1
Exhibit 8(b)
[XXXXXXX & TROY LETTERHEAD]
___________, 1998
Faircom, Inc.
000 Xxxx Xxxx Xxxx
Xxx Xxxxxxxxxx, XX 00000
Regent Communications, Inc.
00 Xxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Re: Merger Pursuant to the Agreement of Merger dated as of December 5,
1997, as amended (the "Merger Agreement"), between Regent
Communications, Inc. ("Regent"), Faircom Inc. ("Faircom") and
Regent Merger Corp. ("Sub") and others
Ladies and Gentlemen:
We have acted as counsel for Regent in connection with the preparation
and execution of the Merger Agreement. Pursuant to the Merger Agreement, Faircom
will merge with and into Sub, a wholly-owned subsidiary of Regent (the
"Merger"). Unless otherwise defined, capitalized terms referred to herein have
the meanings set forth in the Merger Agreement. All section references, unless
otherwise indicated, are to the Internal Revenue Code of 1986, as amended (the
"Code").
You have requested our opinion regarding certain federal income tax
consequences of the Merger. In delivering this opinion, we have reviewed and
relied upon the facts, statements, descriptions and representations set forth in
the Merger Agreement and such other documents pertaining to the Merger as we
have deemed necessary or appropriate. We have also relied upon the statements
and representations made by Regent and Faircom in letters attached hereto
as Exhibits A and B (the "Representation Letters") and in the Proxy Statement/
Prospectus dated May ___, 1998 distributed to stockholders of Regent
in connection with the Merger (the "Proxy Statement/Prospectus"), which is
included in the Registration Statement No. 333-46435, as filed by Regent with
the Securities and Exchange Commission on February 17, 1998, as amended through
the date hereof (the "Registration Statement").
In connection with rendering this opinion, we have assumed or have
obtained representations (without any independent investigation) that, as of the
date hereof and as of the Effectiveness of the Merger:
1. Original documents (including signatures) are authentic, documents submitted
to us as copies conform to the original documents, and there has been (or will
be by the Effectiveness of the Merger) due execution and delivery of all
documents where due execution and delivery are prerequisites to effectiveness
thereof;
2
Faircom, Inc.
Regent Communications, Inc.
_________________, 1998
Page 2
2. Any statement made in any of the documents referred to herein "to the
knowledge" of any person or party is correct without such qualification;
3. All statements, descriptions and representations contained in any of
the documents referred to herein or otherwise made to us are true and correct in
all respects and no actions have been (or will be) taken which are inconsistent
with such representations as of the date hereof and as of the Effectiveness of
the Merger;
4. The shareholders of Faircom do not, and will not on or before the
Effectiveness of the Merger, have a plan or intention to dispose of an amount of
Regent Common Stock to be received in the Merger (or to dispose of Faircom
Common Stock in anticipation of the merger) such that the shareholders of
Faircom will not receive and retain a meaningful continuing equity ownership in
Regent that is sufficient to satisfy the continuity of interest requirement set
forth in Treas. Reg. ss.1.368-1(b) and as interpreted in certain Internal
Revenue Service rulings and federal judicial decisions.
Based on the foregoing and subject to the assumptions, exceptions,
limitations and qualifications set forth herein, we are of the opinion that, if
the Merger is consummated in accordance with the Merger Agreement (without any
waiver, breach or amendment of the provisions thereof), for federal income tax
purposes, the Merger will qualify as a "reorganization" within the meaning of
Section 368(a) of the Code.
In addition, based on our examination and review referred to above and
subject to the assumptions, exceptions, limitations and qualifications set forth
herein and therein, we confirm that the discussion set forth under the heading
"Material Federal Income Tax Consequences" is the Proxy Statement/Prospectus, to
the extent it expresses legal conclusions, fairly summarizes the material
federal income tax consequences of the consummation of the Merger to Faircom and
holders of the Faircom Common Stock to whom such discussion is addressed.
This opinion represents and is based upon our best judgment regarding
the application of federal income tax laws arising under the Code, existing
judicial decisions, administrative regulations and published rulings and
procedures. Our opinion is not binding upon the Internal Revenue Service or the
courts, and there is no assurance that the Internal Revenue Service will not
successfully assert a contrary position. Furthermore, no assurance can be given
that the future legislative, judicial or administrative changes, on either a
prospective or retroactive basis, will not adversely affect the accuracy of the
conclusions stated herein. However, we undertake no responsibility to advise you
of any developments in the application or interpretation of the federal income
tax laws as they might relate to this opinion.
This opinion addresses only the matters set forth above, and does not
address any other federal, state, local or foreign tax consequences that may
result from the Merger or any other transaction (including any transaction
undertaken in connection with the Merger).
3
Faircom, Inc.
Regent Communications, Inc.
_________________, 1998
Page 3
This letter is being delivered to you and is intended solely for your
benefit. This letter may not be relied upon for any other purpose or by any
other person or entity, and may not be made available to any person or entity,
without our prior written consent, except that we consent to the filing of this
opinion as an exhibit to the Registration Statement and to the reference to our
firm therein.
Very truly yours,
4
Exhibit A
Regent Communications, Inc.
00 Xxxx Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
________________, 1998
DRAFT
Xxxxxxx & Xxxx
2100 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re Merger of Faircom, Inc. into Regent Merger Corp.,
a wholly-owned subsidiary of Regent Communications, Inc.
Gentlemen:
You have requested that we represent certain matters to you in
connection with the opinion that you are rendering with respect to certain
federal income tax consequences of the merger (the "Merger") of Faircom Inc.
("Faircom") with and into Regent Merger Corp. ("Sub"), a direct, wholly-owned
subsidiary of Regent Communications, Inc. ("Regent"). We recognize that you will
rely on this certificate in rendering your opinion pursuant to section 21(rr) of
the Agreement of Merger, dated as of December 5, 1997, as amended, by and among
Faircom, Sub and Regent (the "Merger Agreement") and in connection with your
description of certain federal income tax consequences of the Merger in the
Registration Statement. Unless otherwise specified, the capitalized terms used
herein are defined in the Merger Agreement.
In accordance with your request, we hereby represent to you
that the following facts are now true and will continue to be true as of the
Effectiveness of the Merger;
1. The fair market value of the stock of Regent ("Regent
Shares") plus cash in lieu of fractional shares to be received by each
shareholder of Faircom will be approximately equal to the fair market value of
Faircom stock surrendered in the exchange.
2. Following the Merger, Sub will hold at least 90% of the
fair market value of the net assets of Faircom and at least 70% of the fair
market value of the gross assets of Faircom held immediately prior to the
Merger. For purposes of this representation, amounts paid by Faircom to Faircom
shareholders who receive cash or other property in the Merger, amounts, if any,
paid by Faircom to dissenters, amounts used by Faircom to pay its reorganization
expenses, and all redemptions and distributions (except for regular, normal
dividends) made by Faircom will be included as assets of Faircom immediately
prior to the Merger.
3. Except as set forth in Paragraph 15 below, Regent has no
plan or intention to redeem or otherwise reacquire any of its stock issued
pursuant to the Merger (other than in connection with the repurchase of
fractional shares).
5
Xxxxxxx & Xxxx
_________, 1998
Page 2
4. Except for transfers described in Section 368(a)(2)(C) of
the Code, Regent has no plan or intention to liquidate Sub, to merge Sub with or
into another corporation including Regent or any of its affiliates, to sell,
distribute or otherwise dispose of the capital stock of Sub, or to cause Sub to
sell or otherwise dispose of any of its assets or of any of the assets acquired
from Faircom, except for dispositions made in the ordinary course of business.
5. Regent will acquire from shareholders of Faircom their
stock in Faircom solely in exchange for Regent Xxxxxx. Further, no liabilities
of Faircom's shareholders will be assumed by Regent, nor will any Faircom stock
be subject to any liabilities.
6. Regent and Sub will pay their respective expenses, if any,
incurred in connection with the Merger, and will not pay any of the expenses of
Faircom or its shareholders other than a portion of the commission due The
Xxxxxxx Company.
7. Neither Regent nor Sub is an investment company as defined
in section 368 (a)(2)(F)(iii) and (iv) of the Code.
8. There is no intercorporate indebtedness existing between
Regent and Faircom or between Sub and Faircom that was issued, acquired or will
be settled at a discount.
9. Following the Merger, Regent will cause Sub to continue the
historic business Faircom was conducting immediately before the Merger or cause
Sub to use a significant portion of the historic business assets of Faircom in a
business, within the meaning of Treasury Regulation Section 1.368-l(d).
10. Prior to the Merger, Regent will be in "Control" of Sub.
As used in this letter, "Control" means the direct ownership of stock possessing
at least eighty percent (80%) of the total combined voting power of all classes
of stock entitled to vote and at least eighty percent (80%) of the total number
of shares of each other class of stock of the corporation. For purposes of
determining Control, a person or entity shall not be considered to own voting
stock if rights to vote such stock (or to restrict or otherwise control the
voting of such stock) are held by a third party (including a voting trust) other
than an agent of such person or entity.
11. Regent has no plan or intention to cause Sub to issue
additional shares of Sub stock after the Merger that would result in Regent
losing Control of Sub.
12. No stock of Sub will be issued in the Merger.
6
Xxxxxxx & Xxxx
_________, 1998
Page 3
13. The payment of cash in lieu of fractional Regent Shares is
solely for the purpose of avoiding the expense and inconvenience to Regent of
issuing fractional shares and does not represent separately bargained
consideration. The total cash consideration that will be paid in the transaction
to Faircom shareholders instead of issuing fractional Regent Shares will not
exceed ten percent (10%) of the total consideration that will be issued in the
transaction to Faircom shareholders in exchange for their stock in Faircom.
14. None of the shares of Regent Shares received by any
shareholder of Faircom who is (or was) a service provider to Faircom will be
separate consideration for, or allocable to, past or future services (including
covenants not to compete).
15. Other than the 300,000 Regent Shares subject to redemption
pursuant to the Redemption and Warrant Agreement, as amended, between Blue Chip,
Miami Valley and Regent ("Redemption Agreement") and Section 13 of the Merger
Agreement (the "Option Shares"), none of the Regent Shares to be issued in
connection with the Merger contain terms which either: (i) permit the holder to
require Regent or a Related Person (as defined in Section 351(g)(3)(B) of the
Code) to purchase such stock; (ii) require Regent or a Related Person to redeem
or purchase such stock; (iii) permit Regent or a Related Person to redeem or
purchase such stock; or (iv) determine the dividend rate on such stock in whole
or in part (directly or indirectly) based on interest rates (other than the 7%
rate specified), commodity prices or similar indices.
16. The fair market value of all Regent Shares issued in
connection with the Merger, other than the Option Shares, is not less than 50%
of the fair market value of the aggregate consideration issued or paid by Regent
in connection with the Merger, including, without limitation, amounts paid by
Regent to dissenters and in lieu of fractional share interests in Regent Shares,
the right of Blue Chip and Miami Valley to receive warrants pursuant to the
Redemption Agreement, amounts paid in repayment of Optional Faircom Subordinated
Notes, the Option Shares and all other Regent shares issued in connection with
the Merger.
17. The Merger Agreement and the Redemption Agreement
represent the full and complete agreement among Regent, Sub and Faircom
regarding the Merger, and there are no other written or oral agreements
regarding the Merger.
18. The Merger is being undertaken to enhance the business of
Regent and for other good business purposes of Regent.
19. The terms of the Merger Agreement and all other agreements
entered into in connection therewith were the product of arm's-length
negotiations.
7
Xxxxxxx & Xxxx
_________, 1998
Page 4
Regent and Sub will promptly notify Xxxxxxx & Xxxx if, after signing
this letter, Regent and Sub have reason to believe that any of the
representations made in this letter are untrue, incomplete or incorrect in any
respect.
In rendering your opinion, you have our permission to attach a copy of
this letter to your written opinion.
Very truly yours,
REGENT COMMUNICATIONS, INC.
a Delaware corporation
By:_________________________________
Title:_______________________________
REGENT MERGER CORP.
a Delaware corporation
By:_________________________________
Title:_______________________________
8
Exhibit B
DRAFT
Faircom Inc.
000 Xxxx Xxxx Xxxx
Xxx Xxxxxxxxxx, XX 00000
___________________, 1998
Xxxxxxx & Xxxx
2100 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Re: Merger of Faircom Inc. into Regent Merger Corp.,
wholly-owned subsidiary of Regent Communications, Inc.
Gentlemen:
You have requested that we represent certain matters to you in
connection with the opinion that you are rendering with respect to) certain
federal income tax consequence of the merger (the "Merger") of Faircom Inc.
("Faircom") with and into Regent Merger Corp. ("Sub"), a direct, wholly-owned
subsidiary of Regent Communications, Inc. ("Regent"). We recognize that you will
rely on this certificate in rendering your opinion pursuant to the Agreement of
Merger, dated as of December 5, 1997, as amended, by and among Faircom, Sub,
Regent and others (the "Merger Agreement") and in connection with your
description of certain federal income tax consequences of the Merger in the
Registration Statement. Unless otherwise specified, the capitalized terms used
herein are defined in the Merger Agreement.
In accordance with your request, we hereby represent to you
that the following facts are now true and will continue to be true as of the
Effectiveness of the Merger:
1. The fair market value of the stock of Regent ("Regent
Shares") plus cash in lieu of fractional shares to be received by each
shareholder of Faircom will be approximately equal to the fair market value of
Faircom stock surrendered in the exchange.
2. There is no plan or intention by the shareholders of
Faircom who own five percent or more of Faircom stock as of the date of the
Merger, and to the knowledge of the management of Faircom, there is no plan or
intention of the remaining shareholders of Faircom to sell, exchange, or
otherwise dispose of a number of Regent Shares to be received in the Merger that
would reduce Faircom shareholders' ownership of Regent Shares to a number of
Regent Shares having a value as of the date of the Merger of less then 50% of
the value of all of the formerly outstanding Faircom stock as of the same date.
For purposes of this paragraph, shares of Faircom stock exchanged for cash or
other property, surrendered by dissenters or exchanged for fractional shares of
Regent shares will be treated as outstanding Faircom stock exchanged on the date
of the Merger. Moreover, shares of Faircom stock and Regent Shares held
9
Xxxxxxx & Xxxx
_________, 1998
Page 2
by Faircom shareholders and otherwise sold, redeemed, or disposed of prior or
subsequent to the Merger will be considered in making this representation.
3. Faircom and its shareholders will pay their respective
expenses, if any, incurred in connection with the Merger, other than the payment
by Regent of a portion of the fee due to the Xxxxxxx Company pursuant to Section
32 of the Merger Agreement.
4. Faircom is not an investment company as defined in section
368(a)(2)(F) (iii) and (iv) of the Internal Revenue Code of 1986, as amended
(the "Code").
5. On the date of the Merger the fair market value of the
assets of Faircom transferred to Sub will exceed the sum of the liabilities of
Faircom assumed by Sub, plus the amount of liabilities, if any, to which the
assets are subject.
6. Faircom is not under the jurisdiction of a court in a
Title 11, or similar case within the meaning of Section 368 (a) (A) of the Code.
7. Following the Merger, Sub will hold at least 90% of the
fair market value of the net assets of Faircom and at least 70% of the fair
market value of the gross assets of Faircom held immediately prior to the
Merger. For purposes of this representation, amounts paid by Faircom to Faircom
shareholders who receive cash or other property in the Merger, amounts, if any,
paid by Faircom to dissenters, amounts used by Faircom to pay its reorganization
expenses, and all redemptions and distributions (except for regular, normal
dividends) made by Faircom will be included assets of Faircom immediately prior
to the Merger.
8. There is no intercorporate indebtedness existing between
Regent and Faircom or between Sub and Faircom that was issued, acquired or will
be settled at a discount.
9. The liabilities no Faircom to be assumed by Sub and the
liabilities to which the transferred assets of Faircom are subject were incurred
by Faircom in the ordinary course of business,
10. The payment of cash its lieu of fractional Regent Shares
is solely for the purpose of avoiding the expense and inconvenience to Regent of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the transaction
to Faircom shareholders instead of issuing fractional Regent Shares will not
exceed ten percent of the total consideration that will be issued in the
transaction to Faircom shareholders in exchange for their stock in Faircom.
-2-
10
Xxxxxxx & Xxxx
_________, 1998
Page 3
11. None of the compensation received by any stockholder of
Faircom who is (or was) a service provider to Faircom will be separate
consideration for, or allocable to, any of his or her Faircom stock, and the
compensation paid to any such person will be for services actually rendered and
will be commensurate with amounts paid to third parties bargaining at
arm's-length for similar services. None of the Regent Shares received by any
shareholder of Faircom who is (or was) a service provider to Faircom will be
separate consideration for, or allocable to, past or future services (including
any employment agreement or any covenants not to compete).
12. Other than the 300,000 Regent Shares subject to the
Redemption and Warrant Agreement, as amended, between Blue Chip, Miami Valley
and Regent ("Redemption Agreement") and Section 13 of the Merger Agreement (the
"Option Shares"), none of the Regent Shares to be issued in connection with the
Merger contain terms which either: (i) permit the holder to require Regent or a
Related Person (as defined in Section 351(g)(3)(B) of the Code) to purchase such
stock; (ii) require Regent or a Related Person to redeem or purchase such stock;
(iii) permit Regent or a Related Person to redeem or purchase such stock; or
(iv) determine the dividend rate on such stock in whole or in part (directly or
indirectly) with reference to interest rates, commodity prices or similar
indices.
13. The fair market value of all Regent Shares issued in
connection with the Merger, other than the Option Shares, is not less than 50%
of the fair market value of the aggregate consideration issued or paid by Regent
in connection with the Merger, including, without limitation, amounts paid by
Regent, to dissenters and in lieu of fractional share interests in Regent
Shares, the right of Blue Chip and Miami Valley to receive warrants pursuant to
the Redemption Agreement, amounts paid in repayment of Optional Faircom
Subordinated Notes, the Option Shares and all other Regent shares issued in
connection with the Merger.
14. The Merger Agreement and the Redemption Agreement
represent the full and complete agreement among Regent, Sub and Faircom
regarding the Merger, and there are no other written or oral agreements
regarding the Merger.
15. The Merger is being undertaken to enhance the business of
Faircom and for other good business purposes of Faircom.
16. The terms of the Merger Agreement and all other
agreements entered into in connection therewith were the product of arm's-length
negotiations.
Faircom will promptly notify Xxxxxxx & Xxxx if, after signing
this letter, Faircom has reason to believe that any representations made in this
letter are untrue, incomplete or incorrect in any respect.
-3-
11
Xxxxxxx & Xxxx
_________, 1998
Page 4
In rendering your opinion, you have our permission to attach a
copy of this letter to your written opinion.
Very truly yours,
FAIRCOM, INC.
a Delaware CORPORATION
By:_________________________________
Title:_______________________________
-4-
