1
Exhibit 2
NOTE PURCHASE AGREEMENT
Note Purchase Agreement dated as of June 15, 1998 among Blue Chip
Capital Fund II Limited Partnership ("Blue Chip"), Miami Valley Venture Fund
L.P. ("Miami") and Xxxxxx-Xxxxxx Media Partners, L.P. ("Purchaser"). The parties
hereby agree as follows:
1. Immediately prior to the consummation of the Transactions (as
defined below), each of Blue Chip and Miami will sell to Purchaser and Purchaser
will purchase from Blue Chip and Miami, the principal amounts of Class A
Convertible Subordinated Promissory Notes ("Class A Notes") and Class B
Convertible Subordinated Promissory Notes ("Class B Notes" and, together with
the Class A Notes, the "Notes") of Faircom Inc., a Delaware corporation
("Faircom"), set forth on Exhibit 1 hereto for the prices set forth on such
Exhibit 1, and Purchaser will pay such purchase price to Blue Chip and Miami by
wire transfer. At the closing of the transactions contemplated hereby (the
"Closing"), Blue Chip and Miami will deliver to Purchaser the Notes duly
endorsed for transfer to Purchaser and Purchaser will deliver the purchase price
to each of them as provided above. As used herein, the term "Transactions" shall
mean the Merger (as defined below), the closing of the sale of shares of Series
F Convertible Preferred Stock of Regent Communications, Inc. ("Regent") pursuant
to a Stock Purchase Agreement, dated as of June 15, 1998, among Regent,
Purchaser and the other parties thereto (the "Series F Purchase Agreement"), and
the other transactions referred to in the Series F Purchase Agreement and which
are conditions to the obligations of the Purchaser thereunder.
2. Each of Blue Chip and Miami, severally and not jointly,
represents and warrants to Purchaser, as of the date hereof and as of the date
of the Closing, as follows:
a. It is a limited partnership duly organized and validly
existing under the laws of the State of Ohio with full partnership power to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement have been duly approved by
all necessary partnership action on its behalf and will not conflict with or
violate any provision of its Agreement of Limited Partnership, any law, rule or
regulation binding on it, any order of any court or governmental instrumentality
to which it is subject or any contract or agreement to which it is a party or to
which its assets or properties are subject. This Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms. Blue Chip and Miami have obtained all consents or approvals, and made
all filings and notifications, required in connection with the transactions
contemplated hereunder (including the conversion of the Notes by the Purchaser
to shares of Faircom common stock, as confirmed by Faircom in Section 6 hereof),
except that the consent of AT&T Commercial Finance Corporation to the transfer
of the Notes is required, as contemplated by Section 7 hereof.
b. The Notes to be sold by it pursuant to this Agreement are
owned by it free and clear of any lien, charge or encumbrance, except as set
forth in this agreement. Neither it nor, to the best of its knowledge, Faircom
is in default in any respect with respect to, and no Event of Default (as
defined in the Notes), or event or condition which upon notice or passage of
time would become an Event of Default, exists with respect to, the Notes.
c. It is not in breach or default of and it has no knowledge
of any event or condition which, with notice or lapse of time or both, would
constitute a breach or default by any other party to (i) the Securities Purchase
Agreement dated as of June 30, 1997 among Blue Chip, Miami, Faircom and
Faircom's subsidiaries (the "Securities Purchase Agreement"), (ii) the
Intercreditor and Subordination Agreement dated as of June 30, 1997 among
Faircom and its
2
subsidiaries, Blue Chip, Miami and AT&T Commercial Finance Corporation (the
"Senior Lender") or the Acknowledgment and Reaffirmation thereof dated as of
January 22, 1998 (collectively, the "Subordination Agreement"), and (iii) the
Agreement of Merger dated as of December 5, 1997 among Faircom, Regent Merger
Corp., Regent, Blue Chip and Miami (as amended, the "Merger Agreement"), and
there exists no breach by Blue Chip or Miami of any representation, warranty,
covenant or agreement of such party thereunder. There is no material
misstatement or omission of any material fact, with respect to either of Miami
or Blue Chip contained in any information provided to the Purchaser by either of
them or on their behalf or provided by either of them to Regent for inclusion in
the Registration Statement on Form S-4 filed by Regent in respect of the
securities of Regent being issued in connection with such merger (the "Form
S-4").
d. The Notes are valid and enforceable obligations of Faircom,
and are not subject to any claims, defenses or offsets whatsoever. The Class A
Notes set forth on Exhibit 1 are freely convertible into shares of Faircom
common stock at the rate of one share per $0.44474094 of principal amount of
Class A Notes (for an aggregate of 1,653,309 shares of Faircom common stock),
and the Class B Notes set forth on Exhibit 1 are freely convertible into shares
of Faircom common stock at the rate of one share per $0.64354206 of principal
amount of Class B Notes (for an aggregate of 1,188,277 shares of Faircom common
stock).
3. Purchaser represents and warrants to each of Blue Chip and
Miami, as of the date hereof and as of the date of the Closing, as follows:
a. Purchaser has full power and authority under its
organizational documents to execute and deliver this Agreement and to perform
its obligations hereunder. The execution, delivery and performance of this
Agreement by Purchaser have been duly approved on its behalf and will not
conflict with any provision of its organizational documents or any other
agreement to which it is a party. This Agreement constitutes Purchaser's legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
b. Purchaser is acquiring the Notes, and will acquire any
securities issued upon conversion thereof, for its own account for investment
and without any intent to dispose of them in violation of applicable securities
laws. Purchaser is a sophisticated investor and has had an opportunity to
investigate the business and affairs of Faircom. Purchaser has reviewed the
information with respect to Purchaser contained in the Form S-4 filed by Regent
and there has been no material misstatement of fact as to the Purchaser provided
by Purchaser to Regent for inclusion in the Form S-4. Neither Blue Chip nor
Miami has made any representation or warranty as to the value or collectibility
of the Notes. Purchaser is an "accredited investor" as defined under Rule
501(a)(8) under the Securities Act of 1933.
c. Purchaser has received and read the Securities Purchase
Agreement and the Intercreditor and Subordination Agreement.
4. The parties acknowledge that the Notes have been issued
pursuant to the Securities Purchase Agreement and are entitled to the benefits
and subject to the provisions thereof, however, each of Blue Chip and Miami
represents that none of such provisions shall in any way affect or limit the
conversion by Purchaser of the Notes to Faircom common stock or the issuance to
Purchaser of Series C Preferred Stock of Regent upon or prior to the
consummation of the merger contemplated pursuant to the Merger Agreement (the
"Merger") in respect thereof.
2
3
5. The parties acknowledge that the rights of the Investors (as defined
in the Securities Purchase Agreement) and the holders of the Notes are subject
to the provisions of the Subordination Agreement.
6. The parties acknowledge that, pursuant to the Merger Agreement, Blue
Chip and Miami have agreed to convert all of the Notes into common stock of
Faircom immediately prior to the consummation of the Merger. Purchaser will
convert all of the Notes acquired by Purchaser hereunder into common stock of
Faircom immediately prior to the consummation of the Merger pursuant to the
Merger Agreement. Solely for purposes of effecting such conversion, Blue Chip
and Miami hereby assign to Purchaser a pro-rata portion of their rights and
obligations under the Merger Agreement and Purchaser agrees to be bound by the
terms thereof. Each of Miami and Blue Chip severally represents to Purchaser,
and, by its execution and delivery of this Agreement, Faircom hereby
acknowledges and agrees that (i) the Notes to be purchased by the Purchaser
pursuant to this Agreement are convertible without payment of any consideration
to Faircom or any other party into the number of shares of common stock of
Faircom set forth in Section 2(d) above; (ii) such conversion will be effected
immediately prior to the consummation of the Merger without further notice or
action by Purchaser. Faircom acknowledges receipt of the endorsement of the
Notes and hereby represents that upon the effectiveness of the Merger, the
shares of common stock of Faircom issued or issuable upon conversion of the
Notes purchased hereunder shall be converted into the right to receive 400,640
shares of Series C Preferred Stock of Regent on the terms and subject to the
conditions set forth in the Merger Agreement.
7. The parties agree that the parties shall have no obligation to
consummate the transactions contemplated by this Agreement unless and until such
time as Blue Chip and Miami have obtained any and all consents needed by them to
consummate the transactions contemplated hereby, including but not limited to
those consents that may be needed from AT&T Commercial Finance Corporation in
order to sell the Notes hereunder and permit their conversion by the Purchaser.
Each of the parties shall use its best efforts to obtain such consents.
8. Notices, consents and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when (a)
delivered by hand or (b) sent by telecopier (with receipt confirmed), provided
that a copy is mailed by Federal Express or other express delivery service, in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses, and telecopier numbers as a party may designate as
to itself by notice to the other parties).
a. If to Blue Chip or Miami:
c/o Blue Chip Venture Company, Ltd.
2000 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxx X. Xxxxx
with a copy to:
3
4
Xxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
1800 Star Bank Center
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
b. If to Purchaser:
Xxxxxx-Xxxxxx Media Partners, L.P.
c/o Xxxxxx-Xxxxxx Management Group, Inc.
0 Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxx Xxxx Xxxxx Constant & Xxxxxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
9. Miscellaneous.
a. Expenses. Each party shall bear its own expenses incident
to the preparation, negotiation, execution and delivery of this Agreement and
the performance of its obligations hereunder.
b. Payment. A wire transfer or check shall not discharge any
obligation of payment under this Agreement and is accepted subject to
collection.
c. Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this agreement.
d. No Waiver. The failure of a party to insist upon strict
adherence to any obligation of this Agreement shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
e. Exclusive Agreement; Amendment. This Agreement supersedes
all prior agreements among the parties with respect to its subject matter, is
intended (together with the documents referred to herein) as a complete and
exclusive statement of the terms of the agreement among the parties with respect
thereto, and cannot be changed or terminated orally.
4
5
f. Counterparts. This Agreement may be executed in two (2) or
more counterparts each of which shall be considered an original.
g. Governing Law. This Agreement shall be governed by the
internal law of the State of New York, without regard to the conflicts of law
principles thereof.
h. Attorney's Fees. In any action or proceeding brought by a
party to enforce any provision of this Agreement, the prevailing party shall be
entitled to recover the reasonable costs and expenses incurred by it in
connection with that action or proceeding (including, but not limited to,
attorney's fees).
i. Designation of Forum and Consent to Jurisdiction. The
parties hereto (a) designate the United States District Court for the Southern
District of New York, or the Supreme Court of the State of New York, New York
County, as the forum where all matters pertaining to this Agreement may be
adjudicated, and (b) by the foregoing designation, consent to the exclusive
jurisdiction and venue of such court for the purpose of adjudicating all
matters pertaining to this Agreement.
j. Waiver of Jury Trial. As a specifically bargained
inducement for each other party to enter into this Agreement, each of the
parties hereto waives any right it may have to have a jury participate in
resolving any dispute arising our of or related to this Agreement. Instead, any
such disputes resolved in court shall be resolved in a bench trial without a
jury.
k. Binding Agreement. This Agreement shall be binding upon all
parties hereto, their successors and assigns, and shall inure to the benefit of
the parties hereto, their successors and assigns.
BLUE CHIP CAPITAL FUND II LIMITED
PARTNERSHIP
By: BLUE CHIP VENTURE COMPANY, LTD.,
its General Partner
By: /s/ Xxxx X. Xxxxx
-----------------
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
Manager
XXXXXX-XXXXXX MEDIA PARTNERS, L.P.
5
6
By: XXXXXX-XXXXXX MEDIA, L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Member
BY ITS SIGNATURE BELOW,
FAIRCOM INC. AGREES TO
BE BOUND BY THE PROVISIONS
OF THE LAST SENTENCE OF SECTION 6
AND THE PROVISIONS OF SECTION 9:
FAIRCOM INC.
By: /s/ Xxxx X. Xxxxxxx
-------------------
6
7
Exhibit 1
Class A Notes Class B Notes Price (1)
------------- ------------- ---------
Conversion Rate Conversion Rate
= $0.44474094 = $0.64354206
Blue Chip Capital Fund II $625,000 $650,000 $1,275,000
Miami Valley Venture 110,294 114,706 225,000
Fund L.P. -------- -------- ----------
Total $735,294 $764,706 $1,500,000
(1) Excludes accrued interest at 7% per annum from June 30, 1997 to the Closing,
which will be paid by Faircom to Blue Chip and Miami on the date of the Closing.
7
