements of
Faircom for the six months ended June 30, 1997, and for monthly
periods thereafter to the most recent month preceding the Closing
as reasonably practicable, furnished by Faircom to Regent and
consisting of balance sheets, statements of income and retained
earnings, and, except for unaudited financials, statements of
changes in financial position.
(j) "Faircom Licenses" means all licenses, permits
and authorizations issued by the Commission relative to the
Faircom Stations, as listed and described on Exhibit 1(j)
attached hereto and incorporated by reference herein.
(k) "Faircom Senior Debt" means the indebtedness
of Faircom listed on Exhibit 1(k) hereof.
(l) "Faircom Stations" means the following radio
stations and their cities of license: WCRZ-FM, WFNT-AM, Flint,
-A3-<PAGE>
Michigan; WWBN-FM, Tuscola, Michigan; WYHT-FM and WMAN-AM,
Mansfield, Ohio; and, if acquired on or before the Closing Date,
the Shelby Station, and the auxiliary licenses of all such
Faircom Stations.
(m) "Faircom Stock" means all shares of the
capital stock of Faircom outstanding on the Closing Date,
including all shares issued on conversion of the Faircom
Subordinated Notes as contemplated hereby.
(n) "Faircom Stockholders" means all of the
holders of the issued and outstanding shares of capital stock of
Faircom as of the Closing Date, including all shares issued on
conversion of the Faircom Subordinated Notes as contemplated
hereby.
(o) "Faircom Subordinated Notes" means those
certain Class A Convertible Subordinated Promissory Notes and
Class B Convertible Subordinated Promissory Notes in favor of
Blue Chip Capital Fund II Limited Partnership and Miami Valley
Venture Fund L.P. in the aggregate principal amount of
$10,000,000.
(p) "Faircom Subsidiaries" means Faircom Flint
Inc. and Faircom Mansfield Inc. and, if the Shelby Station is
acquired on or before the Closing Date, Faircom Shelby Inc.
(q) "Final Order" means the Commission's Order as
to which the time for filing a request for all administrative or
judicial review shall have expired without any such filing having
been made.
(r) [Reserved].
(s) "Intellectual Property" means all of the
rights in and to the call letters (and any variation thereof),
trademarks, trade names, service marks, franchises, copyrights
(including registrations and applications for registration of any
of the foregoing), computer software, programs and programming
material of whatever form or nature, jingles, slogans, logos or
licenses to use same and other intangible property rights which
are used or useful in connection with the operation of the
Faircom Stations, the Regent Station and the Park Lane Stations,
together with any associated goodwill and any additions thereto
between the date of this Agreement and the Closing Date.
(t) "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended.
(u) "Optionholders" means those persons listed on
Exhibit 21(b) and any amendments thereto as of the Closing Date,
and identified thereon as holding options to acquire capital
stock of Faircom.
(u-1) "Park Lane" means The Park Lane Group, a
California corporation.
(v) "Park Lane Financials" means the consolidated
and consolidating financial statements for Park Lane for the
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fiscal year ended December 31, 1996 and for the fiscal years
ended December 31, 1992, 1993, 1994 and 1995, and notes thereto,
as certified by Coopers & Lybrand, independent public
accountants. The Park Lane Financials include (i) the audited
consolidated balance sheets of Park Lane and its subsidiaries as
of December 31, 1996; (ii) the related audited consolidated
statements of earnings, source and application of funds,
shareholders' equity and changes in financial position or cash
flows (as the case may be) for the years ended as indicated on
each of the Park Lane financial statements; and (iii) an
unaudited balance sheet of Park Lane as of April 30, 1997 and the
unaudited statement of earnings and source and application of
funds for the four-month period then ended, and unaudited
financial statements for monthly periods thereafter through
August 31, 1997.
(w) "Park Lane Stations" means the following radio
stations and their cities of license, constituting The Park Lane
Group, currently operated by Regent under a time brokerage
agreement with The Park Lane Group (which commenced on August 18,
1997), which Regent has agreed to purchase pursuant to a certain
Stock Purchase Agreement dated June 16, 1997: KZGL-FM,
Cottonwood, Arizona; KVNA-AM and KVNA-FM, Flagstaff, Arizona;
KAAA-AM and KZZZ-FM, Kingman, Arizona; KFMF-FM, Chico,
California; KPPL-AM, Colusa, California; KATJ-FM, George,
California; KVOY-AM, Mojave, California; KALF-FM, Red Bluff,
California; KQMS-AM and KSHA-FM, Redding, California; KOWL-AM and
KRLT-FM, South Lake Tahoe, California; KTPI-FM, Tehachapi,
California; and KROY-AM, Victorville, California, and the
auxiliary licenses of all such Park Lane Stations.
(x) "Preferred Stock" means the Series C
Convertible Preferred Stock of Regent being issued and delivered
to, and acquired by, the Faircom Stockholders under the terms of
this Agreement, as set forth in the Amended and Restated
Certificate of Incorporation of Regent in substantially the form
of Exhibit 1(x) hereto, which will be filed with the Delaware
Secretary of State prior to the Closing Date.
(y) "Pro-Rata Percentage Interest" means a Faircom
Stockholder's percentage interest in Faircom as determined in
accordance with Paragraph 13(d)(1)(i) hereof.
(z) "Regent Assets" means any asset which would be
included in the definition of "Faircom Broadcast Assets" and
which is used or useful in the operation of the Regent Station or
the Park Lane Stations, and any other assets acquired by Regent
or the Regent Subsidiaries prior to Closing.
(aa) "Regent Financials" means the audited
financial statements of Regent as of a date consistent with those
that will be included in the Registration Statement (as
hereinafter defined), and unaudited financial statements for
monthly periods thereafter to the most recent month preceding the
Closing as reasonably practicable, to be furnished by Regent to
Faircom and consisting of balance sheets and statements of income
and retained earnings, and, except for unaudited financials,
statements of changes in financial position.
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(bb) "Regent Licenses" means all licenses, permits
and authorizations issued by the Commission relative to the
Regent Station and the Park Lane Stations, as listed and
described on Exhibit 1(bb) attached hereto and incorporated by
reference herein.
(cc) "Regent Projections" means pro forma
projections for Regent for the fiscal years 1997 and 1998.
(dd) "Regent Station" means radio station KCBQ-AM,
San Diego, California.
(ee) "Regent Subsidiaries" means those
subsidiaries of Regent listed on Exhibit 1(ee) hereto.
(ff) "SEC" means the Securities and Exchange
Commission.
(gg) [Reserved]
(hh) "Shelby Station" means radio station WSWR-FM,
licensed to Shelby, Ohio and the auxiliary licenses of such
station.
(ii) "Shelby Station Pro Forma Broadcast Cash
Flow" means the amount of Pro Forma Broadcast Cash Flow used by
the lenders of Faircom providing the senior debt to Faircom for
the acquisition of the Shelby Station to compute the amount of
such senior debt. "Pro Forma Broadcast Cash Flow" means Pro Forma
Net Broadcast Revenues less Pro Forma Operating Expenses, before
provision for interest expense, depreciation and amortization and
management fees, using accrual accounting and prepared in
accordance with generally accepted accounting principles. "Pro
Forma Net Broadcast Revenues" and "Pro Forma Operating Expenses",
respectively, means the revenues, net of agency commissions, and
the expenses, solely arising from the Shelby Station broadcasting
operations, excluding any revenues or expenses from trades and
barter, as prepared on a pro forma basis by such lenders. The
computations hereunder shall be confirmed in writing by such
lenders.
(jj) "Trustee" means The Fifth Third Bank, an Ohio
banking corporation.
AGREEMENT TO MERGE
2. AGREEMENT. Faircom and Subsidiary, both
corporations duly organized and existing under the laws of the
State of Delaware, hereby agree that, in accordance with and
subject to the terms and conditions set forth herein, upon
Effectiveness, Faircom shall be merged with and into Subsidiary,
the separate corporate existence of Faircom shall cease,
Subsidiary shall continue in existence and shall succeed to and
assume all the rights and obligations of Faircom, and such merger
shall in all respects have the effect provided for in Section 259
of the General Corporation Law of the State of Delaware.
3. ACTION TO EFFECT MERGER. Prior to, from and after
Effectiveness, Faircom, Subsidiary and Regent shall take all such
action as shall be necessary or appropriate, in order to
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effectuate the Merger in accordance with and subject to the terms
of this Agreement and the laws of the State of Delaware.
4. CERTIFICATE OF INCORPORATION AND BY-LAWS. From and
after Effectiveness and until thereafter amended as provided by
law, the Certificate of Incorporation and the By-Laws of
Subsidiary, attached hereto as Exhibits 4(a) and 4(b),
respectively, as in effect immediately prior to Effectiveness
shall be the Certificate of Incorporation and By-Laws of the
Surviving Corporation.
5. DIRECTORS.
(a) The following shall be the directors of
the Surviving Corporation as of and after Effectiveness to
replace the existing directors of Faircom and to hold office as
provided in the Certificate of Incorporation and By-Laws of the
Surviving Corporation:
Terry S. Jacobs
William L. Stakelin
(b) The following shall be the directors of
Regent as of and after Effectiveness to hold office as provided
in the Amended and Restated Certificate of Incorporation and By-
Laws of Regent:
Joel M. Fairman
Terry S. Jacobs
R. Glen Mayfield
William L. Stakelin
John H. Wyant
6. OFFICERS. The following shall be the officers of
Regent and of the Surviving Corporation as of and after
Effectiveness to replace the existing officers of Faircom and to
hold office as provided in the Certificate of Incorporation and
By-Laws of Regent and the Surviving Corporation:
Chairman of the Board,
Chief Executive Officer,
Treasurer.......................................Terry S. Jacobs
Vice Chairman...................................Joel M. Fairman
President, Chief Operating Officer,
Secretary...................................William L. Stakelin
Vice President-Finance, Assistant
Secretary........................................Matthew Yeoman
Assistant Secretary.......................Christina Tenhundfeld
Assistant Secretary..............................Alan C. Rosser
7. STOCKHOLDER APPROVAL; EFFECTIVENESS OF MERGER.
This Agreement shall be submitted to the Faircom stockholders as
provided by the applicable laws of the State of Delaware. If this
Agreement is duly authorized and adopted by the requisite votes
or written consents of the Faircom stockholders and is not
terminated or abandoned in accordance with its terms, this
Agreement shall be certified by Faircom and Subsidiary pursuant
to Section 251(c) of the General Corporation Law of the State of
Delaware, and the Surviving Corporation shall prepare, file and
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record a Certificate of Merger in the form provided under such
Section 251(c) as soon as practicable after the approval of the
Faircom stockholders has been obtained and before or
contemporaneously with the Closing. The Merger shall become
effective upon the due and proper filing of the Certificate of
Merger.
8. AUTHORIZED SHARES OF SURVIVING CORPORATION.
Subsidiary presently has authorized capital stock of 1,000 common
shares, $1.00 per share par value, of which 100 shares are issued
and outstanding to Regent.
9. AUTHORIZED SHARES OF DISAPPEARING CORPORATION.
Faircom presently has authorized and outstanding capital stock
consisting of the following:
Total Total
Authorized Outstanding
CAPITAL STOCK SHARES SHARES
------------- ---------- -----------
Common Stock 35,000,000 7,378,199*
*Does not include 19,012,000 shares of common stock
reserved for conversion of the Faircom Subordinated Notes or
1,943,700 shares reserved for issuance upon exercise of
outstanding options.
MODE OF EFFECTING MERGER
10. CONVERSION AND EXCHANGE OF SHARES.
(a) At Effectiveness, each share of Faircom Stock
issued and outstanding immediately prior to Effectiveness (other
than shares owned or held by dissenting Faircom Stockholders)
shall, by virtue of the Merger and without any action on the part
of the holder thereof, automatically be converted into shares of
Preferred Stock as hereinafter provided, and each share of
Faircom Stock held in Faircom's treasury immediately prior to
Effectiveness shall, by virtue of the Merger, cease to be
outstanding, and shall be canceled and retired without payment of
any consideration therefor. At Effectiveness, the holders of each
outstanding option to purchase shares of Faircom Common Stock
(each a "Faircom Option") will receive such substitute stock
options under the Regent Communications, Inc. Faircom Conversion
Stock Option Plan ("Regent Options") as will satisfy the
requirements of Section 424(a) of the Internal Revenue Code and
the regulations under Treas. ss.1.425-1 and as will not
constitute a modification of the existing Faircom Options under
Section 424(h) of the Internal Revenue Code. Each Faircom Option
will be deemed to constitute an option to acquire the same number
of shares of Preferred Stock as the holder of such Faircom Option
would have been entitled to receive pursuant to the Merger had
such holder exercised such Faircom Option in full immediately
prior to the consummation of the Merger (whether or not such
Faircom Option was in fact exercisable at the time). The terms of
the Regent Options shall be the same as the terms of the existing
Faircom Options, and such terms shall run from the date of grant
of the Faircom Options. The Regent Options shall be immediately
exercisable at the same aggregate exercise price as the Faircom
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Options surrendered in exchange therefor. The Regent Option
agreements shall be substantially in the form of Exhibit 10(a).
At the Closing, each Faircom Stockholder shall surrender for
cancellation and exchange his certificate or certificates
evidencing Faircom Stock (or in the case of holders of Faircom
Options, option agreement); provided, however, any Faircom
Stockholder who has properly elected to demand appraisal of
shares pursuant to the applicable laws of Delaware need surrender
his certificate or certificates only concurrently with a
withdrawal of such demand or as required by law following a
determination of the fair value of his or her shares.
(b) The stock transfer books of Faircom shall be
closed at Effectiveness, and thereafter no transfer of any such
shares of Faircom Stock shall be recorded thereon. In the event a
transfer of ownership of shares of Faircom Stock is not recorded
on the stock transfer books of Faircom, a certificate or
certificates representing the number of whole shares of Preferred
Stock into which such shares of Faircom Stock shall have been
converted in connection with the Merger may be issued to the
transferee of such shares of Faircom Stock if the certificate or
certificates representing such shares of Faircom Stock is or are
surrendered to the Trustee accompanied by all documents deemed
necessary by the Trustee to evidence and effect such transfer of
ownership of shares of Faircom Stock and by the payment of any
applicable stock transfer tax with respect to such transfer,
subject to compliance with any restrictions or conditions
contained herein with respect to the transfer of shares of
Faircom Stock.
11. FUNDING OF CONSIDERATION FOR FAIRCOM STOCK. On or
before the Closing Date, Regent shall have issued to Subsidiary
the number of shares of Preferred Stock equal to the Maximum
Number of Shares to be Issued (as defined in Paragraph 13(b)(2)
below).
12. ISSUANCE OF PREFERRED STOCK. Subject to the
provisions of paragraph 13 hereof, at the Closing, Subsidiary
shall cause to be delivered to the Trustee certificates for the
Maximum Number of Shares to be Issued, all of which shares shall
be fully paid and non-assessable and registered pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws.
The Trustee shall act as the disbursing agent and shall
distribute to the Faircom Stockholders the consideration for the
surrender and exchange of the Faircom Stock in accordance with
paragraph 13(d) hereof.
12A. SEC REGISTRATION.
(a) Faircom shall furnish to Regent such
information, including information about Faircom and the Faircom
Subsidiaries (including the respective affiliates of any of
them), as may be necessary to enable Regent to prepare and file
with the SEC a registration statement on Form S-4 under the
Securities Act, and the rules and regulations promulgated
thereunder, in respect of the Preferred Stock to be issued by
reason of the Merger (such registration statement, including the
proxy statement/prospectus included therein, together with any
amendments or supplements thereto, being referred to in this
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Agreement as the "Registration Statement"). Faircom covenants
that the Faircom Information (as defined below) included in the
Registration Statement shall not, at the time the Registration
Statement is declared effective, at the time the proxy
statement/prospectus contained therein (the "Proxy Statement") is
first mailed to Faircom's stockholders, or at the time of the
meeting of the Faircom stockholders held to approve this
Agreement, contain any untrue statement of a material fact, or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
If at any time prior to Effectiveness any event or circumstance
should come to the attention of Faircom with respect to the
Faircom Information that is required to be set forth in an
amendment or supplement to the Registration Statement, Faircom
shall immediately notify Regent and shall assist Regent in
appropriately amending or supplementing the Registration
Statement. An amendment or supplement may be accomplished, to the
extent permitted by law, rule or regulation, by including such
information in a filing under the Securities Exchange Act of
1934, as amended (the "Exchange Act") that is incorporated by
reference into the Registration Statement. The Registration
Statement insofar as it relates to information concerning
Faircom, the Faircom Subsidiaries or any of their respective
businesses, assets, directors, officers, or stockholders or any
other affiliates or other matters pertaining to Faircom that is
supplied by Faircom for inclusion in the Registration Statement,
including by incorporation by reference to SEC filings made by
Faircom (the "Faircom Information") shall comply as to form and
substance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder; except that Faircom
shall have no liability or obligation for any information other
than the Faircom Information.
(b) Faircom shall instruct its accountants, BDO
Seidman, LLP, to deliver, and shall use its reasonable best
efforts to cause such accountants to deliver, to Regent letters
dated at the time the Registration Statement becomes effective
and as of the Closing Date, addressed to Regent, each containing
such matters as are customarily contained in auditors' letters
regarding information about Faircom included in the Registration
Statement, which auditors' letters shall be in form and substance
reasonably satisfactory to Regent. Regent shall use its
reasonable best efforts to cause its accountants, Coopers &
Lybrand, LLP, to deliver to Faircom letters at such times
containing similar information about Regent in form and substance
reasonably satisfactory to Faircom.
(c) Regent shall file the Registration Statement
and use its reasonable best efforts to have it declared effective
by the SEC as promptly as practicable, and shall use its
reasonable best efforts to take any action required to be taken
to comply in all material respects with any applicable federal or
state securities laws in connection with the issuance of
Preferred Stock in the Merger contemplated by this Agreement;
except that such covenant of Regent is made as to those portions
of the Registration Statement containing or required to contain
Faircom Information, assuming and relying solely on timely and
full compliance with subparagraphs (a) and (b) above.
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(d) Regent covenants that the information included
in the Registration Statement shall not, at the time the
Registration Statement is declared effective, at the time the
Proxy Statement is first mailed to the Faircom stockholders, or
at the time of the meeting of the Faircom stockholders held to
approve the Merger, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; except that Regent makes no covenant as to those
portions of the Registration Statement containing or required to
contain Faircom Information. If at any time prior to
Effectiveness any event or circumstance should come to the
attention of Regent that is required to be set forth in an
amendment or supplement to the Registration Statement, Regent
shall give reasonably prompt notice to Faircom and shall use its
reasonable efforts to amend or supplement appropriately the
Registration Statement.
(e) Regent covenants that the Registration
Statement and all other documents required to be filed by Regent
with the SEC in connection with the transactions contemplated
herein shall comply as to form and substance in all material
respects with the applicable requirements of the Securities Act
and the Exchange Act and the rules and regulations promulgated
thereunder; except
that Regent shall have no liability or obligation for any failure
to comply with such requirements arising out of the Faircom
Information.
(f) Regent covenants to obtain prior to the
effective date of the Registration Statement all necessary "blue
sky" permits and approvals, if any, required to consummate the
Merger.
(g) Regent shall use all reasonable best efforts
to take such action as may be necessary to ensure that the
requirements of Rule 144(c) under the Securities Act are
satisfied as to enable any "affiliates" of Faircom (as that term
is used in Rule 145 under the Securities Act) to offer or sell
the Preferred Stock received by them in the Merger pursuant to
paragraph (d) of Rule 145 (subject to compliance with the
provisions of paragraphs (e), (f) and (g) of Rule 144).
12B. AFFILIATES. Faircom shall use its reasonable best
efforts to cause each person that is an "affiliate" of Faircom
under the Securities Act on the date of Faircom's stockholder
meeting held to approve the Merger to deliver to Regent at the
Closing a written agreement substantially in the form attached
hereto as Exhibit 12B ("Rule 145 Letters").
12C. TRADING PROHIBITIONS. Each of Regent and Faircom
hereby acknowledges that as a result of disclosures by Regent and
Faircom contemplated under this Agreement, Faircom, the Faircom
Subsidiaries and their affiliates may, from time to time, have
material, non-public information concerning such parties and
their respective subsidiaries or affiliated companies. Each of
Faircom and Regent confirms that it, each of the Faircom
Subsidiaries and their affiliates is aware, and each party has
advised its representatives that (i) the United States securities
laws may prohibit a person who has material, non-public
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information from purchasing or selling securities of any company
to which such information relates, and (ii) material non-public -
information shall not be communicated to any other person except
as permitted herein.
12D. NO SOLICITATION. From and after the date hereof,
Faircom will not, and shall use its reasonable best efforts not
to permit, any of its officers, directors, employees, attorneys,
financial advisors, agents or other representatives or those of
any of its subsidiaries to, directly or indirectly, solicit,
initiate or knowingly encourage (including by way of furnishing
information) any Takeover Proposal (as hereinafter defined) from
any person, or engage in or continue discussions or negotiations
relating thereto; provided, however, that Faircom may engage in
unsolicited discussions or negotiations with, and furnish
information concerning Faircom and its business, properties or
assets to, any third party which makes a Takeover Proposal if the
Board of Directors of Faircom concludes in good faith and in the
exercise of its reasonable judgment after consultation with its
outside counsel (who may be its regularly engaged outside
counsel) that the failure to take such action would present a
reasonable probability of violating the obligations of such Board
to the Faircom Stockholders under applicable law (and such
counsel has provided an opinion to Faircom's Board of Directors
to such effect). Faircom will promptly (but in no case later than
24 hours) notify Regent of the receipt of any Takeover Proposal,
including the material terms and conditions thereof and the
identity of the person or group making such Takeover Proposal,
and will promptly (but in no case later than 24 hours) notify
Regent of any determination by Faircom's Board of Directors that
a Superior Proposal (as hereinafter defined) has been made. As
used in this Agreement (i) "Takeover Proposal" shall mean any
proposal or offer, or any extension of interest by any third
party relating to Faircom's willingness or ability to receive or
discuss a proposal or offer, in each case made prior to
Faircom's stockholder vote at the meeting to consider the Merger,
other than a proposal or offer by Regent or any of its
subsidiaries, for a merger, consolidation or other business
combination involving, or any purchase of, all or substantially
all of the assets or more than 50% of the voting securities of,
Faircom and (ii) "Superior Proposal" shall mean a bona fide
Takeover Proposal made by a third party on terms that a majority
of the members of the Board of Directors of Faircom determines,
in their good faith reasonable judgment and based on the advice
of an independent financial advisor, is more favorable to the
Faircom Stockholders than the transactions contemplated hereby
and for which any required financing is committed or which, in
the good faith reasonable judgment of a majority of such members
(after consultation with any independent financial advisor), is
reasonably capable of being financed by such third party.
12E. REGISTRATION RIGHTS.
(a) PIGGYBACK REGISTRATION RIGHTS. (i) If, during
any period when either Blue Chip or Miami Valley holds shares of
Preferred Stock, Regent files a registration statement with the
SEC to register for public offering its common stock ("Regent
Common Stock"), Regent shall give at least 45 days' advance
written notice to Blue Chip or Miami Valley, as the case may be,
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of its intent to file such registration statement. If so
requested by either Blue Chip or Miami Valley within 30 days
after the giving of such written notice, to the extent then
permissible under federal and applicable state securities laws,
and the rules and regulations of the SEC thereunder, Regent shall
include in such registration statement for resale for Blue Chip's
or Miami Valley's account such portion of the shares into which
the Preferred Stock held by Blue Chip or Miami Valley is then
convertible (the "Conversion Stock"), as Blue Chip or Miami
Valley shall request, except where the inclusion of any or all of
Blue Chip's or Miami Valley's Conversion Stock is not permitted
by Regent's underwriter(s) based on bona fide market
considerations as specified below. To the extent Blue Chip's or
Miami Valley's Conversion Stock is not included in such
registration statement, either as a result of Blue Chip's or
Miami Valley's requesting inclusion of less than all of such
stock, of Blue Chip's or Miami Valley's not requesting inclusion
within the thirty (30) day period specified above, or of the
operation of the "underwriter out" specified below, such
remaining shares of Conversion Stock shall continue to be subject
to this Paragraph 12E and eligible for inclusion in any
subsequent registration effected by Regent pursuant to this
Paragraph 12E.
(ii) Regent shall not be required to include any
shares of Conversion Stock in any registration statement to the
extent the public offering involves an underwriting, and the
managing underwriter thereof advises Regent in writing that, in
its opinion, the number of shares of Conversion Stock requested
to be included, when added to the number of shares of Regent
Common Stock desired to be offered by Regent, exceeds the number
that can be sold in such offering, at a price reasonably related
to fair market value. To the extent the managing underwriter
provides such advice, the Conversion Stock to be included on
behalf of Blue Chip and Miami Valley, and any other shares to be
registered pursuant to such Registration Statement on behalf of
another selling stockholder, shall be reduced pro rata, taking
into account the number of shares requested to be registered by
Blue Chip or Miami Valley and any other selling stockholders.
(iii) At the time of any registration pursuant to
this Paragraph 12E, Regent, Blue Chip and Miami Valley shall
enter into any underwriting or other formal agreements containing
such terms and provisions with respect to the marketing of such
securities, indemnification and other
related matters as may be reasonably required by Regent's
underwriter(s) in any such registration. As a condition of the
inclusion of the Conversion Stock in any such registration, Blue
Chip and Miami Valley agree to furnish to Regent such information
concerning Blue Chip and Miami Valley as may be requested by
Regent as necessary in connection with the registration or
qualification of the Conversion Stock under federal and state
securities laws.
(b) DEMAND REGISTRATION RIGHTS. At any time, Blue
Chip and Miami Valley together may give notice to Regent
requesting the registration under the Securities Act of any or
all of the Conversion Stock then held by them or to be held by
them upon conversion of the Preferred Stock. Upon receipt of such
notice, Regent shall use its best efforts to effect as promptly
as possible the registration under the Securities Act of the
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Conversion Stock that Regent has been requested to register
pursuant to this Paragraph 12E. Regent shall not be obligated to
file more than two registration statements under this Paragraph
12E or to keep such registration statement effective for more
than 90 days. Regent shall not be obligated to effect any
registration pursuant to this Paragraph 12E if such registration
would require an audit of Regent as of a date other than its
fiscal year end. Regent may defer the filing of a registration
statement under this Paragraph 12E for a period of up to 90 days
based on the good faith judgment of the Board of Directors that
such delay is needed (x) to avoid premature disclosure of a
matter if the Board has determined that the disclosure would not
be in the best interests of Regent or (y) to avoid conflict with
another public offering by Regent. Any registration statement
prepared pursuant to this Paragraph 12E shall be subject to such
restrictions or limitations as may be applicable by law to the
sales price or sales method of the proposed offering of the
Conversion Stock.
(c) OTHER REGISTRATION RIGHTS. If Regent grants
any registration rights (whether "demand" or "piggyback") to any
other person, this Paragraph 12E shall be deemed amended, at the
option of Blue Chip and Miami Valley, to grant to Blue Chip and
Miami Valley rights equivalent to the most favorable rights
granted to any other person.
(d) REGISTRATION PROCEDURES. If and whenever
Regent is required by the provisions of this Paragraph 12E to
effect the registration of any of Blue Chip and Miami Valley's
shares of Conversion Stock or other securities under the
Securities Act, Regent shall, as expeditiously as possible:
(i) Prepare and file with the SEC a
registration statement with respect to such shares or other
securities and use all reasonable efforts to cause such
registration statement to become effective as promptly as
possible;
(ii) Prepare and file with the SEC such
amendments and supplements to such registration statement as may
be necessary to keep such registration statement effective for
three (3) months from the date of its effectiveness;
(iii) Furnish to Blue Chip and Miami Valley
such number of copies of the prospectus forming a part of such
registration statement (including each preliminary prospectus) as
Blue Chip or Miami Valley may reasonably request;
(iv) Use its best efforts to register or
qualify such shares or other securities covered by such
registration statement under the securities or blue sky laws of
such jurisdictions as Blue Chip or Miami Valley shall reasonably
request, and do any and all other acts and things which may be
necessary or advisable to enable Blue Chip or Miami Valley to
consummate the disposition of such shares or such other
securities during the period provided in Paragraph 12E(d)(ii)
above; and
(v) Notify Blue Chip and Miami Valley during
the period when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event
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which causes the prospectus forming a part of such registration
statement to include an untrue statement of a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which
they were made, and at the request of Blue Chip or Miami Valley,
prepare and furnish Blue Chip and Miami Valley with a reasonable
number of copies of the supplement to or any amendment of such
prospectus necessary so as to render such prospectus, as amended
or supplemented, in compliance with the provisions of the
Securities Act.
(e) EXPENSES. All expenses incurred by Regent in
complying with this Paragraph 12E, including without limitation
all registration and filing fees, printing expenses, expenses of
complying with securities or blue sky laws, fees and
disbursements of counsel for Regent and counsel for any
underwriters of the offering and any accountants, fees and
expenses incident to or required by any such registration and all
reasonable fees and disbursements of any counsel retained by Blue
Chip or Miami Valley, shall be borne by Regent to the maximum
extent permitted by law. All underwriting fees and commissions
incurred by Blue Chip and Miami Valley shall be borne by Blue
Chip and Miami Valley.
(f) INDEMNIFICATION.
(i) BY REGENT. In the event of any
registration of Blue Chip's or Miami Valley's shares of
Conversion Stock or other securities under this Paragraph 12E,
Regent shall defend, indemnify and hold harmless each of Blue
Chip and Miami Valley, its officers, directors, partners,
affiliates, each underwriter thereof and each person which
controls such entity or such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or
liabilities and any action in respect thereof, joint or several,
to which Blue Chip or Miami Valley or any such officer, director,
underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of
any material fact contained in any registration statement under
which such securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, other than that which is based upon information
supplied by Blue Chip or Miami Valley in writing, and Regent
shall reimburse each of Blue Chip and Miami Valley and such
officers, directors, underwriters and controlling persons for any
legal or other expenses reasonably incurred by any of them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Regent shall
not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon
information provided in writing to Regent by Blue Chip or Miami
Valley or any such officer, director, underwriter or controlling
person. This indemnity shall be in addition to any liability
which Regent may otherwise have.
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(ii) BY BLUE CHIP AND MIAMI VALLEY.
In the event of any registration of such shares or other
securities under this Paragraph 12E, Blue Chip and Miami Valley
shall indemnify Regent, its officers, directors, partners,
affiliates, each underwriter thereof and each person which
controls such entity or underwriter within the meaning of the
Securities Act, against any losses, claims, damages or
liabilities and any action in respect thereof, joint or several,
to which Regent or any such officer, director, underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon
any untrue or alleged untrue statement of any material fact
contained in any registration statement under which such
securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, which is based upon information supplied by Blue Chip
or Miami Valley in writing, and such entity shall reimburse
Regent for any legal or other expenses reasonably incurred by
Regent in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that
Blue Chip and Miami Valley shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon information provided to
Regent by Regent or any of its stockholders. This indemnity shall
be in addition to any liability which Blue Chip and Miami Valley
may otherwise have.
(iii) CONTRIBUTION. If for any reason any
indemnification described in Paragraph 12E(f)(i) or (f)(ii) above
may not be provided by the party or parties required therein to
provide such indemnification (the "Indemnifying Parties"), in
lieu of providing such indemnification, the Indemnifying Parties
shall contribute to the amount paid or payable by the party or
parties to be provided such indemnification (the "Indemnified
Parties") as a result of such losses, claims, damages,
liabilities or actions, in such proportion as is appropriate to
reflect the relative fault of the parties in connection with any
statement or omission which resulted in such losses, claims,
damages, liabilities or actions, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying
Parties and the Indemnified Parties shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a
material fact relates to information supplied by one of the
Indemnifying Parties or by one of the Indemnified Parties, and
the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or
defending any action or claim. The parties agree that it would
not be just and equitable if contribution pursuant hereto were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to herein. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
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Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
CONSIDERATION
13. (a) BASE CONSIDERATION. The consideration to be
paid to the Faircom Stockholders in the Merger before adjustments
as provided in paragraph 13(b) below (the "Base Consideration")
shall be Preferred Stock in an aggregate liquidation preference
amount of Thirty-One Million One Hundred Sixty-Two Thousand
Dollars ($31,162,000); provided, however, that in the event the
acquisition of the Shelby Station has closed prior to the Closing
Date, the Base Consideration will be increased by an amount equal
to 10.6 times the Shelby Station Pro Forma Broadcast Cash Flow
less the purchase price of the Shelby Station. In the event the
acquisition of the Shelby Station does not occur prior to the
Closing for reasons beyond Faircom's control, but the Net Working
Capital of Faircom plus such available funds as Faircom can
readily borrow under its existing senior credit facility (as
certified in writing by its senior lender) is sufficient at
Closing to fully finance such acquisition, the Base Consideration
will be increased as provided in the immediately preceding
sentence and the Net Working Capital of Faircom shall be reduced
by the purchase price of the Shelby Station and any financing
costs that would be incurred as if the closing of such
acquisition had taken place. If the acquisition of the Shelby
Station does not occur prior to the Closing and the Net Working
Capital of Faircom plus such available funds as Faircom can
readily borrow under its existing senior credit facility (as
certified in writing by its senior lender) at Closing is not
sufficient to fully finance such acquisition, Regent shall assume
the obligation of Faircom to purchase the Shelby Station at the
same purchase price previously agreed to between Faircom and the
seller thereof, and there shall be no increase in the Base
Consideration attributable to the acquisition of the Shelby
Station. The additional amount of Base Consideration, as so
adjusted, shall be distributed to the Faircom Stockholders as
promptly as practicable after the closing of the Shelby Station
acquisition.
(b) CONSIDERATION AFTER ADJUSTMENTS.
(1) As soon as practicable but no later
than ten (10) days following the last to occur of the following,
(A) the Registration Statement is declared effective; (B) a Final
Order has been obtained from the Commission; and (C) the Faircom
stockholders have approved the Merger, a worksheet ("Closing
Worksheet") shall be prepared by Faircom and delivered to Regent
setting forth as of the last day of the month immediately
preceding the Closing Date (the "Compilation Date") the amount of
Faircom's Net Working Capital (as hereinafter defined). The Base
Consideration (as adjusted, if necessary, in accordance with
Paragraph 13(a) above) shall be (a) increased by the amount of
Faircom's Net Working Capital and (b) decreased by the
outstanding principal amount of and accrued interest on the
Faircom Senior Debt, and by one-half of the prepayment premium,
if any, required to be paid upon payment of the Faircom Senior
Debt at Closing (which premium the parties will endeavor through
reasonable efforts and negotiations to eliminate). The Base
Consideration, as so adjusted, shall hereinafter be referred to
as the "Consideration After Adjustments".
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As used herein, "Net Working Capital" shall mean
current assets of Faircom (defined as cash on hand and in banks,
certificates of deposit, treasury bills and marketable securities
and other cash equivalents, accounts receivable (less adequate
reserves) and any other asset properly classified as current)
minus current liabilities. As used herein, the term "current
liabilities" shall mean the amount of all the liabilities of
Faircom at the Compilation Date that should be classified as such
on a balance sheet or disclosed in the notes to the financial
statements as of that date prepared in accordance with generally
accepted accounting principles applied on a basis consistent with
those followed in the preparation of the financial statements
described in paragraph 1(i) and shall include (i) accounts
payable, (ii) all indebtedness (other than the Faircom Senior
Debt and the Faircom Subordinated Notes), (iii) any unpaid
bonuses, severance or vacation pay accrued to employees for
the period ending on the day prior to the Compilation Date, and
(iv) trade and barter obligations not offset by corresponding
amounts of trade and barter receivables.
Regent and/or its representatives shall examine the
Closing Worksheet, including an examination of such of Faircom's
books and records as are deemed by Regent and/or its
representatives to be necessary or appropriate, to verify
Faircom's Net Working Capital as of the Compilation Date. If
Regent shall disagree with the Closing Worksheet, it shall notify
Faircom within ten (10) days of its receipt of the Closing
Worksheet of its objection to such computation, specifying each
item or computation to which objection is taken and the reason
for such objection. In such event, Regent and Faircom shall use
their best efforts to resolve such objections and to agree upon
the Closing Worksheet through negotiation as expeditiously as
possible. If Regent and Faircom are unable to reconcile their
differences and to mutually agree upon the Closing Worksheet,
within five (5) business days after such notice shall have been
given as aforesaid, Regent and Faircom shall designate a mutually
agreeable independent national accounting firm, or if such firm
cannot act, another national accounting firm (which has not been
retained by either Joel M. Fairman, Faircom, Regent or Terry S.
Jacobs within the past ten (10) years) mutually acceptable to
such parties to act as arbitrator ("Arbitrator"). The Arbitrator
shall determine all issues in disagreement and shall make such
adjustments, if any, to the Closing Worksheet as are necessitated
by such determinations, and shall within fifteen (15) business
days after its designation as Arbitrator deliver to Regent and
Faircom a written statement setting forth all adjustments made by
the Arbitrator to the Closing Worksheet. Such Closing Worksheet
shall be employed to determine any further adjustments required
to the Consideration After Adjustments pursuant to this Paragraph
13(b) ("Final Consideration"), and such Final Consideration shall
be final, conclusive and binding upon all parties to this
Agreement. The fees and expenses of Regent's accountants, if any,
and the Arbitrator in connection with the making of the Closing
Worksheet and the determinations herein provided for to resolve
any differences over the Closing Worksheet shall be paid one-half
by Faircom (as a reduction in Net Working Capital at Closing) and
one-half by Regent.
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(2) The maximum number of shares of
Preferred Stock available for distribution to the Faircom
Stockholders (the "Maximum Number of Shares to be Issued") shall
be computed by dividing the Consideration After Adjustments by
$5.00 (the "Initial Number") less the number derived by
multiplying the Initial Number by a fraction, the numerator of
which is the number of shares of Faircom Stock issuable pursuant
to options outstanding and not exercised on the Closing Date (the
"Option Shares") and the denominator of which is the number of
shares of Faircom Stock outstanding on the Closing Date
(including any shares issued on conversion of the Faircom
Subordinated Notes on or before the Closing Date) plus the Option
Shares.
(3) The Maximum Number of Shares to be
Issued shall be affected by the following:
Blue Chip and Miami Valley shall have
the right, at Closing, to require the repayment in cash by Regent
of up to $2,500,000 principal amount of Faircom's Class B
Convertible Subordinated Promissory Notes in the aggregate (the
"Optional Faircom Subordinated Notes") or to convert the
principal amount of the Optional Faircom Subordinated Notes into
Faircom Common Stock as provided therein. If either Blue Chip or
Miami Valley elects to require a repayment of all or a portion of
the Optional Faircom Subordinated Notes at Closing, then the
Maximum Number of Shares to be Issued shall be reduced to the
extent of one share of Preferred Stock per $5.00 so repaid by
Regent. Of the shares of Preferred Stock for which the Faircom
Subordinated Notes are converted into Faircom Common Stock as
provided above (other than the Optional Faircom Subordinated
Notes), certain of the shares to be issued in exchange for the
shares of Faircom Common Stock issued upon the conversion of the
Class B Convertible Subordinated Promissory Notes will be subject
to the option of Blue Chip and Miami Valley to put such shares of
Preferred Stock to Regent for redemption in accordance with the
terms of a Redemption and Warrant Agreement between Blue Chip,
Miami Valley and Regent in substantially the form attached hereto
as Exhibit 13(b)(3). All accrued interest on the Faircom
Subordinated Notes will be treated as a current liability of
Faircom at Closing (so as to reduce Net Working Capital) and paid
in cash at Closing.
(c) CONSIDERATION PER SHARE BEFORE APPRAISAL
RIGHTS. In order to determine the Consideration Per Share Before
Appraisal Rights, the Consideration After Adjustments will be
divided by the total number of shares of Faircom Stock treated as
outstanding. The number of shares of Faircom treated as
outstanding will be the sum of the number of shares actually
outstanding (including any shares issued on conversion of the
Faircom Subordinated Notes on or before the Closing Date) plus
the number of shares issuable upon the exercise of all options to
acquire shares of Faircom outstanding as of the Closing Date.
(d) DISTRIBUTIONS BY TRUSTEE. At Closing, the
Trustee will receive from Regent the Maximum Number of Shares to
be Issued and cash in an amount sufficient to make payment to the
Faircom Stockholders in respect of fractional shares, which
securities and cash will be maintained, allocated and distributed
as follows:
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(1) DISTRIBUTIONS TO FAIRCOM STOCKHOLDERS.
(i) Each Faircom Stockholder will be
allocated an amount equal to the product of the Consideration Per
Share Before Appraisal Rights times the number of shares of
Faircom Stock (including shares issuable pursuant to the
conversion of all Faircom Subordinated Notes, including all
Optional Faircom Subordinated Notes, which are converted into
Faircom Stock on or before the Closing Date) held by such Faircom
Stockholder on the Closing Date. The amount determined as
provided above to be allocable to each Faircom Stockholder, as a
percentage of the total amount allocable to all the Faircom
Stockholders, is referred to herein as that person's "Pro-Rata
Percentage Interest."
(ii) The Pro-Rata Percentage Interest
of each Faircom Stockholder who is not a dissenting Faircom
Stockholder shall be distributed as follows: each such Faircom
Stockholder shall receive as soon as practicable following
Closing the number of shares of Preferred Stock (or, in the event
shares of Preferred Stock are not available to such Faircom
Stockholder pursuant to Paragraph 13(d)(1)(iii), the cash paid in
lieu of such shares of Preferred Stock) equal to the product of
the Maximum Number of Shares to be Issued multiplied by such
Faircom Stockholder's Pro-Rata Percentage Interest; and (B) cash
as payment for any fractional shares of Preferred Stock pursuant
to Paragraph 13(d)(2).
(iii) AVAILABILITY OF PREFERRED STOCK.
In determining the extent to which shares of Preferred Stock are
available for distribution to any individual Faircom Stockholder,
shares of Preferred Stock shall not be available for distribution
to any Faircom Stockholder who is the resident of or who is
otherwise located in a state in which the issuance of the shares
of Preferred Stock is prohibited or conditioned upon terms
unacceptable to Regent under the securities laws or by the
securities administrator of such state.
(2) NO FRACTIONAL SHARES. No certificates or
scrip representing fractional shares of Preferred Stock will be
issued upon surrender of certificates for conversion pursuant to
this Agreement. In the event any Faircom Stockholder is allocated
an interest in a fractional share of Preferred Stock pursuant to
this Paragraph 13, said fractional amount will be rounded down to
the nearest whole share and the Faircom Stockholder will be paid
in cash, without interest, an amount equal to the product of the
fraction multiplied by $5.00.
14. SURRENDER OF CERTIFICATES AND DELIVERY OF
CONSIDERATION AFTER ADJUSTMENTS.
At Effectiveness, Subsidiary or Regent shall take all
steps necessary to enable and cause Subsidiary or Regent to
provide the Trustee with the shares of Preferred Stock and cash
in respect of fractional shares necessary to deliver the
Consideration After Adjustments to each Faircom Stockholder as
contemplated by Paragraph 13 hereof prior to the time that such
deliveries are required to be made by the Trustee as provided in
this Paragraph 14. The Trustee shall hold the shares of Preferred
Stock and cash until the receipt by it of joint instructions
signed by a representative of each of Regent and Faircom
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certifying that the parties have agreed to the Consideration
After Adjustments or the Final Consideration has been determined
by the Arbitrator in accordance with Paragraph 13(b)(1) hereof,
and authorizing the distribution of said shares and cash to the
Faircom Stockholders.
Promptly after Effectiveness, the Trustee shall mail to
each record holder (as of Effectiveness) of an outstanding
certificate or certificates that immediately prior to
Effectiveness represented outstanding shares of Faircom Stock
(the "Certificates"), a letter of transmittal in form reasonably
satisfactory to Regent and Faircom which specifies that delivery
shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the
Trustee and instructions for use in effecting the surrender of
the Certificates in exchange for the Consideration After
Adjustments payable in respect of the shares of Faircom Stock
formerly represented by such Certificate. Subject to the
foregoing paragraph, upon surrender to the Trustee of a
Certificate, together with such letter of transmittal properly
completed and duly executed, together with any other required
documents, the holder of such Certificate shall be entitled to
receive in exchange therefor the Consideration After Adjustments
payable in respect of the shares of Faircom Stock formerly
represented by such Certificate, and such Certificate shall
forthwith be canceled. If payment is to be made to a person other
than the person in whose name the Certificate surrendered is
registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person
requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the
registered holder of the Certificate surrendered or establish to
the satisfaction of Regent that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions
of this paragraph 14, each Certificate shall represent for all
purposes only the right to receive the Consideration After
Adjustments, without any interest on the value thereof.
COMMISSION MATTERS
15. COMMISSION CONSENT TO TRANSFERS OF CONTROL.
Notwithstanding anything herein to the contrary, the terms and
conditions of this Agreement are subject to a Final Order prior
to Closing granting consent to all transfers of control as a
result of the Merger.
16. APPLICATIONS FOR CONSENT - COOPERATION OF THE
PARTIES. Regent and Faircom shall file such applications for
transfer of control as are required and have not already been
filed by not later than five (5) business days after the date of
this Agreement. They shall promptly and diligently file and
expeditiously prosecute all necessary or desired amendments to
such applications, briefs, pleadings, documents and supporting
data, and take all such actions and give all such notices as may
be required or requested by the Commission or as may be
appropriate in an effort to expedite the consent of the
Commission to the transfers of control as a result of the Merger;
provided, however, that neither Regent nor Faircom shall be
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required to petition for review or to file an appeal of any
decision by the Commission or the staff of the Commission denying
such application.
17. COSTS AND EXPENSES. Except as set forth in
Paragraphs 31 and 32 hereof, Faircom, Subsidiary and Regent each
shall bear its own legal fees and other costs and expenses with
respect to this transaction, including preparation and
prosecution of Commission applications. The cost of filing fees
and grant fees, if any, imposed by the Commission shall be borne
equally by the parties. Except as provided in Paragraph 32
hereof, all fees and expenses payable by Faircom but not paid
prior to Closing shall be treated as a current liability of
Faircom at Closing (so as to reduce Net Working Capital) and will
be paid by the surviving entity at Closing.
18. OPERATION OF STATIONS BEFORE CLOSING. Between the
date of this Agreement and the Closing Date, each of Regent and
Faircom (i) will continue to operate its radio stations in good
faith, in the ordinary and usual course of business, under the
terms of the Regent Licenses and the Faircom Licenses,
respectively, substantially in accordance with past practices,
and as stated in paragraphs 21(y) and 22(y) of this Agreement and
(ii) will file with the Commission all documents required to be
filed in connection with the operation of its radio stations.
Between the date hereof and the Closing Date, Faircom and Regent
shall each provide the other with copies of all correspondence
received from or filed with the Commission relating to the
Faircom Stations, the Regent Station or the Park Lane Stations,
as the case may be, the above applications or any amendments of
the same.
19. CONTROL AND ACCESS. Prior to Closing, neither
Regent nor Faircom nor their respective agents shall directly or
indirectly (i) control, supervise or direct, or (ii) attempt to
control, supervise or direct, the operations of the other's radio
stations. Except as otherwise provided herein, such operations
shall be the sole responsibility of and in the complete
discretion of the respective owners of the radio stations. Each
party shall, however, be permitted reasonable observation, access
and inspection of the records and property of the other's radio
stations during regular business hours and each of Faircom and
Regent shall furnish on a monthly basis (within twenty-five (25)
days following the end of each month) a profit and loss statement
and such other financial statements, including historical
statements, relating to the radio stations as the requesting
party may reasonably request and as are regularly prepared by the
station owner in the ordinary course of the business of its
stations.
20. [Reserved].
COVENANTS, REPRESENTATIONS
AND WARRANTIES OF FAIRCOM
__________________________
21. COVENANTS, REPRESENTATIONS AND WARRANTIES OF
FAIRCOM. Faircom, on behalf of itself and on behalf of each of
the Faircom Subsidiaries, makes the following covenants,
representations and warranties (where meaningful, all warranties,
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representations, and covenants relating to Faircom hereunder
shall apply equally to each of the Faircom Subsidiaries, as if
any reference to Faircom is a reference to either or each Faircom
Subsidiary as the context permits):
(a) CORPORATE STANDING AND AUTHORITY.
(i) Faircom is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and has all requisite corporate power and authority
to enter into this Agreement and to carry out the transactions
contemplated hereby. Faircom is in good standing as a corporation
qualified to do business under the laws of the State of New York
(being the only state in which Faircom's offices, equipment,
facilities and other tangible assets are situated).
(ii) Each of the Faircom Subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has full corporate
power to own or lease all of its property and to carry on its
business as it is now being conducted. Faircom Flint Inc. is
authorized to conduct business within the State of Michigan, and
Faircom Mansfield Inc is authorized to conduct business within
the State of Ohio (being the only jurisdictions in which the
ownership or leasing of property by each such subsidiary or the
conduct of its business requires it to be so qualified). All of
the outstanding shares of capital stock of each of the Faircom
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable, and except as set forth on Exhibit
21(a), are owned, of record and beneficially, by Faircom, free
and clear of all liens, encumbrances, equities, options or claims
whatsoever. Neither of the Faircom Subsidiaries has outstanding
any other equity securities or securities options, warrants or
rights of any kind, convertible into, exchangeable for, or
otherwise entitling any person to acquire, equity securities of
such subsidiary.
(iii) This Agreement and the transactions
contemplated hereby have been adopted, ratified and approved by
the Board of Directors of Faircom and, assuming the Registration
Statement has been declared effective, will, by the Closing Date,
have been duly and timely submitted to the Faircom stockholders
for authorization and approval (unless this Agreement is
terminated prior to Closing pursuant to the terms hereof), and
copies of all corporate proceedings of Faircom relating to such
authorization and approval, certified by its Secretary, have been
or will be delivered to Subsidiary at the Closing. Other than
obtaining the approval of the Faircom stockholders, no further
corporate action on the part of Faircom is required. This
Agreement, upon approval by the Faircom stockholders in
accordance with Delaware law, will constitute a valid and binding
obligation of Faircom, enforceable against it in accordance with
its terms, subject to bankruptcy laws, other federal and state
laws affecting creditors' rights generally and the availability
of equitable remedies.
(b) CAPITALIZATION; FAIRCOM STOCK.
(i) The authorized capital stock of
Faircom (the "Capital Stock") consists of 35,000,000 shares of
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common stock ("Common Stock"), of which 7,378,199 shares are
issued and outstanding. Faircom has reserved 19,012,000 shares of
Common Stock for issuance upon conversion of the Faircom
Subordinated Notes and 1,943,700 shares for issuance upon
exercise of outstanding options, as more fully set forth below.
All issued and outstanding shares of Capital Stock constitute the
Faircom Stock. All shares of Faircom Stock are duly authorized,
validly issued in compliance with all applicable laws, fully paid
and non-assessable and not subject to any preemptive,
subscription or other rights to purchase or acquire such
securities created by statute, the Certificate of Incorporation
or By-Laws of Faircom or any agreement to which Faircom is a
party or by which it is bound. There are no restrictions with
respect to the exchange and conversion of the Faircom Stock in
accordance with the terms of this Agreement. No more than 25% of
the Faircom Stock is owned or voted by an alien or a foreign
government or a corporation organized under the laws of a foreign
country or by the representative of any of the above.
(ii) Faircom has outstanding options to
purchase 1,943,700 shares of Common Stock (the "Options").
Exhibit 21(b) sets forth for each outstanding Option the name of
the holder of such Option, the number of shares of Faircom Stock
subject to such Option and the exercise price of such Option. All
of such Options are currently exercisable except for options for
134,000 shares, which will be accelerated and fully exercisable
as of the Closing. Each Option has been duly authorized and
validly issued in compliance with all applicable laws. Except for
the Options described in Exhibit 21(b) and the Faircom
Subordinated Notes, there are no options, warrants, calls,
rights, commitments or agreements of any character, written or
oral, to which Faircom is a party or by which it is bound
obligating Faircom to issue, deliver, sell, repurchase or redeem,
or cause to be issued, delivered, sold, repurchased or redeemed,
any shares of the capital stock of Faircom or obligating Faircom
to grant, extend, accelerate the vesting of, change the price of,
otherwise amend or enter into any such option, warrant, call,
right, commitment or agreement. Other than the transaction
contemplated by this Agreement, there is outstanding no vote,
plan or pending proposal for any redemption of Faircom Stock or
merger or consolidation of Faircom with or into any other
corporation.
(c) CORPORATE POWER. Each of the Faircom
Subsidiaries:
(i) has all requisite corporate power and
authority to own, lease and operate the Faircom Broadcast Assets
owned, leased or operated by it and to carry on the business of
the Faircom Stations as now being conducted by it and as proposed
to be conducted by it between the date hereof and the Closing
Date; and
(ii) has obtained all licenses, permits or other
authorizations and has taken all actions required by applicable
law or governmental regulations which are material to its
business as now conducted.
(d) RESERVED.
(e) RESERVED.
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(f) AFFILIATES. Except as set forth on Exhibit 21(f),
neither Faircom nor either of the Faircom Subsidiaries owns,
directly or indirectly, any capital stock or other equity or
ownership or proprietary interest in any corporation, business
trust, joint stock company or other business organization,
association, partnership, venture or other entity.
(g) RIGHTS TO ACQUIRE SECURITIES. Except as identified
on Exhibit 21(g), there are no outstanding rights, options,
subscriptions, agreements, or commitments giving anyone any
current or future right to require Faircom to sell or issue any
capital stock or other securities or any agreement or arrangement
restricting the right of Faircom to issue or sell any capital
stock or other securities.
(h) CORPORATE RECORDS. The minute books of each of
Faircom and the Faircom Subsidiaries reflect accurately in all
material respects all action taken by the respective stockholders
and Boards of Directors of such entities and the minute book of
Faircom will accurately reflect all action required to be taken
by the Closing by the Faircom Stockholders and its Board of
Directors to enable Faircom to execute and perform this Agreement
and all transactions contemplated hereunder (provided the
requisite Stockholder vote is obtained for approval of the
transactions contemplated hereunder). The minute books of Faircom
and the Faircom Subsidiaries contain true and complete copies of
the Certificate of Incorporation and By-Laws of such entities and
all amendments thereto. The ownership and transfer records
maintained by Faircom or its transfer agent with respect to
Faircom and the Faircom Subsidiaries reflect accurately in all
material respects all information called for thereon and all
issuances and transfers of the capital stock of such entities.
All issuances and transfers reflected in said ownership and
transfer records were duly and validly made in compliance with
the laws of the applicable jurisdiction(s).
(i) TITLE TO FAIRCOM BROADCAST ASSETS. Faircom or one
of the Faircom Subsidiaries has good and marketable title to all
of the Faircom Broadcast Assets, free and clear of all liens,
mortgages, pledges, conditional sales agreements, security
interests, charges and encumbrances, except those listed on
Exhibit 21(i), all of which will be released and discharged on or
prior to the Closing Date, except as noted on Exhibit 21(i).
(j) FINANCIAL STATEMENTS; BUDGET. The Faircom
Financials heretofore furnished to Regent, as well as all
financial information supplied, or to be supplied, pursuant to
paragraphs 12A, 19 and 21(qq), fairly present or will fairly
present the consolidated financial position and consolidated
results of operations of Faircom and the Faircom Subsidiaries as
of the dates thereof and for the periods represented. All said
Faircom Financials and financial information, where applicable,
have been and will be prepared in accordance with generally
accepted accounting principles consistently applied. Faircom
interim statements have been or will be prepared in accordance
with generally accepted accounting principles for interim
financial information subject to year-end audit adjustments and
the absence of footnotes.
The Faircom Budget was prepared based upon assumptions
which were reasonable and justifiable at the time of its
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<PAGE>
preparation and, after taking into account actual conditions
known to Faircom to, and as of, the date of this Agreement,
continue to be reasonable as of the date of this Agreement.
(k) CONTRACTS.
(i) Exhibit 21(k-1) is a complete list or
description of all written and oral contracts relative to the
Faircom Stations in existence at the date of this Agreement which
are enforceable against Faircom, excluding:
(A) oral employment arrangements with Faircom
Station employees;
(B) written employment arrangements with
Faircom Station employees terminable without penalty or severance
pay on no more than two (2) weeks' notice;
(C) contracts for the sale of radio time or
advertising which conform to the representations of subparagraph
(k)(ii) below;
(D) contracts for the use, rental, or lease
of office equipment (other than telephone and computer
equipment);
(E) contracts for the sale of broadcast time
or advertising in exchange for merchandise or services; and
(F) other miscellaneous contracts not
uncommon to broadcast properties which do not exceed $50,000 of
expenditures or revenues annually in the aggregate.
(ii) All contracts for the sale of broadcast
time or advertising on the Faircom Stations in exchange for
merchandise or services on or after the date hereof which will
not be fully performed by the Closing Date to which either
Faircom, the Faircom Subsidiaries, or the Faircom Stations is a
party or by which it is bound are pre-emptible for cash sales and
none is subject to fixed positions (except for those contracts
which provide for the delivery of programming to the Faircom
Stations in return for barter advertising). True and complete
copies of all contracts, leases and agreements listed in Exhibit
21(k-1) have been made available to Regent. Faircom is current in
all of its obligations under all of the contracts, leases and
agreements listed on Exhibit 21(k-1), and each such contract,
lease and agreement is in full force and effect and will not be
impaired by any acts or omissions within the reasonable control
of Faircom, its agents or employees except for those that shall
previously have expired by passage of time in accordance with
their respective terms.
(iii) Except as set forth on Exhibit 21(k-1) or
Exhibit 21(i), Faircom is not a party to any written or oral:
(A) agreement or indenture relating to
the borrowing of money or to the mortgaging or pledging of, or
otherwise placing a lien on, any material asset or material group
of assets of Faircom;
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<PAGE>
(B) guarantee of any obligation (other than
the endorsement of negotiable instruments for collection in the
ordinary course of business); or
(C) agreement whereunder Faircom or any
successor is obligated to make any conditional or other payment
based upon the future performance of Faircom or the Faircom
Stations.
(l) GOVERNMENT AUTHORIZATIONS.
(i) Exhibit 1(j) hereto contains a true and
complete list of all licenses, permits or other authorizations
issued by the Commission which are required for the lawful
conduct of the business and operations of the Faircom Stations in
the manner and to the full extent they are presently conducted
(including, without limitation, auxiliary licenses associated
with each Faircom Station). Faircom has delivered to Regent true
and complete copies of the Faircom Licenses and all amendments
and other modifications thereto.
(ii) The entities specified on Exhibit 1(j) are
the authorized legal holders of the Faircom Licenses. Except as
set forth in Exhibit 1(j), none of the Faircom Licenses is
subject to any restrictions or conditions which would materially
limit the full operation of the Faircom Stations as now operated.
(iii) Except as set forth in Exhibit 1(j), and
except for matters affecting the radio broadcast industry
generally, there are no applications, complaints, petitions or
proceedings pending or threatened as of the date hereof before
the Commission or any other governmental or regulatory authority
relating to the business or operations of the Faircom Stations.
Except as set forth in Exhibit 1(j), the Faircom Licenses are in
good standing, are in full force and effect and are unimpaired by
any act or omission of Faircom or its stockholders, officers,
directors or employees. The operations of the Faircom Stations
are in accordance in all material respects with the Faircom
Licenses and the underlying construction permits. No proceedings
are pending or threatened, and there has not been any act or
omission of Faircom or any of its officers, directors,
stockholders or employees, which reasonably may result in the
revocation, non-renewal, suspension or material modification of
any of the Faircom Licenses, the denial of any pending
applications, the issuance of any cease and desist order, the
imposition of any administrative actions by the Commission or any
other governmental or regulatory authority with respect to the
Faircom Licenses or which reasonably may affect Regent's ability
to continue to operate the Faircom Stations substantially as they
are currently operated.
(iv) Each Faircom Station is operating with the
maximum facilities specified in the respective Faircom Station's
License.
(v) None of the Faircom Stations is causing
objectionable interference to the transmissions of any other
broadcast station or communications facility nor has any of the
Faircom Stations received any complaints with respect thereto;
and no other broadcast station or communications facility is
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<PAGE>
causing objectionable interference to the respective
transmissions of the Faircom Stations or the public's reception
of such transmissions.
(vi) Faircom has no reason to believe that the
Faircom Licenses will not be renewed in their ordinary course.
(vii) All reports, forms, and statements required
to be filed by Faircom or the Faircom Subsidiaries with the
Commission with respect to the Faircom Stations since the grant
of the last renewal of the Faircom Licenses have been filed and
are substantially complete and accurate.
(viii) There are no facts which, under the
Communications Act of 1934, as amended, or the existing rules and
regulations of the Commission, would disqualify Faircom as
assignor of the Faircom Licenses or cause the Faircom Licenses
not to be renewed in their ordinary course.
(ix) The operation of the Faircom Stations and all
of the Faircom Broadcast Assets are in compliance in all material
respects with ANSI Radiation Standards C95.1 - 1992.
(m) MANAGEMENT, KEY EMPLOYEES AND ACCOUNTS. Exhibit
21(m-1) sets forth the names of all employees whose compensation
(including without limitation, salaries, bonuses and commissions)
from Faircom for the year ended December 31, 1996 or for the
current year on an annualized basis exceeds $30,000. Exhibit
21(m-2) sets forth the name of each bank or savings institution
in which Faircom has an account or safe deposit box.
(n) TAX ELECTIONS. Faircom has not filed a consent to
the application of Section 341(f)(2) of the Internal Revenue Code
with regard to any property held, acquired or to be acquired at
any time.
(o) RELATED TRANSACTIONS. All outstanding debts and
other obligations of Faircom to any Faircom Stockholders or
officers or directors of Faircom are listed on Exhibit 21(o),
except for those incurred for normal travel and entertainment in
connection with the conduct of the business of Faircom and the
Faircom Stations, and were incurred in return for fair and
adequate consideration paid or delivered by them in cash,
services, or other property. All debts of any such Faircom
Stockholders or any of Faircom's officers or directors to Faircom
are listed on Exhibit 21(o) and reflected on the Financial
Statements.
(p) TAXES. Except as set forth on Exhibit 21(p),
Faircom 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 as of the date hereof.
All returns identified on Exhibit 21(p) to be filed will be filed
and all taxes required to be paid in respect of the periods
covered by such returns will be paid prior to the Closing Date.
Faircom has delivered to Regent true and complete copies of all
federal, state and local income tax returns of Faircom as filed
for the years ended December 31, 1994, 1995, and 1996. All of the
tax liabilities of Faircom for the current year to date and all
prior years, whether or not they have become due and payable, and
whether or not shown on such returns, and all interest and
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<PAGE>
penalties, whether disputed or not, have been paid in full or
adequately reserved for, and to the extent tax liabilities have
accrued but not become payable, they are reflected on the books
of Faircom or in the Faircom Financials. Faircom has not
requested any extension of time within which to file any tax
returns which have not since been filed, and no deficiencies for
any tax, assessment or governmental charge have been claimed,
proposed or assessed by any taxing authority and there is no
basis for any such deficiency or claim. The federal income tax
returns of Faircom have been examined by the federal tax
authorities or closed by applicable statute and satisfied for all
periods to and including fiscal year 1992; all deficiencies
asserted as a result of such examinations have been paid or
finally settled; and no state of facts exists or has existed
which reasonably might constitute grounds for the assessment of
any further tax liability with respect to the periods which have
been audited by the federal, state, local or foreign taxing
authorities. There are no present disputes as to taxes of any
nature payable by Faircom which in any event reasonably could
adversely affect any of the Faircom Broadcast Assets or the
operation of the Faircom Stations. Except as set forth on Exhibit
21(p), Faircom has not been advised that any of its tax returns,
federal, state, local or foreign, have been or are being audited.
Faircom does not have as of the date hereof any unfunded
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). As used herein, the term "tax" includes, without
limitation, all federal, state, local and foreign income,
profits, sales, use, occupancy, excise, added value, employees'
income withholding, social security, franchise, property, and all
other governmental taxes, license fees and other charges of every
kind and description and related governmental charges imposed by
the laws and regulations of any governmental jurisdiction,
whether such taxes are due or claimed to be due from Faircom by
federal, state, local or foreign taxing authorities.
(q) EMPLOYEE BENEFIT PLANS. On the date hereof and on
the Closing Date, Faircom will not have in effect any bonus,
premium, group insurance, retirement, stock option, pension,
profit sharing or similar plan or any employment agreement with
respect to any of its employees except as set forth on Exhibit
21(q) and Exhibit 21(k-1).
(r) COMPLIANCE WITH COMMISSION REGULATIONS. Except as
specified in Exhibit 21(r), the operation of the Faircom Stations
and all of the Faircom Broadcast Assets are in compliance in all
material respects with: (a) all applicable engineering standards
required to be met under applicable Commission 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 Commission, and all
applicable painting and lighting requirements of the Commission
and the Federal Aviation Administration to the extent required to
be met under applicable Commission rules and regulations, and
there are no filed claims to the contrary.
(s) PERSONAL PROPERTY. Without material omission,
Exhibit 21(s) hereto contains a list of all items of tangible
personal property owned by Faircom or either of the Faircom
Subsidiaries and used in the conduct of the business and
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<PAGE>
operations of the Faircom Stations. Exhibit 21(s) also separately
lists any material tangible personal property leased by Faircom
pursuant to leases included within the Contracts. Except as
disclosed in Exhibit 21(s), Faircom or one of the Faircom
Subsidiaries has good and marketable title to all of the items of
tangible personal property which are included in the Faircom
Broadcast Assets (other than those subject to lease) and none of
such Faircom Broadcast Assets is subject to any security
interest, mortgage, pledge, lease, license, lien, encumbrance,
title defect or other charge, except for liens for taxes not yet
due and payable or which are immaterial. The properties listed in
Exhibit 21(s), along with those properties subject to lease and
included among the Contracts, constitute all material tangible
personal property necessary to operate the Faircom Stations in
all material respects as the same are now being operated. Except
as set forth in Exhibit 21(s), all items of tangible personal
property included in the Faircom Broadcast Assets are, in all
material respects, in good and technically sound operating
condition and repair (ordinary wear and tear excepted), are free
from substantially all material defect and damage, are suitable
for the purposes for which they are now being used, and have been
maintained in a manner consistent with generally accepted
standards of good engineering practice.
(t) REAL PROPERTY.
(i) Exhibit 21(t) 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 Faircom Stations)
used by Faircom or the Faircom Subsidiaries in connection with
the operations of the Faircom Stations (the "Faircom Real
Estate") and includes the name of the record title holder(s)
thereof and a list of all indebtedness secured by a lien,
mortgage or deed of trust thereon. The Faircom Subsidiaries have
good and marketable title in fee simple to all the Faircom Real
Estate specified as owned by them in Exhibit 21(t), free and
clear of all liens, charges, security interests, physical and
financial encumbrances, leases, covenants, restrictions, rights
of way, easements, encroachments, other matters affecting title,
and adverse claims of any kind, direct or indirect, whether
accrued, absolute, contingent or otherwise, except for those of
the nature set forth in Exhibit 21(t). With respect to each of
the buildings, structures and appurtenances situated on the
Faircom Real Estate, the Faircom Subsidiaries have adequate
rights of ingress and egress for operation of their respective
businesses in the ordinary course. None of the buildings,
structures, improvements, or fixtures constructed on the Faircom
Real Estate, including without limitation towers, guy wires and
guy anchors, and ground radials, nor the operation or maintenance
thereto, violates any restrictive covenant or any provision of
any federal, state or local law, ordinance, rule or regulation,
or encroaches on any property owned by others. No condemnation
proceeding is pending or threatened which would preclude or
impair the continued use of any such property by the Faircom
Subsidiaries for the purposes for which it is currently used.
(ii) Except as described in Exhibit 21(t), all
buildings, structures, towers, antennae, improvements and
fixtures situated on the Faircom Real Estate are in all material
respects in good and technically sound operating condition,
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<PAGE>
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 real property site used by the Faircom
Subsidiaries 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 Faircom Stations as presently conducted.
(u) ENVIRONMENTAL. Except as set forth in Exhibit
21(u), Faircom has complied in all material respects with all
federal, state and local environmental laws, rules and
regulations as in effect on the date hereof applicable to each of
the Faircom Stations and its operations, including but not
limited to the Commission's guidelines regarding RF radiation.
The technical equipment included in the Faircom Broadcast 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.
ss.ss.9601 ET SEQ., Toxic Substances Control Act, 15 U.S.C.
ss.ss.2601 ET SEQ., the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss.ss.6901 et seq. or any other applicable
federal, state and local environ- mental 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, 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, under, or about the real property on which
the Faircom Broadcast Assets are situated, including without
limitation the transmitter sites, or contained in the tangible
personal property included in the Faircom Broadcast Assets. The
Faircom Broadcast Assets and Faircom's use thereof are not in any
material respect in violation of any Environmental Laws or any
occupational, safety and health or other applicable law now in effect.
(v) INSURANCE. Exhibit 21(q) and Exhibit 21(v) contain
a list and summary of the terms of all insurance coverage owned
by Faircom. Until the Closing Date, Faircom will maintain or
cause to be maintained all insurance coverage described in such
Exhibits or obtain equivalent replacements therefor, and copies
of all insurance policies have been delivered to Regent or will
be delivered to Regent within three (3) days of when received by
Faircom.
(w) ACCOUNTS AND NOTES RECEIVABLE. All accounts and
notes receivable of Faircom reflected on the balance sheet of the
Faircom Financials or referred to in the notes thereto, and all
accounts and notes receivable of Faircom created after December
31, 1996, arose from valid transactions in the ordinary course of
business with unrelated third parties (except as otherwise
disclosed in the Faircom Financials or on Exhibit 21(o)), and are
collectible at their full amount except for bad debt allowance
indicated therein.
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<PAGE>
(x) LAWS, REGULATIONS AND INSTRUMENTS. Neither Faircom
nor the Faircom Subsidiaries is in violation of any term of its
respective Certificate of Incorporation or By-Laws. On the date
hereof, except as set forth on Exhibit 21(r), the Faircom
Stations are in compliance in all material respects with all
applicable federal, state and local laws, ordinances and
regulations. Faircom agrees that prior to the Closing Date, if it
becomes aware of any violations of the Communications Act of
1934, as amended, or of the rules and regulations of the
Commission, it will remove all such violations or be responsible
for the costs of removing such, including the payment of any
fines or forfeitures that may be assessed before or after Closing
for any such violations. Neither Faircom nor the Faircom
Subsidiaries is in default with respect to any judgment, order,
injunction or decree applicable to it of any court,
administrative agency, or other governmental authority.
(y) CONDUCT OF FAIRCOM STATIONS. Until the Closing
Date, the business of the Faircom Stations will be conducted in
good faith in substantially the same manner as heretofore.
Faircom shall use its reasonable best efforts (based upon the
exercise of reasonably prudent business judgment) to maintain and
preserve the present character of the Faircom Stations, the
quality of their programs, their business organization and makeup
and present customers and present business reputation, to keep
available to the Faircom Stations the services of their present
employees, and to maintain and preserve the good will of their
advertisers and listeners.
(z) DISPOSITION OF ASSETS. Between the date hereof and
the Closing Date, Faircom and the Faircom Subsidiaries will not,
without the prior written consent of Regent, transfer, convey or
assign to any other person any of the Faircom Broadcast Assets
unless, (i) in the case of tangible assets included in the
Faircom Broadcast Assets, the same are replaced by assets of
equal quality and usefulness or (ii) such disposition is in the
ordinary course of Faircom's business and does not exceed $25,000
in the aggregate.
(aa) TRANSMITTER SITES. Except as otherwise disclosed
on Exhibit 1(j), none of the Faircom Stations' transmitter sites
is the subject of any official complaint or notice of violation
of any applicable zoning ordinance or building code and no such
violation is known to exist. Faircom has no knowledge of any
encroachment on adjacent property, violation of any zoning
ordinance or building code or use or occupancy restriction, or
pending or threatened condemnation proceeding which would
preclude or impair the use of such real estate or the
improvements thereon by Regent, consistent with the terms of any
Faircom Station's transmitter site lease and in the manner and
for the purpose for which it is presently used.
(bb) LITIGATION. Except as disclosed in Exhibit 21(bb),
there is no litigation, action, suit, investigation or proceeding
pending, or threatened, against Faircom or against either of the
Faircom Subsidiaries which reasonably may give rise to any claim
against any of the Faircom Broadcast Assets material to the
operation of the Faircom Stations or upon Faircom's ability to
perform in accordance with the terms of this Agreement, or which
might result in a monetary forfeiture in excess of $25,000, in
any material adverse effect upon the business operations or
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assets of Faircom or the Faircom Subsidiaries, or in any
impairment of the right or ability of Faircom or the Faircom
Subsidiaries to carry on in all material respects their business
as now conducted.
(cc) NO CONFLICT. Subject to obtaining the required
consents under material contracts, leases and agreements
identified on Exhibits 2l(t), 21(k-1) and 21(i) and under
paragraph 21(mm)(vii) and the approval of the Faircom
Stockholders and the Commission, the execution, delivery and
performance of this Agreement are not prohibited by and will not
conflict with, constitute grounds for termination of, or result
in any breach or violation of, or constitute a default under, the
provisions of any material contract, the Certificate of
Incorporation or By-Laws (or other charter or organizational
documents) of Faircom or either of the Faircom Subsidiaries or,
subject to obtaining the required approval of the Faircom
Stockholders and the Commission, any applicable law, judgment,
order, injunction, decree, rule, regulation or ruling of any
governmental authority to which Faircom or either of the Faircom
Subsidiaries is a party or by which Faircom or either of the
Faircom Subsidiaries or any of the Faircom Broadcast Assets are
bound.
(dd) REQUIRED CONSENTS. Except as specifically
identified in Exhibits 2l(t), 21(k-1) and 21(i), neither Faircom
nor either of the Faircom Subsidiaries is a party to or bound by
any mortgage, lien, deed of trust, lease, agreement, instrument,
order, judgment or decree which would require the consent of
another to the execution of this Agreement or prohibit or require
the consent of another to, or make unduly burdensome the
consummation of, the Merger; and the consummation of the Merger
will not result (immediately or upon the giving of notice and/or
upon the passage of a period of time) in a breach of any term or
provision of or constitute a default under any mortgage, deed of
trust, note or other contract, agreement, instrument, license or
permit to which Faircom or either of the Faircom Subsidiaries is
a party, or otherwise give any other party thereto a right to
terminate the same or result in an acceleration in the payment
due under any note or other contract, agreement, instrument,
license or permit which is binding on Faircom or the Faircom
Subsidiaries, or in the creation of any lien, security interest,
encumbrance or charge under any of the foregoing on any assets or
properties of Faircom or the Faircom Subsidiaries, except where
such breach or default would be immaterial.
(ee) INTELLECTUAL PROPERTY. Exhibit 21(ee) hereto is a
true and complete list of all material Intellectual Property
applied for, registered or issued to, and owned by the Faircom
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Subsidiaries or under which the Faircom Subsidiaries are
licensees and which is used in the conduct of the respective
business and operations of the Faircom Subsidiaries. Except as
set forth on Exhibit 21(ee): (i) the right, title and interest of
the Faircom Subsidiaries 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 any of the Intellectual Property is licensed
to the Faircom Subsidiaries, such interest is valid and
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<PAGE>
uncontested by the licensor thereof or any third party; (ii) all
computer software located at the Faircom Stations' facilities or
used in the Faircom Stations' business or operations is properly
licensed to the Faircom Subsidiaries, and all of the uses by the
Faircom Subsidiaries of such computer software are authorized
under such licenses; (iii) all of the right, title and interest
of the Faircom Subsidiaries in and to the Intellectual Property
and computer software shall be assignable to Regent at Closing,
and upon such assignment (should such assignment be necessary),
Regent shall receive all of Faircom's or the Faircom
Subsidiaries', as the case may be, right, title, and interest in
and to all tangible and intangible property rights existing in
the Intellectual Property; and (iv) there are no infringements or
unlawful use of such Intellectual Property by Faircom or the
Faircom Subsidiaries in connection with the business or
operations of Faircom or the Faircom Subsidiaries.
(ff) QUALIFICATIONS FOR TRANSFER OF CONTROL. The
Faircom Subsidiaries are presently licensees in good standing
with the Commission, and Faircom and the Faircom Subsidiaries
have no knowledge of any fact or circumstance that could
reasonably prevent approval of the transaction contemplated by
this Agreement or the renewal of the Faircom Licenses.
(gg) PUBLIC INSPECTION FILE. All the documents
required by the rules, regulations and policies of the Commission
to be maintained in each Faircom Station's local public records
file are contained in such file and available for public
inspection.
(hh) ABSENCE OF CERTAIN CHANGES. Since December
31, 1996, except as disclosed in this Agreement, in the Faircom
Financials or in Faircom's filings under the Exchange Act, or as
set forth on Exhibit 21(hh):
(i) Faircom has not created, assumed, or
suffered any mortgage, pledge, lien or encumbrance on any of the
Faircom Broadcast Assets;
(ii) Faircom has conducted the business
of the Faircom Stations only in the ordinary course consistent
with past practices;
(iii) there has not been:
(A) any material adverse change in the
business, assets, capitalization, operations, properties,
prospects, or condition (financial or otherwise) of Faircom or
the Faircom Subsidiaries, or any damage, destruction or loss
(whether or not covered by insurance) materially and adversely
affecting any of the Faircom Broadcast Assets;
(B) any sale, assignment, lease or
other transfer or disposition of any of the properties or assets
used or intended for use in the operation of the Faircom Stations
except in the ordinary course of business, in connection with the
acquisition of similar property or assets in the normal and usual
course of business;
(C) any lease, agreement, contract,
obligation, or commitment entered into in connection with the
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<PAGE>
operation of the Faircom Stations except in the ordinary course
of business;
(D) any issuance of bonds, notes or other
corporate securities by Faircom;
(E) any declaration of payment or
payments or distribution of cash or other property to the Faircom
Stockholders with respect to Faircom's capital stock; or
(F) any purchase or redemption of any
shares of Faircom's capital stock.
(ii) PERSONNEL INFORMATION.
(i) Exhibit 21(ii) contains a true
and complete list of all persons employed full-time at the
Faircom Stations, including date of hire, a description of
material compensation arrangements (other than employee benefit
plans set forth in Exhibit 21(q)) and a list of other material
terms of any and all agreements affecting such persons and their
employment by Faircom. Faircom has received no notice that, and
Faircom is not aware of, any individual employee who shall or is
likely to terminate his or her employment relationship with the
Faircom Stations upon the execution of this Agreement or after
the Closing.
(ii) Faircom, with respect to the
Faircom Stations, is not a party to any contract or agreement
with any labor organization, nor has Faircom 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 Faircom at the Faircom Stations.
Faircom has no knowledge of any organizational effort currently
being made or threatened by or on behalf of any labor union with
respect to employees of Faircom at the Faircom Stations.
(iii) Except as disclosed in Exhibit
21(ii), Faircom, with respect to the Faircom 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.
(jj) [Reserved].
(kk) OUTSTANDING DEBT. Exhibit 21(kk) correctly lists
all outstanding debt of Faircom as of the date specified therein
(other than short term debt payable on demand or within one year
from the creation thereof and incurred in the ordinary course of
business).
(ll) NEGATIVE COVENANTS. Except for changes or actions
in the ordinary course of business consistent with past
practices, between the date hereof and the Closing Date, Faircom
will not, without the prior written consent of Regent:
(i) Increase the compensation payable or to
become payable to any of the employees of Faircom except on a
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case by case basis and then only such that any increase shall not
exceed 6% of any such employee's current salary or except
pursuant to contractual commitments described on Exhibit 21(k-1);
(ii) Enter into any contract, lease or
commitment or engage in any transaction relating to any of the
Faircom Stations;
(iii) Cancel, modify, or amend in any material
manner, or in any manner within its reasonable control impair any
of the contracts, leases or other agreements identified on
Exhibit 21(k-1) relating to any of the Faircom Stations which are
included in the Faircom Broadcast Assets;
(iv) Create any mortgage, pledge, lien or
encumbrance affecting any of the Faircom Broadcast Assets which
cannot be repaid concurrently with the Closing by Faircom or
Regent;
(v) Sell, assign, lease or otherwise
transfer or dispose of any of the Faircom Broadcast Assets;
(vi) Consolidate with, merge into, or acquire
(with the exception of the Shelby Station) any other person or
entity, or permit any person or entity to acquire, merge into or
consolidate with it;
(vii) Declare, make or incur any liability to
make any dividends or other distributions on its capital stock;
(viii) Redeem or otherwise acquire any shares of
its capital stock;
(ix) Issue or sell any shares of its capital
stock, warrants, options or other rights to acquire any shares of
its capital stock, except for shares issued pursuant to the
exercise of options or the conversion of the Faircom Subordinated
Notes outstanding as of the date hereof;
(x) Amend its Certificate of Incorporation or
By-Laws; or
(xi) Borrow or incur any indebtedness
unless such indebtedness can be repaid concurrently with or prior
to Closing.
(mm) AFFIRMATIVE COVENANTS. Between the date
hereof and the Closing Date, Faircom will:
(i) Give to Regent and its authorized
representatives, upon prior reasonable notice, full access during
normal business hours to all properties, books, records,
contracts and documents and furnish or cause to be furnished to
Regent or its authorized representatives all information with
respect to the affairs and business of the Faircom Stations as
Regent may reasonably request, including monthly profit and loss
statements and notice of changes in full-time employees;
(ii) Notify Regent in writing upon obtaining
knowledge of any new litigation pending or threatened against
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Faircom or the Faircom Subsidiaries or any damage to or
destruction of any of the Faircom Broadcast Assets;
(iii) Continue promotional activity at the Faircom
Stations as the same level necessary in order to comply with the
provisions of paragraph 21(y);
(iv) Furnish to Regent, at Faircom's expense,
Faircom Financials for the six months ended June 30, 1997 and for
each month thereafter through the Closing Date;
(v) Promptly notify Regent in writing of any
material adverse developments with respect to the business or
operations of Faircom or the Faircom Subsidiaries;
(vi) Call, give proper notice and hold a special
meeting of Faircom Stockholders for the purposes of submitting
this Agreement and the transactions provided for herein to the
Faircom Stockholders for adoption and approval, all in compliance
with all applicable provisions of Delaware law, which meeting
shall be held as soon as practicable after effectiveness of the
Registration Statement; give the Faircom Stockholders due and
proper notice of such meeting; and include with such notice to
each Stockholder a copy of the proxy statement/prospectus
constituting part of the Registration Statement, as provided to
it by Regent for such purpose;
(vii) Immediately following the execution of this
Agreement, diligently pursue obtaining all consents and approvals
required to be obtained by it, including those required under the
material contracts, leases and agreements identified on Exhibits
2l(t), 21(k-1) and 21(i), and the consent of the Faircom
Stockholders in accordance with paragraph 21(mm)(vi). Within
forty-five (45) days after the execution of this Agreement and at
periodic intervals as may be reasonably requested by Regent
thereafter, Faircom will notify Regent of the status of obtaining
the required consents and approvals, which consents and approvals
have been obtained, and any other information relating thereto;
and
(nn) ADDITIONAL AGREEMENTS. Subject to the terms and
conditions herein provided, Faircom agrees to use its reasonable
best 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 transaction contemplated by
this Agreement. In case at any time after the Closing any further
action is reasonably necessary to carry out the purposes of this
Agreement, Faircom shall take, or cause to be taken, such action.
(oo) JOIN IN EXECUTION OF DOCUMENTS. Faircom will join
with Subsidiary and Regent, at such time as all conditions
precedent to the transactions contemplated by this Agreement have
been fulfilled, in executing and delivering all documents which
may be necessary or appropriate to effect the transactions
contemplated by this Agreement.
(pp) FULL DISCLOSURE. No representation or warranty
made by Faircom contained in this Agreement nor any certificate,
document or other instrument furnished or to be furnished by
Faircom pursuant hereto contains or will contain any untrue
statement of a material fact, or omits or shall omit to state any
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material fact required to make any statement contained herein or
therein not misleading. Faircom is not aware of any impending or
contemplated event or occurrence that would cause any of the
foregoing representations not to be true and complete on the date
of such event or occurrence as if made on that date. There is no
fact which materially adversely affects the business, conditions,
affairs or operations of Faircom or the Faircom Stations which
has not been set forth in this Agreement, in the Faircom
Financials or in Faircom's filings under the Exchange Act, or
otherwise disclosed in writing by Faircom to Regent or its
representatives. When the Registration Statement is filed with
the SEC and at all times subsequent thereto, the portions of the
Registration Statement and the proxy statement/prospectus
included therein, and any amendments or supplements thereto which
have been furnished by or on behalf of Faircom for inclusion
therein pursuant to paragraphs 12A and 21(qq), will comply in all
material respects with the requirements of the Securities Act,
the Exchange Act, and the rules and regulations promulgated
thereunder; will not contain an untrue statement of material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and will
not fail to describe or contain as an exhibit any contract or
document required to be described in the Registration Statement
or the proxy statement/prospectus included therein or to be filed
as an exhibit to the Registration Statement.
(qq) SUBMISSION OF MATERIAL FOR REGISTRATION STATEMENT.
Faircom shall provide or cause to be provided to Regent the
Faircom Information, on or before five (5) days after the date
hereof (or as soon thereafter as such information is available),
for inclusion in the Registration Statement.
(rr) FAIRNESS AND TAX OPINIONS. The Board of Directors
of Faircom has received from Hoffman Schutz Media Capital, Inc.,
its financial advisor, an opinion that the consideration to be
paid to the Faircom Stockholders as contemplated by this
Agreement is fair to them from a financial point of view (the
"Fairness Opinion"), and Faircom has received from Fulbright &
Jaworski L.L.P., its legal counsel, an opinion, in form and
substance reasonably satisfactory to it, to the effect that the
Merger will qualify as a tax-free reorganization under Section
368 of the Internal Revenue Code, on the basis of the facts,
representations and assumptions set forth in such opinion (the
"Tax Opinion").
COVENANTS, REPRESENTATIONS
AND WARRANTIES OF REGENT AND SUBSIDIARY
_______________________________________
22. COVENANTS, REPRESENTATIONS AND WARRANTIES OF REGENT
AND REGENT SUBSIDIARIES. Regent, on behalf of itself and on
behalf of each of the Regent Subsidiaries, makes the following
covenants, representations, and warranties (where meaningful, all
warranties, representations, and covenants relating to Regent
hereunder shall apply equally to each of the Regent Subsidiaries,
as if any reference to Regent is a reference to any or each
Regent Subsidiary as the context permits):
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(a) CORPORATE STANDING AND AUTHORITY.
---------------------------------
(i) Regent is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and is in good standing as a corporation qualified
to do business under the laws of the Commonwealth of Kentucky
(being the only state in which Regent's offices, equipment,
facilities and other tangible assets are situated); and has all
corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby.
(ii) Each of the Regent Subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; and is qualified as a
foreign corporation in good standing under the laws of those
states listed on Exhibit 22(a) attached hereto. All of the
outstanding shares of capital stock of each of the Regent
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable, and except as set forth on Exhibit
22(a), are owned, of record and beneficially, by Regent, free and
clear of all liens, encumbrances, equities, options or claims
whatsoever. None of the Regent Subsidiaries has outstanding any
other equity securities or securities options, warrants or rights
of any kind, convertible into, exchangeable for, or otherwise
entitling any person to acquire, equity securities of such
Subsidiary.
(iii) This Agreement and the transactions
contemplated hereby have been adopted, ratified and approved by
the Boards of Directors of Regent and Subsidiary and the
stockholder of Subsidiary, and copies of all corporate
proceedings of each of Regent and Subsidiary relating to such
authorization and approval, certified by its Secretary, have been
or will be delivered to Faircom at the Closing. No further
corporate action on the part of Regent or Subsidiary is required.
This Agreement constitutes a valid and binding obligation of
Regent and Subsidiary, enforceable in accordance with its terms,
subject to bankruptcy laws, other federal and state laws
affecting creditors' rights generally and availability of
equitable remedies.
(b) CAPITALIZATION; REGENT STOCK. As of
Effectiveness, the authorized capital stock of Regent will be
30,000,000 shares of common stock ("Common Stock") (of which
240,000 shares were issued and outstanding as of the date
hereof), and 20,000,000 shares of preferred stock, of which
620,000 shares will have been designated Series A Convertible
Preferred Stock (600,000 shares of which were issued and
outstanding as of the date hereof); 1,000,000 shares will have
been designated Series B Senior Convertible Preferred Stock (none
of which were issued and outstanding as of the date hereof and
1,000,000 shares of which may be issued and outstanding as of
Effectiveness); 4,000,000 shares will have been designated Series
C Convertible Preferred Stock (none of which are issued and
outstanding as of the date hereof); 1,000,000 shares will have
been designated Series D Convertible Preferred Stock (none of
which were issued and outstanding as of the date hereof and
1,000,000 shares of which may be issued and outstanding as of
Effectiveness); and 5,000,000 shares will have been designated as
Series E Convertible Preferred Stock (none of which were issued
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<PAGE>
and outstanding as of the date hereof). As of the date hereof,
the holders of the preferred stock were entitled to convert the
same into 600,000 shares of Common Stock (without taking into
account the application of the anti-dilution provisions of such
preferred stock). Except as stated herein, there are no other
outstanding rights, warrants, options, subscriptions, agreements,
or commitments giving any current or future right to require
Regent to sell or issue any capital stock or other securities or
any agreement or arrangement restricting the right of Regent to
issue or sell any capital stock or other securities. Between the
date hereof and the Closing Date Regent will not issue any
additional shares of Common Stock or preferred stock, except (i)
pursuant to the conversion of the outstanding preferred stock,
and (ii) pursuant to the exercise of options which may be granted
to management (up to but not to exceed an aggregate of 15% of the
outstanding shares of capital stock, assuming conversion to
Common Stock of all outstanding shares of Series A, B, C, D and E
Convertible Preferred Stock and any series of preferred stock
hereafter created on a fully diluted basis).
All of the outstanding capital stock of Regent and
Regent Subsidiary has been duly and validly authorized and issued
and is fully paid and non-assessable and none of such securities
has been issued or acquired in violation of any preemptive,
subscription or other rights to purchase or acquire such
securities or in violation of the Securities Act or the
securities or blue sky or any other applicable laws or
regulations of any jurisdiction.
(c) CORPORATE POWER. Each of the Regent Subsidiaries:
(i) has all requisite corporate power and
authority to own, lease and operate the Regent Assets owned,
leased or operated by it and to carry on the business of the
Regent Station as now being conducted by it and as proposed to be
conducted by it between the date hereof and the Closing Date; and
(ii) has obtained all licenses, permits or
other authorizations and has taken all actions required by
applicable law or governmental regulations which are material to
its business as now conducted.
(d) RESERVED.
(e) RESERVED.
(f) AFFILIATES. Except as set forth on Exhibit 22(f),
neither Regent nor any of the Regent Subsidiaries owns, directly
or indirectly, any interest in any corporation, business trust,
joint stock company or other business organization, association,
partnership, venture or other entity.
(g) RIGHTS TO ACQUIRE SECURITIES. Except as identified
on Exhibit 22(g), there are no outstanding rights, options,
subscriptions, agreements, or commitments giving anyone any
current or future right to require Regent to sell or issue any
capital stock or other securities or any agreement or arrangement
restricting the right of Regent to issue or sell any capital
stock or other securities.
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(h) CORPORATE RECORDS. The minute books of each of
Regent and the Regent Subsidiaries accurately reflect in all
material respects all action taken by the respective Boards of
Directors of such entities and the minute books of Regent and
Subsidiary will accurately reflect all action required to be
taken by the Closing by the Board of Directors of Regent and
Subsidiary and the stockholder of Subsidiary to enable Regent and
Subsidiary to execute and perform this Agreement and all
transactions contemplated hereunder. The minute books of Regent
and the Regent Subsidiaries contain true and complete copies of
the Certificates of Incorporation and By-Laws of such entities,
and all amendments thereto. The stock certificate books and share
ledgers of Regent and the Regent Subsidiaries reflect accurately
all information called for thereon and all issuances and
transfers of the capital stock of such entities. All issuances
and transfers reflected in said stock certificate books and
ledger were duly and validly made in compliance with the laws of
the applicable jurisdiction(s).
(i) TITLE TO REGENT ASSETS. The Regent Subsidiaries
have, and upon acquisition of the Park Lane Stations will have,
good and marketable title to all of the Regent Assets (other than
those subject to lease), free and clear of all liens, mortgages,
pledges, conditional sales agreements, security interests,
charges and encumbrances, except liens for taxes not yet due and
payable and those listed on Exhibit 22(i).
(j) FINANCIAL STATEMENTS; PROJECTIONS. The Regent
Financials heretofore furnished to Faircom fairly present or will
fairly present the consolidated financial position and
consolidated results of operations of Regent and the Regent
Subsidiaries as of the dates thereof and for the periods
represented. All said Regent Financials, where applicable, have
been and will be prepared in accordance with generally accepted
accounting principles consistently applied. Regent interim
statements have been or will be prepared in accordance with
generally accepted accounting principles for interim financial
information subject to year-end audit adjustments and the absence
of footnotes.
The Park Lane Financials are true, complete and
correct, and have been prepared in accordance with generally
accepted accounting principles consistently applied and
maintained throughout the periods indicated, and present fairly
the financial position and results of operations of Park Lane as
of the dates thereof and for the periods covered thereby.
The Regent Projections were prepared based upon
assumptions which were reasonable and justifiable at the time of
their preparation and, after taking into account actual
conditions known to Regent to, and as of, the date of this
Agreement, continue to be reasonable as of the date of this
Agreement.
(k) CONTRACTS.
(i) Exhibit 22(k-1) is a complete list or
description of all written and oral contracts relative to the
Regent Station and the Park Lane Stations in existence at the
date of this Agreement which are enforceable against Regent or
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which will be enforceable against Regent upon the acquisition by
Regent of Park Lane, excluding:
(A) oral employment arrangements with
Regent Station or Park Lane Station employees;
(B) written employment arrangements with
Regent Station or Park Lane Station employees terminable without
penalty or severance pay on no more than two (2) weeks' notice;
(C) contracts for the sale of radio time or
advertising which conform to the representations of subparagraph
(k)(ii) below;
(D) contracts for the use, rental, or
lease of office equipment (other than telephone and computer
equipment);
(E) contracts for the sale of broadcast
time or advertising in exchange for merchandise or services; and
(F) other miscellaneous contracts not
uncommon to broadcast properties which do not exceed $50,000 of
expenditures or revenues annually in the aggregate.
(ii) All contracts for the sale of broadcast
time or advertising on the Regent Station or the Park Lane
Stations in exchange for merchandise or services on or after the
date hereof which will not be fully performed by the Closing Date
to which either Regent, the Regent Subsidiaries or Park Lane is a
party or by which it is bound are pre-emptible for cash sales and
none is subject to fixed positions (except for those contracts
which provide for the delivery of programming to the Regent
Station or the Park Lane Stations in return for barter
advertising). True and complete copies of all contracts, leases
and agreements listed in Exhibit 22(k-1) have been made available
to Faircom. Regent is current in all of its obligations under all
of the contracts, leases and agreements listed on Exhibit 22(k-1)
which are enforceable against Regent, and each such contract,
lease and agreement is in full force and effect and will not be
impaired by any acts or omissions within the reasonable control
of Regent, its agents or employees except for those that shall
previously have expired by passage of time in accordance with
their respective terms.
(iii) Except as set forth on Exhibit 22(k-1) or
Exhibit 22(i), neither Regent nor Park Lane is a party to any
written or oral:
(A) agreement or indenture relating to
the borrowing of money or to the mortgaging or pledging of, or
otherwise placing a lien on, any material asset or material group
of assets of Regent, the Regent Stations or the Park Lane
Stations;
(B) guarantee of any obligation (other than
the endorsement of negotiable instruments for collection in the
ordinary course of business); or
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(C) agreement whereunder Regent or any
successor is obligated to make any conditional or other payment
based upon the future performance of Regent or the Regent Station
or the Park Lane Stations.
(l) GOVERNMENT AUTHORIZATIONS.
-------------------------
(i) Exhibit 1(bb) hereto contains a true and
complete list of all licenses, permits or other authorizations
issued by the Commission which are required for the lawful
conduct of the business and operations of the Regent Station and
the Park Lane Stations in the manner and to the full extent they
are presently conducted (including, without limitation, auxiliary
licenses associated with each Station). Regent has delivered to
Faircom true and complete copies of the Regent Licenses,
including any and all amendments and other modifications thereto.
(ii) The entities specified on Exhibit 1(bb) are
the authorized legal holders of the Regent Licenses. Except as
set forth in Exhibit 1(bb), none of the Regent Licenses is
subject to any restrictions or conditions which would materially
limit the full operation of the Regent Station or the Park Lane
Stations as now operated.
(iii) Except as set forth in Exhibit 1(bb), and
except for matters affecting the radio broadcast industry
generally, there are no applications, complaints, petitions or
proceedings pending or threatened as of the date hereof before
the Commission or any other governmental or regulatory authority
relating to the business or operations of the Regent Station or
any of the Park Lane Stations. Except as set forth in Exhibit
1(bb), the Regent Licenses are in good standing, are in full
force and effect and are unimpaired by any act or omission of
Regent or its stockholders, officers, directors or employees. The
operations of the Regent Station and the Park Lane Stations are
in accordance in all material respects with the Regent Licenses
and the underlying construction permits. No proceedings are
pending or threatened, and there has not been any act or omission
of Regent or any of its officers, directors, stockholders or
employees, which reasonably may result in the revocation, non-
renewal, suspension or material modification of any of the Regent
Licenses, the denial of any pending applications, the issuance of
any cease and desist order, the imposition of any administrative
actions by the Commission or any other governmental or regulatory
authority with respect to the Regent Licenses or which reasonably
may affect Regent's ability to continue to operate the Regent
Station and the Park Lane Stations substantially as they are
currently operated.
(iv) The Regent Station and each of the Park Lane
Stations is operating with the maximum facilities specified in
the Regent License.
(v) Neither the Regent Station nor any of the
Park Lane Stations is causing objectionable interference to the
transmissions of any other broadcast station or communications
facility nor has any of the Park Lane Stations or the Regent
Station received any complaints with respect thereto; and (ii) no
other broadcast station or communications facility is causing
objectionable interference to the respective transmissions of the
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Regent Station or the Park Lane Stations or the public's
reception of such transmissions.
(vi) Regent has no reason to believe that the
Regent Licenses will not be renewed in their ordinary course.
(vii) All reports, forms, and statements required
to be filed by Regent or the Regent Subsidiaries with the
Commission with respect to the Regent Station and the Park Lane
Stations since the grant of the last renewal of the Regent
Licenses have been filed and are substantially complete and
accurate.
(viii) There are no facts which, under the
Communications Act of 1934, as amended, or the existing rules and
regulations of the Commission, would cause the Regent Licenses
not to be renewed in their ordinary course.
(ix) The operation of the Regent Station and
the Park Lane Station and all of the Regent Assets are in
compliance in all material respects with ANSI Radiation Standards
C95.1 - 1992.
(m) MANAGEMENT, KEY EMPLOYEES AND ACCOUNTS. Exhibit
22(m-1) sets forth the names of all current employees whose
compensation (including without limitation, salaries, bonuses and
commissions) from Regent and Park Lane for the year ended
December 31, 1996 or for the current year on an annualized basis
exceeds $30,000. Exhibit 22(m-2) sets forth the name of each bank
or savings institution in which Regent and Park Lane have an
account or safe deposit box.
(n) TAX ELECTIONS. Neither Regent nor Park Lane has
filed a consent to the application of Section 341(f)(2) of the
Internal Revenue Code with regard to any property held, acquired
or to be acquired at any time.
(o) RELATED TRANSACTIONS. All outstanding debts and
other obligations of Regent to any stockholders or officers or
directors of Regent and all outstanding debts and other
obligations of Park Lane to any stockholders or officers or
directors of Park Lane are listed on Exhibit 22(o), except for
those incurred for normal travel and entertainment in connection
with the conduct of the business of Regent, the Regent Station,
Park Lane, the Park Lane Stations, and were incurred in return
for fair and adequate consideration paid or delivered by them in
cash, services, or other property. All debts of any such
stockholders, officers or directors to Regent and Park Lane are
listed on Exhibit 22(o) and reflected on the Regent Financials or
the Park Lane Financials, respectively.
(p) TAXES. Except as set forth on Exhibit 22(p), each
of Regent and Park Lane 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 as of the
date hereof. All returns identified on Exhibit 22(p) to be filed
will be filed and all taxes required to be paid in respect of the
periods covered by such returns will be paid prior to the Closing
Date. Regent has delivered to Faircom true and complete copies of
all federal, state and local income tax returns of Regent and
Park Lane as filed. Each of Regent and Park Lane has duly paid or
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accrued all taxes required to be paid by it in respect of the
periods covered by all such returns, whether or not shown on such
returns, and all interest and penalties thereon, whether disputed
or not, and neither Regent nor Park Lane has any liability for
taxes in excess of the amounts so paid. All of the tax
liabilities of Regent and Park Lane for the current year to date
and for the year 1996, whether or not they have become due and
payable, have been paid in full or adequately reserved for, and
to the extent tax liabilities have accrued but not become
payable, they are reflected on the books of Regent or in the
Regent Financials or the Park Lane Financials. Neither Regent nor
Park Lane has requested any extension of time within which to
file any tax returns which have not since been filed, and no
deficiencies for any tax, assessment or governmental charge have
been claimed, proposed or assessed by any taxing authority and
there is no basis for any such deficiency or claim. There are no
present disputes as to taxes of any nature payable by Regent or
Park Lane which in any event reasonably could adversely affect
any of the Regent Assets. Except as set forth on Exhibit 22(p),
neither Regent nor Park Lane has been advised that any of its tax
returns, federal, state, local or foreign, have been or are being
audited. Neither Regent nor Park Lane has as of the date hereof
any unfunded 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). As used herein, the term "tax" includes, without
limitation, all federal, state, local and foreign income,
profits, sales, use, occupancy, excise, added value, employees'
income withholding, social security, franchise, property, and all
other governmental taxes, license fees and other charges of every
kind and description and related governmental charges imposed by
the laws and regulations of any governmental jurisdiction,
whether such taxes are due or claimed to be due from Regent by
federal, state, local or foreign taxing authorities.
(q) EMPLOYEE BENEFIT PLANS. On the date hereof and on
the Closing Date, neither Regent nor Park Lane will have in
effect any bonus, premium, group insurance, retirement, stock
option, pension, profit sharing or similar plan or any employment
agreement with respect to any of its employees except as set
forth on Exhibit 22(q) and Exhibit 22(k-1).
(r) COMPLIANCE WITH COMMISSION REGULATIONS. Except as
specified in Exhibit 22(r), the operation of the Regent Station,
the Park Lane Stations, and the Regent Assets are in compliance
in all material respects with: (a) all applicable engineering
standards required to be met under applicable Commission 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
Commission, and all applicable painting and lighting requirements
of the Commission and the Federal Aviation Administration to the
extent required to be met under applicable Commission rules and
regulations, and there are no filed claims to the contrary.
(s) PERSONAL PROPERTY. Without material omission,
Exhibit 22(s) hereto contains a list of all items of tangible
personal property owned by Regent and/or the Regent Subsidiaries
and all items of tangible personal property that are to be
acquired by Regent upon the acquisition by Regent of Park Lane,
and used in the conduct of the business and operations of the
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Regent Station and the Park Lane Stations. Exhibit 22(s) also
separately lists any material tangible personal property leased
by Regent and Park Lane pursuant to leases included within the
contracts listed on Exhibit 22(k-1). Except as disclosed on
Exhibit 22(s), Regent or the Regent Subsidiaries have, and upon
the acquisition of the Park Lane Stations will have, good and
marketable title to all of the items of tangible personal
property which are included in the Regent Assets (other than
those subject to lease) and none of such assets is subject to any
security interest, mortgage, pledge, lease, license, lien,
encumbrance, title defect or other charge, except for liens for
taxes not yet due and payable or which are immaterial. The
properties listed in Exhibit 22(s), along with those properties
subject to lease and included among the contracts listed on
Exhibit 22(k-1), constitute all material tangible personal
property necessary to operate the Regent Station and the Park
Lane Stations as the same are now being operated. Except as set
forth in Exhibit 22(s) and except as provided below, all items of
tangible personal property included in the Regent Assets are, in
all material respects, 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
maintained in a manner consistent with generally accepted
standards of good engineering practice. Regent has discovered
that certain conditions exist which it believes are inconsistent
with certain representations made to Regent by the stockholders
of Park Lane with respect to the condition of certain of its
equipment, and Regent has exercised its right to require Park
Lane to cause this equipment to be brought into compliance with
its representations.
(t) REAL PROPERTY.
(i) Exhibit 22(t) 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 Regent Station and
the Park Lane Stations) used by Regent or the Regent Subsidiaries
in connection with the operations of the Regent Station (the
"Regent Real Estate") and a description of all real property that
is to be acquired upon the closing of the acquisition by Regent
of Park Lane (the "Park Lane Real Estate").
(ii) The Regent Subsidiaries have good and
marketable title in fee simple to all the Regent Real Estate
specified as owned by them in Exhibit 22(t), free and clear of
all liens, charges, security interests, physical and financial
encumbrances, leases, covenants, restrictions, rights of way,
easements, encroachments, other matters affecting title, and
adverse claims of any kind, direct or indirect, whether accrued,
absolute, contingent or otherwise, except for those of the nature
set forth in Exhibit 22(t). With respect to each of the
buildings, structures and appurtenances situated on the Regent
Real Estate, the Regent Subsidiaries have adequate rights of
ingress and egress for operation of their respective businesses
in the ordinary course. None of the buildings, structures,
improvements, or fixtures constructed on the Regent Real Estate,
including without limitation towers, guy wires and guy anchors,
and ground radials, nor the operation or maintenance thereto,
violates any restrictive covenant or any provision of any
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federal, state or local law, ordinance, rule or regulation, or
encroaches on any property owned by others, and all such
buildings, structures, improvements and fixtures are constructed
and operated and used in conformance with all "set back" lines,
easements, covenants, restrictions, and all applicable building,
fire, zoning and health codes. No condemnation or other legal
proceeding or action of any kind relating to such real property
and/or title thereto is pending or threatened which would
preclude or impair the continued use of any such property by the
Regent Subsidiaries for the purposes for which it is currently
used.
(iii) Except as described in Exhibit 22(t),
all buildings, structures, towers, antennae, improvements and
fixtures situated on the Regent Real Estate are in all material
respects 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 real property site used by the Regent Subsidiaries
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
Regent Station as presently conducted.
(iv) With respect to the Park Lane Real Estate,
Park Lane has good and marketable title in fee simple to all of
the Park Lane Real Estate free and clear of all liens, charges,
security interests, physical and financial encumbrances, leases,
covenants, restrictions, rights of way, easements, encroachments,
other matters affecting title, and adverse claims of any kind,
direct or indirect, whether accrued, absolute, contingent or
otherwise, except for those of the nature set forth in Exhibit
22(t). With respect to each of the buildings, structures and
appurtenances situated on the Park Lane Real Estate, Park Lane
has adequate rights of ingress and egress for the operation of
the business of Park Lane in the ordinary course. None of the
buildings, structures, improvements, or fixtures constructed on
the Park Lane Real Estate, including without limitation towers,
guy wires and guy anchors, and ground radials, nor the operation
or maintenance thereto, violates any restrictive covenant or any
provision of any federal, state or local law, ordinance, rule or
regulation, or encroaches on any property owned by others. No
condemnation proceeding is pending or threatened which would
preclude or impair the continued use of any such property by Park
Lane for the purposes for which it is currently used. Except as
described in Exhibit 22(t), all buildings, structures, towers,
antennae, improvements and fixtures situated on the Park Lane
Real Estate are in good and technically sound operating
condition, ordinary wear and tear excepted, have no latent struc-
tural, 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 Park Lane Stations as presently conducted.
(u) ENVIRONMENTAL. Except as set forth in Exhibit
22(u), each of Regent and Park Lane has complied in all material
respects with all federal, state and local environmental laws,
rules and regulations as in effect on the date hereof applicable
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to the Regent Station and its operations and the Park Lane
Stations and their operations, respectively, including but not
limited to the Commission's guidelines regarding RF radiation.
The technical equipment included in the assets used or held for
use in the operation of the Regent Station and the Park Lane
Stations 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.
ss.ss.9601 ET SEQ., Toxic Substances Control Act, 15 U.S.C.
ss.ss.2601 ET SEQ., the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss.ss.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, 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, under, or about the real property on which
the Regent Station and the Park Lane Stations and their assets
are situated, including without limitation the transmitter sites,
or contained in the tangible personal property included in the
assets in respect of the Regent Station and the Park Lane
Stations. The Regent Assets and Regent's use thereof are not in
any material respect in violation of any Environmental Laws or
any occupational, safety and health or other applicable law now
in effect.
(v) INSURANCE. Exhibit 22(q) and Exhibit 22(v)
contain a list and summary of the terms of all insurance coverage
owned by Regent and Park Lane. Until the Closing Date, Regent and
Park Lane will maintain or cause to be maintained all insurance
coverage described in such Exhibits or obtain equivalent
replacements therefor, and copies of all insurance policies have
been delivered to Faircom or will be delivered to Faircom within
three (3) days of when received by Regent.
(w) ACCOUNTS AND NOTES RECEIVABLE. All accounts
and notes receivable of Regent reflected in the Regent Financials
or referred to in the notes thereto, and all accounts and notes
receivable of Park Lane reflected in the Park Lane Financials or
referred to in the notes thereto, arose from valid transactions
in the ordinary course of business with unrelated third parties
(except as otherwise disclosed in the Regent Financials or in the
Park Lane Financials or on Exhibit 22(o)), and are collectible at
their full amount except for bad debt allowance indicated
therein.
(x) LAWS, REGULATIONS AND INSTRUMENTS. Neither
Regent, any of the Regent Subsidiaries, nor Park Lane is in
violation of any term of its respective Certificate of
Incorporation or By-Laws. On the date hereof, except as set forth
on Exhibit 22(r), the Regent Station and the Park Lane Stations
are in compliance in all material respects with all applicable
federal, state and local laws, ordinances and regulations. Regent
agrees that prior to the Closing Date, if it becomes aware of any
violations of the Communications Act of 1934, as amended, or of
the rules and regulations of the Commission, it will remove all
such violations or be responsible for the costs of removing such,
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including the payment of any fines or forfeitures that may be
assessed before or after Closing for any such violations. Neither
Regent, any of the Regent Subsidiaries, nor Park Lane is in
default with respect to any judgment, order, injunction or decree
applicable to it of any court, administrative agency, or other
governmental authority.
(y) CONDUCT OF REGENT STATION AND PARK LANE
STATIONS. Until the Closing Date, Regent shall use its reasonable
best efforts (based upon the exercise of reasonably prudent
business judgment) to maintain and preserve the present character
of the Regent Station and the Park Lane Stations, the quality of
their programs, their business organization and makeup and
present customers and present business reputation, to keep
available to the Regent Station and the Park Lane Stations the
services of their present employees, and to maintain and preserve
the good will of their advertisers and listeners.
(z) DISPOSITION OF ASSETS. Between the date hereof
and the Closing Date, neither Regent, the Regent Subsidiaries nor
Park Lane will, without the prior written consent of Faircom,
transfer, convey or assign to any other person any of the Regent
Assets unless, (i) in the case of tangible assets included in the
Regent Assets, the same are replaced by assets of equal quality
and usefulness or (ii) such disposition is in the ordinary course
of Regent's business and does not exceed $25,000 in the
aggregate.
(aa) TRANSMITTER SITES. Except as otherwise
disclosed on Exhibit 1(bb), neither the Regent Station's
transmitter site nor any of the Park Lane Stations' transmitter
sites is the subject of any official complaint or notice of
violation of any applicable zoning ordinance or building code and
no such violation is known to exist. Regent has no knowledge of
any encroachment on adjacent property, violation of any zoning
ordinance or building code or use or occupancy restriction, or
pending or threatened condemnation proceeding which would
preclude or impair the use of such real estate or the
improvements thereon by Regent, consistent with the terms of the
Regent Station's transmitter site lease or any Park Lane
Stations' transmitter site lease and in the manner and for the
purpose for which it is presently used.
(bb) LITIGATION. Except as disclosed in Exhibit
22(bb), there is no litigation, action, suit, investigation or
proceeding pending, or threatened, against Regent, any of the
Regent Subsidiaries, or Park Lane, which reasonably may give rise
to any claim upon any of Regent's Assets material to the
operation of the Regent Station or the Park Lane Stations or upon
Regent's or Subsidiary's ability to perform in accordance with
the terms of this Agreement, or which might result in a monetary
forfeiture in excess of $25,000, in any material adverse effect
upon the business, operations or assets of Regent or the Regent
Subsidiaries, or in any impairment of the right or ability of
Regent or the Regent Subsidiaries to carry on in all material
respects their business as now conducted.
(cc) NO CONFLICT. Subject to obtaining the
required consents referred to in paragraph 22(dd) and the
approval of the Commission, the execution, delivery and
performance of this Agreement are not prohibited by and will not
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conflict with, constitute grounds for termination of, or result
in any breach or violation of, or constitute a default under, the
provisions of any material contract, the Certificate of
Incorporation or By-Laws (or other charter or organizational
documents) of Regent, any of the Regent Subsidiaries, or Park
Lane, or any applicable law, judgment, order, injunction, decree,
rule, regulation or ruling of any governmental authority to which
Regent, any of the Regent Subsidiaries, or Park Lane is a party
or by which Regent, any of the Regent Subsidiaries, Park Lane, or
any of the Regent Assets is bound.
(dd) REQUIRED CONSENTS. Except as specifically
identified in Exhibit 22(dd), neither Regent, the Regent
Subsidiaries, nor Park Lane is a party to or bound by any
mortgage, lien, deed of trust, lease, agreement, instrument,
order, judgment or decree which would require the consent of
another to the execution of this Agreement or prohibit or require
the consent of another to or make unduly burdensome the
consummation of, the Merger; and the consummation of the Merger
will not result (immediately or upon the giving of notice and/or
upon the passage of period of time) in a breach of any term or
provision of or constitute a default under any mortgage, deed of
trust, note or other agreement or instrument to which Regent, the
Regent Subsidiaries, or Park Lane is a party, or otherwise give
any other party thereto a right to terminate the same or result
in an acceleration in the payment due under any note or other
agreement or instrument which is binding on Regent, the Regent
Subsidiaries, or Park Lane, or in the creation of any lien,
security interest, encumbrance or charge under any of the
foregoing on any assets or properties of Regent, the Regent
Subsidiaries, or Park Lane, except where such breach or default
would be immaterial.
(ee) INTELLECTUAL PROPERTY. Exhibit 22(ee) hereto
is a true and complete list of all material Intellectual Property
applied for, registered or issued to, and owned by the Regent
Subsidiaries and Park Lane or under which the Regent Subsidiaries
and Park Lane are licensees and which is used in the conduct of
the respective business and operations of the Regent Subsidiaries
or Park Lane. Except as set forth on Exhibit 22(ee): (i) the
right, title and interest of the Regent Subsidiaries and Park
Lane 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 any of the Intellectual Property is licensed to the Regent
Subsidiaries and Park Lane, such interest is valid and
uncontested by the licensor thereof or any third party; (ii) all
computer software located at the Regent Station's or the Park
Lane Stations' facilities or used in the Regent Station's or the
Park Lane Stations' business or operations is properly licensed
to the Regent Subsidiaries or Park Lane, as the case may be, and
all of the uses by the Regent Subsidiaries or Park Lane of such
computer software are authorized under such licenses; and (iii)
there are no infringements or unlawful use of such Intellectual
Property by Regent, the Regent Subsidiaries or Park Lane in
connection with the business or operations of Regent, the Regent
Subsidiaries, or Park Lane.
(ff) QUALIFICATIONS FOR TRANSFER OF CONTROL. One
of the Regent Subsidiaries and either Park Lane or one or more of
its subsidiaries is presently a licensee in good standing with
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the Commission, and Regent has no knowledge of any fact or
circumstance that could reasonably prevent approval of the
transaction contemplated by this Agreement or the renewal of the
Regent Licenses.
(gg) PUBLIC INSPECTION FILE. All the documents
required by the rules, regulations and policies of the Commission
to be maintained in the Regent Station's and the Park Lane
Stations' local public records file are contained in such file
and available for public inspection.
(hh) ABSENCE OF CERTAIN CHANGES. Since December
31, 1996, except as disclosed in this Agreement, in the Regent
Financials or the Park Lane Financials, or as set forth on
Exhibit 22(hh):
(i) Neither Regent nor Park Lane has
created, assumed, or suffered any mortgage, pledge, lien or
encumbrance on any of the Regent Assets;
(ii) there has not been:
(A) any material adverse change in
the business, assets, capitalization, operations, properties,
prospects or condition (financial or otherwise) of Regent, the
Regent Subsidiaries, or Park Lane, or any damage, destruction or
loss (whether or not covered by insurance) materially and
adversely affecting the Regent Assets;
(B) any sale, assignment, lease or
other transfer or disposition of any of the properties or assets
used or intended for use in the operation of the Regent Station
and the Park Lane Stations except in the ordinary course of
business, in connection with the acquisition of similar property
or assets in the normal and usual course of business;
(C) any lease, agreement,
contract, obligation, or commitment entered into in connection
with the operation of the Regent Station or the Park Lane
Stations except in the ordinary course of business;
(D) any issuance of bonds, notes or
other corporate securities by Regent;
(E) any declaration of payment or
payments or distribution of cash or other property to Regent's
stockholders with respect to Regent's capital stock; or
(F) any purchase or redemption of
any shares of Regent's capital stock.
(ii) PERSONNEL INFORMATION.
----------------------
(i) Exhibit 22(ii) contains a true
and complete list of all persons employed full-time at the Regent
Station and the Park Lane Stations, including date of hire, a
description of material compensation arrangements (other than
employee benefit plans set forth in Exhibit 22(q)) and a list of
other material terms of any and all agreements affecting such
persons and their employment by Regent. Regent has received no
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notice that, and Regent is not aware of, any individual employee
who shall or is likely to terminate his or her employment
relationship with the Regent Station or any of the Park Lane
Stations upon the execution of this Agreement or after the
Closing.
(ii) Regent, with respect to the Regent
Station and the Park Lane Stations, is not a party to any
contract or agreement with any labor organization, nor has Regent
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 Regent at the Regent
Station or any of the Park Lane Stations. Regent has no knowledge
of any organizational effort currently being made or threatened
by or on behalf of any labor union with respect to employees of
Regent at the Regent Station or any of the Park Lane Stations.
(iii) Except as disclosed in Exhibit 22(ii),
Regent, with respect to the Regent Station and the Park Lane
Stations, has complied in all material respects with all laws
relating to the employment of labor, including, without
limitation, ERISA, and those laws relating to wages, hours,
collective bargaining, unemployment insurance, workers'
compensation, equal employment opportunity and payment and
withholding of taxes.
(jj) [Reserved].
(kk) OUTSTANDING DEBT. Exhibit 22(kk) correctly
lists all outstanding debt of Regent and Park Lane as of the date
specified therein (other than short term debt payable on demand
or within one year from the creation thereof and incurred in the
ordinary course of business).
(ll) NEGATIVE COVENANTS. Except for changes or
actions in the ordinary course of business consistent with past
practices, and except as set forth on Exhibit 22(ll) or as
contemplated by this Agreement, between the date hereof and the
Closing Date, Regent will not, without the prior written consent
of Faircom:
(i) Increase the compensation payable
or to become payable to any of the employees of Regent except on
a case by case basis and then only such that any increase shall
not exceed 6% of any such employee's current salary or except
pursuant to contractual commitments described on Exhibit 22(k-1);
(ii) Enter into any contract, lease or
commitment or engage in any transaction relating to the Regent
Station or any of the Park Lane Stations;
(iii) Cancel, modify or amend in any
material manner, or in any manner within its reasonable control
impair any of the contracts, leases or other agreements
identified on Exhibit 22(k-1) relating to the Regent Station or
any of the Park Lane Stations which are included in the Regent
Assets;
(iv) Create any mortgage, pledge, lien
or encumbrance affecting any of the Regent Assets;
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(v) Sell, assign, lease or otherwise
transfer or dispose of any of the Regent Assets;
(vi) Consolidate with, merge into, or
acquire any other person or entity, or permit any person or
entity to acquire, merge into or consolidate with it; provided,
however, that for purposes of this subparagraph 22(ll)(vi), the
consent of either the President of Faircom or the General Partner
of Blue Chip shall constitute the consent of Faircom, and the
consent of Faircom shall not be required for those transactions
listed on Exhibit 22(ll);
(vii) Declare, make or incur any liability
to make any dividends or other distributions on its capital
stock;
(viii) Redeem or otherwise acquire any
shares of its capital stock;
(ix) Issue or sell any shares of its
capital stock, warrants, options or other rights to acquire any
shares of its capital stock, except pursuant to the conversion of
the outstanding Preferred Stock, and except for shares issued
pursuant to the exercise of options which may be granted to
management (up to but not to exceed 15% of the outstanding shares
of capital stock of Regent, assuming conversion to Common Stock
of all outstanding shares of Series A, B, C, D and E and any
series of preferred stock hereafter created on a fully diluted
basis);
(x) Amend its Certificate of
Incorporation or By-Laws (other than to file its Amended and
Restated Certificate of Incorporation as provided in Paragraph
1(y) hereto); or
(xi) Borrow or incur any indebtedness
unless such indebtedness can be repaid concurrently with or prior
to the Closing.
(mm) AFFIRMATIVE COVENANTS. Between the date
hereof and the Closing Date, Regent will:
(i) Give to Faircom and its authorized
representatives, upon prior reasonable notice, full access during
normal business hours to all properties, books, records,
contracts and documents and furnish or cause to be furnished to
Faircom or its authorized representatives all information with
respect to the affairs and business of the Regent Station or the
Park Lane Stations as Faircom may reasonably request, including
monthly profit and loss statements and notice of changes in full-
time employees;
(ii) Notify Faircom in writing of any new
litigation pending or threatened against Regent, the Regent
Subsidiaries or any of the Park Lane Stations or any damage to or
destruction of any of the Regent Assets;
(iii) Furnish to Faircom, at Regent's
expense, the Regent Financials and the Park Lane Financials;
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(iv) Promptly notify Faircom in writing
of any material adverse developments with respect to the business
or operations of Regent or the Regent Subsidiaries; and
(v) Use its reasonable best efforts to
consummate the acquisition of the Park Lane Stations prior to or
concurrently with the Closing hereunder on substantially the
terms previously disclosed to Faircom, and use its reasonable
best efforts to obtain all necessary financing in connection with
the pending acquisition of Park Lane.
(nn) ADDITIONAL AGREEMENTS. Subject to the terms
and conditions herein provided, Regent and Subsidiary agree to
use their reasonable best 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. In case at any time
after the Closing any further action by Regent or Subsidiary is
reasonably necessary to carry out the purposes of this Agreement,
Regent and Subsidiary shall take, or cause to be taken, such
action.
(oo) JOIN IN EXECUTION OF DOCUMENTS. Regent and
Subsidiary will join with Faircom, at such time as all conditions
precedent to the transactions contemplated by this Agreement have
been fulfilled, in executing and delivering all documents which
may be necessary or appropriate to effect the transactions
contemplated by this Agreement.
(pp) FULL DISCLOSURE. No representation or
warranty made by Regent contained in this Agreement nor any
certificate, document or other instrument furnished or to be
furnished by Regent pursuant hereto contains or will contain any
untrue statement of a material fact, or omits or shall omit to
state any material fact required to make any statement contained
herein or therein not misleading. Regent is not aware of any
impending or contemplated event or occurrence that would cause
any of the foregoing representations not to be true and complete
on the date of such event or occurrence as if made on that date.
There is no fact which materially adversely affects the business,
conditions, affairs or operations of Regent or the Regent Station
which has not been set forth in this Agreement, in the Regent
Financials, or otherwise disclosed or to be disclosed in writing
(pursuant to a registration statement or otherwise) by Regent to
Faircom, its representatives or the Faircom Stockholders. When
the Registration Statement is filed with the SEC and at all times
subsequent thereto, the portions of the Registration Statement
and the proxy statement/prospectus included therein, and any
amendments or supplements thereto which have been furnished by or
on behalf of Regent for inclusion therein, will comply in all
material respects with the requirements of the Securities Act and
the rules and regulations promulgated thereunder, will not
contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, and will not fail to
describe or contain as an exhibit any contract or document
required to be described in the Registration Statement or the
proxy statement/prospectus included therein or to be filed as an
exhibit to the Registration Statement.
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(qq) ISSUANCE OF PREFERRED STOCK. The Preferred
Stock, when and if issued in accordance with the provisions of
this Agreement, will be validly issued, fully paid and non-
assessable, and will be free of any liens or encumbrances (other
than those created by the Faircom Stockholders), and will not be
subject to any restrictions on transferability by Regent's
Certificate of Incorporation, as amended and restated, or by any
agreement to which Regent is a party; provided, however, that
such shares may be subject to restrictions on transfer under
state securities laws and federal communications and/or
securities laws.
(rr) TRANSFERABILITY OF PREFERRED STOCK. The
Preferred Stock, when issued pursuant to the Registration
Statement and delivered to the Faircom Stockholders pursuant to
the terms hereof, will be freely tradable under the Securities
Act by Faircom Stockholders who are not deemed "affiliates" (as
defined under the Securities Act) of Regent or Faircom.
23. RESERVED.
RISK OF LOSS
24. RISK OF LOSS.
(a) FAIRCOM BROADCAST ASSETS. The risk of loss,
damage or destruction from any cause to the tangible Faircom
Broadcast Assets shall be borne by Faircom at all times between
the date of this Agreement and the Closing Date. In the event of
any such loss, damage or destruction, Faircom shall repair,
replace or restore any such Faircom Broadcast Asset prior to the
Closing Date. In the event of substantial damage to any of the
Faircom Broadcast Assets or in the event of the occurrence of any
damage or event which prevents broadcast transmission of any of
the Faircom Stations in the normal and usual manner and
substantially in accordance with its license, Faircom shall
promptly notify Regent of the same in writing, specifying with
particularity the loss or damage incurred, the cause thereof if
known or reasonably ascertainable, and an estimate of the extent
to which restoration, replacement and repair of the property lost
or destroyed will be reimbursed under the insurance coverage. In
the event the damage has not been restored or repaired by the
Closing Date, then Regent and Subsidiary shall have the option
to:
(i) postpone the Closing Date until such
time, not later than thirty (30) days after such loss, damage or
destruction, as the property has been completely repaired,
replaced or restored; or
(ii) terminate this Agreement if Faircom
has not acted diligently to repair, replace or restore such
Faircom Broadcast Assets; or
(iii) elect to consummate the Closing and
accept the Faircom Broadcast Assets in their then condition.
In the event Regent and Subsidiary elect to
postpone the Closing Date, Faircom, Regent and Subsidiary will
cooperate to extend the time during which this Agreement must be
closed as specified in the Commission's Order.
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(b) REGENT ASSETS. The risk of loss, damage or
destruction from any cause to the tangible Regent Assets shall be
borne by Regent at all times between the date of this Agreement
and the Closing Date. In the event of any such loss, damage or
destruction, Regent shall repair, replace or restore any such
Regent Asset prior to the Closing Date. In the event of
substantial damage to any of the Regent Assets or in the event of
the occurrence of any damage or event which prevents broadcast
transmission of the Regent Station or any of the Park Lane
Stations in the normal and usual manner and substantially in
accordance with its license, Regent shall promptly notify Faircom
of the same in writing, specifying with particularity the loss or
damage incurred, the cause thereof if known or reasonably
ascertainable, and an estimate of the extent to which
restoration, replacement and repair of the property lost or
destroyed will be reimbursed under the insurance coverage. In the
event the damage has not been restored or repaired by the Closing
Date, then Faircom shall have the option to:
(i) postpone the Closing Date until such
time, not later than thirty (30) days after such loss, damage or
destruction, as the property has been completely repaired,
replaced or restored; or
(ii) terminate this Agreement if Regent has
not acted diligently to repair, replace or restore such Regent
Assets; or
(iii) elect to consummate the Closing and
accept the Regent Assets in their then condition.
In the event Faircom elects to postpone
the Closing Date, Faircom, Regent and Subsidiary will cooperate
to extend the time during which this Agreement must be closed as
specified in the Commission's Order.
(c) BROADCAST TRANSMISSION OF STATIONS PRIOR TO
CLOSING. Notwithstanding the provisions of paragraphs 24(a) and
(b) above, if prior to the Closing Date any event occurs which
prevents the broadcast transmission of any of the Faircom
Stations or the Regent Station or any of the Park Lane Stations
in the manner which it has heretofore been operating, for a
period of thirty-six (36) hours or more or five (5) periods of
more than five (5) hours each in any thirty (30) day period, then
Faircom (in cases involving the Faircom Stations) or Regent (in
cases involving the Regent Station or the Park Lane Stations)
shall give prompt written notice thereof to the other party. In
such event, the owner of the affected station shall use its best
efforts to restore the operations to substantially full licensed
power and antenna height as soon as possible. If such facilities
are not restored so that operation is resumed with substantially
full licensed power and antenna height as described in the
particular Station's licenses issued by the Commission within
seven (7) consecutive days or eight (8) non-consecutive days
after the date of the interruption, the party whose station is
not subject to such interruption in transmission shall have the
right, by giving written notice to the other party of its
election to do so, to terminate this Agreement forthwith without
any further obligation hereunder, provided that such notice is
given before normal operation is resumed or within ten (10) days
of first receiving from the other party the notice of
interruption.
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CONDITIONS PRECEDENT TO SUBSIDIARY'S AND REGENT'S
OBLIGATION TO CLOSE
25. CONDITIONS PRECEDENT TO SUBSIDIARY'S AND REGENT'S
OBLIGATIONS. If at the Closing Date the following conditions are
satisfied, Subsidiary, subject to the provisions of paragraph 24,
shall be obligated (and Regent shall be obligated to cause
Subsidiary) to consummate the Merger in accordance with the terms
and conditions of this Agreement:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Faircom contained herein or in
any list, certificate or document delivered pursuant to the terms
hereof shall be true in all material respects as of the date of
this Agreement and as of and at the Closing Date as though made
on such date except for changes (i) expressly permitted or
contemplated by this Agreement; or (ii) in the ordinary course of
business which are not individually, or in the aggregate,
material and adverse. Faircom shall have performed and complied
with all obligations and covenants required by this Agreement to
be performed or complied with by Faircom on or prior to the
Closing Date. Faircom shall have delivered to Regent a
certificate dated the Closing Date and signed by an officer of
Faircom attesting to the above.
(b) DELIVERY OF CLOSING DOCUMENTS. Faircom shall
have delivered to Subsidiary the Closing Documents described in
Paragraph 27 of this Agreement.
(c) FAIRCOM LICENSES. Faircom shall be the holder
of the Faircom Licenses, and such Faircom Licenses shall be free
and clear of conditions, competing applications, petitions to
deny, complaints, appeals or any restrictions as might materially
limit the operation or prospects of the Faircom Stations as
presently authorized.
(d) CONSENTS. On the Closing Date, each person,
association, corporation or other entity, the consent or approval
of which to the surrender and exchange of the Faircom Stock and
the Merger of Faircom into Subsidiary, as herein provided (other
than dissenting Faircom Stockholders), is then required shall
have duly consented thereto, and all other consents required
under the terms of the material contracts, leases and agreements
identified on Exhibits 2l(t), 21(k-1) and 21(i) and under
subparagraphs 21(mm)(vi) and (vii) shall have been obtained.
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(e) FINAL ORDER. The Commission's Order shall have
become a Final Order, unless the failure to obtain the Final
Order is caused by the action or inaction of Regent.
(f) ADVERSE PROCEEDINGS. As of the Closing Date,
no suit, action, claim or governmental proceeding or
investigation shall be pending or shall have been instituted,
taken, presented or threatened against Faircom which makes
unlawful the carrying out of this Agreement, causes this
Agreement to be rescinded, or imposes a lien on or requires
Regent to divest itself of any of the Faircom Broadcast Assets.
(g) EXAMINATION OF REAL PROPERTY. Regent shall
have conducted and/or obtained a satisfactory review and
examination of the title to and condition of all real property
owned by Faircom (including such environmental assessments of
said properties as may be currently in existence or as Regent may
elect to have conducted at its expense, to be completed within
sixty (60) days after the execution of this Agreement).
(h) DISSENTERS' RIGHTS. Holders of less than ten
percent (10%) (excluding Blue Chip or Miami Valley) of the
outstanding Faircom Stock shall have taken all necessary steps to
be entitled pursuant to the provisions of Section 262 of the
Delaware Code to make a written demand for payment of the fair
value of their shares.
(i) FAIRCOM INFORMATION. Faircom shall have
provided to Regent all of the Faircom Information for inclusion
in the Registration Statement.
(j) STOCKHOLDER APPROVAL. The Faircom stockholders
shall have approved this Agreement and the Merger contemplated
herein.
(k) REGISTRATION STATEMENT. The Registration
Statement shall have been declared effective, unless the failure
to obtain such effectiveness is caused by the actions or
inactions of Regent.
(l) REGENT FINANCING; ACQUISITION OF PARK LANE.
Regent shall have raised and/or shall have commitments for at
least $13,700,000 of cash equity and additional bank financing
sufficient to finance the acquisition of the assets of the Park
Lane Stations, free and clear of all liabilities other than the
contracts, leases and agreements to be assumed by Regent, and the
closing of such acquisition shall have occurred prior to or
concurrently with the Closing hereunder.
(m) TAX OPINION OF REGENT'S COUNSEL. Regent shall
have received from Strauss & Troy, its legal counsel, to the
effect that the Merger will qualify as a tax-free reorganization
under Section 368 of the Internal Revenue Code, on the basis of
the facts, representations and assumptions set forth in such
opinion.
(n) CONVERSION OF FAIRCOM SUBORDINATED NOTES. The
holders of the Faircom Subordinated Notes shall have converted
such Notes (other than the Optional Faircom Subordinated Notes)
into Faircom Common Stock on or before the Closing Date.
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CONDITIONS PRECEDENT TO FAIRCOM'S
---------------------------------
OBLIGATION TO CLOSE
-------------------
26. CONDITIONS PRECEDENT TO FAIRCOM'S OBLIGATIONS. If
at the Closing Date the following conditions are satisfied,
Faircom, subject to the provisions of Paragraph 24, shall be
obligated to consummate the Merger in accordance with the terms
and conditions of this Agreement:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Regent and Subsidiary contained
herein or in any list, certificate or document delivered pursuant
to the provisions hereof shall be true in all material respects
as of the date of this Agreement and as of and at the Closing
Date as though made on such date except for changes (i) expressly
permitted or contemplated by this Agreement; or (ii) in the
ordinary course of business which are not individually, or in the
aggregate, material and adverse. Regent and Subsidiary shall have
performed and complied with all obligations and covenants
required by this Agreement to be performed or complied with by
Regent and Subsidiary on or prior to the Closing Date, including
without limitation taking all necessary and proper corporate
action to enter into this Agreement and to consummate the
transactions referred to or set forth in this Agreement. Regent
and Subsidiary shall have delivered to Faircom a certificate
dated the Closing Date and signed by an officer of each entity
attesting to the above.
(b) CONSIDERATION. All consideration as set forth
under paragraphs 12 and 13 of this Agreement which is due on the
Closing Date shall have been paid in accordance with the terms of
this Agreement.
(c) DELIVERY OF CLOSING DOCUMENTS. Regent and
Subsidiary shall have delivered to Faircom the Closing Documents
described hereafter in paragraph 28 of this Agreement.
(d) REGENT LICENSES. Regent shall be the holder of
the Regent Licenses, and such Regent Licenses shall be free and
clear of conditions, competing applications, petitions to deny,
complaints, appeals or any restrictions as might materially limit
the operation or prospects of the Regent Station and the Park
Lane Stations as presently authorized.
(e) FINAL ORDER. The Commission's Order shall have
become a Final Order, unless the failure to obtain the Final
Order is caused by the actions or inactions of Faircom.
(f) CONSENTS. On the Closing Date, each person,
association, corporation or other entity, the consent or approval
of which to the issuance and delivery of the Preferred Stock, if
applicable, and the Merger of Faircom into Subsidiary, as herein
provided, is then required shall have duly consented or approved
such merger.
(g) ADVERSE PROCEEDINGS. As of the Closing Date,
no suit, action, claim or governmental proceeding or
investigation shall be pending or shall have been instituted,
taken, presented or threatened against Regent or Subsidiary which
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makes unlawful the carrying out of this Agreement, or causes it
to be rescinded.
(h) ISSUANCE OF PREFERRED STOCK. The issuance of
the Preferred Stock pursuant to the terms of this Agreement shall
be legally permitted by all applicable laws and regulations and
shall be issued pursuant to an effective registration statement
filed with the SEC and pursuant to applicable state securities
laws.
(i) EXAMINATION OF REAL PROPERTY. Faircom shall
have conducted and/or obtained a satisfactory review and
examination of the title to and condition of all real property
owned by Regent (including such environmental assessments of said
properties as may be currently in existence or as Faircom may
elect to have conducted at its expense, to be completed within
sixty (60) days after the execution of this Agreement).
(j) REGENT FINANCING; ACQUISITION OF PARK LANE.
Regent shall have raised and/or shall have commitments for at
least $13,700,000 of cash equity and additional bank financing
sufficient to finance the acquisition of the assets of the Park
Lane Stations, free and clear of all liabilities other than the
contracts, leases and agreements to be assumed by Regent, and the
closing of such acquisition shall have occurred prior to or
concurrently with the Closing hereunder.
(k) STOCKHOLDER APPROVAL. The Faircom Stockholders
shall have approved this Agreement and the Merger contemplated
herein.
(l) REGISTRATION STATEMENT. The Registration
Statement shall have been declared effective.
(m) TAX OPINION. The Tax Opinion shall not have
been withdrawn with reasonable justification, unless such
withdrawal is caused by the action or inaction of Faircom.
(n) FAIRNESS OPINION. The Fairness Opinion shall
not have been withdrawn with reasonable justification, unless
such withdrawal is caused by the action or inaction of Faircom.
(o) TAX OPINION OF REGENT'S COUNSEL. Strauss &
Troy, legal counsel to Regent, shall have delivered to Faircom an
opinion, in form and substance reasonably satisfactory to
Faircom, to the effect that the Merger will qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code, on
the basis of the facts, representations and assumptions set forth
in such opinion.
CLOSING DOCUMENTS
27. CLOSING DOCUMENTS TO BE DELIVERED BY FAIRCOM. On
the Closing Date, Faircom shall deliver to Regent and Subsidiary:
(a) A certificate signed by the President of
Faircom to the effect set forth in paragraph 25(a) hereof.
(b) Such other assignments, documents and
instruments as counsel for Regent and Subsidiary may reasonably
require.
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(c) An opinion of Fulbright & Jaworski L.L.P., as
legal counsel for Faircom, in form satisfactory to counsel for
Regent and Subsidiary, dated the Closing Date, to the effect as
set forth in Exhibit 27(c) attached hereto.
(d) Copies of resolutions of Faircom's Board of
Directors and the Faircom stockholders authorizing the execution,
delivery and performance of this Agreement and all instruments
referred to herein to which Faircom or the Faircom Stockholders
are a party, certified by its corporate secretary or an assistant
secretary as being in full force and effect without modification
or amendment.
(e) All necessary consents to be obtained by
Faircom as set forth under paragraph 25(d).
(f) The Faircom Financials, certified as true and
correct pursuant to an officer's certificate of Faircom.
(g) Certified copies of the Certificate of
Incorporation and certificate of good standing for Faircom and
each of the Faircom Subsidiaries from the Secretary of State of
its state of incorporation and each other state in which it is
qualified as a foreign corporation to do business and a
certificate or other evidence of good standing as to payment of
any applicable taxes from the appropriate taxing authority of
each of such states, each dated a recent date prior to the
Closing Date.
(h) Copies of the Bylaws of Faircom and each of
the Faircom Subsidiaries, certified in each case as of the
Closing Date by its corporate secretary or an assistant
secretary.
(i) Signature and incumbency certificates of
Faircom's officers executing this Agreement.
28. CLOSING DOCUMENTS TO BE DELIVERED BY REGENT AND
SUBSIDIARY. On the Closing Date, Regent and Subsidiary shall
deliver to the Trustee:
(a) Certificates for the number of shares of
Preferred Stock to be issued in accordance with Paragraphs 12 and
13 hereof.
(b) An opinion of Strauss & Troy, counsel for
Regent and Subsidiary, in form satisfactory to counsel for
Faircom and dated the Closing Date to the effect as set forth in
Exhibit 28(b) attached hereto.
(c) A certificate signed by the President of
Regent and Subsidiary to the effect set forth in paragraph 26(a)
hereof.
(d) Copies of resolutions of the Boards of
Directors of Regent and Subsidiary and Regent as sole stockholder
of Subsidiary authorizing the execution, delivery and performance
of this Agreement and all instruments referred to herein to which
Regent or Subsidiary is a party, certified by its corporate
secretary or an assistant secretary as being in full force and
effect without modification or amendment.
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(f) A certified copy of a resolution of the Board
of Directors of Regent authorizing the issuance of the shares of
Preferred Stock to be transferred to the Faircom Stockholders by
Subsidiary.
(g) All necessary consents to be obtained by
Regent and Subsidiary as set forth in Paragraph 25(d).
(h) The Regent Financials, certified as true and
correct pursuant to an officer's certificate of Regent.
(i) Certified copies of the Certificate of
Incorporation and certificate of good standing for Regent and
each of the Regent Subsidiaries from the Secretary of State of
its state of incorporation and each other state in which it is
qualified as a foreign corporation to do business and a
certificate or other evidence of good standing as to payment of
any applicable taxes from the appropriate taxing authority of
each of such states, each dated a recent date prior to the
Closing Date.
(j) Copies of the Bylaws of Regent and each of the
Regent Subsidiaries, certified in each case as of the Closing
Date by its corporate secretary or an assistant secretary.
(k) Signature and incumbency certificates of
Regent's officers executing this Agreement.
29. [Reserved].
30. TERMINATION. This Agreement constitutes the binding
and irrevocable agreement of the parties to consummate the
transactions contemplated hereby, the consideration for which is
(i) the covenants set forth herein and (ii) expenditures and
obligations incurred and to be incurred by Regent and Subsidiary,
on the one hand, and by Faircom, on the other hand, in respect of
this Agreement, and this Agreement may be terminated or abandoned
only as follows:
(a) By the mutual consent of the Boards of
Directors of Faircom and Regent, notwithstanding prior approval
by the stockholders of either or both of such corporations;
(b) By the Boards of Directors of Regent and
Faircom in accordance with their respective rights under
Paragraph 24;
(c) By the Board of Directors of Faircom after
June 1, 1998, if any of the conditions set forth in Paragraph 26,
to which Faircom's obligations are subject, have not been
fulfilled or waived, unless such fulfillment has been frustrated
or made impossible by Faircom's act or failure to act;
(d) By the Board of Directors of Regent after June
1, 1998, if any of the conditions set forth in Paragraph 25, to
which the obligations of Regent are subject, have not been
fulfilled or waived, unless such fulfillment has been frustrated
or made impossible by Regent's act or failure to act;
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(e) By the Board of Directors of Faircom if in the
exercise of its good faith determination and in the exercise of
its reasonable business judgment, as set forth in Paragraph 12D,
as to its fiduciary duties to the Faircom Stockholders imposed by
law, the Board of Directors decides that such termination is
required.
(f) By the Boards of Directors of either Regent or
Faircom if the Commission fails, on its own and through no breach
on the part of Regent or Faircom, to give its consent to the
transfers of control contemplated hereunder in sufficient time to
permit a Closing Date no later than June 1, 1998, or if the FCC
application for such transfers should be set for evidentiary
hearing (other than a hearing at which only oral arguments are to
be presented) by the Commission for any reason; provided,
however, that the terminating party may not so terminate this
Agreement if it is in material breach under any provision of this
Agreement, or if such Commission consent has been given in
sufficient time prior to the delivery of written notice of
termination to permit a Closing Date on or before June 1, 1998.
31. REMEDIES ON TERMINATION OF AGREEMENT OR DEFAULT
PRIOR TO CLOSING.
-----------------------------------------------
(a) In the event this Agreement is terminated
solely because of a material breach by Subsidiary or Regent prior
to Closing of any term contained in this Agreement or any
warranty or representation contained herein, Faircom may
terminate this Agreement only if Faircom has given Subsidiary or
Regent, as the case may be, thirty (30) days' written notice (or
such lesser number of days as are remaining until June 1, 1998 if
such breach occurs prior to June 1, 1998) of the specific nature
of the breach and Subsidiary or Regent have failed to correct it
within that period.
(b) In the event of a material breach by Faircom
prior to Closing of any term or material covenant contained in
this Agreement or any warranty or representation contained
herein, Regent and Subsidiary may, at their option, terminate the
Agreement and Regent and Subsidiary may recover damages from
Faircom or, without terminating this Agreement, obtain specific
performance of this Agreement, which Faircom acknowledges is an
appropriate remedy because the actual damages recoverable at law
may be inadequate or there may not be any other adequate remedy
at law. The rights conferred by this subparagraph may not be
exercised unless either Subsidiary or Regent has given Faircom
thirty (30) days' written notice (or such lesser number of days
as are remaining until June 1, 1998 if such breach occurs prior
to June 1, 1998) of the specific nature of the breach and Faircom
has failed to correct it within that period.
(c) Notwithstanding the provisions of
subparagraphs 30(a) and (b) above, neither party shall be
entitled to damages or expenses from the other in the event this
Agreement fails to close solely due to the failure to obtain in a
timely manner the Final Order or to obtain the consent of the
Faircom Stockholders described in paragraph 21(mm)(vi), provided
that such failure is not attributable, in whole or in part, to
circumstances or events within the control of a party hereto or
to the failure of such party to use its best efforts to obtain
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such Final Order or, except as contemplated by subparagraph
30(e), Faircom Stockholder consent.
(d) Except as provided in subparagraphs (e) and
(f) below, and except as provided in the immediately succeeding
sentence, in the event of a termination of this Agreement
pursuant to Paragraph 30, each party shall pay the costs and
expenses incurred by it in connection with this Agreement, and no
party (or any of its officers, directors, employees, agents,
representatives or stockholders) shall be liable to any other party for any
costs, expenses, damage or loss of anticipated profits hereunder.
In the event of any termination of this Agreement, the parties
shall retain any and all rights attendant to a breach of any
covenant, representation or warranty hereunder.
(e) In the event this Agreement is terminated by
Faircom in accordance with subparagraph 30(e), or in the event
this Agreement is not terminated but the Faircom stockholders do
not approve the Merger and, within one year from the date of the
Faircom Stockholders' meeting, Faircom consummates a transaction
pursuant to a Superior Proposal, Faircom shall promptly pay to
Regent a fee in the amount of $1,650,000.
(f) In the event this Agreement is terminated by
Faircom in accordance with subparagraph 31(a) above, Regent shall
promptly pay to Faircom $300,000 plus any out-of-pocket expenses
incurred by Faircom in connection with this transaction in excess
of $300,000; provided that such expenses must be properly
documented by Faircom and shall be reasonable and charged at
customary hourly rates; and provided further, that in no event
shall Regent be required to pay to Faircom more than $823,000 in
the aggregate.
(g) The parties acknowledge and agree that any and
all amounts paid by any party to the other pursuant to the
provisions of this Paragraph 31 shall constitute liquidated
damages.
32. BROKERAGE. The parties agree that other than The
Crisler Company, no broker or finder was connected with or
brought about this transaction. Of the fees due to The Crisler
Company, Regent will pay $150,000, and will be entitled to a
reduction of the consideration to be paid for the Faircom Stock
for the balance of $50,000 to be paid by Faircom, as a reduction
of Net Working Capital.
33. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties, covenants and agreements herein
contained shall be deemed and construed to be continuing
representations, warranties, covenants, and agreements which
shall survive the consummation of this transaction; and neither
the acceptance of delivery of the Regent Stock nor any other
consideration hereunder shall constitute a waiver of any
covenant, representation, or warranty herein contained. Regent
and Subsidiary, on the one hand, and Faircom, on the other, shall
remain liable to each other for any damage (subject to the
limitations contained in this Agreement) resulting from any
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breach, failure, non-performance or non-fulfillment of any of
their respective covenants, representations or warranties herein,
notwithstanding that the injured party may elect to close this
transaction with such breach outstanding. No waiver or
forbearance by either party in any instance shall constitute or
be deemed a waiver or forbearance in any other instance. Any
party hereto may waive the conditions to its performance
hereunder other than those pertaining to regulatory approval.
MISCELLANEOUS PROVISIONS
34. EMPLOYMENT AGREEMENT. Prior to the mailing of the
Registration Statement and effective as of the Closing, Regent
and the Chairman and Chief Executive Officer of Faircom shall
execute an employment agreement (the "Employment Agreement"). The
Employment Agreement shall be substantially in the form attached
as Exhibit 34 hereto, with such additional terms and conditions
as may be mutually agreed to by the various parties thereto.
35. HEADINGS. The headings of paragraphs of this
Agreement are for convenience of reference only, and do not form
a part hereof, and do not in any way modify, interpret or
construe the meanings of the parties.
36. EXECUTION. This Agreement may be executed in one or
more counterparts, all of which shall be construed to be one and
the same Agreement, and shall become effective when one
counterpart has been signed by each party and delivered to the
others hereto.
37. 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
Faircom, by notifying Regent, and in the case of Regent or
Subsidiary, by notifying Faircom:
If to Regent or Subsidiary:
Terry S. Jacobs, Chairman
Regent Communications, Inc.
50 East RiverCenter Blvd., Suite 180
Covington, Kentucky 41011
Fax: (606) 292-0352
copy to:
Strauss & Troy
2100 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attn: Alan C. Rosser, Esq.
Fax: (513) 241-8289
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If to Faircom:
Joel M. Fairman, Chairman
Faircom Inc.
333 Glen Head Road
Old Brookville, New York 11545
Fax: (516) 676-2631
copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, N.Y. 10103
Attn: Anthony Pantaleoni, Esq.
Fax: (212) 752-5958
and a copy to:
Taft Stettinius & Hollister
1800 Star Bank Center
425 Walnut Street
Cincinnati, Ohio 45202-3957
Attn: Gerald S. Greenberg, Esq.
Fax: (513) 381-0205
38. DISCLOSURE. The parties hereto agree that the
subject matter of this Agreement is one of the utmost
confidentiality and the release of information is a matter of
great importance to such parties. The parties hereto agree that
no disclosure of any aspect of this Agreement, no press release
or other publicity shall be released by either party without the
consent of the other; provided, however, the parties hereto may
release any information that is required by state or federal law,
customarily transmitted to any potential or present senior
lender, or a matter of public record on file with the Commission.
39. RECEIPT OF PREFERRED STOCK. Receipt of the shares
of the Preferred Stock by a Faircom Stockholder shall be deemed
to be acceptance, ratification and consent by said Faircom
Stockholder in all respects to the terms and provisions of this
Agreement.
40. ENTIRE AGREEMENT. This Agreement, together with the
Exhibits hereto, embodies the entire agreement and understanding
between the parties hereto with respect to the subject matter
hereof.
41. GOVERNING LAW. This Agreement shall be construed
and governed in accordance with the laws of the State of Delaware
without reference to its conflicts of laws provisions.
42. SUCCESSORS AND ASSIGNS. Neither this Agreement nor
any of the rights, interest or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation or
law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first set forth above.
WITNESS: FAIRCOM INC.
/s/ By: /s/ Joel M. Fairman
- -------------------------- -----------------------------
Its: Chairman and Ceo
----------------------------
WITNESS: REGENT MERGER CORP.
/s/ By: /s/ Terry S. Jacobs
- -------------------------- -----------------------------
Its: Chairman and Ceo
-----------------------------
WITNESS: REGENT COMMUNICATIONS, INC.
/s/ By: /s/ Terry S. Jacobs
- -------------------------- -----------------------------
Its: Chairman and Ceo
-----------------------------
The undersigned, Blue Chip Capital Fund II Limited Partnership
and Miami Valley Venture Fund L.P., hereby consent and agree to
the terms and conditions of the foregoing Merger Agreement
(except that such parties shall not be subject to or bound by the
representations, warranties or covenants made therein by Faircom)
and do hereby covenant and agree that (i) they will convert at
least $7.5 million of the outstanding principal amount of Faircom
Subordinated Notes into Faircom Common Stock not later than
immediately prior to Effectiveness; and (ii) they will enter into
an agreement with Faircom to the effect that, upon such
conversion, they will have no voting rights with respect to the
Faircom Stock into which such Notes are converted until such time
as approval of the Commission is no longer required.
BLUE CHIP CAPITAL FUND II LIMITED
PARTNERSHIP
By: Blue Chip Venture Company, Ltd.
Its General Partner
By: /s/ John H. Wyant
-----------------------------------
John H. Wyant
Its: Manager
MIAMI VALLEY VENTURE FUND L.P.
By: Blue Chip Venture Company of Dayton, Ltd.
Its Special Limited Partner
By: /s/ John H. Wyant
----------------------------------
John H. Wyant
Its: Manager
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I, _________________________, Secretary of Faircom
Inc., a corporation organized and existing under the laws of the
State of Delaware ("Faircom"), hereby certify, as such Secretary,
that the Agreement of Merger dated December ______, 1997 between
Faircom, Regent Merger Corp. and Regent Communications, Inc., to
which this certificate is attached, was duly submitted to the
Faircom Stockholders at a special meeting of said Faircom
Stockholders called and held after at least 20 days' notice by
mail as provided by Section 251 of Title 8 of the General
Corporation Law of the State of Delaware on the ________ day of
__________________, 199___, for the purpose, among other things,
of consideration and taking action upon the proposed Agreement of
Merger; that _____________ shares of common stock of Faircom were
on said date issued and outstanding; that the proposed Agreement
of Merger was approved by the affirmative vote of the holders of
a majority of the total number of shares of the outstanding
common stock of Faircom entitled to vote thereon, and that
thereby the Agreement of Merger was at such meeting duly adopted
as the act of the Faircom Stockholders and the duly adopted
agreement of such corporation.
WITNESS my hand on this ________ day of
________________, 199___.
---------------------------------
Secretary
I, ______________________, Secretary of Regent Merger
Corp., a corporation organized and existing under the laws of the
State of Delaware ("Subsidiary"), hereby certify, as such
Secretary, that the Agreement of Merger dated December _____,
1997, between Faircom Inc., Subsidiary and Regent Communications,
Inc., to which this certificate is attached, was duly consented
to in writing by Regent Communications, Inc., the holder of all
the outstanding stock of Subsidiary, in accordance with Section
228 of Title 8 of the General Corporation Law of the State of
Delaware and thereby such Agreement of Merger was duly adopted as
the act of the stockholder of Subsidiary, and the duly adopted
agreement of such corporation.
WITNESS my hand on this _________ day of
__________________, 199___.
---------------------------------
Secretary
-A68-
<PAGE>
The above Agreement of Merger, having been approved by
the Board of Directors of each of Faircom Inc. and Subsidiary,
and having been adopted separately by the stockholders of Faircom
Inc. and the stockholder of Subsidiary, in accordance with the
provisions of the General Corporation Law of the State of
Delaware, and that fact having been certified on said Agreement
of Merger by the Secretary of each of Faircom Inc. and
Subsidiary, the ____________ of Faircom Inc. and the
______________ of Regent Merger Corp., do now hereby execute the
said Agreement of Merger by authority of the directors and
stockholders of Faircom Inc. and the directors and stockholder of
Regent Merger Corp., as the respective act, deed and agreement of
each of such corporations, on this _____ day of _____________,
199___.
WITNESS: FAIRCOM INC.
- ------------------------- By: --------------------------
Its: -------------------------
WITNESS: REGENT MERGER CORP.
- ------------------------
By: --------------------------
Its: -------------------------
-A69-<PAGE>
EXHIBIT 3
---------
NOTE PURCHASE AGREEMENT
-----------------------
Note Purchase Agreement dated as of February 13, 1998 among
Blue Chip Capital Fund II Limited Partnership ("Blue Chip"),
Miami Valley Venture Fund L.P. ("Miami") and PNC Bank, National
Association, Trustee (No. 1061291) (in its capacity as such,
"Trustee"). The parties hereby agree as follows:
1. Simultaneously with the execution hereof, each of Blue
Chip and Miami sells to Trustee, and Trustee purchases from Blue
Chip and Miami, the principal amounts of Class A Convertible
Subordinated Promissory Notes ("Class A Notes") and Class B
Convertible Subordinated Promissory Notes ("Class B Notes" and,
together with the Class A Notes, the "Notes") of Faircom Inc., a
Delaware corporation ("Faircom"), set forth on Exhibit 1 hereto
for the prices set forth on such Exhibit 1, and Trustee is paying
such purchase price to Blue Chip and Miami by wire transfer.
2. Each of Blue Chip and Miami, severally and not jointly,
represents and warrants to Trustee as follows:
a. It is a limited partnership duly organized and
validly existing under the laws of the State of Delaware with
full partnership power to execute and deliver this Agreement and
to perform its obligations hereunder. The execution, delivery
and performance of this Agreement have been duly approved by all
necessary partnership action on its behalf and will not conflict
with any provision of its Agreement of Limited Partnership or any
agreement to which it is a party. This Agreement constitutes its
legal, valid and binding obligation, enforceable against it in
accordance with its terms.
b. The Notes to be sold by it pursuant to this
Agreement are owned by it free and clear of any lien, charge or
encumbrance, except as set forth in this Agreement. To the best
of its knowledge, no Event of Default (as defined in the Notes),
or event or condition which upon notice or passage of time would
become an Event of Default, exists with respect to the Notes.
3. Trustee represents and warrants to each of Blue Chip
and Miami as follows;
a. Trustee has full power and authority under the
related trust agreement (the "Trust Agreement") to execute and
deliver this Agreement and to perform its obligations hereunder.
The execution, delivery and performance of this Agreement by
Trustee have been duly approved on its behalf and will not
conflict with any provision of the Trust Agreement or any other
agreement to which it is a party. This Agreement constitutes its<PAGE>
legal, valid and binding obligation, enforceable against it in
accordance with its terms.
b. Trustee is acquiring the Notes, and will acquire
any securities issued upon conversion thereof, for its own
account for investment and without any intent to dispose of them
in violation of applicable securities laws. Trustee is a
sophisticated investor and has had an opportunity to investigate
the business and affairs of Faircom and is not relying on any
representation or warranty with respect thereto of Blue Chip or
Miami. Trustee has reviewed Faircom's most recent Annual Report
on Form 10-K and all filings made by Faircom with the Securities
and Exchange Commission since the date thereof. Neither Blue
Chip nor Miami has made any representation or warranty as to the
value or collectibility of the Notes. Trustee is an "accredited
investor" as defined under Rule 501(a)(8) under the Securities
Act of 1933.
c. Trustee has received and read the Securities
Purchase Agreement dated as of June 30, 1997 among Blue Chip,
Miami, Faircom and Faircom's subsidiaries (the "Securities
Purchase Agreement"), the forms of the Notes, the Intercreditor
and Subordination Agreement dated as of June 30, 1997 among
Faircom and its subsidiaries, Blue Chip, Miami and AT&T
Commercial Finance Corporation (the "Senior Lender") and the
Acknowledgement and Reaffirmation thereof dated as of January 22,
1998 (collectively, the "Subordination Agreement"), and the
Agreement of Merger dated as of December 5, 1997 among Faircom,
Regent Merger Corp., Regent Communications, Inc. ("Regent"), Blue
Chip and Miami (the "Merger Agreement"), the current draft of
Regent's Registration Statement on Form S-4 relating to the
transaction contemplated by the Merger Agreement.
4. The parties acknowledge that the Notes have been issued
pursuant to the provisions of the Securities Purchase Agreement
and are entitled to the benefits thereof. Blue Chip and Miami
hereby assign to Trustee a pro-rata portion of their rights under
the Securities Purchase Agreement and Trustee agrees to be bound
by the terms thereof. The parties agree that any action which
may be taken under the Securities Purchase Agreement by the
Investors (as defined therein) shall be taken only as directed by
a majority in interest of such Investors.
5. The parties acknowledge that the rights of the
Investors and the holders of the Notes are subject to the
provisions of the Subordination Agreement. Trustee hereby agrees
to comply with the terms of the Subordination Agreement
applicable to Blue Chip and Miami as if Trustee were a party
thereto. The parties further agree that consummation of the
transactions contemplated hereby is subject to the consent of the
Senior Lender substantially in the form of Exhibit A hereto.
6. The parties acknowledge that, pursuant to the Merger
Agreement, Blue Chip and Miami have agreed to convert a portion
of the Notes into common stock of Faircom as provided therein. <PAGE>
Trustee will convert all of the Notes acquired by Trustee
hereunder into common stock of Faircom pursuant to the Merger
Agreement and Blue Chip and Miami hereby assign to Trustee a pro-
rata portion of their rights and obligations under the Merger
Agreement and Trustee agrees to be bound by the terms thereof.
Trustee agrees to exercise any rights under the Merger Agreement
(other than such conversion rights and any rights of a holder of
securities of Regent under its Articles of Incorporation and
related agreements) in the same manner and at the same time as
they are exercised by Blue Chip and Miami.
7. Notices, consents and other communications under this
agreement shall be in writing and shall be deemed to have been
duly given when (a) delivered by hand or (b) sent by telecopier
(with receipt confirmed), provided that a copy is mailed by
Federal Express or other express delivery service, in each case
to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses, and telecopier numbers as a
party may designate as to itself by notice to the other parties).
a. If to Blue Chip or Miami:
c/o Blue Chip Venture Company, Ltd.
2000 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Telecopier No.: 513-723-2306
Attention: John H. Wyant
with a copy to:
Taft, Stettinius & Hollister LLP
1800 Star Bank Center
425 Walnut Street
Cincinnati, Ohio 45202
Telecopier No.: 513-381-0205
Attention: Gerald S. Greenberg, Esq.
b. If to Trustee:
PNC Bank, National Association
201 East Fifth Street, Fifth Floor
Cincinnati, Ohio 45202
Telecopier No.: 513-651-8461
Attention: Patricia S. Grelle (1061291)
with a copy to:
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Telecopier No.: 513-651-6981
Attention: Albert E. Heekin III, Esq.
<PAGE>
8. Miscellaneous.
-------------
a. Expenses. Each party shall bear its own expenses
--------
incident to the preparation, negotiation, execution and delivery
of this Agreement and the performance of its obligations
hereunder.
b. Payment. A wire transfer or check shall not
-------
discharge any obligation of payment under this Agreement and is
accepted subject to collection.
c. Captions. The captions in this Agreement are for
--------
convenience of reference only and shall not be given any effect
in the interpretation of this agreement.
d. No Waiver. The failure of a party to insist upon
---------
strict adherence to any obligation of this Agreement shall not be
considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
e. Exclusive Agreement; Amendment. This Agreement
------------------------------
supersedes all prior agreements among the parties with respect to
its subject matter, is intended (together with the documents
referred to herein) as a complete and exclusive statement of the
terms of the agreement among the parties with respect thereto,
and cannot be changed or terminated orally.
f. Counterparts. This Agreement may be executed in
------------
two (2) or more counterparts each of which shall be considered an
original.
g. Governing Law. This Agreement shall be governed
-------------
by the internal law of the State of Ohio, without regard to the
conflicts of law principles thereof.
h. Attorney's Fees. In any action or proceeding
---------------
brought by a party to enforce any provision of this Agreement,
the prevailing party shall be entitled to recover the reasonable
costs and expenses incurred by it in connection with that action
or proceeding (including, but not limited to, attorney's fees).
i. Designation of Forum and Consent to Jurisdiction.
------------------------------------------------
The parties hereto (a) designate the United States District Court
for the Southern District of Ohio, Western Division, or the Court<PAGE>
of Common Pleas, Hamilton County, Ohio, as the forum where all
matters pertaining to this Agreement may be adjudicated, and
(b) by the foregoing designation, consent to the exclusive
jurisdiction and venue of such court for the purpose of
adjudicating all matters pertaining to this Agreement.
j. Waiver of Jury Trial. As a specifically bargained
--------------------
inducement for each other party to enter into this Agreement,
each of the parties hereto waives any right it may have to have a
jury participate in resolving any dispute arising out of or
related to this Agreement. Instead, any such disputes resolved
in court shall be resolved in a bench trial without a jury.
k. Binding Agreement. This Agreement shall be
-----------------
binding upon all parties hereto, their successors and assigns,
and shall inure to the benefit of the parties hereto, their
successors and assigns.
BLUE CHIP CAPITAL FUND II LIMITED
PARTNERSHIP
By: BLUE CHIP VENTURE COMPANY, LTD.
its General Partner
By: /s/ John H. Wyant
---------------------------
Its: Manager
MIAMI VALLEY VENTURE FUND, L.P.
By: BLUE CHIP VENTURE COMPANY OF
DAYTON, LTD.
its Special Limited Partner
By: /s/ John H. Wyant
---------------------------
Its: Manager
PNC BANK, NATIONAL ASSOCIATION,
TRUSTEE
By: /s/ Ronald J. Retzler
-------------------------------
Its: Senior Vice President
<PAGE>
Exhibit 1
---------
Class A Class B
Notes Notes Price(1)
------- ------- -----
Blue Chip Capital Fund II
Limited Partnership $500,000 $350,000 $ 850,000
Miami Valley Venture
Fund L.P. 88,235 61,765 150,000
-------- -------- ----------
Total $588,235 $411,765 $1,000,000
(1) Plus accrued interest at 7% per annum from June 30, 1997 to
Closing, to be paid when interest on the Notes is paid.
