AGREEMENT OF MERGER
AMONG
FAIRCOM INC.
AND
REGENT MERGER CORP.
AND
REGENT COMMUNICATIONS, INC.
Dated as of December 5, 1997
TABLE OF CONTENTS
Page
DEFINITION OF TERMS..................................................... 2
Definition of Terms..................................................... 2
(a) [Reserved]..................................................... 2
(b) "Closing Date"........................................ 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 Financials".................................. 3
(j) "Faircom Licenses".................................... 4
(k) "Faircom Senior Debt"................................. 4
(l) "Faircom Stations".................................... 4
(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"............................... 5
(u) "Optionholders"....................................... 5
(v-1) "Park Lane"........................................... 5
(v) "Park Lane Financials"................................ 5
(w) "Park Lane Stations".................................. 5
(x) "Preferred Stock"..................................... 5
(y) "Pro-Rata Percentage Interest"........................ 5
(z) "Regent Assets"....................................... 5
(aa) "Regent Financials"................................... 6
(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"............................................. 7
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AGREEMENT TO MERGE...................................................... 7
2. Agreement............................................. 7
3. Action to Effect Merger............................... 7
4. Certificate of Incorporation and By-Laws.............. 7
5. Directors............................................. 7
6. Officers.............................................. 8
7. Stockholder Approval; Effectiveness of Merger......... 8
8. Authorized Shares of Surviving Corporation............ 8
9. Authorized Shares of Disappearing Corporation......... 8
MODE OF EFFECTING MERGER................................................ 9
10. Conversion and Exchange of Shares..................... 9
11. Funding of Consideration for Faircom Stock............10
12. Issuance of Preferred Stock...........................10
12 A. SEC Registration.............................10
12 B. Affiliates...................................12
12 C. Trading Prohibitions.........................12
12 D. No Solicitation..............................12
12 E. Registration Rights..........................13
(a) Piggyback Registration Rights................13
(b) Demand Registration Rights...................14
(c) Other Registration Rights....................14
(d) Registration Procedures......................15
(e) Expenses.....................................15
(f) Indemnification..............................15
CONSIDERATION...........................................................17
13. (a) Base Consideration...........................17
(b) Consideration After Adjustments..............18
(c) Consideration Per Share Before Appraisal
Rights......................................20
(d) Distributions by Trustee.....................20
14. Surrender of Certificates and Delivery of Consideration
After Adjustments.....................................21
COMMISSION MATTERS......................................................22
15. Commission Consent to Transfers of Control............22
16. Applications for Consent - Cooperation of the Parties.22
17. Costs and Expenses....................................22
18. Operation of Stations Before Closing..................22
19. Control and Access....................................23
20. [Reserved]............................................23
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COVENANTS, REPRESENTATIONS AND WARRANTIES OF FAIRCOM....................23
21. Covenants, Representations and Warranties of Faircom..23
(a) Corporate Standing and Authority.............23
(b) Capitalization; Faircom Stock................24
(c) Corporate Power..............................25
(d) Reserved.....................................25
(e) Reserved.....................................25
(f) Affiliates...................................25
(g) Rights to Acquire Securities.................25
(h) Corporate Records............................26
(i) Title to Faircom Broadcast Assets............26
(j) Financial Statements; Budget.................26
(k) Contracts....................................27
(l) Government Authorizations....................28
(m) Management, Key Employees and Accounts.......29
(n) Tax Elections................................29
(o) Related Transactions.........................29
(p) Taxes........................................30
(q) Employee Benefit Plans.......................30
(r) Compliance with Commission Regulations.......31
(s) Personal Property............................31
(t) Real Property................................31
(u) Environmental................................32
(v) Insurance....................................33
(w) Accounts and Notes Receivable................33
(x) Laws, Regulations and Instruments............33
(y) Conduct of Faircom Stations..................33
(z) Disposition of Assets........................33
(aa) Transmitter Sites............................34
(bb) Litigation...................................34
(cc) No Conflict..................................34
(dd) Required Consents............................34
(ee) Intellectual Property........................35
(ff) Qualifications for Transfer of Control.......35
(gg) Public Inspection File.......................35
(hh) Absence of Certain Changes...................35
(ii) Personnel Information........................36
(jj) [Reserved]...................................37
(kk) Outstanding Debt.............................37
(ll) Negative Covenants...........................37
(mm) Affirmative Covenants........................38
(nn) Additional Agreements........................39
(oo) Join in Execution of Documents...............39
(pp) Full Disclosure..............................39
(qq) Submission of Material for Registration
Statement..................................40
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(rr) Fairness and Tax Opinions................... 40
COVENANTS, REPRESENTATIONS AND
WARRANTIES OF REGENT AND SUBSIDIARY............................... 40
22. Covenants, Representations and Warranties of Regent
and Regent Subsidiaries..............................40
(a) Corporate Standing and Authority..............40
(b) Capitalization; Regent Stock..................41
(c) Corporate Power...............................42
(d) [Reserved]....................................42
(e) [Reserved]....................................42
(f) Affiliates....................................42
(g) Rights to Acquire Securities..................42
(h) Corporate Records.............................42
(i) Title to Regent Assets........................43
(j) Financial Statements; Projections.............43
(k) Contracts.....................................43
(l) Government Authorizations.....................45
(m) Management, Key Employees and Accounts........46
(n) Tax Elections.................................46
(o) Related Transactions..........................46
(p) Taxes.........................................47
(q) Employee Benefit Plans........................47
(r) Compliance with Commission Regulations........47
(s) Personal Property.............................48
(t) Real Property.................................48
(u) Environmental.................................50
(v) Insurance.....................................50
(w) Accounts and Notes Receivable.................50
(x) Laws, Regulations and Instruments.............51
(y) Conduct of Regent Station and
Park Lane Stations...........................51
(z) Disposition of Assets.........................51
(aa) Transmitter Sites.............................51
(bb) Litigation....................................52
(cc) No Conflict...................................52
(dd) Required Consents.............................52
(ee) Intellectual Property.........................52
(ff) Qualifications for Transfer of Control........53
(gg) Public Inspection File........................53
(hh) Absence of Certain Changes....................53
(ii) Personnel Information.........................54
(jj) [Reserved]....................................54
(kk) Outstanding Debt..............................54
(ll) Negative Covenants............................55
(mm) Affirmative Covenants.........................56
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(nn) Additional Agreements.........................56
(oo) Join in Execution of Documents................57
(pp) Full Disclosure...............................57
(qq) Issuance of Preferred Stock...................57
(rr) Transferability of Preferred Stock............57
23. [Reserved]...........................................57
RISK OF LOSS...........................................................58
24. Risk of Loss.........................................58
(a) Faircom Broadcast Assets....................58
(b) Regent Assets...............................58
(c) Broadcast Transmission of Stations Prior to
Closing....................................59
CONDITIONS PRECEDENT TO SUBSIDIARY'S AND REGENT'S
OBLIGATION TO CLOSE...................................................59
25. Conditions Precedent to Subsidiary's and Regent's
Obligations.........................................59
(a) Representations, Warranties and Covenants...60
(b) Delivery of Closing Documents...............60
(c) Faircom Licenses............................60
(d) Consents....................................60
(e) Final Order.................................60
(f) Adverse Proceedings.........................60
(g) Examination of Real Property................60
(h) Dissenters' Rights..........................61
(i) Faircom Information.........................61
(j) Stockholder Approval........................61
(k) Registration Statement......................61
(l) Regent Financing; Acquisition of Park Lane..61
(m) Tax Opinion of Regent's Counsel.............61
(n) Conversion of Faircom Subordinated Notes....61
CONDITIONS PRECEDENT TO FAIRCOM'S
OBLIGATION TO CLOSE....................................................61
26. Conditions Precedent to Faircom's Obligations........61
(a) Representations, Warranties and Covenants...61
(b) Consideration...............................62
(c) Delivery of Closing Documents...............62
(d) Regent Licenses.............................62
(e) Final Order.................................62
(f) Consents....................................62
(g) Adverse Proceedings.........................62
(h) Issuance of Preferred Stock.................62
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(i) Examination of Real Property................62
(j) Regent Financing; Acquisition of Park Lane..63
(k) Stockholder Approval........................63
(l) Registration Statement......................63
(m) Tax Opinion.................................63
(n) Fairness Opinion............................63
(o) Tax Opinion of Regent's Counsel.............63
CLOSING DOCUMENTS......................................................63
27. Closing Documents to be Delivered by Faircom.........63
28. Closing Documents to be Delivered by Regent and
Subsidiary.........................................64
29. [Reserved]...........................................65
30. Termination..........................................65
31. Remedies on Termination of Agreement or Default
Prior to Closing....................................66
32. Brokerage............................................67
33. Survival of Representations and Warranties...........67
MISCELLANEOUS PROVISIONS...............................................68
34. Employment Agreement.................................68
35. Headings.............................................68
36. Execution............................................68
37. Notices..............................................68
38. Disclosure...........................................69
39. Receipt of Preferred Stock...........................70
40. Entire Agreement.....................................70
41. Governing Law........................................70
42. Successors and Assigns...............................70
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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:
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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.
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(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).
(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.
-3-
(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, 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.
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(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.
(v-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 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 & Xxxxxxx, 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
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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.
(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.
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(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 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:
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxx
(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:
Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
R. Xxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
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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........................................ Xxxxx X. Xxxxxx
Vice Chairman.................................... Xxxx X. Xxxxxxx
President, Chief Operating
Officer, Secretary........................... Xxxxxxx X. Xxxxxxxx
Vice President-Finance,
Assistant Secretary............................... Xxxxxxx Xxxxxx
Assistant Secretary........................ Xxxxxxxxx Xxxxxxxxxxx
Assistant Secretary............................... Xxxx X. Xxxxxx
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 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 Authorized Total 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.
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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. 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
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
-9-
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 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
-10-
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 Xxxxxxx, 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 & Xxxxxxx, 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.
(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
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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 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)
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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, 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
-13-
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 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.
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(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 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.
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(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.
(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
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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 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
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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".
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
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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 Xxxx X. Xxxxxxx,
Faircom, Regent or Xxxxx X. Xxxxxx 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.
(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
-19-
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:
(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 xnot a dissenting Faircom Stockholder shall be distributed as follows:
each such Faircom Stockholder shall receive as soon as practicable
-20-
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.
(iv) 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 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
-21-
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 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
-22-
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, 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).
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(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 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
-24-
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.
(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.
-25-
(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 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.
-26-
(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:
-27-
(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;
(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.
-28-
(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 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 License 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
-29-
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 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).
-30-
(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 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).
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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, 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.
9601 et seq., Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. 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 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.
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(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.
(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.
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(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 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
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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 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 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;
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(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
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.
(iv) 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.
(v) 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
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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.
(vi) 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 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;
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(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 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
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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 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
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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 Xxxxxxx Xxxxxx 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
& Xxxxxxxx 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):
(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
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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
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
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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.
(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
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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 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;
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(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
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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 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.
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(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 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,
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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 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,
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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 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 Xxxx Xxxx Xxxx
Xxxxxx, Xxxx Xxxx 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.
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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 structural, mechanical
or other defects of material significance, are reasonably suitable for
the purposes for which they are being used, and each has adequate
rights of ingress and egress, utility service for water and sewer,
telephone, electric and/or gas, and sanitary service for the conduct
of the business and operations of the 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 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. 9601 et seq., Toxic Substances
Control Act, 15 U.S.C. ss. 2601 et seq., the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. 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
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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,
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.
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(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 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
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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 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
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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 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
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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;
(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 X, X,
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X, X 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;
(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.
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(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.
(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.
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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.
(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
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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.
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:
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(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.
(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).
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(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 Xxxxxxx & Xxxx, 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.
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 Xxxxxxxxx 00, xxxxx xx 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
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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 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
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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. Xxxxxxx & Xxxx, 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.
(c) An opinion of Fulbright & Xxxxxxxx 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.
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(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 Xxxxxxx & Xxxx, 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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(e) 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.
(f) All necessary consents to be obtained by Regent and
Subsidiary as set forth in Paragraph 25(d).
(g) The Regent Financials, certified as true and correct
pursuant to an officer's certificate of Regent.
(h) 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.
(i) 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.
(j) 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;
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(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;
(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
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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 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 Xxxxxxx Company,
no broker or finder was connected with or brought about this transaction. Of
the fees due to The Xxxxxxx 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
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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 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:
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If to Regent or Subsidiary:
Xxxxx X. Xxxxxx, Chairman
Regent Communications, Inc.
00 Xxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
copy to:
Xxxxxxx & Xxxx
2100 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
If to Faircom:
Xxxx X. Xxxxxxx, Chairman
Faircom Inc.
000 Xxxx Xxxx Xxxx
Xxx Xxxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attn: Xxxxxxx Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
and a copy to:
Xxxx Xxxxxxxxxx & Xxxxxxxxx
1800 Star Bank Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
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
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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/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
---------------------------- ---------------------------------------
Its: Chairman & CEO
---------------------------------------
WITNESS: REGENT MERGER CORP.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------------- ---------------------------------------
Its: Chairman & CEO
---------------------------------------
WITNESS: REGENT COMMUNICATIONS, INC.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxx x. Xxxxxx
---------------------------- ---------------------------------------
Its: Chairman & 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/ Xxxx X. Xxxxx
---------------------------------------
Xxxx X. Xxxxx
Its: Manager
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MIAMI VALLEY VENTURE FUND L.P.
By: Blue Chip Venture Company of Dayton, Ltd.
Its Special Limited Partner
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Xxxx X. Xxxxx
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
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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
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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:
---------------------------------------
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