UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

 

Filed by the Registrant þ

Filed by a Party other than the Registrant o

Check the appropriate box:

 

Renaissance Acquisition Corp.

(Name of Registrant as Specified In Its Charter)

 

(N/A)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

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(1)

to consider and vote upon a proposal to approve the agreement and plan of merger, dated as of September 13, 2008, as amended on December 22, 2008 and December 31, 2008, (collectively, the “Merger Agreement”), among Renaissance, Renaissance’s wholly-owned subsidiaries formed for the purposes of consummating the merger, FCI Merger Sub I, Inc. (“Merger Sub I”) and FCI Merger Sub II, LLC (“Merger Sub II”), First Communications, Inc. (“First Communications”) and The Gores Group, LLC, solely in its capacity as Stockholders’ Representative (“Stockholders’ Representative”), which, among other things, provides for the merger of Merger Sub I with and into First Communications, with First Communications continuing as the surviving corporation (“First Merger”) and First Communications immediately thereafter merging with and into Merger Sub II, with Merger Sub II continuing as the surviving limited liability company (“Second Merger,” and together with the First Merger, the “Merger”) — we refer to this proposal as the merger proposal;

(2)

to consider and vote upon a proposal to amend and restate Renaissance’s charter to (i) change Renaissance’s corporate name to “First Communications, Inc.,” (ii) increase the number of authorized shares of capital stock, (iii) provide for the company’s perpetual existence, (iv) provide for the classification of the board of directors into three classes, (v) delete Article Sixth of Renaissance’s current amended and restated certificate of incorporation and (vi) make certain other changes in tense and number that Renaissance’s board of directors believes are immaterial — we refer to this proposal as the charter amendment proposal;

(3)

to consider and vote upon a proposal to approve the 2008 Equity Incentive Plan (the “2008 Plan”), which is an equity-based incentive compensation plan for directors, officers, employees and certain consultants, pursuant to which Renaissance will reserve up to 3,000,000 shares of common stock for issuance under the 2008 Plan — we refer to this proposal as the incentive compensation plan proposal;

(4)

to consider and vote upon election of nine directors to Renaissance’s board of directors, effective immediately following and contingent upon closing of the Merger, of whom Barry W. Florescue, Theodore V. Boyd and Joseph R. Morris will serve until the annual meeting to be held in 2009, Raymond Hexamer, Marshall B. Belden Jr. and Mark R. Stone will serve until the annual meeting to be held in 2010 and Richard Bloom, Scott M. Honour and Mark T. Clark will serve until the annual meeting to be held in 2011 and, in each case, until their successors are elected and qualified — we refer to this proposal as the director election proposal; and

(5)

to consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, Renaissance is not authorized to consummate the Merger — we refer to this proposal as the adjournment proposal.

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				Page
SUMMARY OF THE MATERIAL TERMS OF THE MERGER					1
QUESTIONS AND ANSWERS FOR RENAISSANCE STOCKHOLDERS ABOUT THE PROPOSALS					4
SUMMARY OF THE PROXY STATEMENT					9
SELECTED HISTORICAL FINANCIAL INFORMATION					23
SELECTED UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS					25
RISK FACTORS					27
FORWARD-LOOKING STATEMENTS					50
SPECIAL MEETING OF RENAISSANCE STOCKHOLDERS					52
THE MERGER PROPOSAL					58
THE MERGER AGREEMENT					85
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION					95
THE CHARTER AMENDMENT PROPOSAL					107
THE INCENTIVE COMPENSATION PLAN PROPOSAL					109
THE DIRECTOR ELECTION PROPOSAL					116
THE ADJOURNMENT PROPOSAL					122
OTHER INFORMATION RELATED TO RENAISSANCE					123
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF RENAISSANCE					130
BUSINESS OF FIRST COMMUNICATIONS					134
FIRST COMMUNICATIONS’ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS					152
EXECUTIVE COMPENSATION					164
REGULATION					172
COMPARISON OF RIGHTS OF RENAISSANCE AND FIRST COMMUNICATIONS STOCKHOLDERS					180
BENEFICIAL OWNERSHIP OF SECURITIES					190
TRANSACTIONS WITH RELATED PERSONS					194
DESCRIPTION OF RENAISSANCE COMMON STOCK AND OTHER SECURITIES					197
PRICE RANGE OF FIRST COMMUNICATIONS SECURITIES AND DIVIDENDS					201
PRICE RANGE OF RENAISSANCE SECURITIES AND DIVIDENDS					202
APPRAISAL RIGHTS					203
STOCKHOLDER COMMUNICATIONS AND PROPOSALS					204
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS					204
DELIVERY OF DOCUMENTS TO STOCKHOLDERS					205
WHERE YOU CAN FIND MORE INFORMATION					206
INDEX TO FINANCIAL STATEMENTS					F-1
ANNEXES
AGREEMENT AND PLAN OF MERGER					A-1
AMENDMENT NO. 1 TO THE AGREEMENT AND PLAN OF MERGER					A-1-1
AMENDMENT NO. 2 TO THE AGREEMENT AND PLAN OF MERGER					A-2-1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION					B-1
2008 EQUITY INCENTIVE PLAN					C-1
OPINION OF HOULIHAN SMITH & COMPANY, INC.					D-1
FORM OF ESCROW AGREEMENT					E-1
COMPENSATION COMMITTEE CHARTER					F-1

 

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•

The parties to the Merger are Renaissance, Merger Sub I, Merger Sub II, First Communications and The Gores Group, LLC, solely in its capacity as Stockholders’ Representative (“Stockholders’ Representative”). Pursuant to the Merger Agreement, Merger Sub I will merge with and into First Communications, with First Communications continuing as the surviving corporation and First Communications will immediately thereafter merge with and into Merger Sub II, with Merger Sub II continuing as the surviving limited liability company. See the section entitled “The Merger Proposal.”

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First Communications is a leading facilities-based competitive communications and wireless communication tower operator providing services throughout the Midwest and Mid-Atlantic United States. See the section entitled “Business of First Communications.”

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The First Communications stockholders including certain warrant holders who make an irrevocable cashless exercise of their warrants immediately prior to and contingent upon the consummation of the Merger (each a “First Communications Holder” and collectively, the “First Communications Holders”) will receive an aggregate of 14,460,000 shares of Renaissance common stock (the “Initial Shares”) and the right to receive up to an aggregate of an additional (i) 13,950,000 shares of Renaissance common stock if a performance milestone is achieved before December 31, 2011 and (ii) 8,500,000 shares of Renaissance common stock if the last sales price of Renaissance common stock has been at least $8.50 per share, on 20 trading days within any 30 trading day period ending on January 28, 2011. Based on the closing market price of $5.80 per share on September 12, 2008, the last trading day prior to the announcement of the Merger Agreement, the Initial Shares had an aggregate value of $83,868,000. Based on the closing market price of $5.81 per share on December 15, 2008, the Initial Shares had an aggregate value of $84,012,600. In addition, holders of First Communications Series A Preferred Stock will receive an aggregate of $15.0 million in cash consideration, together with an accrued dividend of 12% per annum, pro rated and calculated from September 28, 2008 in exchange for their shares of Series A Preferred Stock. If a fractional share is required to be issued to a First Communications Holder, Renaissance will issue such First Communications Holder an amount of cash (rounded to the nearest whole cent), without interest, equal to the product of such fraction multiplied by $6.00. Upon completion of the Merger, assuming that none of the shares Renaissance issued in its initial public offering (the “Public Shares”) are converted into cash, the First Communications Holders will own approximately 42.6% of the shares of Renaissance common stock outstanding immediately after the closing of the Merger and the other Renaissance stockholders will own approximately 57.4% of Renaissance’s outstanding common stock. If 19.99% of the Public Shares are converted into cash, such percentages would be 47.6% and 52.4%, respectively. The foregoing does not take into account shares that would be released to First Communications Holders upon achievement of the EBITDA Condition or the Warrant Condition or the shares that would be released from escrow to RAC Partners, LLC (“RAC Partners”) upon achievement of the EBITDA Condition as described below. If none of the Public Shares are converted and thereafter the EBITDA Condition and Warrant Condition are satisfied, the current Renaissance stockholders and the First Communications Holders would own 36.4% and 63.6%, respectively, assuming that no other shares are issued. If 19.99% of the Public Shares are converted, such percentages would be 32.3% and 67.7%, respectively. See the sections entitled “Summary of the Proxy Statement — The Merger” and “The Merger Proposal.”

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In addition to the consideration to be issued to First Communications stockholders described above, pursuant to an amended and restated stock escrow agreement (the “Amended and Restated Stock Escrow Agreement”) to be delivered to First Communications at closing, RAC Partners, an entity controlled by Barry W. Florescue, Renaissance’s chairman and chief executive officer and of which Richard Bloom and Logan D. Delany, Jr., Renaissance directors and/or executive officers, are members, has agreed that 2,000,000 of the shares of Renaissance common stock that it acquired prior to Renaissance’s initial public offering (“IPO”), which are being held in an escrow account in connection with Renaissance’s IPO, will be released to RAC Partners only in the event that the EBITDA Condition is satisfied. In the event the EBITDA Condition is not satisfied, such shares will be released to the post-merger combined company and cancelled. See the sections entitled “Summary of the Proxy Statement — The Merger” and “The Merger Proposal.”

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The Merger Agreement provides that either Renaissance or First Communications may terminate the agreement if the business combination is not consummated by January 29, 2009. The Merger Agreement may also be terminated, among other reasons, upon material breach of a party. See the section entitled “The Merger Agreement — Termination.”

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The Renaissance stockholders must approve certain amendments to the amended and restated certificate of incorporation of Renaissance, which include (i) changing Renaissance’s corporate name to “First Communications, Inc.,” (ii) increasing the number of authorized shares of capital stock, (iii) providing for the company’s perpetual existence, (iv) providing for the classification of the board of directors into three classes, (v) deletion of Article Sixth of Renaissance’s current amended and restated certificate of incorporation and (vi) making certain other changes in tense and number that Renaissance’s board of directors believes are immaterial (referred to herein as the charter amendment proposal). The stockholders of Renaissance will also vote on proposals to approve the 2008 Equity Incentive Plan (the “2008 Plan”) (referred to herein as the incentive compensation plan proposal), to elect nine directors to Renaissance’s board of directors (referred to herein as the director election proposal) and, if necessary, to approve an adjournment of the meeting (referred to herein as the adjournment proposal). See the sections entitled “The Charter Amendment Proposal,” “The Incentive Compensation Plan Proposal,” “The Director Election Proposal” and “The Adjournment Proposal.”

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After the Merger, if management’s nominees are elected, the directors of Renaissance following the Merger will be Theodore V. Boyd, Raymond Hexamer, Joseph R. Morris, Marshall B. Belden Jr., Mark T. Clark, Scott M. Honour and Mark R. Stone, who are designees of certain of the First Communications stockholders, and Barry W. Florescue and Richard A. Bloom, who are designees of Renaissance. Barry W. Florescue is the chairman of the board, chief executive officer and a current director of Renaissance and Richard A. Bloom is Renaissance’s chief operating officer. See the section entitled “The Director Election Proposal.”

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Following closing of the Merger, certain officers of First Communications will become officers of Renaissance, holding positions similar to the positions such officers held with First Communications. These officers are Raymond Hexamer, who will become chief executive officer of Renaissance, Joseph R. Morris, who will become chief operating and chief financial officer of Renaissance, Richard J. Buyens, who will become president of Renaissance and David Johnson, II who will become senior vice president of sales and marketing of Renaissance. Each of these persons is currently an executive officer of First Communications and has an employment agreement with First Communications which will be assumed by Renaissance as a result of the Merger. See the section entitled “Executive Compensation — Post-Merger Employment Agreements.”

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After the Merger, Renaissance anticipates having approximately $106.5 million in cash available from the trust account (“Trust Account”) it established in connection with its IPO completed on February 1, 2007. If you are a holder of Public Shares, you have the right to vote against the merger proposal and demand that Renaissance convert your shares into a pro rata portion of the Trust Account. Renaissance sometimes refers to these rights to vote against the Merger and demand conversion of the Public Shares into a pro rata portion of the Trust Account as conversion rights. If you are a holder of Public Shares and wish to exercise your conversion rights, you must (i) vote against the merger proposal, (ii) demand that Renaissance convert your shares into cash, (iii) continue to hold your shares through the closing of the Merger and (iv) deliver your stock to Renaissance’s transfer agent physically or electronically using Depository Trust Company’s DWAC System within the period specified in a notice you will receive from or on behalf of Renaissance, which period will be not less than 20 days. Any action that does not include an affirmative vote against the Merger will prevent you from exercising your conversion rights. Your vote on any proposal other than the merger proposal will have no impact on your right to seek conversion. For more information about exercising your conversion rights see the section entitled, “Questions and Answers for Renaissance Stockholders about the Proposals—How do I exercise my conversion rights?” If the maximum number of shares issued in its IPO are converted (3,587,999 shares), Renaissance may still consummate the Merger. Such payments would total approximately $21.3 million based on a conversion price of $5.93 per share.

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When you consider the recommendation of Renaissance’s board of directors in favor of approval of the merger proposal, you should keep in mind that Renaissance’s executive officers and members of Renaissance’s board have interests in the Merger that are different from, or in addition to, your interests as a stockholder. Amongst others, these interests include: (i) the 3,900,000 shares of common stock held by Renaissance’s directors and officers that were acquired before the IPO will be worthless if the Merger is not consummated because Renaissance’s directors and officers are not entitled to receive any of the proceeds with respect to such shares in the event of a liquidation; (ii) the 4,666,667 warrants issued by Renaissance to RAC Partners, an entity controlled by Barry W. Florescue, Renaissance’s chairman and chief executive officer, and Charles Miersch and Morton Farber, two of Renaissance’s directors, will become worthless if the Merger is not consummated by January 29, 2009; (iii) Barry W. Florescue and Richard A. Bloom will be directors of Renaissance if the Merger is consummated and will receive any cash fees, stock options or stock awards that the Renaissance board of directors determines to pay to its non-executive directors; (iv) if Renaissance liquidates, Barry W. Florescue will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by Renaissance for services rendered or contracted for or products sold to Renaissance; and (v) RAC Partners purchased 811,269 shares of Renaissance common stock for an aggregate purchase price of $4,595,532 and at an average purchase price per share of $5.66 pursuant to a share purchase plan entered into prior to Renaissance’s IPO, under which RAC Partners placed a limit order for $12 million of Renaissance common stock commencing ten business days after Renaissance filed its Current Report on Form 8-K announcing its execution of the Merger Agreement and ending on the date preceding the record date for this special meeting, and RAC Partners may vote these shares on the Merger any way it chooses, which may result in RAC Partners being able to influence the outcome of the merger proposal and the other proposals under consideration For more information see the section entitled, “The Merger Proposal — Interests of Renaissance’s Directors and Officers in the Merger.”

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Renaissance Acquisition Corp. 50 East Sample Road, Suite 400 Pompano Beach, FL 33064 Tel: (954) 784-3031 or Morrow & Co., LLC 470 West Avenue, 3rd Floor Stamford, CT 06902 Tel: (203) 658-9400

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Mark Zimkind Continental Stock Transfer & Trust Company 17 Battery Place New York, New York 10004 (212) 845-3287

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significant growth potential;

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unique network infrastructure;

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diverse revenue base and end markets;

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successful history of acquiring and integrating complementary assets; and

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experienced and proven senior management team.

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holders of a majority of Renaissance’s Public Shares present and eligible to vote thereon have approved the merger proposal;

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holders of fewer than 20% of Renaissance’s Public Shares have voted against the merger proposal and demanded conversion of their shares into cash;

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all necessary governmental approvals or waiting periods, including those of the Federal Communications Commission (the “FCC”) and of certain public utility commissions (each, a “State PUC” and collectively the “State PUCs”), have been obtained or expired, as applicable;

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First Communications’ stockholders holding not more than 10% of the outstanding shares of First Communications have exercised dissenters rights under the DGCL with respect to the transactions contemplated by the Merger Agreement; and

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the other conditions specified in the Merger Agreement have been satisfied or waived.

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				Post Merger Ownership Percentage
				First Communications Holders																Renaissance Stockholders
				Neither EBITDA nor Warrant Condition Satisfied				EBITDA Condition Satisfied				Warrant Condition Satisfied				EBITDA and Warrant Condition Satisfied				Neither EBITDA nor Warrant Condition Satisfied				EBITDA Condition Satisfied				Warrant Condition Satisfied				EBITDA and Warrant Condition Satisfied
No Public Shares Elect Cash Conversion					42.6	%			56.8	%			55.0	%			63.6	%			57.4	%			43.2	%			45.0	%			36.4	%
19.99% of Public Shares Elect Cash Conversion					46.7	%			61.1	%			59.9	%			67.7	%			52.4	%			38.9	%			40.1	%			32.3	%

 

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Barry W. Florescue, Theodore V. Boyd and Joseph R. Morris in the class to stand for reelection in 2009;

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Raymond Hexamer, Marshall B. Belden Jr. and Mark R. Stone in the class to stand for reelection in 2010; and

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Richard A. Bloom, Mark T. Clark and Scott M. Honour in the class to stand for reelection in 2011.

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Pursuant to Renaissance’s charter, the approval of the merger proposal will require the affirmative vote of the holders of a majority of the Public Shares present at the meeting in person or by proxy and entitled to vote thereon. There are 21,840,000 shares of Renaissance common stock outstanding as of the record date for the special meeting, of which 17,940,000 are Public Shares. The Merger will not be consummated if the holders of 20% or more of the Public Shares (3,588,000 shares or more) properly demand conversion of their Public Shares into cash.

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The approval of the charter amendment proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Renaissance common stock on the record date.

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The approval of the incentive compensation plan proposal will require the affirmative vote of the holders of a majority of the shares of Renaissance common stock represented in person or by proxy and entitled to vote thereon at the meeting.

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The election of directors requires a plurality vote of the shares of common stock present in person or represented by proxy and entitled to vote at the special meeting. “Plurality” means that the individuals who receive the largest number of votes cast “FOR” are elected as directors. Consequently, any shares not voted “FOR” a particular nominee (whether as a result of abstentions or a direction to withhold authority) will not be counted in the nominee’s favor.

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The approval of the adjournment proposal will require the affirmative vote of the holders of a majority of the shares of Renaissance common stock represented in person or by proxy and entitled to vote thereon at the meeting.

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If the Merger is not consummated by January 29, 2009, Renaissance will be liquidated. In such event, the 3,900,000 shares of common stock held by Renaissance’s directors and officers that were acquired before the IPO, for an aggregate purchase price of $25,000, will be worthless because Renaissance’s directors and officers are not entitled to receive any of the liquidation proceeds with respect to such shares. Such shares had an aggregate market value of $22,542,000 based upon the closing price of $5.78 on the American Stock Exchange on December 24, 2008, the record date for the Renaissance special meeting. Furthermore, proceeding the IPO, Barry Florescue and Charles Miersch each bought 5,000 Public Shares on the open market which each may vote as they choose at the special meeting.

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The Company issued and sold 4,666,667 warrants (exercisable at $6.00 per share) to RAC Partners and Charles Miersch and Morton Farber, two of Renaissance’s directors, on February 1, 2007 for an aggregate purchase price of $2,100,000 (the “Insider Warrants”). All of the proceeds Renaissance received from these purchases were placed in the Trust Account. The Insider Warrants are identical to the warrants underlying the Units sold in Renaissance’s IPO except that (i) they have an exercise price of $6.00 per share, (ii) Renaissance did not register the sale of the warrants to the public and (iii) the Insider Warrants will be exercisable on a cashless basis at the holders’ option so long as such warrants are held by such directors, RAC Partners or its affiliates. Renaissance has agreed to register the transfer of the Insider Warrants by RAC Partners to its members in a liquidation or distribution and the resale of the shares underlying the Insider Warrants by RAC Partners and the directors at any time after Renaissance has executed a definitive agreement for a business combination, but the purchasers of the Insider Warrants have agreed that the Insider Warrants will not be sold or, subject to certain limited exceptions (including in a distribution upon liquidation at RAC Partners), transferred by them and they may not exercise the Insider Warrants until 30 days after Renaissance has completed a business combination. Accordingly, the Insider Warrants have been placed in escrow and will not be released until 30 days after the completion of a business combination. Such warrants are not publicly traded and have an exercise price of $6.00 per warrant. All of the warrants will become worthless if the Merger is not consummated by January 29, 2009 (as will the remainder of the public warrants).

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The transactions contemplated by the Merger Agreement provide that Barry W. Florescue and Richard A. Bloom, appointees of Renaissance, will be directors of Renaissance after the closing of the Merger. As such, in the future each will receive any cash fees, stock options or stock awards that the Renaissance board of directors determines to pay to its non-executive directors.

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If Renaissance liquidates prior to the consummation of a business combination, Barry W. Florescue will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by Renaissance for services rendered or contracted for or products sold to Renaissance. Renaissance cannot assure you that he would be able to satisfy those obligations. As of September 30, 2008, Renaissance had accounts payable of approximately $855,375. It estimates that it will incur additional expenses of approximately $50,000 that would be required to be paid if the Merger is not consummated. Of such total of $855,375, creditors to whom approximately $802,572 is or would be owed have waived their rights to make claims for payment from amounts in the Trust Account. Mr. Florescue would be obligated to indemnify Renaissance for the balance of approximately $52,803 that would be owed to creditors who have not waived their rights against the Trust Account. However, Renaissance believes that Mr. Florescue does not have any risk of being required to provide indemnification since all persons who have had contractual obligations with

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Renaissance but have not waived their rights against the Trust Account have been paid in full (or will be paid in accordance with Renaissance’s past practices).

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Renaissance and each Merger Sub’s representations and warranties set forth in the Merger Agreement being true and correct in all material respects (except representations which, as written, are already qualified by materiality or material adverse effect, in which case such representations and warranties will be true and correct in all such respects) as of the date of the Merger Agreement, and, except to the extent such representations and warranties speak as of an earlier date, as of the effective time of the First Merger;

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Renaissance and each Merger Sub having duly performed in all material respects all obligations, covenants and agreements undertaken by them in the Merger Agreement and having complied in all material respects with all terms and conditions applicable to them under the Merger Agreement to be performed or complied with on or before the closing date;

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all necessary third party approvals or consents having been obtained from any person or entity whose approval or consent is necessary to consummate the Merger including, without limitation, the approval of the board of directors of Renaissance and each Merger Sub and the consents of the State PUCs and the FCC;

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Renaissance having received approval from its stockholders in a manner consistent with Renaissance’s final prospectus dated January 29, 2007 and having delivered evidence of such approval to First Communications; and

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since the date of the Merger Agreement there having been no occurrence, event, change, effect or development that, individually or in the aggregate, has had or is reasonably expected to have a material adverse effect on Renaissance.

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First Communications’ representations and warranties set forth in the Merger Agreement being true and correct in all material respects (except representations which, as written, are already qualified by materiality or material adverse effect, in which case such representations and warranties shall be true and correct in all such respects) as of the Merger Agreement and, except to the extent such representations and warranties speak as of an earlier date, as of the effective time of the First Merger;

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all necessary third party approvals or consents, having been obtained from any person or entity whose approval or consent is necessary to consummate the Merger including, without limitation, the consents of the State PUCs and the FCC;

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First Communications having performed in all material respects all obligations, covenants and agreements undertaken by First Communications in the Merger Agreement and having complied in all material respects with all terms and conditions applicable to it under the Merger Agreement to be performed and complied with on or before the closing date;

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First Communications’ stockholders holding not more than 10% of the outstanding shares of First Communications common stock having exercised or having continuing rights to exercise appraisal rights under the DGCL with respect to the transactions contemplated by the Merger Agreement;

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since the date of the Merger Agreement there not having been any occurrence, event, change, effect or development that, individually or in the aggregate, has had or is reasonably expected to have a material adverse effect on First Communications; and

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First Communications having obtained an amendment to its existing credit facility waiving the change of control provision therein.

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by mutual written consent of Renaissance and First Communications;

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by either Renaissance or First Communications if the Merger is not consummated on or before January 29, 2009;

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by either Renaissance or First Communications if a governmental authority has enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order, in each case which has become final and non-appealable, and which permanently restrains, enjoins or otherwise prohibits the Merger;

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by either Renaissance or First Communications if, at Renaissance’s special meeting (including any adjournments thereof), the Merger shall fail to be approved and adopted by the affirmative vote of the holders of Renaissance common stock required under its amended and restated certificate of incorporation, or the holders of 20% or more of the Public Shares outstanding as of the record date of Renaissance’s special meeting exercise their rights to convert the shares of Renaissance common stock held by them into cash in accordance with Renaissance’s amended and restated certificate of incorporation; or

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by either Renaissance or First Communications, if such party is not in material breach of its obligations under the Merger Agreement and there has been a material breach of the representations and warranties, covenants, or agreements by the other party and such breach has not been cured within 30 days after written notice to the breaching party, if curable.

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No gain or loss will be recognized by non-converting stockholders of Renaissance; and

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A stockholder of Renaissance who exercises conversion rights and effects a termination of the stockholder’s interest in Renaissance will be required to recognize capital gain or loss upon the exchange of that stockholder’s shares of common stock of Renaissance for cash, if such shares were held as a capital asset on the date of the Merger. Such gain or loss will be measured by the difference between the amount of cash received and the tax basis of that stockholder’s shares of Renaissance common stock.

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				First Communications (successor)								First Communications, LLC (predecessor)
																For the Year Ended or as of December 31,
				For the Nine Months Ended and as of September 30, 2008				For the Period July 2, 2007 (date of inception) through and as of December 31, 2007				For the Period January 1, 2007 through July 1, 2007				2006				2005				2004				2003
				(in thousands, except per share data)
Net sales				$	113,485			$	65,553			$	67,152			$	107,076			$	77,278			$	56,194			$	47,361
Net income					3,950				929				3,797				7,206				3,495				5,205				6,058
Basic earnings per share					0.15				(0.43	)			N/A				N/A				N/A				N/A				N/A
Diluted earnings per share					0.12				(0.43	)			N/A				N/A				N/A				N/A				N/A
Total assets					326,093				184,936				55,159				35,607				33,691				23,426				19,750
Long-term debt					104,500				—				—				4,035				8,204				5,000				5,000
Redeemable preferred stock					15,000				40,000				—				—				—				—				—

 

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Consolidated Statement of Operations Data:				Nine Months Ended September 30, 2008				Nine Months Ended September 30, 2007				Twelve Months Ended December 31, 2007				April 17, 2006 (inception) to December 31, 2006				April 17, 2006 (inception) to September 30, 2008
				(unaudited)				(unaudited)												(unaudited)
General and administrative expenses				$	1,323,749			$	761,264			$	847,558			$	1,998			$	2,173,305
Operating loss					(1,323,749	)			(761,264	)			(847,558	)			(1,998	)			(2,173,305	)
Income (loss) before provision for income taxes					380,657				2,056,253				3,314,220				(1,518	)			3,693,359
Net income (loss) attributable to common stock not subject to possible conversion				$	(442,144	)		$	1,374,825			$	2,056,175			$	(1,518	)		$	1,612,513
Net income (loss) per share attributable to common stock not subject to conversion:
Basic and diluted					($0.02	)		$	0.08			$	0.12				($0.00	)
Pro forma diluted					($0.02	)		$	0.07			$	0.11				($0.00	)
Maximum number of shares subject to possible conversion:
Weighted average shares outstanding not subject to possible conversion:
Basic and diluted					18,253,794				16,521,006				16,957,763				3,900,000
Pro forma diluted					22,601,153				19,468,103				19,417,922				3,900,000

 

Consolidated Balance Sheet Data:				As of September 30, 2008				As of December 31, 2007				As of December 31, 2006
				(unaudited)
Cash				$	870,793			$	1,410,028			$	60,165
Total Assets					107,372,039				106,803,634				387,892
Total Liabilities					3,975,615				3,173,568				364,410
Common Equity				$	82,123,566			$	82,565,710			$	23,482
Common stock issued and outstanding					21,840,000				21,840,000				3,900,000
Book value per common share				$	3.76			$	3.78			$	0.01

 

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				For the Nine Months Ended September 30, 2008								For the Twelve Months Ended December 31, 2007
				Pro Forma Consolidated Assuming No Conversions				Pro Forma Consolidated Assuming Maximum Conversions				Pro Forma Consolidated Assuming No Conversions				Pro Forma Consolidated Assuming Maximum Conversions
				(In thousands)								(In thousands)
Total Revenues, Net				$	155,315			$	155,315			$	188,623			$	188,623
Operating Income					8,551				8,551				10,331				10,331
Interest Expense					(5,279	)			(5,279	)			(6,992	)			(6,992	)
Net Income					2,899				2,686				4,135				3,601
Earnings per share
Basic				$	0.08			$	0.09			$	0.13			$	0.12
Diluted				$	0.08			$	0.08			$	0.12			$	0.11
Weighted average shares outstanding
Basic					34,300				30,714				32,680				29,418
Diluted					38,646				35,060				35,755				32,493

 

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				As of September 30, 2008
				Pro Forma Consolidated Assuming No Conversions				Pro Forma Consolidated Assuming Maximum Conversions
				(In thousands)
Cash and cash equivalents				$	75,499			$	54,226
Working capital					63,046				41,773
Total assets					398,914				377,641
Long-term debt, less current portion					104,500				104,500
Total liabilities					177,629				177,629
Stockholders’ equity					221,285				200,012

 

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make it more difficult to satisfy current and future debt obligations;

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make it more difficult to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes;

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require First Communications to dedicate a substantial portion of cash flows from operating activities to the payment of principal and interest on the indebtedness, thereby reducing the funds available for operations and other purposes, including investments in service development, capital spending and acquisitions;

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place First Communications at a competitive disadvantage to competitors who are not as highly leveraged;

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make First Communications vulnerable to interest rate fluctuations, if any indebtedness that bears interest at variable rates is incurred;

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impair First Communications’ ability to adjust to changing industry and market conditions; and

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make First Communications more vulnerable in the event of a downturn in general economic conditions or in business or changing market conditions and regulations.

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incur or guarantee additional indebtedness or issue preferred stock;

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pay dividends or distributions on, or redeem or repurchase, capital stock;

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create liens with respect to its assets;

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make investments, loans or advances;

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prepay subordinated indebtedness;

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enter into transactions with affiliates;

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merge, consolidate, reorganize or sell its assets; and

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engage in any business other than activities related or complementary to communications.

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long-standing relationships and strong reputation with customers;

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substantially greater financial, technical, marketing, personnel and other resources;

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more funds to deploy communications services and systems that compete with First Communications;

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the potential to subsidize competitive services with revenue from a variety of businesses;

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anticipated increased pricing flexibility and relaxed regulatory oversight;

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larger networks; and

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benefits from existing regulations that favor the ILECs.

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consumer demand for wireless services;

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the financial condition of the wireless service providers;

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the ability and willingness of wireless service providers to maintain or increase capital expenditures;

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the availability and cost of capital, including interest rates;

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volatility in the equity and debt markets; and

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the willingness of tenants to renew their leases for additional terms.

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integrating that business’ personnel, services, products or technologies into existing operations;

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retaining key personnel of the acquired business;

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failing to adequately identify or assess liabilities of that business;

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failing to achieve the forecasts used to determine the purchase price of that business; and

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diverting First Communications’ management’s attention from the normal daily operation of the existing business.

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offer high-quality, reliable services at reasonable costs;

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introduce new technologies;

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install and operate telecommunications switches and related equipment;

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lease access to suitable transmission facilities at competitive prices;

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scale operations;

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obtain successful outcomes in disputes and in litigation;

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successfully negotiate, adopt or arbitrate interconnection agreements with other carriers;

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acquire necessary equipment, software and facilities;

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integrate existing and newly acquired technology and facilities, such as switches and related equipment;

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evaluate markets;

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add products;

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monitor operations;

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control costs;

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maintain effective quality controls;

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hire, train and retain qualified personnel;

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enhance operating and accounting systems;

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address operating challenges;

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adapt to market and regulatory developments; and

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obtain and maintain required governmental authorizations.

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transitioning the branding of the acquired company to First Communications;

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persuading employees of First Communications and the acquired company that the business cultures are compatible, maintaining morale, and retaining and integrating key employees;

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incorporating new facilities into business operations;

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coordinating sales and marketing functions;

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combining products and services;

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integrating systems; and

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maintaining standards, controls, procedures and policies.

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Renaissance does not achieve the perceived benefits of the Merger as rapidly, or to the extent anticipated by, financial or industry analysts; or

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the effect of the Merger on Renaissance’s financial results is not consistent with the expectations of financial or industry analysts.

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a limited availability of market quotations for Renaissance’s securities;

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a limited amount of news and analyst coverage for the post-merger combined company; and

•

a decreased ability for Renaissance to issue additional securities or obtain additional financing in the future.

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discuss future expectations;

•

contain projections of future results of operations or financial condition; or

•

state other “forward-looking” information.

•

the number and percentage of Renaissance stockholders voting against the merger proposal and seeking conversion;

•

Renaissance’s expectations regarding consummation and timing of the Merger and related transactions, including satisfaction of the closing conditions of the Merger;

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the receipt of necessary regulatory approvals;

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Renaissance’s ability to dissolve and liquidate in a timely manner and as anticipated, if necessary;

•

the post-merger combined company’s expectations regarding competition;

•

difficulties encountered in integrating the merged businesses;

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the amount of cash on hand available to the combined company after the Merger;

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general economic conditions;

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industry trends;

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changes adversely affecting the business in which First Communications is engaged;

•

legislation or regulatory requirements or changes affecting the businesses in which First Communications is engaged;

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management of growth;

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First Communications’ business strategy and plans;

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fluctuations in customer demand;

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the result of future financing efforts; and

•

outstanding litigation or vendor disputes.

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consider and vote upon a proposal to adopt and approve the Merger Agreement and the transactions contemplated thereby;

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consider and vote upon a proposal to amend and restate Renaissance’s certificate of incorporation to (i) change its name from “Renaissance Acquisition Corp.” to “First Communications, Inc.;” (ii) increase the number of authorized shares of Renaissance common stock from 72 million to 200 million; (iii) change Renaissance’s corporate existence to perpetual; (iv) incorporate the classification of directors that would result from the election of directors in the manner described in the director election proposal; (v) delete the present Article Sixth and its preamble, as such provisions will no longer be applicable to Renaissance after the Merger, and to renumber succeeding Articles accordingly; and (vi) make certain other changes that its board of directors believes are immaterial;

•

consider and vote upon a proposal to approve the adoption of the 2008 Plan;

•

consider and vote upon a proposal to elect nine directors to Renaissance’s board of directors effective immediately following and contingent upon the closing of the Merger, of whom three will serve until the annual meeting to be held in 2009, three will serve until the annual meeting to be held in 2010 and three will serve until the annual meeting to be held in 2011 and, in each case, until their successors are elected and qualified; and

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consider and vote upon a proposal to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that, based upon the tabulated votes at the time of the special meeting, Renaissance would not have been authorized to consummate the Merger.

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has unanimously determined that each of the merger proposal, the charter amendment proposal and the incentive compensation plan proposal is fair to and in the best interests of Renaissance and its stockholders;

•

has unanimously approved the merger proposal, the charter amendment proposal and the incentive compensation plan proposal;

•

unanimously recommends that Renaissance common stockholders vote “FOR” the merger proposal;

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unanimously recommends that Renaissance common stockholders vote “FOR” the charter amendment proposal;

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unanimously recommends that Renaissance common stockholders vote “FOR” the incentive compensation plan proposal;

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unanimously recommends that Renaissance common stockholders vote “FOR” the persons nominated by its management for election as directors; and

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unanimously recommends that Renaissance’s stockholders vote “FOR” an adjournment proposal if one is presented to the meeting.

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You Can Vote By Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted as recommended by Renaissance’s board “FOR” the merger proposal, the charter amendment proposal, the incentive compensation plan proposal, the persons nominated by Renaissance’s management for election as directors and, if necessary, an adjournment proposal. Votes received after a matter has been voted upon at the special meeting will not be counted.

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You Can Attend the Special Meeting and Vote in Person. Renaissance will give you a ballot when you arrive. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way Renaissance can be sure that the broker, bank or nominee has not already voted your shares.

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you may send another proxy card with a later date;

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you may notify Mark Seigel, Renaissance’s secretary, in writing before the special meeting that you have revoked your proxy; or

•

you may attend the special meeting, revoke your proxy, and vote in person, as indicated above.

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14,460,000 shares of Renaissance common stock, where each share of outstanding First Communications common stock will be converted into the right to receive 0.44932 of a single validly issued, fully paid and nonassessable share of Renaissance common stock;

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up to an additional 13,950,000 shares of Renaissance common stock (less the number of shares that would have been issuable to First Communications stockholders who properly exercised their appraisal rights) which will be placed into an escrow account and distributed proportionally to each stockholder based on its ownership interest if, for any fiscal quarter from September 13, 2008 through December 31, 2011, the surviving corporation has an annualized adjusted EBITDA equal to or greater than the EBITDA target, which is more fully described below.

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up to an additional 8,500,000 shares of Renaissance common stock (less the number of shares that would have been issuable to First Communications stockholders who properly exercised their appraisal rights) which will be placed into an escrow account and distributed proportionately to each First Communications’ stockholder as of the closing based on its ownership interest if Renaissance has the right to redeem the warrants it issued in connection with its IPO at any time prior to their exercise and at any time after the warrants become exercisable if the last sale price of Renaissance common stock has been at least $8.50 per share, on each of 20 trading days within any 30 trading day period ending on January 28, 2011. If all warrants are exercised prior to the date the Warrant Condition is satisfied, Renaissance remains obligated to pay such amount upon satisfaction of the Warrant Condition.

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warrants to purchase a total of 5,333,333 shares of First Communications common stock at an exercise price of $0.05 per share expiring on July 2, 2012 (“T1 Warrants”);

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warrants to purchase a total of 8,000,000 shares of First Communications common stock at an exercise price of $7.50 per share and an expiration date of three years following the redemption of all of the Series A Preferred Stock held by the holder of such warrant (“T2 Warrants”); and

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warrants to purchase a total of 2,000,000 shares of First Communications common stock at an exercise price of $7.50 per share and an expiration date of three years following the redemption of all of the Series A Preferred Stock (“T3 Warrants”).

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the name of Renaissance will be First Communications, Inc.;

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the corporate headquarters and principal executive offices of Renaissance will be located at 3340 West Market Street, Akron, OH 44333, which is First Communications’ corporate headquarters; and

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Renaissance common stock, warrants and Units, which are currently quoted on the American Stock Exchange under the symbols RAK, RAK.WS and RAK.U, respectively, will be listed for trading on Nasdaq if an application made by Renaissance to such effect is granted.

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the corporation could financially undertake the opportunity;

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the opportunity is within the corporation’s line of business; and

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it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

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initiating conversations, whether via phone, e-mail or other means and whether directly or via their underwriters with third-party companies they believed may make attractive business combination partners;

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contacting professional service providers (lawyers, accountants, consultants and bankers);

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utilizing their own network of business associates and friends for leads;

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working with third-party intermediaries, including investment bankers;

•

inquiring of business owners of their interest in selling their business; and

•

engaging consultants with whom Renaissance entered into success fee based engagement letters.

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Target Company Business				Activity Period				Reason not Pursued
Plastic Disposable Consumer Products				March 2007 – July 2008				Executed letter of intent; did not win auction process
National Casual Restaurant Chain				March 2007 – June 2007				Executed letter of intent; did not win auction process
National Upscale Restaurant Chain				May 2007 – August 2007				Executed letter of intent; seller decided not to sell after beginning definitive documentation

 

Target Company Business				Activity Period				Reason not Pursued
Specialty Finance				October 2007 – February 2008				Executed letter of intent; did not agree on valuation and structure
Networking Hardware Equipment				November 2007 – May 2008				Executed letter of intent; seller decided to pursue a different transaction
Investment Banking Firm				November 2007 – January 2008				Could not agree on valuation
Dry Bulk Shipping				April 2008 – August 2008				Executed letter of intent; could not agree on valuation and structure; tax issues

 

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First Communications’ financial condition and results of operations;

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First Communications’ growth potential;

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the experience and skills of First Communications’ management and the availability of additional personnel;

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First Communications’ competitive position;

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barriers to entry;

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the regulatory environment for First Communications;

•

the valuation of comparable companies;

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the valuation of comparable merger/acquisition transactions;

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First Communications’ industry dynamics, including the competitive landscape;

•

favorable long-term growth prospects;

•

the reports of outside due diligence consultants retained by Renaissance;

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research reports published by third-parties on markets and/or companies similar to First Communications;

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future capital requirements;

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costs associated with effecting the transaction;

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the oral opinion of Houlihan Smith to the board of directors of Renaissance on September 8, 2008 (which was subsequently confirmed in writing by delivery of Houlihan Smith’s written opinion dated September 8, 2008) with respect to whether the fair market value of First Communications as indicated by Houlihan Smith’s financial analyses was at least equal to $83 million;

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the underlying businesses and components of First Communications; and

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Renaissance’s management’s experience in building, managing and financing growth companies, including various relationships or strategies that Renaissance could bring to bear with First Communications to potentially accelerate growth, enter new markets, increase market share, improve profitability and trade at premium multiples relative to its peer group going forward.

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First Communications’ record of revenue growth and high potential for future growth, as well as its historical financial performance;

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First Communications’ diversified revenue stream in terms of multiple business segments and geographic markets and a lack of customer concentration;

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First Communications’ prospective position as an acquisition platform in a highly fragmented industry and compelling acquisition opportunities; and

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Renaissance board of directors’ belief that First Communications has the ability to continue its growth because opportunities exist to:

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expand current business both organically and through acquisitions;

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build wireless towers and attachments to existing towers; and

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fund additional sales and marketing initiatives.

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the competitive local exchange carrier and/or fiber companies of Cbeyond, Inc., Global Crossing Ltd., Level 3 Communications Inc., PAETEC Holding Corp. and tw telecom inc.; and

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the wireless tower companies of American Tower Corp., Crown Castle International Corp. and SBA Communications Corp.

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the competitive local exchange carrier transactions of McLeodUSA Inc., NEON Communications Group, Eschelon Telecom, Inc., United Communications, Inc., Broadwing Corporation, Cavalier Telephone & TV Talk America, US LEC Corp., OneEighty Communications, Inc., Xspedius Communications, LLC, Mountain Telecommunications, Inc., Looking Glass Networks, Inc., OnFiber Communications, Inc., Mpower Communications, TelCove, Inc., ICG Communications, Inc., Electric Lightwave, Inc. and Oregon Telecom, Inc.; and

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the wireless tower transactions of Vodafone Australia-Tower Divestiture, Sprint Nextel-Tower Divestiture, Light Tower LLC, Optasite, Global Tower, National Grid Wireless Infrastructure, Global Signal, Mountain Union Telecom, SpectraSite, TrinTel Communications and Sprint Sites.

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If the Merger is not consummated by January 29, 2009, Renaissance will be liquidated. In such event, the 3,900,000 shares held by the Renaissance Inside Stockholders that were acquired prior to the IPO, for an aggregate purchase price of approximately $25,000, would be worthless because Renaissance’s directors and officers are not entitled to receive any of the liquidation proceeds with respect to such shares. Such shares had an aggregate market value of $22,542,000 based upon the closing price of $5.78 on the American Stock Exchange on December 24, 2008, the record date for the Renaissance special meeting.

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The Company issued and sold 4,666,667 warrants (exercisable at $6.00 per share) to RAC Partners and Charles Miersch and Morton Farber, two of Renaissance’s directors, on February 1, 2007. All of the proceeds Renaissance received from these purchases were placed in the Trust Account. The Insider Warrants are identical to the warrants underlying the Units sold in Renaissance’s IPO except that (i) they have an exercise price of $6.00 per share, (ii) Renaissance did not register the sale of the warrants to the public and (iii) the Insider Warrants will be exercisable on a cashless basis at the holders’ option so long as such warrants are held by such directors, RAC Partners or its affiliates. Renaissance has agreed to register the transfer of the Insider Warrants by RAC Partners to its members in a liquidation or distribution and the resale of the shares underlying

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the Insider Warrants by RAC Partners and the directors at any time after Renaissance executes a definitive agreement for a business combination, but the purchasers of the Insider Warrants have agreed that the Insider Warrants will not be sold or, subject to certain limited exceptions (including in a distribution upon liquidation at RAC Partners), transferred by them and they may not exercise the Insider Warrants until 30 days after Renaissance has completed a business combination. Accordingly, the Insider Warrants have been placed in escrow and will not be released until 30 days after the completion of a business combination. Such warrants are not traded publicly and have an exercise price of $6.00 per warrant. All of the warrants will become worthless if the Merger is not consummated (as will the remainder of the public warrants).

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In addition, pursuant to a share purchase plan entered into prior to Renaissance’s IPO, RAC Partners, an entity controlled by Barry W. Florescue, placed a limit order for $12 million of Renaissance common stock which commenced ten business days after Renaissance filed its Current Report on Form 8-K announcing its execution of a definitive agreement for the Merger and ended on the business day immediately preceding the record date for the meeting of stockholders at which this Merger is to be voted upon. Pursuant to this limit order, RAC Partners purchased 811,269 shares of Renaissance common stock for an aggregate purchase price of $4,595,532 and at an average purchase price per share of $5.66. RAC Partners may vote these shares on a proposed business combination any way it chooses. As a result, RAC Partners may be able to influence the outcome of the merger proposal and the other proposals under consideration. The purchases were at a price equal to the per share amount held in the Trust Account as reported in the Form 8-K filed in connection with the execution of the Merger Agreement and were made by R.M. Stark & Co., Inc. in such amounts and at such times as R.M. Stark & Co., Inc. determined, so long as the purchase price did not exceed the above-referenced per share purchase price. Mr. Florescue has agreed that he will not sell or transfer any shares of common stock purchased by him pursuant to this agreement until one year after Renaissance has completed this Merger.

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As of the record date, Mr. Florescue beneficially owned 5,000 Public Shares (excluding those held by RAC Partners) and Charles Miersch beneficially owned 5,000 Public Shares. Additionally, at any time prior to the special meeting, during a period when they are not then aware of any material nonpublic information regarding Renaissance or its securities, the Renaissance Inside Stockholders, First Communications or First Communications’ stockholders and/or their respective affiliates may purchase shares from institutional and other investors, or execute agreements to purchase such shares from them in the future, or they may enter into transactions with such persons and others to provide them with incentives to acquire shares of Renaissance common stock or vote their shares in favor of the merger proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the holders of a majority of the Public Shares cast on the merger proposal vote in its favor and that holders of fewer than 20% of the Public Shares vote against the merger proposal and demand conversion of their Public Shares into cash where it appears that such requirements would otherwise not be met. While the exact nature of any incentives that would be provided by the Renaissance Inside Stockholders, First Communications or First Communications’ stockholders and/or their respective affiliates has not been determined as of the date of this proxy statement, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or warrants owned by the Renaissance Inside Stockholders for nominal value. Renaissance will not enter into any such arrangement, either prior to or after the consummation of the Merger, and no funds in its Trust Account will be used to make such purchases or to fund other such arrangements.

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If Renaissance liquidates prior to the consummation of a business combination, Barry W. Florescue will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by Renaissance for services rendered or contracted for or products sold to Renaissance. Renaissance cannot assure you that he would be able to satisfy those obligations. As of September 30, 2008, Renaissance had accounts payable of approximately $855,375. It estimates that it will incur additional expenses of approximately $50,000 that would be required to be paid if the Merger is not consummated. Of such total of $855,375, creditors to whom approximately $802,572 is or would be owed have waived their rights

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to make claims for payment from amounts in the Trust Account. Mr. Florescue would be obligated to indemnify Renaissance for the balance of approximately $52,803 that would be owed to creditors who have not waived their rights against the Trust Account. However, Renaissance believes that Mr. Florescue does not have any risk of being required to provide indemnification since all persons who have had contractual obligations with Renaissance but have not waived their rights against the Trust Account have been paid in full (or will be paid in accordance with Renaissance’s past practices).

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A proposed merger with a special purpose acquisition company, such as Renaissance, provides a mechanism to achieve a public market in the United States for First Communications without many of the costs, management time expenditures and risks inherent in completing a traditional United States initial public offering. First Communications’ board believes that the proposed approach of merging with Renaissance would be beneficial to First Communications and its stockholders, especially when taking into account the various uncertainties in the public equity markets.

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First Communications’ board believes that becoming a publicly traded company in the United States will provide certain benefits that are meaningful to First Communications. The board of First Communications believes that the higher profile of being publicly traded in the United States and listed on Nasdaq, compared

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to its current status as a listed company on AIM, may enhance First Communications’ recognition in the United States telecommunications and tower markets as it seeks to obtain new customers and to expand its relationships with existing customers. The board also believes that the currency of a United States publicly traded stock will provide First Communications with additional methods of financing and completing acquisitions without the added strain of depleting First Communications’ balance sheet.

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The Merger will also enhance and diversify the composition of First Communications’ board of directors. The Merger Agreement contemplates that the post-merger combined company will have two members nominated by Renaissance on its board of directors — Barry W. Florescue and Richard A. Bloom — and First Communications believes these new members will add their expertise in the financial markets to the continuing members of the First Communications board and management team.

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The board of directors believes that the value of the consideration to be received by First Communications, compared to its book value and earnings per share, and the fact that the shares to be received as consideration will be registered for re-sale on a registration statement to be filed by Renaissance, maximize stockholder value and will provide a valuable form of liquidity for First Communications stockholders.

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Maintaining a strong balance sheet is an important consideration to the First Communications board and the First Communications management team. With the Renaissance transaction, the cash that Renaissance has raised through its public offering will allow First Communications to maintain the strength of its balance sheet, and will provide a publicly traded currency for acquisitions, thus allowing First Communications to retain some of that cash even as it explores additional strategic acquisitions.

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The Merger will also allow the post-merger combined company to maintain the existing First Communications management team. The First Communications board believes that the continuity of management of the post-merger combined company will allow for a continuation of the historically strong performance of First Communications, both with respect to its ability to complete and integrate complementary acquisitions, and its ability to provide strong financial results. The First Communications board also believes that the performance of the post-merger combined company will be enhanced by the added tools and benefits of being a United States publicly traded company.

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Marshall Belden, Mark Clark, Raymond Hexamer, Scott Honour, Joseph R. Morris and Mark Stone have been nominated as directors of Renaissance effective upon consummation of the transaction contemplated by the Merger Agreement, and Theodore Boyd has been nominated as the chairman of the board of directors of Renaissance. As employee directors, Messrs. Hexamer and Morris will not receive any additional compensation for serving on the board of directors of Renaissance. The independent directors will, in the future, receive any cash fees, stock options or stock awards that the Renaissance board of directors approves following a determination of fair compensation for its directors.

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Pursuant to the transactions contemplated by the Merger Agreement, Messrs. Hexamer and Morris and Richard Buyens and David Johnson, II are expected to become executive officers of Renaissance. Following the

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consummation of the transactions contemplated by the Merger Agreement, these individuals will continue to serve pursuant to the terms of their existing employment agreements with First Communications. Set forth below is information with respect to these individuals:

Name				Term of Employment Agreement and Position				Annual Base Salary
Raymond Hexamer				Expires July 2009				$265,000
				(automatic renewal) Chief Executive Officer
Joseph R. Morris				Expires July 2009				$250,000
				(automatic renewal) Chief Financial Officer and Chief Operating Officer
Richard J. Buyens				Expires May 6, 2010				$250,000
				(automatic renewal) President
David Johnson, II				Expires July 2009				$125,000
				(automatic renewal) Senior Vice President, Sales and Marketing

 

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Each of the First Communications executive officers listed above will also receive as part of his employment arrangements:

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Bonus. A discretionary bonus based on a policy to be established by the board of directors or compensation committee of Renaissance. Currently bonus potential is as follows for each executive:

				Percentage of Base
Raymond Hexamer					60	%
Joseph R. Morris					50	%
Richard J. Buyens					50	%
David Johnson, II					120	%

 

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Termination Payment. If Mr. Hexamer’s, Mr. Morris’ or Mr. Johnson’s employment is terminated without cause, Renaissance will continue to pay the executive his base salary for the 12 month period following the date of termination and pay the annual bonus earned as of the date of termination. If Mr. Buyens’ employment is terminated by Renaissance without cause, or by Mr. Buyens for good reason, prior to November 6, 2008, Renaissance will pay him his annual base salary for 60 days after such termination. If Mr. Buyens employment is terminated by Renaissance without cause or by Mr. Buyens for good reason, on or after November 6, 2008 and before May 7, 2009, Renaissance will pay him his annual base salary for 90 days after such termination. If Mr. Buyens’ employment is terminated by Renaissance without cause, or by Mr. Buyens for good reason, on or after May 7, 2009, Renaissance will pay him his annual base salary for 12 months after such termination. If a termination without cause or for good reason occurs at any time within a 12 month period following a change in control of First Communications, Mr. Buyens will be entitled to be paid his annual base salary for 12 months following such termination and a pro rated portion of his annual bonus.

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Other Benefits. Limited personal use of other prerequisites as may be provided under the policies and practices then in place at the time of the closing date and/or by the compensation committee of Renaissance, including club membership dues and expenses.

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Additionally, pursuant to the Merger Agreement, Renaissance has agreed to approve the grant of options and restricted stock to certain First Communications employees contingent upon the consummation of the Merger and approval by Renaissance stockholders of the 2008 Plan. Messrs Hexamer and Morris will each be entitled

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to options exercisable for 80,000 shares of Renaissance stock and 40,500 restricted shares of Renaissance common stock, Mr. Buyens will be entitled to options exercisable for 413,850 shares of Renaissance common stock and Mr. Johnson will be entitled to options exercisable for 60,000 shares of Renaissance common stock and 30,500 restricted shares of Renaissance common stock.

•

The transactions contemplated by the Merger Agreement provide that each of the First Communications stockholders will receive shares of Renaissance common stock in exchange for their shares of First Communications common stock and a cash payment in exchange for their shares of First Communications preferred stock. Those shares of First Communications common stock and preferred stock held by the executive officers, by individual members of the board of directors of First Communications, or by entities with which the individual members are affiliated, will be treated the same way and will be exchanged for the same consideration in the Merger as all other shares of common stock or preferred stock of First Communications. In addition, holders of T2 Warrants and T3 Warrants who agree to exchange their warrants will be entitled to receive warrants and, potentially, common stock (as further described herein) of Renaissance. Warrants held by entities with which members of the board are affiliated will be treated the same way and such entities will be entitled to the same consideration for their warrants as any T2 Warrant Holder or T3 Warrant Holder. Please see “Beneficial Ownership of Securities” for a discussion of the beneficial ownership of First Communications and Renaissance shares of the key personnel and affiliates of First Communications, including those members of the board of directors of First Communications who have been nominated to join the board of directors of Renaissance as part of the transactions contemplated by the Merger Agreement.

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•

reviewed a draft of the Merger Agreement, dated September 7, 2008;

•

reviewed and analyzed First Communications’ audited Annual Report for 2007;

•

reviewed and analyzed First Communications’ audited historical financial statements for the fiscal years ending 2004 through 2006;

•

reviewed and analyzed financial projections (pro forma for the completion of the Globalcom acquisition) for the years ending December 31, 2008 through December 31, 2012 for First Communications provided by Renaissance management;

•

reviewed Globalcom’s audited financial statements for the fiscal years ending 2004 through 2007;

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•

reviewed publicly available financial information and other data with respect to Renaissance, including the Annual Report on Form 10-K for the year ended December 31, 2007 and Form 10-Q for the period ended June 30, 2008;

•

reviewed a confidential information memorandum for private investors regarding a term loan commitment increase prepared by JP Morgan, dated June 18, 2008;

•

held discussions with Renaissance management and First Communications management regarding, among other items, the telephone communications and communication services industries, generally, and the competitive local exchange carrier (“CLEC”) and communication tower (“Tower”) industries, specifically; Renaissance’s decision to form a business combination with First Communications;

•

reviewed the financial terms of certain recent business combinations in the telephone communications, communications services and wireless communication industries specifically, and in other industries generally;

•

reviewed certain Renaissance board of directors materials regarding First Communications, dated August 5, 2008;

•

reviewed financial and operating information with respect to certain publicly-traded companies in the telecommunication services, wireless communications, information technology and infrastructure industries which Houlihan Smith believes to be generally comparable to the business of First Communications, as well as other research related to the size and growth of markets in which First Communications operates or may operate;

•

reviewed a company overview presentation for First Communications, dated July 2008;

•

reviewed a confidential information memorandum prepared by Jefferies regarding certain senior secured credit facilities, dated November 2007;

•

reviewed a summary of the capital structures of First Communications on both a pre-transaction and post-transaction basis regarding the Merger prepared by Jefferies;

•

reviewed a current First Communications organizational chart; and

•

performed other financial studies, analyses and investigations, and considered such other information, as Houlihan Smith deemed necessary or appropriate.

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•

financial institutions;

•

investors in pass-through entities;

•

a person that has a functional currency other than the U.S. dollar;

•

an insurance company;

•

tax-exempt organizations;

•

dealers in securities or currencies;

•

traders in securities that elect to use a mark to market method of accounting;

•

persons that hold stock as part of a straddle, hedge, constructive sale or conversion transaction; and

•

persons who are not citizens or residents of the United States.

•

an individual who is a citizen or resident of the United States for United States federal income tax purposes;

•

a corporation, or any entity treated as a corporation for United States federal income tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia;

•

any estate that is subject to United States federal income tax regardless of its source; or

•

a trust if (i) a United States court is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (ii) the trust has a valid election in effect to be treated as a United States person for United States federal income tax purposes.

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•

proper organization, valid existence and good standing under the laws of its respective state of incorporation;

•

subsidiaries (First Communications only);

•

capital structure of each company;

•

the authorization, execution, delivery and enforceability of the Merger Agreement;

•

board approval;

•

stockholder approval (First Communications only);

•

real and tangible personal property;

•

litigation;

•

absence of conflicts or violations under organizational documents, certain agreements and applicable laws or decrees as a result of the contemplated transaction;

•

tax matters;

•

financial information (First Communications only);

•

absence of undisclosed liabilities;

•

material contracts;

•

intellectual property;

•

insurance (First Communications only);

•

employee matters and employee benefits (First Communications only);

•

environmental matters (First Communications only);

•

compliance with laws;

•

accounts receivable (First Communications only);

•

brokers’ and finders’ fees;

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•

warranties (First Communications only);

•

absence of certain changes;

•

suppliers and customers (First Communications only);

•

permits and licenses (First Communications only);

•

related party transactions;

•

prohibited payments (First Communications only);

•

books and records (First Communications only);

•

information included in this proxy (First Communications only);

•

business activities (Renaissance only);

•

SEC filings (Renaissance only);

•

indebtedness (Renaissance only); and

•

the Trust Account (Renaissance only).

•

any facts, changes, developments, events, occurrences, actions, omissions or effects generally affecting (A) the economy, or financial or capital markets, in the United States or elsewhere in the world, to the extent that they do not disproportionately affect First Communications or Renaissance, respectively, in relation to other companies in the industry in which such company primarily operates or (B) the industry in which First Communications or Renaissance, respectively, operates to the extent that they do not disproportionately affect First Communications or Renaissance in relation to other companies in the industry in which they respectively primarily operate; or

•

any facts, changes, developments, events, occurrences, actions, omissions or effects arising out of, resulting from or attributable to (1) changes (after the date of the Merger Agreement) in law or in generally accepted accounting principles or in accounting standards or (2) any decline in the market price, or change

---

in trading volume, of the capital stock of First Communications or Renaissance, respectively, or any failure to meet publicly announced revenue or earnings projections or internal projections.

•

cooperating to obtain needed FCC and State PUC consents and comply with the HSR Act;

•

cooperating with respect to certain tax-related matters;

•

the use of reasonable good faith efforts to hold in confidence and not use for their own benefit any proprietary and non-public information concerning the other parties obtained in connection with the Merger, subject to certain exceptions;

•

using commercially reasonable efforts to take all actions and to do all things necessary, proper or advisable to consummate and make effective as promptly as practicable, the Merger;

•

cooperating with respect to certain filings with the SEC and other filings required under the Securities Act or any other federal, foreign or blue sky laws relating to the Merger; and

•

cooperation with respect to obtaining approval of the Merger by Renaissance stockholders.

•

make certain changes to accounting or tax practices;

•

enter into any new line of business;

•

fail to pay any taxes when they become due and payable, other than taxes being contested in good faith through appropriate proceedings and, in the case of First Communications, for which adequate reserves are reflected in its financial statements in accordance with GAAP;

•

issue any additional shares of capital stock (other than shares of stock issued in connection with existing warrants or upon exercise of outstanding options by persons who are stockholders of Renaissance or First Communications, as applicable, as of the date of the Merger Agreement) or any options, warrants or other rights to purchase, or securities convertible into or exchangeable for, shares of stock;

•

declare, set aside or pay any dividends or other distribution in respect of any stock;

•

split, combine or reclassify any shares of its capital stock;

•

knowingly or intentionally take any action that results or is reasonably likely to result in any of the representations and warranties of First Communications or Renaissance, as applicable, being untrue in any material respect or certain conditions specified in the Merger Agreement not to be satisfied;

•

take or omit to take any action, the taking or omission of which could reasonably be expected to have a material adverse effect; or

•

agree to do, or take any action in furtherance of, any of the foregoing.

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•

amend or propose to amend its amended and restated certificate of incorporation or bylaws;

•

adopt a plan of or effect any complete or partial liquidation or adopt resolutions providing for such liquidation or adopt a plan of or effect any dissolution, merger, consolidation, restructuring, recapitalization or reorganization;

•

create or make any changes to the terms or collateral of any debt or receivables (other than trade payables and receivables in the ordinary course of business consistent in type and amount with prior practice), or any employee or officer loans or advances, except incurrences that constitute a refinancing of existing obligations on terms that are no less favorable to First Communications than the existing terms;

•

assume, guarantee, endorse or otherwise become liable or responsible for the obligations of any person or entity except to the extent permitted under the terms of First Communications’ current credit facility;

•

except in accordance with First Communications’ budgeted capital expenditures and to the extent permitted under the terms of its current credit facility, make any capital expenditures;

•

make any loans, advances or capital contributions to, or investments in, any other person or entity (other than customary travel, relocation or business advances to employees consistent with past practices);

•

acquire stock or assets of, or merge or consolidate with, any other entity;

•

incur any material liability or obligation except to the extent permitted under the terms of First Communications’ current credit facility;

•

agree to sell, transfer, mortgage, pledge, lease, encumber or otherwise dispose of, any assets or properties other than inventory held for sale or the disposition and replacement of obsolete personal property in the ordinary course of business, or to secure permitted debt;

•

incur any indebtedness other than under its existing credit facility or other ordinary course of business indebtedness except to the extent permitted under the terms of First Communications current credit facility;

•

subject to certain limited exceptions, increase the compensation or other benefits of any of its officers or employees or enter into, amend or terminate any employment or benefits arrangement with any officer, director or employee other than as required by applicable law or pursuant to the terms of agreements in effect on the date of the Merger Agreement or in the ordinary course of business with employees;

•

hire any employees except in the ordinary course of business;

•

fail to make contributions to any employee benefit plan in accordance with the terms thereof or with past practice;

•

commence or settle any litigation or other proceedings with any entity or person in excess of amounts reserved for such litigation on the most recent balance sheet or excess of $2 million;

•

waive the benefits of, agree to modify in any manner, terminate, release any person or entity from or knowingly fail to enforce any material confidentiality or similar agreement to which it is a party or of which it is a beneficiary outside the ordinary course of business; or

•

enter into any agreement or group of related agreements which would be considered a material contract, modify, amend or terminate any material contract, or waive, release or assign any rights or claims thereunder, or enter into any agreement that if entered into prior to the date hereof would be a material contract or in any such case outside the ordinary course of business, or enter into or amend any contract or agreement with any affiliate of First Communications.

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•

First Communications will use its reasonable good faith efforts to become compliant with all applicable provisions of and rules under the Securities Act, Exchange Act, Sarbanes-Oxley Act of 2002 within the time frame and waiver periods permitted by the SEC with respect to all its SEC filings and system of internal accounting controls;

•

First Communications, for itself and each of its subsidiaries, affiliated entities, directors, officers, employees, stockholders, representatives, advisors and all other associates and affiliates, has waived all rights, title, interest or claim of any kind against Renaissance to collect from the Trust Account any monies that may be owed to them by First Communications for any reason whatsoever, including but not limited to a breach of the Merger Agreement by Renaissance or any negotiations, agreements or understandings with Renaissance (whether in the past, present or future), and will not seek recourse against the Trust Account at any time for any reason whatsoever; and

•

First Communications will use reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable rules and policies of the AIM to enable the delisting from AIM by First Communications of its common stock.

•

filing as soon as possible after the closing of the Merger, and using its best efforts to become effective within 12 months after such closing, a registration statement under the Securities Act with respect to shares of Renaissance common stock issued pursuant to the Merger Agreement;

•

advising First Communications, as reasonably requested, and on a daily basis on each of the last 7 business days prior to the Renaissance stockholders meeting, as to the aggregate tally of proxies and votes received in respect of such special meeting and the number of shares of Renaissance common stock for which notices of conversion have been delivered to Renaissance; and

•

as of and after the effective time of the Merger, Renaissance (i) changing its name to “First Communications, Inc.” and (ii) causing the symbol under which Renaissance common stock and any warrants to purchase Renaissance common stock are traded on the Nasdaq to be reasonably representative of the corporate name or business of First Communications.

•

will not, and will cause its stockholders, officers, directors, affiliates, representatives and advisors not to enter into any written agreement with any other person or entity regarding a Renaissance third party acquisition (as defined below) other than the transactions contemplated by the Merger Agreement;

•

will not and will cause its stockholders, officers, directors, affiliates, representatives and advisors not to solicit, offer, initiate, knowingly encourage, conduct or engage in any discussions, investigations or negotiations or enter into any agreement with any other person or entity regarding a Renaissance third party acquisition; and

•

agrees it shall promptly, after obtaining knowledge thereof, advise First Communications of any inquiry or proposal regarding a Renaissance third party acquisition that is received by them, including the terms of the proposal and the identity of the inquirer or offeror.

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•

any purchase of 15% or more of the consolidated assets of a third party and its subsidiaries, or 15% or more of the equity or voting securities of a third party or a material subsidiary thereof;

•

any tender offer or exchange offer that, if consummated, would result in Renaissance beneficially owning 15% or more of a third party’s equity or voting securities or any material subsidiary thereof; or

•

a merger, consolidation, business combination, share exchange, purchase of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving Renaissance and any third party, in each such case in this clause that would result in Renaissance beneficially owning 15% or more of any class of equity or voting securities of such third party or any material subsidiary thereof, or 15% or more of the consolidated assets of such third party.

•

will not, and will cause its stockholders, officers, directors, affiliates, representatives and advisors not to enter into any written agreement with any other person or entity regarding a First Communications third party acquisition (as defined below) other than the transactions contemplated by the Merger Agreement;

•

will not and will cause its stockholders, officers, directors, affiliates, representatives and advisors not to solicit, offer, initiate, knowingly encourage, conduct or engage in any discussions, investigations or negotiations or enter into any agreement or understanding with any other person or entity regarding a First Communications third party acquisition, other than the transactions contemplated in the Merger Agreement; and

•

after obtaining knowledge thereof, advise Renaissance of any inquiry or proposal regarding a First Communications third party acquisition that is received by them, including the terms of the proposal and the identity of the inquirer or offeror.

•

any sale of 15% or more of the consolidated assets of First Communications and its subsidiaries, or 15% or more of the equity or voting securities of First Communications or any subsidiary whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of First Communications (each referred to as a material subsidiary);

•

any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 15% or more of the equity or voting securities of First Communications or of any material subsidiary; and

•

a merger, consolidation, business combination, share exchange, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the First Communications or any material subsidiary, in each such case in this clause that would result in either (x) a third party beneficially owning 15% or more of any class of equity or voting securities of First Communications or any material subsidiary, or 15% or more of the consolidated assets of First Communications or (y) the stockholders of First Communications receiving securities traded in the U.S. on any nationally-recognized exchange or over-the-counter market;

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•

Renaissance receiving the approval of the Merger by its stockholders in accordance with the DGCL and its amended and restated certificate of incorporation; and,

•

an executed copy of its amended and restated certificate of incorporation having been filed with the Secretary of State of the State of Delaware to be effective as of the closing of the Merger;

•

the Trust Account containing at least $81,000,000 having been disbursed to Renaissance;

•

holders of 20% or more of the Public Shares having not exercised their rights to convert their shares into a pro rata share of the Trust Account in accordance with Renaissance’s amended and restated certificate of incorporation;

•

the shares of Renaissance common stock having been approved for listing on Nasdaq, subject to official notice of issuance;

•

no governmental authority of competent jurisdiction having enacted, issued, enforced or entered any law, rule, injunction, judgment, order, decree, ruling or charge that is in effect and (a) restrains, enjoins or otherwise prohibits or challenges the validity or legality of the Merger, (b) limits or otherwise adversely affects the right of Renaissance to own and control First Communications, or to operate all or any material portion of either the business or the assets of First Communications or any material portion of the business or the assets of Renaissance or (c) compels Renaissance or any of its affiliates to dispose of all or any material portion of either the business or the assets of First Communications and no person having instituted or overtly threatened any action, suit or proceeding that would be reasonably expected to, result in any of the foregoing;

•

all applicable waiting periods (and any extension thereof) under the HSR Act having expired or otherwise been terminated and all notices, reports, registrations and other filings with, and all consents, approvals and authorizations from the FCC and State PUCs having been made or obtained, as the case may be;

•

the stockholders of Renaissance having voted to elect to Renaissance’s board of directors the seven First Communications recommended directors and the two Renaissance recommended directors, effective immediately after the closing of the Merger, as specified in the Merger Agreement; and

•

Renaissance having appointed Raymond Hexamer, Joseph Morris and Richard Buyens as executive officers of Renaissance, effective immediately after the closing of the Merger, as specified in the Merger Agreement.

•

Renaissance and each Merger Sub’s representations and warranties set forth in Merger Agreement being true and correct in all material respects (except representations which, as written, are already qualified by materiality or material adverse effect, in which case such representations and warranties will be true and correct in all such respects) as of the date of the Merger Agreement, and, except to the extent such representations and warranties speak as of an earlier date, as of the effective time of the First Merger;

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•

Renaissance and each Merger Sub having duly performed in all material respects all obligations, covenants and agreements undertaken by them in the Merger Agreement and having complied in all material respects with all terms and conditions applicable to them under the Merger Agreement to be performed or complied with on or before the closing date;

•

all necessary third party approvals or consents, having been obtained from any person or entity whose approval or consent is necessary to consummate the Merger including, without limitation, the approval of the board of directors of Renaissance and each Merger Sub and the consents of the State PUCs and the FCC;

•

Renaissance having confirmed that it is prepared to deposit the merger consideration;

•

Renaissance having received approval from its stockholders in a manner consistent with Renaissance’s final prospectus dated January 29, 2007 and having delivered such approval to First Communications;

•

immediately prior to the closing, Renaissance being in compliance with the reporting requirements under the Exchange Act; and

•

since the date of the Merger Agreement there having been no occurrence, event, change, effect or development that, individually or in the aggregate, has had or is reasonably expected to have a material adverse effect on Renaissance.

•

First Communications’ representations and warranties set forth in the Merger Agreement being true and correct in all material respects (except representations which, as written, are already qualified by materiality or material adverse effect, in which case such representations and warranties shall be true and correct in all such respects) as of the Merger Agreement and, except to the extent such representations and warranties speak as of an earlier date, as of the effective time of the First Merger;

•

all necessary third party approvals or consents, having been obtained from any person or entity whose approval or consent is necessary to consummate the Merger including, without limitation, the approval of the board of directors and stockholders of First Communications and the consents of the State PUCs and the FCC;

•

First Communications having performed in all material respects all obligations, covenants and agreements undertaken by First Communications in the Merger Agreement and having complied in all material respects with all terms and conditions applicable to it under the Merger Agreement to be performed and complied with on or before the closing date;

•

First Communications’ stockholders holding not more than 10% of the outstanding shares of First Communications common stock having exercised or having continuing rights to exercise appraisal rights under the DGCL with respect to the transactions contemplated by the Merger Agreement;

•

since the date of the Merger Agreement there not having been any occurrence, event, change, effect or development that, individually or in the aggregate, has had or is reasonably expected to have a material adverse effect on First Communications; and

•

First Communications having obtained an amendment to its existing credit facility waiving the change of control provision therein.

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•

by mutual written consent of Renaissance and First Communications;

•

by either Renaissance or First Communications if the Merger is not consummated on or before January 29, 2009;

•

by either Renaissance or First Communications if a governmental authority has enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order, in each case which has become final and non-appealable, and which permanently restrains, enjoins or otherwise prohibits the Merger;

•

by either Renaissance or First Communications if, at Renaissance’s special meeting (including any adjournments thereof), the Merger shall fail to be approved and adopted by the affirmative vote of the holders of Renaissance common stock required under its amended and restated certificate of incorporation, or the holders of 20% or more of the Public Shares outstanding as of the record date of Renaissance’s special meeting exercise their rights to convert the shares of Renaissance common stock held by them into cash in accordance with Renaissance’s amended and restated certificate of incorporation; or

•

by either Renaissance or First Communications, if such party is not in material breach of its obligations under the Merger Agreement and there has been a material breach of the representations and warranties, covenants, or agreements by the other party and such breach has not been cured within 30 days after written notice to the breaching party, if curable.

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				First Communications				Renaissance				Pro Forma Adjustments				Pro Forma Consolidated Assuming No Conversions				Pro Forma Adjustments Assuming Maximum Conversions				Pro Forma Consolidated Assuming Maximum Conversions
CURRENT ASSETS
Cash and cash equivalents				$	2,771			$	871			$	106,408	(d)		$	75,499			$	(21,273	)(f)		$	54,226
													(15,000	)(b)
													(10,000	)(d)
													(3,051	)(e)
													(1,500	)(a)
													(5,000	)(a)
Accounts receivable, net					20,473				—				—				20,473				—				20,473
Accounts receivable — related party					1,675				—				—				1,675				—				1,675
Federal income tax refund receivable					1,722				—				—				1,722				—				1,722
Inventory					2,888				—				—				2,888				—				2,888
Prepaid expenses					5,915				90				—				6,005				—				6,005
TOTAL CURRENT ASSETS					35,444				961				71,857				108,262				(21,273	)			86,989
NET PROPERTY AND EQUIPMENT					62,632				3				—				62,635				—				62,635
OTHER ASSETS
Goodwill					123,527				—				—				123,527				—				123,527
Other intangibles — net					96,383				—				—				96,383				—				96,383
Deposits and other assets					8,107				106,408				(106,408	)(d)			8,107				—				8,107
TOTAL OTHER ASSETS					228,017				106,408				(106,408	)			228,017				—				228,017
TOTAL ASSETS				$	326,093			$	107,372			$	(34,551	)		$	398,914			$	(21,273	)		$	377,641
CURRENT LIABILITIES
Revolver and line of credit				$	10,000			$	—			$	(10,000	)(d)		$	—			$	—			$	—
Current portion of long-term debt					12,000				—				—				12,000				—				12,000
Accounts payable — trade					13,628				855				—				14,483				—				14,483
Accrued expenses					10,742				3,120				(3,051	)(e)			10,811				—				10,811
Deferred revenue — current					7,277				—				—				7,277				—				7,277
Deferred federal taxes					645				—				—				645				—				645
TOTAL CURRENT LIABILITIES					54,292				3,975				(13,051	)			45,216				—				45,216
NON-CURRENT LIABILITIES
Long-term debt, less current portion					104,500				—				—				104,500				—				104,500
Deferred tax liability — long term					12,948				—				—				12,948				—				12,948
Deferred revenue — long term					14,965				—				—				14,965				—				14,965
TOTAL NON-CURRENT LIABILITIES					132,413				—				—				132,413				—				132,413
TOTAL LIABILITIES					186,705				3,975				(13,051	)			177,629				—				177,629
Common stock subject to conversion (plus attributable interest)					—				21,273				(21,273	)(c)			—				—				—
Redeemable preferred stock					15,000				—				(15,000	)(b)			—				—				—
TOTAL SHAREHOLDERS’ EQUITY					124,388				82,124				21,273	(c)			221,285				(21,273	)(f)			200,012
													(1,500	)(a)
													(5,000	)(a)
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY				$	326,093			$	107,372			$	(34,551	)		$	398,914			$	(21,273	)		$	377,641

 

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Purchase Price Calculation:
Cash				$	58,500
Acquisition related transaction costs					500
Total Preliminary Purchase Price				$	59,000
Preliminary Allocation of Purchase Price
Cash				$	1,070
Goodwill					33,549
Identifiable intangible assets					20,000
Accounts receivable					5,615
Property and equipment					13,343
Prepaid and other assets					1,422
Tangible liabilities assumed					(9,324	)
Net deferred tax liabilities					(6,675	)
Total Preliminary Purchase Price Allocation				$	59,000

 

•

The fair value of intangible assets was based on First Communications’ management’s estimate utilizing rates to discount net cash flows to their present values.

•

The estimated useful life of the customer list was eight years. Estimated useful lives for the intangible assets was based on historical experience with historical and projected customer renewal rates, historical treatment of First Communcations’ acquisition-related intangible assets and its intended future use of the intangible

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assets. Intangible assets are being amortized using the straight-line method, considering the pattern in which the economic benefits of the intangible assets are consumed.

•

First Communications believes the changes that may affect Globalcom’s purchase price allocation will relate to the valuation of the intangible assets. First Communications also believes that additional purchase price adjustments may affect the allocation. However, First Communications is unable to quantify the effect of these adjustments until the purchase price adjustment is completed.

(a)

To record payment and related expense of the estimated acquisition transaction costs and associated reduction to shareholders’ equity in accordance with FAS 141R.

(b)

To record the retirement of the remaining $15 million of First Communications Series A Preferred Stock.

(c)

To record the assumed termination of the redemption provision and related reclassification Renaissance’s common stock subject to conversion into shareholders’ equity. The Merger must be submitted to Renaissance’s stockholders for approval and be authorized by the vote of a majority of the shares. The Merger will not be consummated if the holders of 20% or more of the shares exercise their conversion rights.

(d)

To reclassify Renaissance’s cash held in the Trust Account to cash and record the repayment of First Communications’ line of credit balance.

(e)

To record cash settlement of deferred underwriting fees which are payable in full upon consummation of the acquisition.

(f)

To adjust for the maximum conversion percentage (19.99% or 3,586,206 shares) of Renaissance common stock and the decreased cash balance outstanding.

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				First Communications				Globalcom(1)				Pro Forma Adjustments				First Communications Pro Forma
REVENUES — NET
Revenues — net				$	107,538			$	41,830			$	—			$	149,368
Revenues, net — related parties					5,947				—				—				5,947
TOTAL REVENUES, NET					113,485				41,830				—				155,315
COST OF FACILITIES, exclusive of depreciation and amortization					69,838				24,679				(441	)(b)			94,076
SELLING, GENERAL AND ADMINISTRATIVE					26,169				16,275				(3,824	)(b)			38,620
DEPRECIATION AND AMORTIZATION					8,475				2,394				1,875	(d)			12,744
OPERATING INCOME (LOSS)					9,003				(1,518	)			2,390				9,875
OTHER INCOME (EXPENSES)
Interest expense					(2,552	)			(530	)			(1,970	)(a)			(5,277	)
													(225	)(c)
Other					156				—				—				156
					(2,396	)			(530	)			(2,195	)			(5,121	)
INCOME(LOSS) BEFORE INCOME TAXES					6,607				(2,048	)			195				4,754
INCOME TAXES					2,657				(754	)			(120	)(e)			1,783
NET INCOME (LOSS)				$	3,950			$	(1,294	)		$	315			$	2,971

 

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				Renaissance				Pro Forma Adjustments				Pro Forma Consolidated Assuming No Conversions				Pro Forma Adjustments Assuming Maximum Conversions				Pro Forma Consolidated Assuming Maximum Conversions
REVENUES — NET
Revenues — net				$	—			$	—			$	149,368			$	—			$	149,368
Revenues, net — related parties					—				—				5,947				—				5,947
TOTAL REVENUES, NET					—				—				155,315				—				155,315
COST OF FACILITIES, exclusive of depreciation and amortization					—				—				94,076				—				94,076
SELLING, GENERAL AND ADMINISTRATIVE					1,324				—				39,944				—				39,944
DEPRECIATION AND AMORTIZATION					—				—				12,744				—				12,744
OPERATING INCOME					(1,324	)			—				8,551				—				8,551
OTHER INCOME (EXPENSES)
Interest expense					(2	)			—				(5,279	)			—				(5,279	)
Other					1,706				(496	)(f)			1,366				(341	)(h)			1,025
					1,704				(496	)			(3,913	)			(341	)			(4,254	)
INCOME BEFORE INCOME TAXES					380				(496	)			4,638				(341	)			4,297
INCOME TAXES					614				(658	)(g)			1,739				(128	)(g)			1,611
NET INCOME				$	(234	)		$	162			$	2,899			$	(213	)		$	2,686
Earnings per share:
Basic				$	(0.01	)						$	0.08							$	0.09
Diluted				$	(0.01	)						$	0.08							$	0.08
Weighted average shares outstanding (including shares subject to conversion):
Basic					21,840				12,460	(j)			34,300				(3,586	)(i)(j)			30,714
Diluted					21,840				16,806	(k)			38,646				(3,586	)(i)(k)			35,060

 

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(a)

Represents the adjustment to historical interest expense on debt to be retired and interest expense on debt assumed and incurred in connection with the Globalcom acquisition. The estimated average outstanding balance and interest rate under the new long term debt incurred was $105 million and 6.5%, respectively, for the nine months ended September 30, 2008. The annual impact on interest expense of a 1/8% change in interest rates is approximately $131,000.

(b)

Cost reductions realized from (i) the release of certain executives as specified in the Globalcom merger agreement of approximately $3.2 million; (ii) the release of personnel provided notice on the date of closing as specified in the Globalcom merger agreement of approximately $639,000; and (iii) rate reduction from a major telecommunication service provider based on expected higher volumes pursuant to an agreement executed in connection with the acquisition of Globalcom in the amount of approximately $441,000.

(c)

To record the amortization of $1.5 million debt financing costs related to the Globalcom acquisition over the five year term of the loan.

(d)

To record amortization expense of $1.9 million for the $20 million in customer relationships intangible asset resulting from the Globalcom acquisition which has an estimated useful life of eight years. As the fair value assigned to the intangible assets acquired from Globalcom are preliminary in nature, actual amortization expense in future periods may differ materially from the amortization expense presented. The estimated useful lives for the Globalcom customer relationships intangible assets are based on past experience with historical and projected customer renewal rates. The determination of estimated useful lives also incorporates assumptions that a market participant would use in making fair value estimates in a discounted cash flow model.

(e)

To adjust the provision for income taxes to First Communications’ effective tax rate of 37.5%. The pro forma combined provision for income taxes does not reflect the amounts that would have resulted had Renaissance and First Communications filed consolidated income tax returns for 2008.

(f)

To adjust interest income to reflect the $30.9 million (30%) reduction in the average outstanding cash balance invested in marketable securities for the period.

(g)

To adjust the provision for income taxes to the First Communications effective tax rate of 37.5%. The pro forma combined provision for income taxes does not reflect the amounts that would have resulted had Renaissance and First Communications filed consolidated income tax returns for 2008.

(h)

To adjust interest income to reflect the $21.3 million (28%) reduction in the average outstanding cash balance invested in marketable securities for the period resulting from maximum permitted conversions of shares of Renaissance common stock.

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(i)

To adjust for the weighted average maximum permitted conversions of shares of Renaissance common stock.

(j)

The pro forma basic earnings per share are based on the weighted average number of shares of Renaissance common stock outstanding and are adjusted for additional common stock issued, or assumed issued to First Communications stockholders as part of the merger as follows (in thousands):

Basic shares (including shares subject to conversion), as reported					21,840
Recharacterization of shares of Renaissance common stock issued to RAC Partners prior to Renaissance’s initial public offering to contingently issuable based on the satisfaction of the EBITDA milestones described in the Merger Agreement					(2,000	)
Issuance of Renaissance common stock to First Communications common stock and T1 warrant holders based on an exchange of one First Communications common share for 0.44932 shares of Renaissance common stock					14,460
Basic shares, pro forma assuming no conversions					34,300
Maximum conversion of Renaissance common stock into cash					(3,586	)
Basic shares, pro forma assuming maximum conversions					30,714

 

(k)

The pro forma diluted earnings per share are based on the weighted average number of shares of Renaissance common stock outstanding and are adjusted for warrants which became exercisable upon the business combination and additional common stock issued to First Communications stockholders as part of the acquisition as follows (in thousands):

Diluted shares (including shares subject to conversion), as reported					21,840
Recharacterization of shares of Renaissance common stock issued to RAC Partners prior to Renaissance’s initial public offering to contingently issuable based on the satisfaction of the EBITDA milestones described in the Merger Agreement					(2,000	)
Issuance of Renaissance common stock to First Communications common stock and T1 warrant holders based on an exchange of one First Communications common share for 0.44932 shares of Renaissance common stock					14,460
Warrants to purchase 35,880 shares of Renaissance common stock at $5 per share issued in conjunction with Renaissance’s initial public offering, the exercise of which was contingent upon the consummation of a qualifying business combination					4,346
Diluted shares, pro forma assuming no conversions					38,646
Maximum conversion of Renaissance common stock into cash					(3,586	)
Diluted shares, pro forma assuming maximum conversions					35,060

 

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				First Communications				FC LLC				Xtension				Globalcom
				7/2–12/31/07				1/1–7/1/07
REVENUES — NET
Revenues — net				$	61,200			$	48,154			$	15,723			$	55,918
Revenues, net — related parties					4,353				3,275				—				—
TOTAL REVENUES, NET					65,553				51,429				15,723				55,918
COST OF FACILITIES, exclusive of depreciation and amortization					44,560				33,798				12,629				31,584
SELLING, GENERAL AND ADMINISTRATIVE					15,706				12,328				1,931				19,475
DEPRECIATION AND AMORTIZATION					3,712				2,269				9				2,630
OPERATING INCOME (LOSS)					1,575				3,034				1,154				2,229
OTHER INCOME (EXPENSES)
Interest expense					(134	)			(725	)			—				(815	)
Other					76				275				58				—
					(58	)			(450	)			58				(815	)
INCOME (LOSS) BEFORE INCOME TAXES					1,517				2,584				1,212				1,414
INCOME TAXES					588				—				—				546
NET INCOME (LOSS)				$	929			$	2,584			$	1,212			$	868

 

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				Pro Forma Adjustments				First Communications Pro Forma				Renaissance				Pro Forma Adjustments				Pro Forma Consolidated Assuming No Conversions				Pro Forma Adjustments Assuming Maximum Conversions				Pro Forma Consolidated Assuming Maximum Conversions
REVENUES — NET
Revenues — net				$	—			$	180,995			$	—			$	—			$	180,995			$	—			$	180,995
Revenues, net — related parties					—				7,628				—				—				7,628				—				7,628
TOTAL REVENUES, NET					—				188,623				—				—				188,623				—				188,623
COST OF FACILITIES, exclusive of depreciation and amortization					(588	)(b)			121,983				—				—				121,983				—				121,983
SELLING, GENERAL AND ADMINISTRATIVE					(5,099	)(b)			44,341				848				—				45,189				—				45,189
DEPRECIATION AND AMORTIZATION					2,500	(d)			11,120				—				—				11,120				—				11,120
OPERATING INCOME					3,187				11,179				(848	)			—				10,331				—				10,331
OTHER INCOME (EXPENSES)
Interest expense					(5,013	)(a)			(6,987	)			(5	)			—				(6,992	)			—				(6,992	)
					(300	)(c)
Other					(58	)(b)			351				4,167				(1,240	)(f)			3,278				(854	)(h)			2,424
					(5,371	)			(6,636	)			4,162				(1,240	)			(3,714	)			(854	)			(4,568	)
INCOME BEFORE INCOME TAXES					(2,184	)			4,543				3,314				(1,240	)			6,617				(854	)			5,763
INCOME TAXES					570	(e)			1,704				1,013				(235	)(g)			2,482				(320	)(g)			2,162
NET INCOME				$	(2,754	)		$	2,839			$	2,301			$	(1,005	)		$	4,135			$	(534	)		$	3,601
Earnings per share:
Basic												$	0.11							$	0.13							$	0.12
Diluted												$	0.10							$	0.12							$	0.11
Weighted average shares outstanding (including shares subject to conversion):
Basic													20,220				12,460	(j)			32,680				(3,262	)(i)(j)			29,418
Diluted													23,295				12,460	(k)			35,755				(3,262	)(i)(k)			32,493

 

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(a)

To eliminate the historical interest expense on outstanding debt to be retired and record interest expense on the debt assumed and incurred in connection with the Globalcom acquisition and the Merger. The estimated average outstanding balance and interest rate under the new long term debt was $120 million and 6.5%, respectively, for the six months ended June 30, 2008. The annual impact on interest expense of a 1/8% change in interest rates is approximately $150,000.

(b)

Cost reductions realized from (i) the release of certain executives as specified in the Globalcom merger agreement of approximately $4.2 million; (ii) the release of personnel provided notice on the date of closing as specified in the Globalcom merger agreement of approximately $852,000; and (iii) rate reduction from a major telecommunication service provider based on expected higher volumes pursuant to an agreement executed in connection with the acquisition of Globalcom in the amount of approximately $588,000.

(c)

To record the amortization of $1.5 million in debt financing costs related to the Globalcom acquisition over the 5 year term of the loan.

(d)

To record amortization expense of $2.5 million for the $20 million in customer relationships intangible asset resulting from the Globalcom acquisition which has an estimated useful life of eight years. As the fair value assigned to the intangible assets acquired from Globalcom are preliminary in nature, actual amortization expense in future periods may differ materially from the amortization expense presented. The estimated useful lives for the Globalcom customer relationships intangible assets are primarily based on past experience with historical and projected customer renewal rates. The determination of estimated useful lives also incorporates assumptions that a market participant would use in making fair value estimates in a discounted cash flow model.

(e)

To adjust the provision for income taxes to the First Communications effective tax rate of 37.5%. The pro forma combined provision does not reflect that amounts that would have resulted had Renaissance and First Communications filed consolidated tax returns for 2008.

(f)

To adjust interest income to reflect the $30.9 million (30%) reduction in the average outstanding cash balance invested in marketable securities for the period.

(g)

To adjust the provision for income taxes to the First Communications effective tax rate of 37.5%. The pro forma combined provision does not reflect that amounts that would have resulted had Renaissance and First Communications filed consolidated tax returns for 2008.

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(h)

To adjust interest income to reflect the $21.3 million (28%) reduction in the average outstanding cash balance invested in marketable securities for the period resulting from maximum permitted conversions of shares of Renaissance common stock.

(i)

To adjust for the weighted average maximum permitted conversion of shares of Renaissance common stock.

(j)

The pro forma basic earnings per share are based on the weighted average number of shares of Renaissance common stock outstanding and are adjusted for additional common stock issued, or assumed issued to First Communications stockholders as part of the Merger as follows (in thousands):

Basic shares (including shares subject to conversion), as reported					20,220
Recharacterization of shares of Renaissance common stock issued to RAC Partners prior to Renaissance’s initial public offering to contingently issuable based on the satisfaction of the EBITDA milestones described in the Merger Agreement					(2,000	)
Issuance of Renaissance common stock to First Communications common stock and T1 warrant holders based on an exchange of one First Communications common share for 0.44932 shares of Renaissance common stock					14,460
Basic shares, pro forma assuming no conversions					32,680
Maximum conversion of Renaissance common stock into cash					(3,262	)
Basic shares, pro forma assuming maximum conversions					29,418

 

(k)

The pro forma diluted earnings per share are based on the weighted average number of shares of Renaissance common stock outstanding and are adjusted for additional common stock issued to First Communications stockholders as part of the acquisition as follows (in thousands):

Diluted shares (including shares subject to conversion), as reported which includes warrants to purchase 35,880 shares of Renaissance common stock at $5 per share issued in conjunction with Renaissance’s initial public offering, the exercise of which was contingent upon the consummation of a qualifying business combination					23,295
Recharacterization of shares of Renaissance common stock issued to RAC Partners prior to Renaissance’s initial public offering to contingently issuable based on the satisfaction of the EBITDA milestones described in the Merger Agreement					(2,000	)
Issuance of Renaissance common stock to First Communications common stock and T1 warrant holders based on an exchange of one First Communications common share for 0.44932 shares of Renaissance common stock					14,460
Diluted shares, pro forma assuming no conversions					35,755
Maximum conversion of Renaissance common stock into cash					(3,262	)
Diluted shares, pro forma assuming maximum conversions					32,493

 

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•

The change of Renaissance corporate name is desirable to reflect its merger with First Communications. The First Communications name has been used for almost ten years in connection with its provision of voice and data telecommunications services.

•

The number of authorized shares should be increased because, as a result of the issuance of shares in the Merger and the assumption of warrants and the adoption of the 2008 Plan as described in the incentive compensation plan proposal, Renaissance requires additional shares of common stock to be reserved in its amended and restated certificate of incorporation in order to effect the Merger and execute on the business plan of the post-merger combined company.

•

The present amended and restated certificate of incorporation provides that Renaissance’s corporate existence will terminate on January 29, 2009. In order to continue in existence after the consummation of the Merger subsequent to such date, this provision must be amended. Perpetual existence is the usual period of existence for corporations and Renaissance’s board of directors believes it is the most appropriate period for Renaissance as the surviving company in the Merger.

•

As no meetings of stockholders have been held since Renaissance’s IPO, the present directors are the same persons who were appointed at the time of Renaissance’s organization. Pursuant to the Merger Agreement, the directors to be elected at the special meeting of stockholders to which this proxy statement relates will serve for terms that expire in 2009 (Class I directors), 2010 (Class II directors) and 2011 (Class III directors). The proposed amendment to the present Article Seventh incorporates these classifications.

•

Article Sixth and its preamble relate to the operation of Renaissance as a blank check company prior to the consummation of a business combination and will not be applicable after consummation of the Merger. Section 6.1 requires that the business combination be submitted to Renaissance’s stockholders for

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approval under the DGCL and is authorized by the vote of a majority of the Public Shares present at the Special Meeting in person or by proxy and eligible to vote thereon, provided that the business combination shall not be consummated if the holders of 20% or more of the Public Shares exercise their conversion rights. Section 6.2 specifies the procedures for exercising conversion rights. Section 6.3 provides that holders of Public Shares are entitled to receive distributions from the Trust Account only if a business combination is not consummated by the “Termination Date” (January 29, 2009) or by demanding conversion in accordance with Section 6.2. Section 6.4 provides that Renaissance must consummate the business combination, as defined in the preamble of Article Sixth, before Renaissance can consummate any other type of business combination. Section 6.5 permits Renaissance to have a classified board of directors prior to the business combination. Accordingly, Article Sixth and it preamble will serve no further purpose.

•

The other changes include certain other changes in tense and number that Renaissance’s board of directors believes are immaterial.

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•

Nonstatutory stock options and incentive stock options (individually a “Stock Option” and collectively, the ”Stock Options”) are rights to purchase common stock of Renaissance. A Stock Option may be immediately exercisable or may become exercisable in such installments, cumulative or non-cumulative, as the Compensation Committee may determine. A Stock Option may be exercised by the recipient giving written notice to Renaissance, specifying the number of shares with respect to which the Stock Option is then being exercised, and accompanied by payment of an amount equal to the exercise price of the shares to be purchased. The purchase price may be paid by cash, check, by delivery to Renaissance, through the withholding of shares of Renaissance common stock that would have otherwise been received upon the exercise of the Stock Option, or through and under the terms and conditions of any formal cashless exercise program authorized by Renaissance.

•

Incentive stock options may be granted only to eligible employees of Renaissance or any parent or subsidiary corporation of Renaissance and must have an exercise price of not less than 100% of the fair market value of Renaissance common stock on the date of grant (110% for incentive stock options granted to any 10% stockholder of Renaissance). In addition, the term of an incentive stock option may not exceed 10 years (five years, if granted to any 10% stockholder of Renaissance). Nonstatutory stock options must

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have an exercise price of not less than 100% of the fair market value of Renaissance common stock on the date of grant. In the case of an incentive stock option, the amount of the aggregate fair market value of Renaissance common stock (determined at the time of grant) with respect to which incentive stock options are exercisable for the first time by an employee during any calendar year (under all such plans of his or her employer corporation and its parent and subsidiary corporations) may not exceed $100,000. Any Stock Options granted in excess of this limit will be nonstatutory stock options.

•

Stock appreciation rights (individually a “SAR” and collectively “SARs”) are rights to receive (without payment to Renaissance) cash, property or other forms of payment, or any combination thereof, as determined by the Compensation Committee, based on the increase in the value of the number of shares of Renaissance common stock specified in the SAR. The base price (above which any appreciation is measured) of a SAR may in no event be less than 100% of the fair market value of Renaissance common stock on the date of grant.

•

Awards of restricted stock are grants or sales of Renaissance common stock which are subject to a risk of forfeiture, such as a requirement of the continued performance of services for a stated term or the achievement of individual or company performance goals. A holder of restricted stock will have all of the rights of a stockholder of Renaissance, including the right to vote, and the right to receive dividends with respect to, shares of restricted stock. The Compensation Committee may elect to require deferral of payment of cash dividends with respect to shares of restricted stock or to require dividends to be reinvested in additional shares of restricted stock pending vesting (or forfeiture) of the underlying shares of restricted stock.

•

Awards of restricted stock units and performance units are grants of rights to receive either shares of Renaissance common stock (in the case of restricted stock units) or the appreciation over a base value (as specified by the Compensation Committee) of a number of shares of Renaissance common stock (in the case of performance units) subject to satisfaction of service or performance requirements established by the Compensation Committee in connection with the award. Such awards may include the right to the equivalent to any dividends on the shares covered by the award, which amount may in the discretion of the Compensation Committee be deferred and paid if and when the award vests. The Compensation Committee may permit (or, if provided at the date of grant, require) a recipient of performance units to defer receipt of payment of cash or delivery of stock that would otherwise be due by virtue of the satisfaction of any requirements or goals with respect to the performance units.

•

Qualified performance-based awards are awards which include performance criteria intended to satisfy Section 162(m) of the IRC. Section 162(m) of the IRC limits Renaissance’s federal income tax deduction for compensation to certain specified senior executives to $1 million dollars, but excludes from that limit ”performance-based compensation.” Qualified performance-based awards may be in the form of Stock Options, SARs, restricted stock, restricted stock units or performance units, but in each case will be subject to satisfaction of one of the following criteria, either individually, alternatively or in any combination, applied to either Renaissance as a whole or to a business unit or affiliate, either individually, alternatively, or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the Compensation Committee in the award:

cash flow (before or after dividends)				earnings per share (including, without limitation, earnings before interest, taxes, depreciation and amortization)
stock price				return on equity
stockholder return or total stockholder return				return on capital (including without limitation return on total capital or return on invested capital)

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return on investment				return on assets or net assets
market capitalization				economic value added
debt leverage (debt to capital)				revenue
sales or net sales				backlog
income, pre-tax income or net income				operating income or pre-tax profit
operating profit, net operating profit or economic profit				gross margin, operating margin or profit margin
return on operating revenue or return on operating assets				cash from operations
operating ratio				operating revenue
market share improvement				general and administrative expenses
customer service				new production introductions
product line enhancements				strategic acquisitions

 

No payment or other amount will be available to a recipient of a qualified performance-based award except upon the Compensation Committee’s determination that a particular goal or goals established by the Compensation Committee for the criteria (from among those specified above) selected by the Compensation Committee has been satisfied.

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•

provide that the awards be assumed, or substantially equivalent awards be substituted, by the successor company;

•

upon written notice to holders, provide that unexercised awards terminate immediately prior to consummation of the Transaction unless exercised within a specific period of time following the date of the notice;

•

provide that awards become exercisable in whole or in part upon the Transaction;

•

provide for cash payments equal to the proceeds the holders would have received if they had exercised prior to the Transaction, net of the exercise price and applicable tax withholding; or

•

in the event of a liquidation or dissolution, provide that awards convert into the right to receive liquidation proceeds net of the exercise price and applicable tax withholding.

•

all Stock Options and SARs not already exercisable in full will accelerate with respect to 100% of the shares for which such Stock Options and SARs are not then exercisable;

•

any risk or forfeiture applicable to restricted stock and restricted stock units which is not based on achievement of performance goals will lapse with respect to 100% of the restricted stock and restricted stock units still subject to such risk of forfeiture; and

•

all outstanding awards of restricted stock and restricted stock units conditioned on the achievement of performance goals and the target payout opportunities attainable under outstanding performance units will be deemed to have been satisfied as of the effective date of the change of control as to a pro rata number of share based on the assumed achievement of all relevant performance goals and the length of time within the performance period which has elapsed prior to the change of control.

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•

Nonstatutory Stock Options.  Generally, there are no federal income tax consequences to the participants upon grant of nonstatutory stock options. Upon the exercise of such a nonstatutory stock option, the participant will recognize ordinary income in an amount equal to the amount by which the fair market value of the Renaissance common stock acquired upon the exercise of such Stock Option exceeds the exercise price, if any. The participant’s tax basis in such shares of Renaissance common stock will equal their fair market value on the date of exercise. A sale of Renaissance common stock so acquired will give rise to short-term or long-term capital gain or loss, depending on whether the Renaissance common stock was held for more than 12 months, equal to the difference between the amount received by the participant for such shares of Renaissance common stock and his or her tax basis in such shares of Renaissance common stock. Under the 2008 Plan, nonstatutory stock options may, if permitted by the Compensation Committee, be exercised in whole or in part with shares of Renaissance common stock held by the participant. Such an exercise will be treated as a tax-free exchange of the shares of Renaissance common stock surrendered for an equivalent number of shares of Renaissance common stock received, and the equivalent number of shares will have a tax basis equal to the tax basis of the surrendered shares. Shares of Renaissance common stock received in excess of the number of shares surrendered will have a tax basis of zero.

•

Incentive Stock Options.  Except as noted at the end of this paragraph, there are no federal income tax consequences to the participant upon grant or exercise of an incentive stock option. If the participant holds shares of Renaissance common stock purchased pursuant to the exercise of an incentive stock option for at least two years after the date the Stock Option was granted and at least one year after the exercise of the Stock Option, the subsequent sale of Renaissance common stock will give rise to a long-term capital gain or loss to the participant equal to the difference between the amount received for such shares of Renaissance common stock and the participant’s tax basis in such shares of Renaissance common stock and no deduction will be available to Renaissance (or any of its affiliates). If the participant sells the shares of Renaissance common stock within two years after the date an incentive stock option is granted or within one year after the exercise of such incentive stock option (a “disqualifying disposition”), the participant will recognize ordinary income in an amount equal to the lesser of (i) the difference between the fair market value at the exercise date and the exercise price or (ii) the excess of the amount realized upon disposition of the shares of Renaissance common stock over the exercise price. Any additional gain or loss recognized by a participant in such circumstances will be short-term or long-term capital gain or loss, depending on whether the Renaissance common stock was held for more than 12 months. Some participants may have to pay alternative minimum tax in connection with the exercise of an incentive stock option, however. Under the 2008 Plan, incentive stock options may, if permitted by the Compensation Committee, be exercised in whole or in part with shares of Renaissance common stock held by the Participant. Such an exercise will be treated as a tax-free exchange of the shares of Renaissance common stock surrendered (assuming the surrender of the previously-owned shares does not constitute

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a disqualifying disposition of those shares) for an equivalent number of shares of Renaissance common stock received, and the equivalent number of shares will have a tax basis equal to the tax basis of the surrendered shares. Shares of Renaissance common stock received in excess of the number of shares surrendered will have a tax basis of zero.

•

Restricted Stock.  A participant will generally not recognize ordinary income with respect to an award of restricted stock until his or her rights in that award become substantially vested. When a participant’s rights with respect to an award of restricted stock become substantially vested, he or she will recognize ordinary income in an amount equal to the amount by which the then fair market value of the Renaissance common stock acquired exceeds the price he or she has paid for it, if any. Upon the sale of such shares of restricted stock, the participant will recognize short-term or long-term capital gain or loss, depending on whether the shares were held for more than 12 months, in an amount equal to the difference between the amount received for such shares and the participant’s tax basis in such shares. Recipients of restricted stock may, however, within 30 days after receiving an award of restricted stock, choose to have any applicable risk of forfeiture disregarded for tax purposes by making an “83(b) election.” If the participant makes an 83(b) election, he or she will have to report compensation income equal to the difference between the value of the shares and the price paid for the shares, if any, at the time of the transfer of the restricted stock. Any gain or loss recognized upon the sale of shares of restricted stock for which an 83(b) election was made will be short-term or long-term capital gain or loss, depending on whether the shares were held for more than 12 months. In general, during the period in which restricted stock is not substantially vested, dividends and distributions paid with respect to restricted stock will be treated as compensation income (not dividend income) received by the participant. Dividend payments received with respect to shares of restricted stock for which an 83(b) election has been made generally will be treated as dividend income.

•

Stock Appreciation Rights.  A participant will generally recognize no taxable income upon the grant of a Stock Appreciation Right. A participant will generally recognize ordinary income on the receipt of cash or other property pursuant to the exercise of an award of stock appreciation rights equal to the amount of such cash or the fair market value of such Renaissance common stock or other property received.

•

Restricted Stock Units and Performance Units.  A participant will generally recognize no taxable income upon the grant of restricted stock units or performance units. A participant will generally recognize ordinary income on the receipt of any shares of Renaissance common stock, cash or other property in satisfaction of an award of restricted stock units or performance units equal to the amount of such cash or the fair market value of such Renaissance common stock or other property received.

•

Potential Deferred Compensation.  The foregoing summary of federal income tax consequences assumes that no award under the 2008 Plan will be considered “deferred compensation” as that term is defined for purposes of Section 409A of the IRC, or that if any award were considered to any extent to constitute deferred compensation, its terms would comply with the requirements of that legislation (in general, by limiting any flexibility in the time of payment). If an award includes deferred compensation, and its terms do not comply with the requirements of Section 409A of the IRC, then any deferred compensation component of an award under the 2008 Plan will be taxable when it is earned and vested (even if not then payable) and the recipient will be subject to a 20% additional tax, and possibly also interest penalties.

•

Section 162(m) Limitations on Renaissance’s Tax Deduction.  In general, whenever a recipient is required to recognize ordinary income in connection with an award, Renaissance (or its affiliate employing the recipient) will be entitled to a corresponding tax deduction. However, Renaissance (or its affiliate employing the recipient) will not be entitled to deductions in connection with awards under the 2008 Plan to certain senior executive officers to the extent that the amount of deductible income in a year to any such officer, together with his or her other compensation from Renaissance (or such affiliate) exceeds the $1 million dollar limitation of Section 162(m) of the IRC. Compensation which qualifies as “performance-based” is not subject to this limitation, however.

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Withholding.  The Compensation Committee is entitled to deduct from the payment of any award all applicable taxes required by federal, state or local law to be withheld, or to take such other action as the Compensation Committee may deem advisable to enable Renaissance or any affiliate and participants to satisfy tax obligations relating to any award.

2008 Equity Incentive Plan
Name and Position				Dollar Value ($)(1)				Number of Restricted Shares or Options
Raymond Hexamer Chief Executive Officer				$	243,000			40,500 restricted shares 80,000 options to purchase common stock
Joseph R. Morris Chief Financial Officer and Chief Operating Officer				$	243,000			40,500 restricted shares 80,000 options to purchase common stock
Richard J. Buyens President					—			413,850 options to purchase common stock
David Johnson, II Senior Vice President, Sales				$	183,000			30,500 restricted shares 60,000 options to purchase common stock
Executive Group				$	669,000			111,500 restricted shares 633,850 options to purchase common stock
Non-Executive Director Group					—			—
Non-Executive Officer Employee Group				$	975,000			162,500 restricted shares 520,000 options to purchase common stock

 

(1)

With respect to grants of restricted shares, assumes a per share value of $6.00 at the time of grant. Pursuant to SEC guidance, no dollar value is provided for Stock Options.

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Barry W. Florescue, Theodore V. Boyd and Joseph R. Morris in the class to stand for reelection in 2009;

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Raymond Hexamer, Marshall B. Belden Jr. and Mark R. Stone in the class to stand for reelection in 2010; and

•

Richard A. Bloom, Mark T. Clark and Scott M. Honour in the class to stand for reelection in 2011.

Name				Age				Position
Raymond Hexamer					47			Chief Executive Officer and Director
Joseph R. Morris					38			Chief Operating and Financial Officer and Director
Richard J. Buyens					52			President
Theodore V. Boyd					66			Chairman of the Board
David Johnson, II					47			Senior Vice President Sales and Marketing
Marshall B. Belden Jr.					60			Director
Mark T. Clark					58			Director
Scott M. Honour					42			Director
Mark R. Stone					44			Director
Barry W. Florescue					64			Director
Richard A. Bloom					41			Director

 

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reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in the Form 10-K;

•

discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of financial statements;

•

discussing with management major risk assessment and risk management policies;

•

monitoring the independence of the independent auditor;

•

verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

•

reviewing and approving all related-party transactions;

•

inquiring and discussing with management Renaissance’s compliance with applicable laws and regulations;

•

pre-approving all audit services and permitted non-audit services to be performed by the independent auditor, including the fees and terms of the services to be performed;

•

appointing or replacing the independent auditor;

•

determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; and

•

establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or reports which raise material issues regarding Renaissance’s financial statements or accounting policies.

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should have demonstrated notable or significant achievements in business, education or public service;

•

should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to board deliberations; and

•

should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.

•

reviewing, from time to time, the post-merger combined company’s philosophy regarding executive compensation;

•

recommending to the board of directors for approval annual performance criteria, including long-term and short-term goals, for the chief executive officer and reviewing the chief executive officer’s performance against such established criteria;

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determining and approving all compensation arrangements of the executive officers of the post-merger combined company (other than the chief executive officer);

•

reviewing and recommending to the board of directors for approval all compensation arrangements of the chief executive officer;

•

determining which employees are “executive officers” whose compensation is subject to the review and approval of the committee, and reviewing, in its discretion, the compensation of employees who are not executive officers;

•

making recommendations to the board of directors concerning adopting and amending incentive compensation plans applicable to executive officers generally and equity compensation plans, benefit plans and retirement plans for all employees;

•

fixing and determining awards to officers and employees of stock, stock options, stock appreciation rights and other equity interests pursuant to any equity compensation plans from time to time in effect and exercising such other power and authority as may be permitted or required under such plans;

•

reviewing, at least annually, the competitiveness of the post-merger combined company’s executive compensation programs, including a review of the compensation practices in the markets where the post-merger combined company competes for executive talent, to ensure (i) the attraction and retention of corporate officers, (ii) the motivation of corporate officers to achieve the post-merger combined company’s business objectives and (iii) the alignment of the interests of key leadership with the long-term interests of the post-merger combined company’s stockholders;

•

establishing and periodically reviewing policies concerning perquisite benefits;

•

managing and reviewing executive officer and director indemnification and insurance matters; and

•

reviewing and discussing with the post-merger combined company’s chief executive officer and chief financial officer the Compensation Discussion and Analysis (“CD&A”) required to be included in the post-merger combined company’s annual report or proxy statement filed with the SEC and recommending to the board of directors that the CD&A be included in the annual report or proxy statement.

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Name				Age				Position
Barry W. Florescue					63			Chairman of the Board and Chief Executive Officer
Richard A. Bloom					41			President and Chief Operating Officer
Logan D. Delany, Jr.					59			Executive Vice President and Director
Stanley Kreitman					77			Director
Charles W. Miersch					61			Director
Morton Farber					80			Director

 

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$4,898 beginning on February 28, 2007. As of September 30, 2008, $4,864 was outstanding, excluding accrued interest. The installment loan bears interest at 7.75% per annum and is payable from the funds transferred from earnings of the Trust Account, which funds will be distributed to the Public Stockholders if Renaissance does not consummate a business combination within the required time periods. Interest expense for the periods presented relates to the borrowings from the installment loan for insurance.

Net proceeds from its initial public offering and private placement of warrants placed in trust				$	104,147,840
Total interest and miscellaneous income received to date					5,790,462
Less total interest disbursed to Renaissance for working capital through September 30, 2008					(1,875,000	)
Less total taxes paid through September 30, 2008					(1,655,310	)
Total funds held in trust account through September 30, 2008				$	106,407,992

 

•

payment of premiums associated with directors’ and officers’ insurance;

•

payment of estimated taxes incurred as a result of interest income earned on funds currently held in the Trust Account;

•

due diligence and investigation of prospective target businesses;

•

legal and accounting fees relating to SEC reporting obligations and general corporate matters;

•

structuring and negotiating a business combination, including the making of a down payment or the payment of exclusivity or similar fees and expenses; and

•

other miscellaneous expenses including $8,000 per month to a related party for office space and general and administrative services.

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								Payments Due by Period
Contractual Obligations				Total				Less than 1 Year				1-3 Years				3-5 Years				More than 5 Years
Long-Term Contractual Obligations (1)(2)				$	104,000			$	96,000			$	8,000			$	—			$	—

 

(1)

Represents sums payable to BMD Management Company for office space, office and secretarial space commencing February 1, 2007 and continuing at $8,000 per month through the acquisition of a target business.

(2)

Does not include obligations which are contingent upon the consummation of a business combination, including $3,051,240 in deferred underwriting compensation in connection with Renaissance’s IPO.

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Region				Market
Ohio				Akron
Ohio				Youngstown
Ohio				Cleveland
Ohio				Dayton
Ohio				Columbus
Ohio				Canton
Illinois				Chicago
Michigan				Detroit
Michigan				Grand Rapids
Michigan				East Lansing
Wisconsin				Milwaukee

 

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Dark Fiber: Dark fiber services provide dark (unlit) strands of fiber optic cable between target destinations for a customer’s use in data and telecommunications networks. The customer installs its own optoelectronic equipment and this product permits a customer to use as much or as little capacity as it desires and to customize its capacity with feature-rich technology and deploy various network protocols.

Private Build: Private build services develop a custom dark fiber network between a customer’s target sites. This may involve existing dark fiber in combination with construction of new routes and building entries. This is a system dedicated to the customer — its own private network.

Collocation: Collocation is providing First Communications customers with space and power at strategic locations along the fiber optic network in which its customers install customer-owned electronic equipment. The collocation is often needed to regenerate a signal over a long distance or allow the customer to aggregate or deliver traffic.

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Voice				Data				Mobility
Fixed cost Flexible long distance spending Toll-free and conferencing services Fax-to-email service				Web hosting Data storage and back up Managed firewall				Blackberry smartphones Standard cell phones Remote access to call forwarding

 

Voice Services				Data Services				Value-Added Products and Services
Local, regional, domestic and international services T-1 PRI services Private line Voicemail Caller identification Call waiting Call forwarding Conference calling VoIP Toll free services				Dedicated Internet T-1 access Broadband Internet access Dial-up E-mail Collocation Metro Ethernet Services Dynamic T-1’s from 1.5 to 6.0 Megabyte of High Speed bandwidth Integrated with Voice Services Wireless Data via Blackberry Wireless Internet (WiFi) Connectivity				Traditional and converged telephone systems Enhanced e-mail security Managed firewall Internet policy management Fax to Email Local Area Network/Wide Area Network integration Web hosting Inside wiring Data backup and recovery Unified Communications solutions Cellular

 

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Managed Services. First Communications’ managed services offering includes web hosting services, managed firewalls, managed WAN services, email virus security and Internet browsing security.

•

In-Building Broadband over Power Lines. In-building BPL delivers a very high capacity (up to 200 Mbps) broadband Internet connection through the existing electrical infrastructure of a building, allowing for high-speed Internet, VoIP and video services, as well as value-added services such as security systems, monitoring, biometric access and e-concierge services. In-building BPL networks allow for high-speed Internet access through any electrical outlet. Once a BPL network has been installed, the customer has high-speed access to the Internet in the building simply by plugging a modem into any electrical outlet and plugging a PC or other Internet device into the modem. In-building BPL avoids the need for inside wiring. It can be used in new construction to avoid the expense associated with installing Ethernet cable, and in existing buildings where Ethernet cable is not available.

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Hardware Solutions. First Communications provides customers premise equipment bundled with its telecommunications products, leading to a single source provisioning of bundled data and voice services. The equipment provided includes routers, integrated access devices, servers, and other voice and data equipment.

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Voice Services				Data & Other Services
Local, Regional, Domestic and International Services Cellular Phones and Calling Plans Voicemail Caller Identification Call Waiting Ring Identification Conference Calling				BPL (limited basis) Dial-up Internet access Fixed Wireless (limited basis) VoIP Inside Wiring

 

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On-Net T-1 / On-Net UNE-Loops. On-net T-1 is a leased high capacity connection directly from First Communications’ collocation equipment to the customer’s location. This T-1 can provide voice, data or integrated communications services to its customers. T-1s are generally the most cost-effective and reliable access method. To provide voice lines to residential and small business accounts, First Communications collocates its access equipment in an ILEC central office and leases UNE-loops from its equipment to the customer premise. For the three months ended September 30, 2008, sales of integrated T-1 lines and POTS lines, installed on-net, contributed 84.5% of newly acquired revenue.

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Off-Net. Off-net access methods are used to implement First Communications’ smart-build strategy by acquiring customers located in ILEC central offices in which there is not yet sufficient density to build a collocation. Off-net access is also used in order to be able to serve all locations of a multi-location account. There are two major forms of off-net access. The first is utilizing the transport and/or loops and facilities of an alternative communications provider other than the ILEC. First Communications has contracts with several major providers of access and transport. The second form of off-net access is provided through the ILEC. First Communications has entered into commercial agreements with AT&T, Qwest, Verizon, McLeod and One Communications, which guarantee multi-year availability and predictable pricing for the required access and associated features needed to provide services to its end-users. First Communications’ commercial agreement with AT&T extends through September 2010, with Qwest through January 2011, with Verizon through February 2011, with Paetec through January 2011, and with One Communications through July 2009.

•

Wireless. First Communications owns 15 LMDS A-block spectrum licenses, with 1150 MHz of spectrum per market. LMDS is an authorized, point-to-multipoint fixed wireless service that provides a high-capacity broadband connection. First Communications has deployed an LMDS service and intends to use last mile

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wireless access opportunistically as a cost effect replacement for leasing access from the ILEC or another competitive service provider.

•

BPL. First Communications has a 50% interest in the FirstSpeed joint venture, which is involved in a pilot project for the purpose of offering customers access to BPL along FirstEnergy Corp. power lines. Access BPL is designed to provide broadband telecommunications and Internet access to commercial and residential customers, by installing additional equipment attached to an electric utility’s power lines, thereby permitting broadband telecommunications to travel over the electricity lines. As with utilizing First Communications’ LMDS spectrum as an access technology, First Communications will leverage its BPL technology in situations where the platform is the most appropriately suited to serve the needs of the customer.

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Location				Use				Approximate Square Footage				Lease Expiration
Akron, OH				Corporate Headquarters					33,345			February 28, 2013
Akron, OH				Switch Facility					2,400			February 28, 2010
Worthington, OH				Sales Office, Switch Facility					13,600			February, 28 2009
Pittsburgh, PA				Network Operations Center					3,800			August 31, 2011
Cleveland, OH				Sales Office					3,540			March 31, 2010
Cleveland, OH				Switch Facility					4,375			October 20, 2009
Cleveland, OH				Operations Center					3,300			December 31, 2009
Cleveland, OH				Warehouse					5,000			February 28, 2009
Los Angeles, CA				Switch Facility					6,390			MTM
New York, NY				Switch Facility					6,000			June 30, 2010
San Diego, CA				Operations Center					15,498			April 30, 2011
Southfield, MI				Sales Office					1,570			February 28, 2009
Reading, PA				Sales Office, Operations Center					2,500			September 30, 2013
Lauderdale, PA				Warehouse					6,000			May 31, 2010
Chicago, IL				Sales Office, Operations Center					30,274			November 30, 2013
Chicago, IL				Switch Facility					6,647			May 31, 2009
Lombard, IL				Sales Office					6,175			October 31, 2013

 

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Name				Age				Position
Raymond Hexamer				47				Chief Executive Officer and Director
Joseph R. Morris				38				Chief Operating and Financial Officer and Director
Richard J. Buyens				52				President
Theodore V. Boyd				66				Chairman of the Board
David Johnson, II				47				Senior Vice President Sales and Marketing
Marshall B. Belden Jr.				60				Director
Mark T. Clark				58				Director
Scott M. Honour				42				Director
Mark R. Stone				44				Director
H. Arthur Bellows, Jr.				70				Director

 

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Maintenance of fiber transport services;

•

Leasing local loops and digital T-1 lines that connect its customers to its network;

•

Leasing high capacity digital lines that connect its switching equipment to its collocations;

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Leasing high capacity digital lines that interconnect its network with the RBOCs;

•

Leasing space, power and terminal connections in the RBOC central offices for collocating its equipment;

•

Signaling system network connectivity;

•

Leasing or maintaining its long-haul Internet backbone network; and

•

Internet transit and peering, which is the cost of delivering Internet traffic from its customers to the public Internet.

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				Payments Due by Period
Contractual Obligations at December 31, 2007				Less than 1 Year				2-3 Years				4-5 Years				After 5 Years				Total
Operating leases				$	1,405			$	2,391			$	1,256			$	95			$	5,147
Line of credit					625				—				—				—				—
Total contractual cash obligations				$	2,030			$	2,391			$	1,256			$	95			$	5,147

 

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				Amount of Commitment Expiration Per Period
Commercial Commitments at December 31, 2007				Less than 1 Year				2-3 Years				4-5 Years				After 5 Years				Total
Standby letters of credit				$	171			$	—			$	—			$	—			$	171
Total commercial commitments				$	171			$	—			$	—			$	—			$	171

 

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Staying competitive with other companies with whom it competes for talent;

•

Providing a strong incentive to the executives to achieve their individual and First Communications’ short- and long-term goals; and

•

Aligning the interests of the executives with the interests of First Communications’ stockholders.

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Name				Bonus Potential as a Percentage of Annual Base Salary				Relative Weight of Revenue Target/Adjusted EBITDA Target
Raymond Hexamer					60	%			40%/60	%
Joseph R. Morris					50	%			40%/60	%
Richard J. Buyens					50	%			50%/50	%
David Johnson, II					120	%			80%/20	%

 

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Achievement (% of Target)				Multiplier (times % over 100%)				Example
Revenue Target:
At or above 100%				None				Performance at 100% of objective results in eligibility for 100% of incentive potential for revenue target objective
At or above 103%				3x				Performance at 103% of objective results in eligibility for 109% of incentive potential for revenue target objective
At or above 106%				4.5x				Performance at 106% of objective results in eligibility for 127% of incentive potential for revenue target objective
At or above 109%				6x				Performance at 109% of objective results in eligibility for 154% of incentive potential for revenue target objective
At or above 112%				7.5x				Performance at 112% or more of objective results in eligibility for 200% of incentive potential for revenue target objective
Adjusted EBITDA Target:
At or above 100%				None				Performance at 100% of objective results in eligibility for 100% of incentive potential for adjusted EBITDA target objective
At or above 104%				2.25x				Performance at 104% of objective results in eligibility for 109% of incentive potential for adjusted EBITDA target objective
At or above 108%				3.38x				Performance at 108% of objective results in eligibility for 127% of incentive potential for adjusted EBITDA target objective
At or above 112%				4.5x				Performance at 112% of objective results in eligibility for 154% of incentive potential for adjusted EBITDA target objective
At or above 116%				6.25x				Performance at 116% or more of objective results in eligibility for 200% of incentive potential for adjusted EBITDA target objective

 

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Name and Principal Position				Year				Salary ($)				Bonus ($)				Stock Awards ($)				Non-Equity Incentive Plan Compensation				Total ($)
Raymond Hexamer					2008			$	265,000				—				—				—	(1)		$	265,000
Chief Executive Officer					2007			$	140,000			$	120,000			$	997,660	(2)		$	1,662,921	(3)		$	2,920,581
Richard J. Buyens(4) President					2008			$	166,667				—				—				—	(1)		$	166,667
Joseph R. Morris
Chief Financial Officer and					2008			$	250,000				—				—				—	(1)		$	250,000
Chief Operating Officer					2007			$	130,000			$	100,000			$	997,660	(2)		$	1,662,921	(3)		$	2,890,581
David Johnson, II					2008			$	125,000				—				—				—	(1)		$	125,000
Senior Vice President, Sales					2007			$	110,000			$	90,000			$	1,195,455	(2)		$	1,638,481	(3)		$	3,033,936

 

(1)

Each of the named executive officers is a participant in an annual cash bonus plan established by First Communications’ remuneration committee in April 2008. For more detail regarding the financial performance objectives contained in the plan, see “First Communications Executive Compensation — Elements of Compensation — Annual Bonus” above. First Communications anticipates calculating and paying the bonuses within the first two months of 2009.

(2)

Consists of grants of common stock of First Communications made by the former members of FC LLC upon the consummation of First Communications’ initial public offering, pursuant to an incentive compensation program adopted by FC LLC and amended in June 2007. The amount of the grants were as follows: Mr. Hexamer, 199,532 shares; Mr. Morris, 199,532 shares; and Mr. Johnson, 239,091 shares. For purposes of calculating the dollar values above, each share of First Communications common stock was valued at $5.00 per share on the date of grant. Because the grants were made by the former members of FC LLC, neither First Communications nor any of the companies it acquired recognized an accounting charge in connection with these grants.

(3)

Consists of one time cash bonus paid by the former members of FC LLC upon the consummation of First Communications’ initial public offering, pursuant to an incentive compensation program adopted by FC LLC and amended in June 2007 in connection with the sale of substantially all of its assets to First Communications.

(4)

Mr. Buyens’ employment with First Communications began in May 2008.

				Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)
Name(a)				Threshold(2) ($)(c)				Target(3) ($)(d)				Maximum(4) ($)(e)
Raymond Hexamer				$	39,750			$	159,000			$	318,000
Richard J. Buyens(5)				$	20,833			$	83,333			$	166,667
Joseph R. Morris				$	31,250			$	125,000			$	250,000
David Johnson, II				$	37,500			$	150,000			$	300,000

 

(1)

Represents amounts payable pursuant to a plan established by First Communications’ remuneration committee in April 2008. For more detail regarding the financial performance objectives contained in the plan, see “First

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Communications Executive Compensation — Elements of Compensation — Annual Bonus” above. First Communications anticipates calculating and paying the bonuses within the first two months of 2009.

(2)

Assumes that 95% of the revenue target and 90% of the adjusted EBITDA target are met.

(3)

Assumes that 100% of the revenue target and 100% of the adjusted EBITDA target are met.

(4)

Assumes that 112% of the revenue target and 116% of the adjusted EBITDA target are met.

(5)

Mr. Buyens’ payout under the plan is prorated for the period from the start of his employment with First Communications through December 31, 2008.

				Termination Without Cause												Termination Upon Death or Disability(1)
Name				Base Salary ($)				Bonus ($)				Total ($)				Base Salary ($)				Bonus ($)				Total ($)
Raymond Hexamer				$	265,000			$	159,000			$	424,000			$	265,000			$	159,000			$	424,000
Richard J. Buyens				$	62,500				—			$	62,500			$	250,000			$	83,333			$	333,333
Joseph R. Morris				$	200,000			$	125,000			$	375,000			$	250,000			$	125,000			$	375,000
David Johnson, II				$	125,000			$	150,000			$	275,000			$	125,000			$	150,000			$	275,000

 

(1)

Reported payments would be offset by the amount of any Social Security benefits payable to the named executive officer and by the amount of any life insurance proceeds or disability benefits paid to such named executive officer, or his estate, pursuant to policies, the premiums for which First Communications paid.

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Name				Fees Earned or Paid in Cash(1) ($)				Total ($)
Theodore V. Boyd				$	74,250			$	74,250
Marshall Belden, Jr.				$	36,167			$	36,167
H. Arthur Bellows, Jr.				$	82,250			$	82,250
Mark T. Clark				$	76,250			$	76,250
Scott M. Honour					—				—
Roderick Sherwood, III					—				—
Mark Stone					—				—

 

(1)

Each non-employee director other than Messrs. Honour, Sherwood and Stone received a pro rata annual retainer in an amount equal to $50,000 paid in quarterly installments at or before the beginning of each calendar quarter and a stipend of $1,500 for each meeting of the board attended in person and $1,000 for each such meeting attended telephonically. Each non-employee director serving on a board committee, other than Messrs. Honour, Sherwood and Stone, received an annual stipend of $1,000 for each meeting of such board committee attended in person and $750 for each such meeting attended telephonically. The chairman of the audit, nomination, remuneration and finance committees received additional pro rata annual retainers of $10,000, $7,500, $5,000 and $5,000, respectively. Messrs. Honour, Sherwood and Stone agreed to forgo payment of directors fees for so long as First Communications’ Series A Preferred Stock remains outstanding. Mr. Belden joined the board of directors of First Communications in May 2008 and, thus, stipends payable to him were made pro rata since he became a director.

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The FCC’s current rules make an exception to the ILECs’ unbundling obligations for mass market fiber-to-the-home and fiber-to-the-curb loops with fiber that is within 500 feet of the premises. The FCC also clarified that ILECs are not required to equip new packetized transmission facilities with the capability to transmit conventional telephony signals for third party carriers. In October 2004, the FCC voted to eliminate any independent unbundling obligation under Section 271 of the Telecommunications Act for any broadband unbundled network element (“UNE”) that has been relieved from unbundling under Section 251 of the Telecommunications Act. As ILECs deploy fiber optic technology deeper into their loop networks, these rules could limit First Communications’ ability to compete in particular geographic submarkets, and particularly its ability to offer competitive data services to customers served over these fiber loops.

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In September 2003, the FCC issued a proposed rulemaking to review the Total Element Long Run Incremental Cost (“TELRIC”) methodology used to determine the prices charged to competitive carriers for unbundled network elements. A change in pricing methodology that materially increases unbundled network element prices would increase First Communications’ costs and could have a materially adverse affect on its ability to compete. The FCC has taken no further action to date in this proceeding.

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In September 2005, the FCC agreed, at Qwest’s request, to forebear from applying its unbundling rules to Qwest in certain wire centers in the Omaha, Nebraska market. Similarly, in December 2006, the FCC granted similar forbearance to ACS Anchorage, Inc. for certain wire centers in the Anchorage, Alaska market. The decision to forebear from applying the unbundling rules in these wire centers means that Qwest does not have to provide competitive providers, such as First Communications, access to unbundled loops at prices based on the FCC’s TELRIC rules. Subsequently, the FCC denied petitions for similar relief sought by Verizon in six Eastern markets, and by Qwest in an additional four Western markets. Although, to date, none of the FCC forbearance decisions have directly affected markets that First Communications serves, it is possible that similar petitions may be brought by ILECs in other markets in the future. As part of its application for approval of its merger with Bell South, AT&T has committed that it will not file or give effect to any forbearance from its obligations provide unbundled loops and transport facilities for 42 months from the date of its merger closing in December 2006. However, Verizon and Qwest have made no commitment to refrain from filing future forbearance petitions. There can be no assurance that First Communications’ business or financial condition will not be materially adversely affected if the FCC forbears from applying its unbundling rules in material portions of its markets.

•

In a series of orders since 2006, the FCC has effectively deregulated provision of certain broadband services to enterprise customers by most major ILECs, including Verizon, AT&T, Qwest, Embarq Corporation and Citizens Communication Company. First Communications does not directly purchase these broadband services from the ILECs, so these decisions did not affect its costs, but the orders may result in increased competitive pressure on its own broadband service offerings.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Capitalization:				Renaissance’s amended and restated certificate of incorporation authorizes it to issue 201,000,000 shares, of which 200,000,000 are common stock, par value $0.0001 per share, and 1,000,000 are preferred stock, par value $0.0001. Renaissance’s board of directors is expressly granted the power to issue shares of the preferred stock in one or more series and to fix the rights and preferences, including voting powers, of each series of preferred stock.				First Communications’ amended and restated certificate of incorporation authorizes it to issue 70,000,000 shares, consisting of 59,165,000 shares of common stock, par value $0.001 per share, 835,000 shares of Class B common stock, par value $0.001 per share and 10,000,000 shares of preferred stock, par value $0.001 per share. First Communications’ board of directors is authorized to provide for the issuance of shares of preferred stock and may establish from time to time the number of shares to be included in such series, and to fix the rights and preferences, including voting powers, of each series of preferred stock.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Voting Rights:				Except as otherwise required by law or as otherwise provided in the terms of any class or series of stock having a preference over the common stock as to dividends or upon liquidation, the holders of Renaissance common stock shall exclusively possess all voting power, and each share of common stock shall have one vote.				Except as required by law or by a preferred stock designation, First Communications’ amended and restated certificate of incorporation provides that the holders of First Communications common stock shall exclusively possess all voting power, and that each share of common stock will have one vote. Except as otherwise required by law, the holders of Class B Common Stock shall have no right to vote and shall not be included in determining the number of shares voting or entitled to vote.
								So long as an aggregate of more than fifty percent (50%) of the outstanding shares of Series A Preferred Stock are held collectively by Gores FC Holdings, LLC or any affiliate thereof, at any annual or other meeting of the stockholders at which members of the board of directors are to be elected or whenever directors are to be elected by written consent, the holders of a majority of the Series A Preferred Stock shall be entitled to elect one less than a majority of the members of the board where the total number of directors is an odd number, or two less than a majority of the board where the total number of directors is an even number, provided, that the holders of a majority of the Series A Preferred Stock shall be entitled to elect at least one director.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
								Upon receipt of all necessary governmental and regulatory consents and approvals required in order for the holders of shares of Series A Preferred Stock to be entitled to elect a majority of the members of the board of directors, and so long as an aggregate of more than fifty percent (50%) of the outstanding shares of Series A Preferred Stock are held collectively by Gores FC Holdings, LLC or any affiliate thereof, at any annual or other meeting of the stockholders at which members of the board of directors are to be elected or whenever directors are to be elected by written consent, the holders of a majority of the shares of Series A Preferred Stock shall be entitled to elect a majority of the members of the board of directors.
Conversion Rights:				Shares of Renaissance common stock are not subject to conversion rights.				Shares of First Communications’ Series A Preferred Stock are not subject to conversion rights. Subject to certain limitations, holders of shares of Class B Common Stock are entitled to convert any and all shares of Class B Common Stock into the same number of shares of First Communications common stock.
Number of Directors:				Pursuant to Renaissance’s amended and restated certificate of incorporation and amended and restated bylaws, the board of directors shall consist of three (3) classes and each such class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire board of directors. The number of directors shall be fixed from time to time by a vote of a majority of the entire board of directors and shall be not less than one (1) director and no more than (15) fifteen directors.				Pursuant to First Communications’ amended and restated bylaws, the board of directors shall consist of at least three (3) directors and no more than nine (9) directors. The exact number shall be determined by the board of directors or the stockholders from time to time.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Removal of Directors:				Renaissance’s amended and restated bylaws provide that any director may be removed, only for cause, by the affirmative vote of the holders of a majority of all the shares of the stock of the company outstanding and entitled to vote for the election of directors.				First Communications’ amended and restated bylaws provide that, except as otherwise required by the laws of the State of Delaware or the amended and restated certificate of incorporation, a director may be removed only for cause by the affirmative vote or consent of more than fifty percent (50%) of the shares entitled to vote at an election of directors.
Filling Vacancies on the Board of Directors:				Renaissance’s amended and restated bylaws provide that any newly created directorships resulting from an increase in the number of directors or vacancies occurring in the board of directors for any reason whatsoever shall be filled by vote of the board of directors. If the number of directors then in office is less than a quorum, such newly created directorships and vacancies may be filled by a vote of a majority of the directors then in office.				First Communications’ amended and restated bylaws provide that except as otherwise required by the certificate of incorporation, any vacancy occurring in the board of directors, including a vacancy created by an increase in the number of directors, may be filled for the remainder of the unexpired term by the affirmative vote of a majority of the remaining directors then in office, even if there is less than a quorum of the board of directors.
Amendments to Certificate of Incorporation:				The DGCL prescribes that any amendment to Renaissance’s certificate of incorporation must be approved by the board of directors in a resolution recommending that the amendment be approved by a majority of the outstanding stock entitled to vote on the amendment, plus the approval of a majority of the outstanding stock of any class entitled under the DGCL to vote separately as a class on the amendment. The DGCL also provides that restrictions on transfers of securities may not be amended without the consent of each holder thereof.				The DGCL prescribes that any amendment to First Communications’ certificate of incorporation must be approved by the board of directors in a resolution recommending that the amendment be approved by a majority of the outstanding stock entitled to vote on the amendment, plus the approval of a majority of the outstanding stock of any class entitled under the DGCL to vote separately as a class on the amendment. The DGCL also provides that restrictions on transfers of securities may not be amended without the consent of each holder thereof.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
				Renaissance’s amended and restated certificate of incorporation provides that except as otherwise set forth in the amended and restated certificate of incorporation, Renaissance reserves the right to amend, alter, change or repeal any provision contained in the certificate of incorporation, in the manner now or hereafter prescribed by statute or therein, and all rights conferred upon stockholders therein are granted subject to this reservation.				First Communications’ amended and restated certificate of incorporation provides that, in order to cancel the admission of First Communications common stock trading on the AIM or to amend the provisions of Seventeenth Article (concerning such cancellation of trading), the company must first obtain the approval of the holders of at least seventy-five percent (75%) of the issued and outstanding shares of common stock present and voting at a general meeting of the stockholders called for that purpose.
								Eighteenth Article (relating to the obligation to notify First Communications and comply with any requests to purchase outstanding shares of First Communications common stock and Class B Common Stock by a person or entity that is the beneficial owner of more than ninety percent (90%) of the issued and outstanding shares of First Communications common stock) may be amended only by a resolution made at a duly called meeting of the stockholders and approved by the stockholders of record of at least ninety percent (90%) of the issued and outstanding common stock.
Amendments to Bylaws:				Renaissance’s amended and restated bylaws provide that the bylaws may be altered, amended or repealed at any meeting of the board of directors or at any meeting of the stockholders by the vote of the holders of a majority of the stock issued and outstanding and entitled to vote at such a meeting.				First Communications’ amended and restated certificate of incorporation and amended and restated bylaws provide that the board of directors shall have the power, without the assent or vote of the stockholders, to make, alter, amend, change, add to or repeal the bylaws of the company as provided in the bylaws and new bylaws may be adopted by the affirmative vote of a majority of the shares of stock of each class of First Communications’ capital stock.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Special Meetings of the Board of Directors:				Renaissance’s amended and restated bylaws provide that special meetings of the board of directors may be called by the chairman of the board, chief executive officer, the president or the secretary upon the written request of a majority of the directors. Such request shall state the date, time and place of the meeting. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.				First Communications’ amended and restated bylaws provide that special meetings of the board of directors may be called by any of the directors then in office. Notice of special meetings need not state the purpose of such meeting, unless otherwise required by the DGCL and shall be given to each director either in person, by telephone, by overnight courier service, by facsimile transmission, by first-class mail or by electronic mail transmission.
Special Stockholders Meetings:				Renaissance’s amended and restated bylaws provide that special meetings of stockholders may be called by a majority of the board of directors, the chairman of the board, the chief executive officer or the president and shall be called by the president or the secretary upon the written request of the holders of a majority of the outstanding shares of the Renaissance common stock. Any such request shall state the date, time, place and the purpose or purposes of the meeting. At such meetings the only business which may be transacted is that relating to the purpose or purposes set forth in the notice or waivers of notice thereof.				First Communications’ amended and restated bylaws provide that special meetings of stockholders may be called, unless otherwise prescribed by the DGCL or the certificate of incorporation, by the board of directors, the chairman of the board or the chief executive officer. Written notice of any such special meeting, stating the place, date, hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed present in person and vote, and the purpose or purposes of such special meeting, shall be given not less than ten (10) but not more than sixty (60) days prior to the meeting.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
				With respect to special meetings of stockholders, notice must be delivered to the secretary of the company not more than ninety (90) days prior to a special meeting and not later than the later of (i) sixty (60) days prior to such meeting, or (ii) ten (10) days following the date on which public announcement of the date of such meeting is made by the Company. Such stockholder notice shall set forth as to each matter the stockholders propose to bring before the meeting (a) a brief description of, and reasons for, the business to be brought before the meeting, (b) the name and address of the stockholder, (c) a statement regarding the stockholder’s beneficial ownership of the stock of the company and (d) a description of the stockholder’s material interest, and all arrangements and understandings between such stockholder and any other person, in connection with such business.
Action by Consent of the Stockholders:				Renaissance’s amended and restated certificate of incorporation provides that any action required or permitted to be taken by stockholders pursuant to the certificate of incorporation or under applicable law may be effected only at a duly called annual or special meeting of stockholders and with a vote thereat, and may not be effected by consent in writing.				First Communications’ amended and restated bylaws provide that, unless otherwise indicated in the certificate of incorporation, any action required to be taken or that may be taken at any annual or special meeting of stockholders of the company may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by persons entitled to vote stock representing not less than the number of shares necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Requirements for Timely Stockholder Notification:				Renaissance’s amended and restated bylaws provide that, to be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the company not less than 120 days nor more than 150 days prior to the first anniversary of the date that the company’s proxy statement is delivered to stockholders in connection with the preceding year’s annual meeting, or if the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary, or if no proxy was delivered in connection with the preceding year’s annual meeting, then such notice must be delivered not earlier than ninety (90) days prior to such annual meeting and no later than the later of (i) sixty (60) days prior to the annual meeting and (ii) ten (10) days following the date on which public announcement of the date of such annual meeting is first made by the company.				First Communications’ amended and restated certificate of incorporation and amended and restated bylaws do not list the requirements that must be fulfilled in order for a stockholder to raise a matter at a stockholder general meeting.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Limitation of Personal Liability of Directors:				Renaissance’s amended and restated certificate of incorporation provides that no director shall be personally liable to the company or its stockholders for monetary damages for breach of a fiduciary duty as a director, provided, however, that to the extent required by the provisions of Section 102(b)(7) of the DGCL or any other laws of Delaware, a director may be held personally liable (i) for any breach of the director’s duty of loyalty to the company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (unlawful payment or dividend or unlawful stock purchase or redemption), (iv) for any transaction from which the director derived an improper personal benefit, or (v) for any act or omission occurring prior to the date when the referenced article becomes effective.				First Communications’ amended and restated certificate of incorporation provides that a director shall not be personally liable to the company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the company or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL (unlawful payment or dividend or unlawful stock purchase or redemption), or (iv) for any transaction from which the director derived an improper personal benefit. In addition, upon any amendment of the DGCL further eliminating or limiting the personal liability of directors, such personal liability shall be eliminated or limited to the fullest extent permitted by the DGCL, as amended.

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				Rights of Renaissance’s Stockholders				Rights of First Communications’ Stockholders
Indemnification of Directors and Officers:				Renaissance’s amended and restated certificate of incorporation provides that Renaissance shall indemnify, to the fullest extent permitted by Section 145(b) of the DGCL, each person who was or is party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal or otherwise, formal or informal, by reason of the fact that he or she is or was a director, officer employee or agent of the company or is or was serving at the request of the company as a director, officer or employee of another entity, whether the basis of such proceeding is alleged action in an official capacity as such a director or officer of the company or in any other capacity while serving as such other director or officer, against all judgments, penalties, fines and expenses incurred or paid (including attorneys’ fees), except in relation to matters as to which the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the company, and, with respect to any criminal proceeding, had no reasonable cause to believe the person’s conduct was unlawful.				First Communications’ amended and restated certificate of incorporation and amended and restated bylaws provide that First Communications shall to the maximum extent and in the manner permitted by the DGCL indemnify each of its directors and officers against all expenses (including attorneys’ fees), liabilities, losses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise, arising by reason of the fact that such person is or was an agent of the company. A “director” or “officer” of the company includes any person (a) who is or was a director or officer of the company, (b) who, while serving as a director or officer of the company, is or was serving at the request of the company as a director or officer of another entity, or (c) who was a director or officer of a predecessor corporation of the company or of another enterprise at the request of such predecessor corporation.

 

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•

each person known by Renaissance to be the beneficial owner of more than 5% of its outstanding shares of common stock either on December 24, 2008 or after the consummation of the Merger;

•

each of Renaissance’s current executive officers and directors;

•

each of the executive officers and directors upon consummation of the Merger;

•

all of Renaissance’s current executive officers and directors as a group; and

•

all of Renaissance’s executive officers and directors as a group after the consummation of the Merger.

				Beneficial Ownership of Renaissance Common Stock on December 24, 2008								Beneficial Ownership of Common Stock After the Consummation of the Merger
Name and Address of Beneficial Owner(1)				Number of Shares				Percent of Class				Number of Shares				Percent of Class
RAC Partners LLC					4,421,069	(2)			20.24	%			8,868,736	(2)(3)(4)			21.71	%
Barry W. Florescue					4,456,069	(5)			20.40	%			8,903,736	(3)(5)(6)			21.62	%
Logan D. Delany, Jr.					30,000	(7)			*				30,000	(7)			*
Richard A. Bloom					—	(8)			*				—	(8)			*
Stanley Kreitman					30,000	(9)			*				30,000				*
Charles W. Miersch					122,600	(9)			*				232,100	(9)			*
Morton Farber					117,600	(9)			*				227,100	(9)			*
Integrated Core Strategies (US) LLC(10)					1,460,631	(10)			6.69	%			1,460,631				3.99	%
QVT Financial LP(11)					1,273,750	(11)			5.83	%			1,273,750				3.48	%
Jeffrey Thorp(12)					1,214,443	(12)			5.56	%			1,214,443				3.32	%
Raymond Hexamer					—				*				279,102	(13)			*
Joseph R. Morris					—				*				279,102	(14)			*
Richard J. Buyens					—				*				—				*
David Johnson, II					—				*				231,020	(15)			*
Theodore V. Boyd(16)					—				*				277,601	(16)			*
Marshall B. Belden Jr. (17)					—				*				2,331,844	(17)			6.38	%

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				Beneficial Ownership of Renaissance Common Stock on December 24, 2008								Beneficial Ownership of Common Stock After the Consummation of the Merger
Name and Address of Beneficial Owner(1)				Number of Shares				Percent of Class				Number of Shares				Percent of Class
Mark T. Clark(18)					—				*				—				*
Scott M. Honour(19)					—				*				5,300,179				13.81	%
Mark R. Stone(19)					—				*				5,300,179				13.81	%
Rockledge Limited(20)					—				*				277,601				*
Gores FC Holdings LLC(21)					—				*				5,300,179	(21)			13.81	%
Marbel Investments LLC(22)					—				*				2,331,844				6.38	%
First Energy Corp(23).					—				*				1,733,643				4.74	%
All pre-merger Renaissance directors and officers as a group (6 individuals)					4,756,269				21.78	%			9,422,936				21.84	%
All post-merger Renaissance directors and officers as a group (11 individuals)					4,756,269				21.78	%			18,121,783				42.00	%

 

*

Less than 1%.

(1)

Unless otherwise noted, the business address of each of the following is c/o Renaissance Acquisition Corp., 50 East Sample Road, Pompano Beach, Florida 33064 and the business address for Messrs. Hexamer, Morris, Buyens and Johnson is c/o First Communications, Inc., 33340 West Market Street, Akron, Ohio 44333.

(2)

Barry W. Florescue is the managing member of RAC Partners and has sole voting and dispositive power with respect to these shares. Certain of Renaissance’s other officers and directors and certain of Renaissance’s special advisors are members of RAC Partners.

(3)

Includes 4,447,667 shares of common stock issuable upon exercise of warrants held by RAC Partners, an entity which Mr. Florescue controls. Such warrants will be exercisable 30 days after the closing of the Merger.

(4)

Includes 2,000.000 shares held by RAC Partners which are subject to forfeiture if the EBITDA Condition is not satisfied. In the event such shares are forfeited, RAC Partners’ ownership percentage would decrease to 17.60%.

(5)

Includes 4,421,069 shares held by RAC Partners, an entity which Mr. Florescue controls.

(6)

Includes 2,000,000 shares held by RAC Partners which are subject to forfeiture if the EBITDA Condition is not satisfied. In the event such shares are forfeited, Mr. Florescue’s ownership percentage would decrease to 17.69%.

(7)

Does not include any securities held by RAC Partners.

(8)

All of Mr. Bloom’s interest in shares of common stock of Renaissance is held through RAC Partners.

(9)

Includes 109,500 shares of common stock issuable upon exercise of warrants held by such director. Such warrants will be exercisable 30 days after the closing of the Merger.

(10)

The business address for Integrated Core Strategies (US) LLC (“Integrated”) is c/o Millennium Management LLC, 666 Fifth Avenue, New York, New York 10103. The number of shares held by Integrated, as of October 24, 2008, is derived from a Schedule 13G filed by Integrated, Millennium Management LLC (“Millennium Management”), Millenco LLC (“Millenco”) and Israel A. Englander on November 3, 2008. Each of Integrated, Millennium Management and Israel A. Englander may be deemed to be the beneficial owner of 1,460,631 shares of Renaissance common stock held by Integrated. Millennium Management, is the general partner of Integrated Holding Group LP, which is the managing member of Integrated, and consequently may be deemed to have shared voting control and investment discretion over securities owned by Integrated. Israel A. Englander is the managing member of Millennium Management. As a result, Mr. Englander may be deemed to have shared voting control and investment discretion over securities deemed to be beneficially owned by Millennium Management.

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(11)

The business address for QVT Financial LP (“QVT Financial”) is 1177 Avenue of the Americas, 9th Floor, New York, New York 10036. The number of shares held by QVT Financial is derived from a Schedule 13G/A filed by QVT Financial and QVT Financial GP LLC on October 8, 2008. QVT Financial is the investment manager for QVT Fund LP (the “Fund”), which beneficially owns 1,017,426 shares of Renaissance common stock, and for Quintessence Fund L.P. (“Quintessence”), which beneficially owns 111,732 shares of Renaissance common stock. QVT Financial is also the investment manager for a separate discretionary account managed for Deutsche Bank AG (the “Separate Account”), which holds 144,592 shares of Renaissance common stock. QVT Financial has the power to direct the vote and disposition of the shares of Renaissance common stock held by the Fund, Quintessence and the Separate Account. Accordingly, QVT Financial may be deemed to be the beneficial owner of an aggregate amount of 1,273,750 shares of Renaissance common stock, consisting of the shares owned by the Fund and Quintessence and the shares held in the Separate Account. QVT Financial GP LLC, as General Partner of QVT Financial, may be deemed to beneficially own the same number of shares of Renaissance common stock reported by QVT Financial.

(12)

The business address for Jeffrey Thorp is 954 Third Avenue, No. 705, New York, New York 10022. The number of shares held by Jeffrey Thorp, as of November 21, 2008, is derived from a Schedule 13G filed by (i) Jeffrey Thorp, (ii) Sonoma Capital, LP, (iii) Sonoma Capital, LLC, (iv) Sonoma Capital Management, LLC, (v) Jeffrey Thorp IRA, Merrill Lynch, Pierce, Fenner & Smith, Inc., as custodian (the “Merrill Lynch IRA”), (vi) Jeffrey Thorp IRA, Charles Schwab & Co., Inc., as custodian (the “Charles Schwab IRA”) and (vii) Jeffrey Thorp IRA, Delaware Charter Guarantee & Trust Company, as custodian (the “Delaware Charter IRA”), on December 1, 2008. Each of Sonoma Capital, LP, Sonoma Capital Management, LLC, Sonoma Capital LLC and Jeffrey Thorp may be deemed to be the beneficial owner of 475,000 shares of Renaissance common stock held by Sonoma Capital, LP. Sonoma Capital, LLC is the general partner of Sonoma Capital, LP. Jeffrey Thorp is the managing member of Sonoma Capital, LLC. Sonoma Capital Management, LLC is the investment manager of Sonoma Capital, LP. Jeffrey Thorp is the managing member of Sonoma Capital Management, LLC. As a result, Sonoma Capital, LP, Sonoma Capital Management, LLC, Sonoma Capital LLC and Jeffrey Thorp may be deemed to have shared power to vote or to direct the vote and shared power to dispose or to direct the disposition of the shares of common stock owned by Sonoma Capital, LP. In addition to the 475,000 shares of Renaissance common stock held by Sonoma Capital, LP, Jeffrey Thorp may be deemed to be the beneficial owner of the following: (a) 493,443 shares of Renaissance common stock held by Merrill Lynch IRA, (b) 60,000 shares of Renaissance common stock held by Charles Schwab IRA and (c) 186,000 shares of Renaissance common stock held by Delaware Charter IRA. Jeffrey Thorp is the controlling person of each of the Merrill Lynch IRA, Charles Schwab IRA and the Delaware Charter IRA. As a result, Jeffrey Thorp may be deemed to have shared power to vote or to direct the vote and shared power to dispose or to direct the disposition of the shares of common stock owned by each of the Merrill Lynch IRA, Charles Schwab IRA and the Delaware Charter IRA.

(13)

Includes 40,500 restricted shares of Renaissance common stock to be awarded under the 2008 Plan upon the closing of the Merger.

(14)

Includes 40,500 restricted shares of Renaissance common stock to be awarded under the 2008 Plan upon the closing of the Merger.

(15)

Includes 30,500 restricted shares of Renaissance common stock to be awarded under the 2008 Plan upon the closing of the Merger.

(16)

Mr. Boyd’s business address is P.O. Box 20590, Canton, Ohio 44701. Mr. Boyd may be deemed to be the beneficial owner of 277,601 shares held by Rockledge Limited, a company in which Mr. Boyd is a general partner.

(17)

Mr. Belden’s business address is 612 Market Avenue South, Canton, Ohio 44702. Mr. Belden may be deemed to be the beneficial owner of 2,331,844 shares held by Marbel Investments LLC, of which Mr. Belden is a member.

(18)

Mr. Clark’s business address is c/o FirstEnergy, 76 South Main Street, Akron, Ohio 44308.

(19)

Messrs. Honour’s and Stone’s business address is c/o The Gores Group, 10877 Wilshire Boulevard, 18th Floor, Los Angeles, California 90024. Represents shares held by Gores FC Holdings LLC. Messrs. Honour and Stone

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are Senior Managing Directors of The Gores Group, LLC, which is the manager of Gores FC Holdings, LLC. Each of Messrs. Honour and Stone disclaims beneficial ownership of the securities of Renaissance owned by Gores FC Holdings, LLC, except to the extent of any pecuniary interest therein

(20)

The business address for Rockledge Limited is P.O. Box 20590, Canton, Ohio 44701.

(21)

The business address for Gores FC Holdings LLC is 10877 Wilshire Boulevard, 18th Floor, Los Angeles, California 90024. Includes 1,800,000 shares of common stock issuable upon exercise of warrants that are immediately exercisable. Does not include 720,000 shares of common stock issuable upon exercise of warrants that will be exercisable if the Warrant Condition is met.

(22)

The business address for Marbel Investments LLC is 612 Market Avenue South, Canton, Ohio 44702.

(23)

The business address for FirstEnergy Corp. is 76 South Main Street, Akron, Ohio 44308.

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Name				Number of Shares				Relationship to Renaissance
RAC Partners LLC					3,574,800			Entity controlled by Barry W. Florescue
Barry W. Florescue					30,000			Chairman and Chief Executive Officer
Logan D. Delany, Jr.					30,000			Executive Vice President and Director
Stanley Kreitman					30,000			Director
Charles W. Miersch					117,600			Director
Morton Farber					117,600			Director

 

Name				Number of Insider Warrants				Relationship to Renaissance
RAC Partners					4,447,667			Entity controlled by Barry W. Florescue, Renaissance’s Chairman of the Board and Chief Executive Officer
Morton Farber					109,500			Director
Charles W. Miersch					109,500			Director

 

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•

in whole and not in part;

•

at a price of $.01 per warrant at any time while the warrants are exercisable;

•

upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

•

if, and only if, the reported last sale price of the common stock equals or exceeds $8.50 per share, for any 20 trading days within a 30 trading day period ending on the third business day prior to the notice of redemption to warrant holders.

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				Units								Common Stock								Warrants
				High				Low				High				Low				High				Low
2008:
Third Quarter				$	6.35			$	5.70			$	5.82			$	5.55			$	.18			$	.03
Second Quarter					6.00				5.70				5.80				5.60				.25				.05
First Quarter					6.26				5.79				6.62				5.50				.40				.13
2007:
Fourth Quarter					6.40				6.10				5.65				5.52				.50				.35
Third Quarter					6.79				6.15				5.85				5.45				.60				.40
Second Quarter					6.90				6.09				5.62				5.42				.65				.38
First Quarter(1)					6.74				6.00				5.51				5.31				.45				.38

 

(1)

Represents the high and low sale prices for Renaissance Units and warrants from February 15, 2007, the date that Renaissance warrants and Units first became separately tradable, through March 31, 2007.

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Mark Seigel Secretary Renaissance Acquisition Corp. 50 East Sample Road, Suite 400 Pompano Beach, FL 33064 (954) 784-3031

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				Page
First Communications, Inc.
Report of Independent Registered Public Accounting Firm					F-4
Consolidated Balance Sheet as of December 31, 2007					F-5
Consolidated Statement of Operations for the period from inception (July 2, 2007) through December 31, 2007					F-7
Consolidated Statement of Changes in Redeemable Stock and Shareholders’ Equity for the period from inception (July 2, 2007) through December 31, 2007					F-8
Consolidated Statement of Cash Flows for the period from inception (July 2, 2007) through December 31, 2007					F-9
Notes to Consolidated Financial Statements					F-10
Condensed Consolidated Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007					F-26
Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2008 (unaudited)					F-28
Condensed Consolidated Statement of Cash Flows for nine months ended September 30, 2008 (unaudited)					F-29
Notes to Unaudited Consolidated Financial Statements					F-30
First Communications, LLC
Independent Auditors’ Report					F-37
Balance Sheets as of December 31, 2006 and 2005					F-38
Statements of Income for the years ended December 31, 2006, 2005 and 2004					F-40
Statement of Changes in Members’ Equity for the years ended December 31, 2006, 2005 and 2004					F-41
Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004					F-42
Notes to Financial Statements					F-44
Independent Auditors’ Report					F-54
Balance Sheet as of July 1, 2007					F-55
Statement of Income for the period from January 1, 2007 to July 1, 2007					F-57
Statement of Changes in Members’ Equity for the period from January 1, 2007 to July 1, 2007					F-58
Statement of Cash Flow for the period from January 1, 2007 to July 1, 2007					F-59
Notes to Financial Statements					F-60
Xtension Services, Inc.
Independent Auditors’ Report					F-69
Balance Sheets as of December 31, 2006, 2005 and 2004					F-70
Statements of Income and Retained Earnings for the years ended December 31, 2006, 2005 and 2004					F-71
Statements of Cash Flows for the years ended December 31, 2006, 2005 and 2004					F-72
Notes to Financial Statements					F-73
Independent Auditors’ Report					F-76
Balance Sheet as of July 1, 2007					F-77
Statement of Income and Retained Earnings for the period from January 1, 2007 to July 1, 2007					F-78
Statement of Cash Flows for the period from January 1, 2007 to July 1, 2007					F-79
Notes to Financial Statements					F-80

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				Page
GCI Globalcom Holdings, Inc.
Independent Auditors’ Report					F-83
Consolidated Balance Sheets as of September 30, 2008 and 2007 (unaudited) and December 31, 2007					F-84
Consolidated Statement of Operations for the nine months ended September 30, 2008 and 2007 (unaudited) and year ended December 31, 2007					F-85
Consolidated Statement of Stockholders’ Equity (Deficit) for the nine months ended September 30, 208 and 2007 (unaudited) and year ended December 31, 2007					F-86
Consolidated Statement of Cash Flows for the nine months ended September 30, 2008 and 2007 (unaudited) and year ended December 31, 2007					F-87
Notes to Consolidated Financial Statements					F-88
Renaissance Acquisition Corp.
Report of Independent Registered Public Accounting Firm					F-98
Balance Sheets as of December 31, 2007 and 2006					F-99
Statements of Operations for the for the year ended December 31, 2007 and for the period from April 17, 2006 (inception) to December 31, 2007 and for the period from April 17, 2006 (inception) to December 31, 2006					F-100
Statements of Stockholders’ Equity for the year ended December 31, 2007 and for the period from April 17, 2006 (inception) to December 31, 2007 and the period from April 17, 2006 (inception) to December 31, 2006					F-101
Statements of Cash Flows for the year ended December 31, 2007 and for the period from April 17, 2006 (inception) to December 31, 2007 and for the period from April 17, 2006 (inception) to December 31, 2006					F-102
Notes to Financial Statements					F-103
Condensed Balance Sheets as of September 30, 2008 and December 31, 2007					F-110
Condensed Statements of Operations for the nine and three months ended September 30, 2008 and 2007 and for the period from April 17, 2006 (inception) to September 30, 2008					F-111
Condensed Statements of Stockholders’ Equity for the nine months ended September 30, 2008 and 2007 and the period from April 17, 2006 (inception) to September 30, 2008					F-112
Condensed Statements of Cash Flows for the nine months ended September 30, 2008 and 2007 and for the period from April 17, 2006 (inception) to September 30, 2008					F-113
Notes to Unaudited Condensed Financial Statements					F-114

 

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ASSETS
CURRENT ASSETS
Cash and cash equivalents				$	9,300
Accounts receivable — trade, less allowance for doubtful accounts of $661					13,793
Accounts receivable — related party					945
Inventory					136
Prepaid expenses					823
TOTAL CURRENT ASSETS					24,997
PROPERTY AND EQUIPMENT
Switches					2,750
Technical equipment					1,922
Leasehold improvements					28
Office equipment					232
Furniture and fixtures					561
Software					1,500
Software development in progress					823
					7,816
Less: Accumulated depreciation					(593	)
NET PROPERTY AND EQUIPMENT					7,223
OTHER ASSETS
Goodwill					88,079
Other intangible assets, net					63,280
Deposits and other assets					1,357
TOTAL OTHER ASSETS					152,716
TOTAL ASSETS				$	184,936

 

---

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Line of credit				$	625
Accounts payable — trade					13,220
Federal income tax payable					362
Accrued expenses					2,600
Deferred tax liability, net — current					213
Deferred revenue — current					3,244
TOTAL CURRENT LIABILITIES					20,264
NON-CURRENT LIABILITIES
Deferred tax liability, net — long term					4,064
Deferred revenue — long term					170
TOTAL NON-CURRENT LIABILITIES					4,234
TOTAL LIABILITIES					24,498
Redeemable Preferred Stock, $0.001 par value; 10,000,000 shares authorized, 40,000 shares issued and outstanding (liquidation preference $1,000 per share)					40,000
SHAREHOLDERS’ EQUITY
Series A Common Stock, $0.001 par value; 59,165,000 shares authorized, 26,067,000 shares issued and outstanding					26
Series B Non-Voting Common Stock, $0.001 par value; 835,000 shares authorized, issued and outstanding					1
Additional paid in capital					119,482
Retained earnings					929
TOTAL SHAREHOLDERS’ EQUITY					120,438
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				$	184,936

 

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REVENUES, NET
Revenues, net				$	61,200
Revenues, net — related party					4,353
TOTAL REVENUES, NET					65,553
COST OF FACILITIES, exclusive of depreciation and amortization stated below					44,560
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					15,706
DEPRECIATION AND AMORTIZATION					3,712
OPERATING INCOME					1,575
OTHER EXPENSES, NET					58
INCOME BEFORE INCOME TAXES					1,517
PROVISION FOR INCOME TAXES					588
NET INCOME				$	929
EARNINGS PER SHARE
Numerator:
Net income				$	929
Preferred stock accretion					(12,548	)
Net loss attributable to common shareholders				$	(11,619	)
Per share amounts:
Basic earnings per share				$	(0.43	)
Diluted earnings per share				$	(0.43	)

 

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												Common Stock
				Redeemable Preferred Stock Series A								Series A								Series B
				Shares				Amount				Shares				Amount				Shares				Amount				Additional Paid In Capital				Retained Earnings				Total Shareholders’ Equity
Balances at July 2, 2007 (date of inception)					—			$	—				—			$	—				—			$	—			$	—			$	—			$	—
Management shares													1,326,000				1												(1	)							—
Issuance of common stock, preferred stock and warrants, net of issuance costs					40,000				27,452				9,165,000				9				835,000				1				54,167								54,177
Shares issued to acquire FC LLC and Xtensions													15,576,000				16												77,864								77,880
Accretion of preferred stock to redemption value									12,548																				(12,548	)							(12,548	)
Net income																																	929				929
Balances at December 31, 2007					40,000			$	40,000				26,067,000			$	26				835,000			$	1			$	119,482			$	929			$	120,438

 

---

CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	929
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization					3,712
Bad debt expense					917
Deferred taxes					225
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable — trade, net					(839	)
Inventory					93
Prepaid expenses					(243	)
Deposits and other assets					(281	)
Accounts payable — trade					(4,536	)
Federal income tax payable					363
Accrued expenses					(2,853	)
Deferred revenue					196
NET CASH USED IN OPERATING ACTIVITIES					(2,317	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment					(1,605	)
Acquisition of assets and assumption of liabilities, net of cash acquired					(72,250	)
Net change in accounts receivable — related party					45
NET CASH USED IN INVESTING ACTIVITIES					(73,810	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuance, net of issuance and transaction costs					81,631
Net borrowings on line of credit					625
Bank overdraft liability					3,171
NET CASH PROVIDED BY FINANCING ACTIVITIES					85,427
NET INCREASE IN CASH AND CASH EQUIVALENTS					9,300
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					—
CASH AND CASH EQUIVALENTS, END OF PERIOD				$	9,300
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest paid				$	708
Income taxes paid					—
Non-cash investing and financing activities:
Stock issued in exchange for assets acquired and liabilities assumed				$	77,880

 

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Beginning balance				$	—
Charged to expense					917
Uncollectible amounts written-off, net of recoveries					256
Ending balance				$	661

 

				Years
Switches					7
Technical equipment					3–5
Leasehold improvements					5
Office equipment					3
Furniture and fixtures					5
Software					6
Software development in progress					6

 

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•

As a significant portion of the purchase proceeds was comprised of cash compared to the issuance of equity interests.

•

On a fully diluted basis, holders of our stock before we acquired FC LLC held 9,165,000 shares of Series A Common Stock along with 5,333,333 “in-the-money” warrants after the acquisition of FC LLC, whereas the prior owners of FC LLC held 13,176,000 shares of Series A Common Stock after the acquisition.

•

Through our agreement with Gores FC Holdings, LLC as the majority owner of the Series A Redeemable Preferred Stock, Gores FC Holdings, LLC has the ability to elect a majority of the members of our Board of Directors and retains this right for as long as long as it maintains its ownership interest in Series A Redeemable Preferred Stock.

•

We did not retain the President or the CFO of FC LLC, choosing instead to hire a new President and to continue to search for a new CFO.

				FC LLC				Xtensions				TOTAL
				(Restated)				(Restated)				(Restated)
Assets Acquired:
Cash and cash equivalents				$	33			$	460			$	493
Accounts receivable — trade, net					11,842				1,503				13,345
Accounts receivable — related party					990				—				990
Inventory					228				—				228
Prepaid expenses					562				20				582
Property and equipment					6,143				33				6,176
Goodwill					71,704				16,375				88,079
Other intangibles, net					55,600				10,800				66,400
Deferred tax assets					86				—				86
Deposits and other assets					1,075				—				1,075
Total assets acquired					148,263				29,191				177,454
Liabilities Assumed:
Accounts payable — trade					13,115				1,470				14,585
Accrued expenses					4,800				583				5,383
Deferred tax liability					—				4,138				4,138
Deferred revenues					3,218				—				3,218
Total liabilities assumed					21,133				6,191				27,324
Net assets acquired				$	127,130			$	23,000			$	150,130

 

---

				Other Intangible Assets				Accumulated Amortization				Net				Weighted Average Amortization Period
Trademarks				$	12,400			$	—			$	12,400			Indefinite
Customer lists					48,000				3,000				45,000			8 years
LMDS licenses					6,000				120				5,880			25 years
				$	66,400			$	3,120			$	63,280

 

2008				$	6,240
2009					6,240
2010					6,240
2011					6,240
2012					6,240
Thereafter					19,680
				$	50,880

 

---

2008				$	1,405
2009					1,416
2010					975
2011					689
2012					567
Thereafter					95
				$	5,147

 

---

				(Restated)
Current:
Federal				$	323
State and local					40
					363
Deferred:
Federal				$	200
State and local					25
					225
				$	588

 

Current deferred tax (assets) liabilities:
Allowance for doubtful accounts				$	(253	)
Vacation accrual					(85	)
Prepaid expenses					342
COGS disputes					209
Deferred tax liability, net — current					213
Non-current deferred tax (assets) liabilities:
Non-goodwill intangibles				$	3,649
Goodwill					280
Fixed assets					242
Deferred rent					(28	)
Unearned revenue					(65	)
Other					(14	)
Deferred tax liability, net — long-term					4,064
Net deferred tax liability				$	4,277

 

Statutory federal income tax rate					34.0	%
Increases (reductions) in taxes resulting from:
State income taxes, net of federal tax benefit					4.3	%
Other, net					1.4	%
Effective income tax rate for the period					39.7	%

 

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Warrant				Tranche 1 Warrants				Tranche 2 Warrants				IPO Warrants
Term (years)					5				3				3
Volatility					40.0	%			35.0	%			35.0	%
Risk-free rate					3.6	%			3.1	%			3.1	%
Dividend rate					0.0	%			0.0	%			0.0	%

 

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				As Previously Reported				Restated
Consolidated Balance Sheet:
Cash and cash equivalents				$	11,163			$	9,300
Accounts receivable — trade					14,469				13,793
Accounts receivable — related party					502				945
Deferred tax asset — current					215				—
Prepaid expenses					1,256				823
Total current assets					27,740				24,997
Office equipment					278				232
Furniture and fixtures					606				561
Goodwill					103,410				88,079
Deposits and other assets					1,707				1,357
Total other assets					168,397				152,716
Total assets					203,359				184,936
Accounts payable — trade					14,802				13,220
Federal income tax payable					1,466				362
Accrued expenses					2,455				2,600
Deferred tax liability, net — current					—				213
Deferred revenue — current					1,625				3,244
Total current liabilities					20,974				20,264
Deferred tax liability, net — long-term					13,735				4,064
Total non-current liabilities					13,905				4,234
Redeemable preferred stock — mezzanine					—				40,000
Redeemable preferred stock — shareholders’ equity					40				—
Common stock					27				—
Series A common stock					—				26
Series B common stock					—				1
Additional paid in capital					164,854				119,482
Retained earnings					3,599				929
Total shareholder’s equity					168,480				120,438
Total liabilities and shareholder’s equity					203,359				184,936
Consolidated Statement of Operations
Revenues, net				$	64,286			$	61,200
Total revenues, net					68,640				65,553
Cost of facilities					43,683				44,560
Selling, general and administrative expenses					15,384				15,706
Operating income					5,860				1,575
Other expenses, net					7				58
Income before income taxes					5,854				1,517
Provision for income taxes					2,255				588
Net income					3,599				929
Consolidated Statement of Cash Flows:
Net cash flows — operating activities				$	8,150			$	(2,317	)
Net cash flows — investing activities					(82,787	)			(73,810	)
Net cash flows — financing activities					85,799				85,427
Cash and cash equivalents, end of period					11,163				9,300

 

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				September 30, 2008				December 31, 2007
				(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents				$	2,771			$	9,300
Accounts receivable — trade, less allowance for doubtful accounts of $1,123 at September 30, 2008 and $661 at December 31, 2007, respectively					20,473				13,793
Accounts receivable — related party					1,675				945
Federal income tax refund receivable					1,722				—
Inventory					2,888				136
Prepaid expenses					5,915				823
TOTAL CURRENT ASSETS					35,444				24,997
PROPERTY AND EQUIPMENT
Switches					55,676				2,750
Cell towers					723				—
Technical equipment					5,100				1,922
Leasehold improvements					43				28
Office equipment					660				232
Furniture and fixtures					640				561
Software					1,613				1,500
Software development in progress					1,623				823
					66,078				7,816
Less: Accumulated depreciation					(3,446	)			(593	)
NET PROPERTY AND EQUIPMENT					62,632				7,223
OTHER ASSETS
Goodwill					123,527				88,079
Other intangible assets, net					96,383				63,280
Deposits and other assets					8,107				1,357
TOTAL OTHER ASSETS					228,017				152,716
TOTAL ASSETS				$	326,093			$	184,936

 

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				September 30, 2008				December 31, 2007
				(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long-term debt				$	12,000			$	—
Revolver and line of credit					10,000				625
Accounts payable — trade					13,628				13,220
Federal income tax payable					—				362
Accrued expenses					10,742				2,600
Deferred tax liability, net — current					645				213
Deferred revenue — current					7,277				3,244
TOTAL CURRENT LIABILITIES					54,292				20,264
NON-CURRENT LIABILITIES
Long-term debt, net of current maturities					104,500				—
Deferred tax liability, net — long term					12,948				4,064
Deferred revenue — long term					14,965				170
TOTAL NON-CURRENT LIABILITIES					132,413				4,234
TOTAL LIABILITIES					186,705				24,498
Redeemable Preferred Stock, $0.001 par value; 10,000,000 shares authorized, 15,000 and 40,000 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively (liquidation preference $1,000 per share)					15,000				40,000
SHAREHOLDERS’ EQUITY
Series A Common Stock, $0.001 par value; 59,165,000 shares authorized, 26,067,000 shares issued and outstanding					26				26
Series B Non-Voting Common Stock, $0.001 par value; 835,000 shares authorized, 835,000 shares issued and outstanding					1				1
Additional paid in capital					119,482				119,482
Retained earnings					4,879				929
TOTAL SHAREHOLDERS’ EQUITY					124,388				120,438
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				$	326,093			$	184,936

 

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				Three Months Ended September 30, 2008				Nine Months Ended September 30, 2008
REVENUES, NET
Revenues, net				$	37,500			$	107,538
Revenues, net — related party					2,211				5,947
TOTAL REVENUES, NET					39,711				113,485
COST OF FACILITIES, exclusive of depreciation and amortization stated below					23,741				69,838
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					8,596				26,169
DEPRECIATION AND AMORTIZATION					3,231				8,475
OPERATING INCOME					4,143				9,003
OTHER INCOME (EXPENSE)
Interest expense					(1,544	)			(2,552	)
Other					167				156
OTHER INCOME (EXPENSE), NET					(1,377	)			(2,396	)
INCOME BEFORE INCOME TAXES					2,766				6,607
PROVISION FOR INCOME TAXES					1,205				2,657
NET INCOME				$	1,561			$	3,950
Basic weighted average shares outstanding					26,902				26,902
Effect of dilutive securities — Stock options and awards					5,280				5,280
Diluted weighted average shares outstanding					32,182				32,182
Basic earnings per share				$	0.06			$	0.15
Diluted earnings per share				$	0.05			$	0.12

 

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				Nine Months Ended September 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	3,950
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					8,475
Bad debt expense					708
Deferred taxes					2,641
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable — trade, net					778
Prepaid expenses					(3,934	)
Inventory					18
Deposits and other assets					(1,085	)
Accounts payable — trade					99
Federal income tax payable					(1,325	)
Accrued expenses					4,080
Deferred revenue					(3,008	)
NET CASH PROVIDED BY OPERATING ACTIVITIES					11,397
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment					(3,265	)
Acquisition of assets and assumption of liabilities, net of cash acquired					(105,750	)
Investment in equity method investee					(134	)
Net change in accounts receivable — related party					(730	)
NET CASH USED IN INVESTING ACTIVITIES					(109,879	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from term note					120,000
Proceeds from revolver					10,000
Proceeds from stock issuance, net of issuance and transaction costs					—
Redemption of preferred stock					(25,000	)
Payment of deferred financing costs					(5,751	)
Repayment of long-term note					(3,500	)
Repayment of line of credit					(625	)
Change in bank overdraft					(3,171	)
NET CASH PROVIDED BY FINANCING ACTIVITIES					91,953
NET DECREASE IN CASH AND CASH EQUIVALENTS					(6,529	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					9,300
CASH AND CASH EQUIVALENTS, END OF PERIOD				$	2,771
Cash paid during the period for:
Interest				$	2,695
Income taxes, net of refunds					1,724

 

---

Purchase Price Calculation:
Cash				$	58,500
Acquisition related transaction costs					500
Total Preliminary Purchase Price				$	59,000

 

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Preliminary Allocation of Purchase Price
Cash				$	1,070
Goodwill					33,549
Identifiable intangible assets					20,000
Accounts receivable					5,615
Property and equipment					13,343
Prepaid and other assets					1,422
Tangible liabilities assumed					(9,324	)
Net deferred tax liabilities					(6,675	)
Total Preliminary Purchase Price Allocation				$	59,000

 

				Three Months Ended September 30, 2008				Nine Months Ended September 30, 2008
Revenues				$	53,722			$	158,982
Net income					1,129				3,614
Earnings per share:
Basic				$	0.04			$	0.13
Diluted				$	0.04			$	0.11

 

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				Other Intangible Assets				Accumulated Amortization				Net				Weighted Average Amortization Period
Trademarks				$	12,400			$	—			$	12,400			Indefinite
Customer lists					85,803				7,520				78,283			8–16 years
LMDS licenses					6,000				300				5,700			25 years
				$	104,203			$	7,820			$	96,383

 

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				Fair Value Measurements at September 30, 2008 Using
Description				Carrying Value at June 30, 2008				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Interest rate swap				$	383			$	—			$	383			$—

 

---

---

---

---

				2006				2005
ASSETS
CURRENT ASSETS
Cash and cash equivalents				$	502,252			$	941,490
Accounts receivable — trade, less allowance for doubtful accounts of $625,000 and $800,000 as of December 31, 2006 and 2005, respectively					9,309,320				9,706,595
Accounts receivable — related party					1,200,350				1,094,685
Inventory					240,112				53,258
Prepaid expenses					974,500				311,763
TOTAL CURRENT ASSETS					12,226,534				12,107,791
PROPERTY AND EQUIPMENT
Switches					2,429,691				1,910,184
Technical equipment					4,482,576				3,261,668
Leasehold improvements					105,210				43,561
Office equipment					1,154,358				960,885
Furniture and fixtures					245,798				204,696
Vehicles					71,472				71,472
					8,489,105				6,452,466
Less: Accumulated depreciation					(3,595,534	)			(2,384,791	)
NET PROPERTY AND EQUIPMENT					4,893,571				4,067,675
OTHER ASSETS
Goodwill					11,494,007				9,788,007
Other intangibles, net, as restated (Note 4)					1,891,595				4,230,800
Deposits and other assets					641,260				322,996
					14,026,862				14,341,803
TOTAL ASSETS				$	31,146,967			$	30,517,269

 

---

				2006				2005
LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES
Line of credit				$	3,922,000			$	—
Current maturities of long-term debt					6,168,254				557,143
Accounts payable — trade					4,773,884				5,443,350
Accounts payable — related party					—				171,041
Accrued expenses					1,562,484				1,926,521
Accrued distributions					—				1,577,037
Deferred revenue — current, as restated (Note 4)					1,616,312				2,998,315
TOTAL CURRENT LIABILITIES					18,042,934				12,673,407
NON-CURRENT LIABILITIES
Long-term debt, net of current maturities					4,035,318				8,203,571
Deferred revenue — long term, as restated (Note 4)					195,699				2,125,320
TOTAL NON-CURRENT LIABILITIES					4,231,017				10,328,891
TOTAL LIABILITIES					22,273,951				23,002,298
MEMBERS’ EQUITY
Member units, 1,000 units outstanding					8,881,672				8,881,672
Accumulated deficit					(31,096	)			(1,364,308	)
Accumulated other comprehensive gain (loss)					22,440				(2,393	)
					8,873,016				7,514,971
TOTAL LIABILITIES AND MEMBERS’ EQUITY				$	31,146,967			$	30,517,269

 

---

				2006				2005				2004
REVENUES, NET
Revenues, net				$	67,812,190			$	52,886,942			$	36,750,341
Revenues, net — related party					4,881,754				5,086,303				3,780,830
TOTAL REVENUES, NET					72,693,944				57,973,245				40,531,171
COST OF FACILITIES, exclusive of depreciation and amortization shown below					50,589,448				41,396,736				25,624,400
DEPRECIATION AND AMORTIZATION					2,377,515				1,139,882				534,546
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					17,400,416				14,078,408				12,367,869
INCOME FROM OPERATIONS					2,326,565				1,358,219				2,004,356
OTHER INCOME (EXPENSE)					(388,431	)			(61,751	)			370,599
NET INCOME				$	1,938,134			$	1,296,468			$	2,374,955

 

---

				Member Units								Accumulated Deficit				Accumulated Other Comprehensive Gain (Loss)				Total Members’ Equity				Comprehensive Income
Beginning balance, January 1, 2004					1,000			$	8,881,672			$	(2,452,580	)		$	(308,802	)		$	6,120,290
Net income													2,374,955				—				2,374,955			$	2,374,955
Net gain on cash flow hedging instruments					—				—				—				134,560				134,560				134,560
Ending balance, December 31, 2004					1,000			$	8,881,672			$	(77,625	)		$	(174,242	)		$	8,629,805			$	2,509,515
Net income					—				—				1,296,468				—				1,296,468			$	1,296,468
Distributions													(2,583,151	)			—				(2,583,151	)
Net gain on cash flow hedging instruments					—				—				—				171,849				171,849				171,849
Ending balance, December 31, 2005					1,000				8,881,672				(1,364,308	)			(2,393	)			7,514,971			$	1,468,317
Net income					—				—				1,938,134								1,938,134			$	1,938,134
Distributions					—				—				(604,922	)			—				(604,922	)
Net gain on cash flow hedging instruments					—				—				—				24,833				24,833				24,833
Ending balance, December 31, 2006					1,000			$	8,881,672			$	(31,096	)		$	22,440			$	8,873,016			$	1,962,967

 

---

				2006				2005				2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	1,938,134			$	1,296,468			$	2,374,955
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					2,377,515				1,139,882				534,546
Gain on sale of property and equipment					(220,573	)			—				—
Changes in operating assets and liabilities:
Accounts receivable — trade, net					1,530,519				(4,295,506	)			(1,048,673	)
Prepaid expenses					14,308				(231,564	)			(1,927	)
Inventory					(186,854	)			(37,570	)			(15,688	)
Deposits and other assets					(27,882	)			62,924				—
Accounts payable — trade					(669,466	)			1,824,055				222,874
Accrued expenses					(339,204	)			516,226				(31,930	)
Deferred revenue					(2,086,624	)			1,546,965				667,471
NET CASH PROVIDED BY OPERATING ACTIVITIES					2,329,873				1,821,880				2,701,628
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property and equipment					(2,074,632	)			(988,248	)			(365,665	)
Deposits on property and equipment					(190,382	)			(190,382	)			(14,424	)
Business acquisitions					(3,910,290	)			(4,263,000	)			—
Proceeds from sale of property and equipment					500,000				—				—
Net change in accounts receivable — related party					(105,665	)			(351,747	)			(445,626	)
NET CASH USED IN INVESTING ACTIVITIES					(5,780,969	)			(5,793,377	)			(825,715	)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings (payments) due to cash overdraft, funded by line of credit					—				(911,877	)			911,877
Net borrowings on line of credit					3,922,000				—				—
Proceeds from issuance of long-term notes payable					2,000,000				3,900,000				—
Payments on notes payable					(557,142	)			(139,286	)			(406,504	)
Distributions paid					(2,181,959	)			(1,006,114	)			—
Net change in accounts payable — related party					(171,041	)			171,041				(92,000	)
NET CASH PROVIDED BY FINANCING ACTIVITIES					3,011,858				2,013,764				413,373
NET (DECREASE) INCREASE IN CASH CASH EQUIVALENTS					(439,238	)			(1,957,733	)			2,289,286
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR					941,490				2,899,223				609,937
CASH AND CASH EQUIVALENTS, END OF YEAR				$	502,252			$	941,490			$	2,899,223

 

---

				2006				2005				2004
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid				$	910,587			$	188,296			$	324,712
SUPPLEMENTARY DISCLOSURES OF NONCASH ACTIVITIES:
Fair market value adjustment for derivatives
Accrued liabilities — other				$	24,833			$	171,849			$	134,560
Accumulated comprehensive loss					(24,833	)			(171,849	)			(134,560	)
				$	—			$	—			$	—

 

---

				Years
Switches					5–10
Technical equipment					3–10
Leasehold improvements					3–5
Office furniture, fixtures and equipment					3–10
Vehicles					5

 

---

				Years
Customer lists:
Commercial Customers					7
Residential Customers					5
Other intangible assets					3

 

2007				$	414,204
2008				$	414,204
2009				$	414,204
2010				$	331,157
2011				$	179,898

 

---

---

				Other Intangible Assets				Accumulated Amortization				Net
December 31, 2006:
Trademarks				$	10,500			$	—			$	10,500
Customer lists:
Akron Canton Communication					353,000				105,900				247,100
CoreComm, Inc. — commercial customers					1,259,283				232,368				1,026,915
CoreComm, Inc. — residential customers					818,534				211,454				607,080
				$	2,441,317			$	549,722			$	1,891,595

---

				Other Intangible Assets				Accumulated Amortization				Net
December 31, 2005:
Trademarks				$	10,500			$	—			$	10,500
Customer lists:
Akron Canton Communication					353,000				35,300				317,700
CoreComm, Inc. — commercial customers					1,259,283				52,470				1,206,813
CoreComm, Inc. — residential customers					818,534				47,747				770,787
Other intangible assets					2,100,000				175,000				1,925,000
				$	4,541,317			$	310,517			$	4,230,800

 

				As Previously Reported				Adjustments				As Restated
Balance Sheet — December 31, 2006:
Other intangibles, net				$	3,116,595			$	(1,225,000	)		$	1,891,595
Deferred revenue:
Current				$	2,316,312			$	(700,000	)		$	1,616,312
Long term				$	720,699				(525,000	)		$	195,699
Total								$	(1,225,000	)

 

---

				2006				2007
Note payable to a bank, monthly interest payments at 6.26%, principal payment in one installment on December 24, 2007, secured by all assets of the Company and a guaranty from a member.				$	5,000,000			$	5,000,000
Note payable to a bank, monthly principal payments of $55,555, plus interest at one month LIBOR plus 150 basis (6.82% at December 31, 2006) commencing February, 2007 through January, 2010, secured by all assets of the Company.					2,000,000
Note payable to a bank, monthly principal payments of $46,429, plus interest at the lower of one month LIBOR plus 175 basis (7.07% and 6.14% at December 31, 2006 and 2005, respectively) or prime, (8.25% December 31, 2006 and 7.25% at December 31, 2006 and 2005, respectively) through September, 2012, secured by all assets of the Company.					3,203,572				3,760,714
					10,203,572				8,760,714
Less: Current maturities					6,168,254				557,143
				$	4,035,318			$	8,203,571

 

2007				$	6,168,254
2008					1,223,810
2009					1,223,810
2010					612,698
2011					557,143
Thereafter					417,857
				$	10,203,572

 

---

				2006				2005
Balance beginning of year				$	(2,393	)		$	(174,242	)
Net gain for the year					24,833				171,849
Balance, end of year				$	22,440			$	(2,393	)

 

2007				$	512,809
2008					370,664
2009					165,875
2010					57,480
2011					38,320
				$	1,145,148

 

---

---

---

---

---

ASSETS
CURRENT ASSETS
Cash and cash equivalents				$	33,298
Accounts receivable — trade, less allowance for doubtful accounts of $740,000					12,381,207
Accounts receivable — related party					843,825
Inventory					228,194
Prepaids and other assets					989,174
TOTAL CURRENT ASSETS					14,475,698
PROPERTY AND EQUIPMENT
Switches					2,429,691
Technical equipment					5,693,584
Leasehold improvements					152,340
Office equipment					1,244,378
Furniture and fixtures					245,798
Vehicles					71,472
Software development in progress					331,239
					10,168,502
Less: Accumulated depreciation					(4,519,422	)
NET PROPERTY AND EQUIPMENT					5,649,080
OTHER ASSETS
Goodwill					13,924,126
Other intangibles, net					15,469,851
Deposits and other assets					3,622,877
					33,016,854
TOTAL ASSETS				$	53,141,632

 

---

LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES
Line of credit				$	4,003,038
Debt					25,194,281
Accounts payable — trade					6,725,378
Accrued expenses					2,516,600
Deferred revenue — current					3,068,334
TOTAL CURRENT LIABILITIES					41,507,631
NON-CURRENT LIABILITIES
Deferred revenue — long term					185,266
TOTAL NON-CURRENT LIABILITIES					185,266
TOTAL LIABILITIES					41,692,897
MEMBERS’ EQUITY
Member units, 1,000 units outstanding					8,881,672
Accumulated income					2,553,454
Accumulated other comprehensive gain					13,609
					11,448,735
TOTAL LIABILITIES AND MEMBERS’ EQUITY				$	53,141,632

 

---

REVENUES, NET
Revenues, net				$	48,153,990
Revenues, net — related party					3,275,214
TOTAL REVENUES, NET					51,429,204
COST OF FACILITIES, exclusive of depreciation and amortization shown below					33,797,971
DEPRECIATION AND AMORTIZATION					2,268,510
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					12,327,950
INCOME FROM OPERATIONS					3,034,773
OTHER EXPENSE (INCOME)
Interest expense					725,419
Miscellaneous income					(275,198	)
TOTAL OTHER EXPENSE (INCOME)					450,221
NET INCOME				$	2,584,552

 

---

				Member Units								Accumulated Income				Accumulated Other Comprehensive Gain (Loss)				Total Members’ Equity				Comprehensive Income
Beginning balance, January 1, 2007					1,000			$	8,881,672			$	(31,098	)		$	22,440			$	8,873,014
Net income													2,584,552				—				2,584,552			$	2,584,552
Net loss on cash flow hedging instruments					—				—				—				(8,831	)			(8,831	)			(8,831	)
Ending balance, July 1, 2007					1,000			$	8,881,672			$	2,553,454			$	13,609			$	11,448,735			$	2,575,721

 

---

CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	2,584,552
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization					2,268,510
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable — trade, net					1,693,664
Prepaid expenses					(14,674	)
Inventory					11,918
Deposits and other assets					(1,341,435	)
Accounts payable — trade					(2,956,049	)
Accrued expenses					(1,009,969	)
Deferred revenue					1,092,112
NET CASH USED IN OPERATING ACTIVITIES					2,328,629
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment					(754,334	)
Acquisition of assets and assumption of liabilities					(16,456,119	)
Net change in accounts receivable — related party					356,525
NET CASH USED IN INVESTING ACTIVITIES					(16,853,928	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings on line of credit					81,038
Proceeds from issuance of debt					15,000,000
Payments on debt					(9,291	)
Payments of transaction costs related to sale of Company					(2,959,354	)
Bank overdraft liability					1,943,952
NET CASH PROVIDED BY FINANCING ACTIVITIES					14,056,345
NET DECREASE IN CASH AND CASH EQUIVALENTS					(468,954	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					502,252
CASH AND CASH EQUIVALENTS, END OF PERIOD				$	33,298
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid				$	466,706
SUPPLEMENTARY DISCLOSURES OF NONCASH ACTIVITIES:
Fair market value adjustment for derivatives
Accrued liabilities — other				$	(8,831	)
Accumulated comprehensive loss				$	8,831

 

---

				Years
Switches					5–10
Technical equipment and software					3–10
Leasehold improvements					3–5
Office furniture, fixtures and equipment					3–10
Vehicles					5

 

---

---

Assets Acquired:
Accounts receivable — trade, net				$	4,765,551
Property and equipment					48,000
Other intangibles, net					12,700,000
Goodwill					3,308,119
Deposits and other assets					902,771
Total assets acquired					21,724,441
Liabilities Assumed:
Accounts payable — trade					2,963,591
Accrued expenses					1,955,254
Deferred revenues					349,477
Total liabilities assumed					5,268,322
Net assets acquired				$	16,456,119

 

---

				(Unaudited) Pro forma
Revenue
Revenues, net				$	55,304,287
Revenues, net — related party					3,275,214
Total revenue, net					58,579,501
Cost of facilities					38,308,074
Depreciation and amortization					2,456,903
Selling, general and administrative expenses					14,227,968
Income from operations					3,586,556
Other expense					(535,086	)
Net Income				$	3,051,470

 

				Other Intangible Assets				Accumulated Amortization				Net
Trademarks				$	10,500			$	—			$	10,500
Other assets					2,238,715				306,689				1,932,026
Customer lists					15,130,816				1,603,491				13,527,325
				$	17,380,031			$	1,910,180			$	15,469,851

 

---

2007				$	1,761,811
2008				$	3,511,121
2009				$	3,481,956
2010				$	3,286,607
2011				$	2,867,096
2012				$	550,760

 

Note payable to a bank, monthly interest payments at 6.26%, principal payment in one installment on December 24, 2007, secured by all assets of the Company and a guaranty from a member. In conjunction with sale of Company this note was paid in full on July 2, 2007, see Note 13.				$	5,000,000
Note payable to a bank, monthly principal payments of $55,555, plus interest at one month LIBOR plus 150 basis (6.82% at July 1, 2007) commencing February, 2007 through January, 2010, secured by all assets of the Company. In conjunction with sale of Company this note was paid in full on July 2, 2007, see Note 13.					2,269,281

 

Note payable to a bank, monthly principal payments of $416,667 commencing October, 2007 through September, 2010, plus interest at one month LIBOR plus 175 basis (7.07% at July 1, 2007), payments of interest only from April through September 2007, secured by all assets of the Company. In conjunction with sale of Company this note was paid in full on July 2, 2007, see Note 13.					15,000,000
Note payable to a bank, monthly principal payments of $46,429, plus interest at the lower of one month LIBOR plus 175 basis (7.07% July 1, 2007) or prime, (8.25% July 1, 2007) through September, 2012, secured by all assets of the Company. In conjunction with sale of Company this note was paid in full on July 2, 2007, see Note 13.					2,925,000
				$	25,194,281

 

---

Balance beginning of period				$	22,440
Net loss for the period					(8,831	)
Balance, end of period				$	13,609

 

2007				$	484,081
2008					871,053
2009					870,302
2010					467,153
2011					116,533
				$	2,809,122

 

---

				As Computed Under Old Method				As Reported Under New Method				Effect of Change
Cost of Facilities				$	34,220,701			$	33,797,971			$	(422,730	)
Depreciation and Amortization					1,961,821				2,268,510				306,689
Income from Operations					2,918,732				3,034,773				116,041
Net Income					2,468,511				2,584,552				116,041

 

				As Computed Under Old Method				As Reported Under New Method				Effect of Change
Other Assets				$	31,084,828			$	33,016,854			$	1,932,026
Current Liabilities					41,507,631				43,439,657				1,932,026
Members’ Equity					11,332,694				11,448,735				116,041

 

---

				As Computed Under Old Method				As Reported Under New Method				Effect of Change
Other Assets				$	14,026,862			$	15,842,847			$	1,815,985
Current Liabilities					4,231,017				6,047,002				1,815,985
Members’ Equity					8,873,016				8,873,016				—

 

---

---

---

				December 31,
				2006				2005				2004
Current Assets
Cash and cash equivalents				$	2,283,597			$	1,172,484			$	773,643
Accounts receivable — net of allowance for doubtful accounts of $90,354, $25,865, and $40,070 in 2006, 2005 and 2004, respectively (Note 5)					2,063,257				1,933,443				1,352,519
Other assets					73,596				4,889				—
Total Current Assets					4,420,450				3,110,816				2,126,162
Property And Equipment (Note 2)					39,183				63,614				79,855
				$	4,459,633			$	3,174,430			$	2,206,017
Liabilities And Stockholders’ Equity
Current Liabilities
Accounts payable (Note 4)				$	1,973,946			$	1,718,668			$	1,212,898
Accrued expenses					1,312,635				264,616				415,145
Customer deposits					324,736				159,771				156,104
Total Current Liabilities					3,611,317				2,143,055				1,784,147
Commitments And Contingencies (Note 3)
Stockholders’ Equity
Common stock (1,500 shares, no par value, authorized, 1,000 shares issued and outstanding)					1,000				1,000				1,000
Retained earnings					847,316				1,030,375				420,870
Total Stockholders’ Equity					848,316				1,031,375				421,870
				$	4,459,633			$	3,174,430			$	2,206,017

 

---

				For The Years Ended December 31,
				2006				2005				2004
Net Revenue (Note 5)				$	34,382,017			$	19,305,038			$	15,662,835
Cost Of Revenue (Note 4)					24,210,619				13,787,860				9,638,083
Gross Profit					10,171,398				5,517,178				6,024,752
Operating Expenses
Selling, general and administrative					5,082,863				3,347,615				3,270,810
Depreciation					29,823				31,727				28,809
Total Operating Expenses					5,112,686				3,379,342				3,299,619
Income From Operations					5,058,712				2,137,836				2,725,133
Other Income
Interest income					208,229				61,669				104,677
Net Income				$	5,266,941			$	2,199,505			$	2,829,810
Statement Of Retained Earnings
Retained Earnings — Beginning Of Year				$	1,030,375			$	420,870			$	811,063
Net Income					5,266,941				2,199,505				2,829,810
Distributions					(5,450,000	)			(1,590,000	)			(3,220,003	)
Retained Earnings — End Of Year				$	847,316			$	1,030,375			$	420,870

 

---

				For The Years Ended December 31,
				2006				2005				2004
Cash Flows From Operating Activities
Net income				$	5,266,941			$	2,199,505			$	2,829,810
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation					29,823				31,727				28,809
Change in assets and liabilities:
(Increase) decrease in accounts receivable					(129,814	)			(580,924	)			427,925
(Increase) decrease in other assets					(68,707	)			(4,889	)			377
Increase in accounts payable					255,278				505,770				232,601
Increase (decrease) in accrued expenses					1,048,019				(150,529	)			(131,864	)
Increase (decrease) in customer deposits					164,965				3,667				(13,592	)
Net Cash Provided By Operating Activities					6,566,505				2,004,327				3,374,066
Net Cash Used In Investing Activities
Purchases of equipment					(5,392	)			(15,486	)			(19,689	)
Net Cash Used In Financing Activities
Cash distributions to stockholders					(5,450,000	)			(1,590,000	)			(3,220,003	)
Net Increase In Cash And Cash Equivalents					1,111,113				398,841				134,374
Cash And Cash Equivalents — Beginning Of Year					1,172,484				773,643				639,269
Cash And Cash Equivalents — End Of Year				$	2,283,597			$	1,172,484			$	773,643

 

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1.

Summary Of Accounting Policies

---

2.

Property And Equipment

				2006				2005				2004
Software				$	44,872			$	44,872			$	44,872
Office equipment					98,409				93,017				77,531
					143,281				137,889				122,403
Less: Accumulated depreciation					104,098				74,275				42,548
Net property and equipment				$	39,183			$	63,614			$	79,855

 

3.

Commitments

4.

Major Supplier

5.

Major Customers

---

---

---

CURRENT ASSETS
Cash and cash equivalents				$	460,392
Accounts receivable — net of allowance for doubtful accounts of $25,500					1,502,738
Other assets					19,962
TOTAL CURRENT ASSETS					1,983,092
PROPERTY AND EQUIPMENT
Software					44,872
Office equipment					102,570
					147,442
Less: Accumulated depreciation					112,927
NET PROPERTY AND EQUIPMENT					34,515
TOTAL ASSETS				$	2,017,607

 

CURRENT LIABILITIES
Accounts payable				$	1,680,680
Accrued expenses					168,187
Customer deposits					144,825
TOTAL CURRENT LIABILITIES					1,993,692
SHAREHOLDERS’ EQUITY
Common Stock, no par value; 1,500 shares authorized, 1,000 shares issued and outstanding					1,000
Retained earnings					22,915
TOTAL SHAREHOLDERS’ EQUITY					23,915
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				$	2,017,607

 

---

REVENUES, NET				$	15,723,325
COST OF FACILITIES, exclusive of depreciation and amortization stated below					12,628,595
GROSS PROFIT					3,094,730
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES					1,931,507
DEPRECIATION AND AMORTIZATION					8,828
OPERATING INCOME					1,154,395
INTEREST INCOME, NET					58,204
NET INCOME					1,212,599
RETAINED EARNINGS — JANUARY 1, 2007					847,316
DISTRIBUTIONS TO SHAREHOLDERS					(2,037,000	)
RETAINED EARNINGS — JULY 1, 2007				$	22,915

 

---

CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	1,212,599
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					8,828
Changes in operating assets and liabilities:
Accounts receivable, net					560,519
Other assets					53,634
Accounts payable					(293,266	)
Accrued expenses					(1,144,448	)
Customer deposits					(179,911	)
NET CASH PROVIDED BY OPERATING ACTIVITIES					217,955
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment					(4,160	)
NET CASH USED IN INVESTING ACTIVITIES					(4,160	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash distributions to owners					(2,037,000	)
NET CASH USED IN FINANCING ACTIVITIES					(2,037,000	)
NET DECREASE IN CASH AND CASH EQUIVALENTS					(1,823,205	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					2,283,597
CASH AND CASH EQUIVALENTS, END OF PERIOD				$	460,392

 

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				September 30, 2008				September 30, 2007				December 31, 2007
				(unaudited)				(unaudited)
Assets
Current Assets
Cash				$	1,069,712			$	961,965			$	2,450,530
Accounts receivable:
Trade					4,672,745				4,250,185				3,249,722
Unbilled					942,581				1,205,688				1,689,657
Other current assets
Income tax receivable					710,804				885,804				710,804
Deferred tax assets					1,060,227				909,470				757,705
Other current assets					710,994				441,412				465,804
Total current assets					9,167,063				8,654,524				9,324,222
Property and Equipment — Net					13,342,718				10,994,539				12,102,070
Total assets				$	22,509,781			$	19,649,063			$	21,426,292
Liabilities, Redeemable Preferred Stock, and Stockholders’ Deficit
Current Liabilities
Trade accounts payable				$	3,149,342			$	3,261,285			$	4,466,284
Revolving credit facility					3,625,000				4,150,000				4,150,000
Current portion of notes payable					2,437,000				627,750				1,237,000
Accrued and other current liabilities:
Accrued compensation and commissions					1,038,294				316,131				362,021
Deferred revenue					920,836				910,230				686,796
Accrued telecommunications taxes					813,613				999,929				644,204
Accrued telecommunications expense					684,875				426,296				461,350
Accrued related party management service expense					1,225,806				—				—
Other accrued liabilities					1,017,913				854,173				776,098
Total current liabilities					14,912,679				11,545,794				12,783,753
Notes Payable — Long-term portion					5,909,628				5,231,182				5,273,718
Deferred Rent Liability					472,663				350,389				390,498
Deferred Income Taxes					95,495				486,436				565,301
Total liabilities					21,390,465				17,613,801				19,013,270
Redemption Value of Preferred Stock — Class A, $.001 par value, 25,000,000 shares authorized; 3,030,303 shares issues and outstanding at September 30, 2008, September 30, 2007, and December 31, 2007 (liquidation preference of $8,100,000, $7,700,000, and $7,800,000 at September 30, 2008, September 30, 2007, and December 31, 2007, respectively)					8,100,000				7,700,000				7,800,000
Stockholders’ Equity (Deficit)
Common stock — $0.001 par value:					55,500				55,500				55,500
100,000,000 shares authorized; 55,500,000 shares issued and outstanding at September 30, 2008, September 30, 2007, and December 31, 2007
Accumulated deficit					(7,036,184	)			(5,720,238	)			(5,442,478	)
Total stockholders’ deficit					(6,980,684	)			(5,664,738	)			(5,386,978	)
Total liabilities, redeemable preferred stock and stockholders’ deficit				$	22,509,781			$	19,649,063			$	21,426,292

 

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				Nine Months Ended
				September 30, 2008				September 30, 2007				Year Ended December 31, 2007
				(unaudited)				(unaudited)
Net Revenue				$	41,829,723			$	41,484,819			$	55,918,480
Cost of Revenue
Network carrier charges					18,949,584				19,193,886				25,107,572
Salaries and benefits — Sales representatives					2,543,660				2,149,482				3,065,002
Commissions — Outside sales representatives					3,185,951				2,510,834				3,410,916
Depreciation					1,638,958				1,597,646				2,159,261
Total cost of revenue					26,318,153				25,451,848				33,742,751
Gross Profit					15,511,570				16,032,971				22,175,729
Operating Expenses
Sales, general and administrative					15,048,933				14,182,236				19,475,966
Related party management service expense					1,225,806				—				—
Depreciation					754,942				252,681				471,437
Total operating expenses					17,029,681				14,434,917				19,947,403
Operating (Loss) Income					(1,518,111	)			1,598,054				2,228,326
Nonoperating Expenses
Interest expense					(529,577	)			(707,699	)			(928,006	)
Other (expense) income					—				(89,158	)			113,526
Total nonoperating expenses					(529,577	)			(796,857	)			(814,480	)
(Loss) Income — Before income tax expense					(2,047,688	)			801,197				1,413,846
Income Tax (Recovery) Expense					(753,982	)			311,311				546,200
Net (Loss) Income				$	(1,293,706	)		$	489,886			$	867,646

 

---

				Common Stock				Accumulated Deficit				Total
Balance — January 1, 2007				$	55,500			$	(5,910,124	)		$	(5,854,624	)
Net Income — Unaudited					—				489,886				489,886
Accreted dividends on redeemable preferred stock					—				(300,000	)			(300,000	)
Balance — September 30, 2007					55,500				(5,720,238	)			(5,664,738	)
Net income					—				377,760				377,760
Accreted dividends on redeemable preferred stock					—				(100,000	)			(100,000	)
Balance — December 31, 2007					55,500				(5,442,478	)			(5,386,978	)
Net loss — Unaudited					—				(1,293,706	)			(1,293,706	)
Accreted dividends on redeemable preferred stock					—				(300,000	)			(300,000	)
Balance — September 30, 2008 — Unaudited				$	55,500			$	(7,036,184	)		$	(6,980,684	)

 

---

				Nine Months Ended
				September 30, 2008				September 30, 2007				Year Ended December 31, 2007
				(unaudited)				(unaudited)
Cash Flows from Operating Activities
Net (loss) income				$	(1,293,706	)		$	489,886			$	867,646
Adjustments to reconcile net (loss) income to net cash from operating activities:
Depreciation					2,393,900				1,831,061				2,630,698
Bad debt expense					1,045,480				336,066				735,095
Deferred income tax provision					(772,328	)			310,579				541,209
Changes in operating assets and liabilities which provided (used) cash:
Accounts receivable					(1,721,427	)			127,706				245,171
Other current assets					(245,190	)			(549,278	)			(398,670	)
Trade accounts payable					(1,316,942	)			(634,982	)			570,017
Accrued and other current liabilities					2,770,868				580,357				4,067
Deferred rent liability					82,165				205,492				245,601
Net cash provided by operating activities					942,820				2,696,887				5,440,834
Cash Flows from Investing Activities — Purchase of property and equipment					(3,634,548	)			(2,490,471	)			(4,397,639	)
Cash Flows from Financing Activities
Proceeds from notes payable					2,463,660				5,859,000				1,150,000
Payments on notes payable					(627,750	)			(7,003,642	)			(1,117,856	)
Payments on revolving credit facility					(525,000	)			—				(525,000	)
Net cash provided by (used in) financing activities					1,310,910				(1,144,642	)			(492,856	)
Net (Decrease) Increase in Cash					(1,380,818	)			(938,226	)			550,339
Cash — Beginning of period					2,450,530				1,900,191				1,900,191
Cash — End of period				$	1,069,712			$	961,965			$	2,450,530
Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest				$	571,554			$	727,302			$	925,818
Income taxes					20,727				340,000				340,000

 

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---

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				September 30, 2008				September 30, 2007				December 31, 2007
				(unaudited)				(unaudited)
Fiber network				$	370,177			$	370,177			$	370,177
Network equipment					20,574,935				17,525,425				18,993,901
Transportation equipment					44,912				44,912				44,912
Furniture and fixtures					669,866				666,803				669,866
Computer equipment and software					6,827,957				4,505,189				4,933,790
Leasehold improvements					538,220				317,033				355,943
Total cost					29,026,067				23,429,539				25,368,589
Accumulated depreciation					15,683,349				12,435,000				13,266,519
Net property and equipment				$	13,342,718			$	10,994,539			$	12,102,070

 

---

				September 30, 2008				September 30, 2007			December 31, 2007
				(unaudited)				(unaudited)
Term note payable to a financial institution due in quarterly repayment amounts of $209,250, plus accrued interest, with a balloon payment of $1,534,968 due on September 30, 2012. The interest rate is prime plus an applicable margin, as defined in the agreement (6.75%, 9.5%, and 9% at September 30, 2008, September 30, 2007, and December 31, 2007, respectively). The note is collateralized by substantially all assets of the Company. The term note was paid in full in connection with the sale of the Corporation’s common stock on September 30, 2008				$	4,882,968			$	5,858,932		$5,510,718
CapEx facility payable to a financial institution due in quarterly principal payments beginning October 1, 2008 calculated on the outstanding balance at that date. The facility is due on September 30, 2012. The interest rate is split with LIBOR plus an applicable margin, as defined in the agreement for $1,000,000 of the outstanding balance (8.97% and 8.3% at September 30, 2008 and December 31, 2007, respectively) and prime plus an applicable margin, as defined in the agreement for the remaining outstanding balance (6.75% and 7.88% at September 30, 2008 and December 31, 2007, respectively). Accrued interest is payable quarterly. The note is collateralized by substantially all assets of the Company. The CapEx facility note was paid in full in connection with the sale of the Corporation’s common stock on September 30, 2008					3,463,660				—		$1,000,000
Total					8,346,628				5,858,932		6,510,718
Less current portion					2,437,000				627,750		1,237,000
Long-term portion				$	5,909,628			$	5,231,182		$5,273,718

 

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Years Ending September 30				Amount
2009				$	2,437,000
2010					2,437,000
2011					1,100,660
2012					2,371,968
Total				$	8,346,628

 

Years Ending September 30				Amount
2009				$	969,564
2010					1,115,606
2011					1,144,646
2012					1,175,365
2013					1,172,175
Thereafter					1,796,184
Total				$	7,373,540

 

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				September 30, 2008				September 30, 2007				December 31, 2007
				(unaudited)				(unaudited)
Federal income taxes				$	(2,381	)		$	(6,909	)		$	(6,909	)
State income taxes					20,727				7,641				11,900
Deferred income taxes					(772,328	)			310,579				541,209
Total income tax (recovery) expense				$	(753,982	)		$	311,311			$	546,200

 

				September 30, 2008				September 30, 2007				December 31, 2007
				(unaudited)				(unaudited)
Deferred tax assets:
Accounts receivable				$	433,159			$	809,755			$	580,067
Net operating loss carryforwards					1,652,301				1,061,165				1,067,300
Accrued liabilities					627,068				99,715				92,638
Total					2,712,528				1,970,635				1,740,005
Deferred tax liabilities — Property and equipment					(1,747,796	)			(1,547,601	)			(1,547,601	)
Net deferred tax asset				$	964,732			$	423,034			$	192,404

 

				Deferred Tax Assets				Deferred Tax Liabilities				Total
Current				$	1,060,227			$	—			$	1,060,227
Long term					1,652,301				(1,747,796	)			(95,495	)
Total				$	2,712,528			$	(1,747,796	)		$	964,732

 

				Deferred Tax Assets				Deferred Tax Liabilities				Total
Current				$	909,470			$	—			$	909,470
Long term					1,061,165				(1,547,601	)			(486,436	)
Total				$	1,970,635			$	(1,547,601	)		$	423,034

 

---

				Deferred Tax Assets				Deferred Tax Liabilities				Total
Current				$	757,705			$	—			$	757,705
Long term					982,300				(1,547,601	)			(565,301	)
Total				$	1,740,005			$	(1,547,601	)		$	192,404

 

				Par Value				Dividends				Redemption Value				Total Redemption Value
Balance January 1, 2007				$	3,030			$	2,400,000			$	4,996,970			$	7,400,000
Accretion (unaudited)					—				300,000								300,000
Balance September 30, 2007					3,030				2,700,000				4,996,970				7,700,000
Accretion (unaudited)					—				100,000				—				100,000
Balance December 31, 2007					3,030				2,800,000				4,996,970				7,800,000
Accretion (unaudited)					—				300,000				—				300,000
Balance September 30, 2008 (unaudited)				$	3,030			$	3,100,000			$	4,996,970			$	8,100,000

 

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				December 31, 2006				December 31, 2007
ASSETS
Current assets:
Cash				$	60,165			$	1,410,028
Prepaid expenses					—				19,213
Investment income receivable					—				8,374
Total current assets					60,165				1,437,615
Deferred offering costs					327,727
Cash equivalents held in trust account									105,364,922
Fixed assets, net of accumulated depreciation									1,097
Total assets				$	387,892			$	106,803,634
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable				$	—			$	42,078
Accrued expenses					1,917				80,250
Accrued offering costs					212,493				—
Notes payable to stockholder					150,000				—
Total current liabilities					364,410				122,328
Long-term obligations:
Accrued underwriting costs					—				3,051,240
Total liabilities					364,410				3,173,568
Common stock subject to possible conversion, 3,586,206 shares at conversion value									20,819,153
Interest income attributable to common stock subject to conversion									245,203
Commitments and contingencies (Note C, E and F):
Stockholders’ equity:
Preferred stock — $.0001 par value, none authorized at December 31, 2006; 1,000,000 shares authorized and none outstanding at December 31, 2007					—				—
Common stock — $.0001 par value, 6,000,000 shares authorized; 3,900,000 issued and outstanding as of December 31, 2006; 72,000,000 shares authorized, 21,840,000 issued and outstanding (including 3,586,206 shares subject to possible conversion) as of December 31, 2007					390				2,184
Additional paid-in capital					24,610				80,508,869
(Deficit) earnings accumulated during the development stage					(1,518	)			2,054,657
Total stockholders’ equity					23,482				82,565,710
				$	387,892			$	106,803,634

 

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				April 17, 2006 (inception) to December 31, 2006				For the year ended December 31, 2007				April 17, 2006 (inception) to December 31, 2007
General and administrative expenses				$	1,998			$	847,558			$	849,556
Operating loss					(1,998	)			(847,558	)			(849,556	)
Other income (expense):
Interest expense					—				(5,263	)			(5,263	)
Interest income					480				53,108				53,588
Interest income trust account					—				4,113,933				4,113,933
(Loss) income before provision for income taxes					(1,518	)			3,314,220				3,312,702
Provision for income taxes					—				(1,012,842	)			(1,012,842	)
Net (loss) income				$	(1,518	)			2,301,378				2,299,860
Less: interest attributable to common stock subject to possible conversion					—				(245,203	)			(245,203	)
Net income attributable to common stock not subject to possible conversion					(1,518	)			2,056,175				2,054,657
Total net (loss) income per share:
Basic				$	(0.00	)		$	0.11
Diluted				$	(0.00	)		$	0.10
Total weighted average shares outstanding:
Basic					3,900,000				20,220,164
Diluted					3,900,000				23,294,978
Net (loss) income per share attributable to common stock not subject to conversion:
Basic				$	(0.00	)			0.12
Diluted				$	(0.00	)			0.11
Weighted average shares outstanding:
Basic					3,900,000				16,957,763
Diluted					3,900,000				19,417,922
Shares subject to possible conversion:
Weighted average number of shares									3,262,401
Income per share amount:								$	0.18

 

---

				Common Stock
				Shares				Amount				Additional Paid-In Capital				(Deficit)/Earnings Accumulated During the Development Stage				Total Stockholders’ Equity
Balance at April 17, 2006 (inception)					—			$	—			$	—			$	—			$	—
Sale of common stock to founding stockholders (April 17, 2006 at $0.006 per share)					3,900,000				390				24,610				—				25,000
Net loss for the period					—				—				—				(1,518	)			(1,518	)
Balance as of December 31, 2006					3,900,000				390				24,610				(1,518	)			23,482
Sale of private placement warrants (1)					—				—				2,100,000				—				2,100,000
Sale of 15,600,000 units, net of offering expenses (2)					15,600,000				1,560				86,005,946				—				86,007,506
Sale of 2,340,000 units for over-allotment (3)					2,340,000				234				13,197,366				—				13,197,600
Proceeds subject to possible conversion of 3,586,206 shares					—				—				(20,819,153	)			—				(20,819,153	)
Sale of unit purchase option (February 1, 2007)					—				—				100				—				100
Accretion of trust account relating to common stock subject to possible conversion																	(245,203	)			(245,203	)
Net income for the year					—				—				—				2,301,378				2,301,378
Balance as of December 31, 2007					21,840,000			$	2,184			$	80,508,869			$	2,054,657			$	82,565,710

 

(1)

(January 29, 2007 at $0.45 per warrant)

(2)

(February 1,2007 at $6.00 per unit)

(3)

(February 16,2007 at $6.00 per unit)

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				April 17, 2006 (inception) to December 31, 2006				For the year ended December 31, 2007				April 17, 2006 (inception) to December 31, 2007
Cash flows from operating activities:
Net (loss) income				$	(1,518	)		$	2,301,378			$	2,299,860
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Depreciation and amortization									219				219
Changes in operating assets and liabilities:
Prepaid expenses									(19,213	)			(19,213	)
Interest income receivable									(8,374	)			(8,374	)
Accounts payable and accrued liabilities					1,917				120,411				122,328
Net cash provided by operating activities					399				2,394,421				2,394,820
Cash flows from investing activities:
Proceeds invested in trust account									(105,364,922	)			(105,364,922	)
Acquisition of fixed assets									(1,316	)			(1,316	)
Net cash used by investing activities					–0–				(105,366,238	)			(105,366,238	)
Cash flows from financing activities:
Proceeds from (repayment of) note payable to stockholder					150,000				(150,000	)			–0–
Proceeds from sale of units, net									102,371,680				102,256,446
Proceeds from issuance of warrants									2,100,000				2,100,000
Proceeds from sale of common stock to initial stockholder					25,000				—				25,000
Payment of accrued offering costs					(115,234	)			—				—
Net cash provided by financing activities					59,766				104,321,680				104,381,446
Net increase in cash					60,165				1,349,863				1,410,028
Cash at beginning of period					–0–				60,165				–0–
Cash at end of period					60,165			$	1,410,028			$	1,410,028
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest				$	–0–			$	5,263			$	5,263
Income taxes				$	–0–			$	1,022,000			$	1,022,000
Supplemental disclosures of noncash operating and financing activity:
Accrual of deferred offering costs				$	212,493				—				(212,493	)
Accrued deferred underwriting fees					—			$	3,051,240			$	3,051,240
Accrued insurance installment loan					—			$	47,282			$	47,282

 

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---

---

---

---

---

Current
Federal				$	794.963
State					217,879
Total current				$	1,012,842

 

				December 31, 2007
Statutory federal income tax rate					34.0	%
Increase in valuation allowance					8.7	%
State taxes					5.5	%
Impact of permanent differences					(17.7	%)
Other					.1	%
Effective income tax rate					30.6	%

 

				Fiscal Quarter Ended
				March 31, 2007				June 30, 2007				September 30, 2007				December 31, 2007
Net income				$	486,782			$	671,121			$	274,894			$	868,581
Net (loss) income per share
Basic				$	.03			$	.03			$	.01			$	.04
Diluted				$	.03			$	.03			$	.01			$	.03

 

---

---

				December 31, 2007				September 30, 2008
								(unaudited)
ASSETS
Current assets:
Cash				$	1,410,028			$	870,793
Prepaid expenses					19,213				89,857
Investment income receivable					8,374				—
Total current assets					1,437,615				960,650
Cash equivalents held in trust account					105,364,922				106,407,992
Fixed assets, net of accumulated depreciation					1,097				3,397
				$	106,803,634			$	107,372,039
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable				$	42,078			$	855,375
Accrued expenses					80,250				69,000
Total current liabilities					122,328				924,375
Long-term obligations:
Accrued underwriting costs					3,051,240				3,051,240
Total liabilities					3,173,568				3,975,615
Common stock subject to possible conversion, 3,586,206 shares at conversion value					20,819,153				20,819,153
Interest income attributable to common stock subject to conversion, net of tax					245,203				453,705
Commitments and contingencies (Note 3 and 7):									—
Stockholders’ equity:
Preferred stock — $.0001 par value, 1,000,000 shares authorized and none outstanding at December 31, 2007 and September 30, 2008									—
Common stock — $.0001 par value, 72,000,000 shares authorized, 21,840,000 issued and outstanding (including 3,586,206 shares subject to possible conversion) as of December 31, 2007 and September 30, 2008					2,184				2,184
Additional paid-in capital					80,508,869				80,508,869
Earnings accumulated during the development stage					2,054,657				1,612,513
Total stockholders’ equity					82,565,710				82,123,566
				$	106,803,634			$	107,372,039

 

---

				Three Months Ended September 30, 2007				Three Months Ended September 30, 2008				Nine Months Ended September 30, 2007				Nine Months Ended September 30, 2008				April 17, 2006 (inception) to September 30, 2008
General and administrative expenses				$	466,888			$	994,357			$	761,264			$	1,323,749			$	2,173,305
Operating loss					(466,888	)			(994,357	)			(761,264	)			(1,323,749	)			(2,173,305	)
Other income (expense)
Interest expense					(1,352	)			(281	)			(4,175	)			(1,664	)			(6,927	)
Interest income					20,263				6,073				33,234				29,690				83,279
Interest income trust account					1,268,684				407,398				2,788,458				1,676,380				5,790,312
Income (loss) before provision for income taxes					820,707				(581,167	)			2,056,253				380,657				3,693,359
Provision for income taxes					(542,803	)			(146,783	)			(623,456	)			(614,299	)			(1,627,141	)
Net income (loss)				$	277,904			$	(727,950	)		$	1,432,797			$	(233,642	)		$	2,066,218
Less: Interest attributable to common stock subject to possible conversion, net of tax					(57,972	)			(48,993	)			(57,972	)			(208,502	)			(453,705	)
Net income (loss) attributable to common stock not subject to possible conversion				$	219,932			$	(776,943	)		$	1,374,825			$	(442,144	)		$	1,612,513
Maximum number of shares subject to possible conversion:
Weighted average shares outstanding subject to possible conversion					3,586,206				3,586,206				3,153,280				3,586,206
Income per share amount:
Basic and diluted				$	.02			$	.01			$	.02			$	.06
Weighted average shares outstanding not subject to possible conversion:
Basic and diluted					18,253,794				18,253,794				16,521,006				18,253,794
Pro forma diluted					21,999,710				23,037,729				19,468,103				22,601,153
Net income (loss) per share attributable to common stock not subject to conversion:
Basic and diluted				$	.01			$	(.04	)		$	.08			$	(.02	)
Pro forma diluted				$	.01			$	(.03	)		$	.07			$	(.02	)

 

---

				Common Stock
				Shares				Amount				Additional Paid-In Capital				(Deficit)/Earnings Accumulated During the Development Stage				Total Stockholders’ Equity
Balance at April 17, 2006 (inception)					—			$	—			$	—			$	—			$	—
Sale of common stock to founding stockholders at $.0064 per share (April 17, 2006)					3,900,000				390				24,610				—				25,000
Net loss for the period					—				—				—				(1,518	)			(1,518	)
Balance as of December 31, 2006					3,900,000				390				24,610				(1,518	)			23,482
Sale of private placement warrants at $0.45 per warrant					—				—				2,100,000				—				2,100,000
Sale of 17,940,000 units net of offering expenses at $6.00 per unit (February 1, 2007)					17,940,000				1,794				99,203,312				—				99,205,106
Proceeds subject to possible conversion of 3,586,206 shares					—				—				(20,819,153	)			—				(20,819,153	)
Sale of unit purchase option					—				—				100				—				100
Accretion of trust account relating to common stock subject to possible conversion, net of tax																	(245,203	)			(245,203	)
Net income for the year					—				—				—				2,301,378				2,301,378
Balance as of December 31, 2007					21,840,000				2,184				80,508,869				2,054,657				82,565,710
Accretion of trust account relating to common stock subject to possible conversion, net of tax																	(208,502	)			(208,502	)
Net loss for the nine months ending September 30, 2008																	(233,642	)			(233,642	)
Balance as of September 2008 (unaudited)					21,840,000			$	2,184			$	80,508,869			$	1,612,513			$	82,123,566

 

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				Nine Months Ended September 30, 2007				Nine Months Ended September 30, 2008				April 17, 2006 (inception) to September 30, 2008
Cash flows from operating activities:
Net income (loss)				$	1,432,797			$	(233,642	)		$	2,066,218
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization					142				376				596
Changes in operating assets and liabilities:
Prepaid expenses					(9,843	)			(70,644	)			(704,156	)
Interest income receivable					(9,360	)			8,374				—
Accounts payable and accrued liabilities					985,029				802,047				1,538,674
Net cash provided by operating activities					2,398,765				506,511				2,901,332
Cash flows from investing activities:
Proceeds invested in trust account					(105,061,449	)			(1,043,070	)			(106,407,992	)
Acquisition of fixed assets					(1,316	)			(2,676	)			(3,993	)
Net cash used by investing activities					(105,062,765	)			(1,045,746	)			(106,411,985	)
Cash flows from financing activities:
Proceeds from/(repayment of) note payable to stockholder					(150,000	)			—				—
Proceeds from sale of units, net					102,371,680								102,256,446
Proceeds from issuance or warrants					2,100,000								2,100,000
Proceeds from sale of common stock to initial stockholder					—				—				25,000
Net cash provided by financing activities					104,321,680				–0–				104,381,446
Net increase (decrease) in cash					1,657,680				(539,235	)			870,793
Cash at beginning of period					60,165				1,410,028				–0–
Cash at end of period				$	1,717,845			$	870,793			$	870,793
Supplemental cash flow disclosures:
Cash paid for:
Interest				$	(4,175	)		$	(1,664	)		$	(6,927	)
Income taxes				$	–0–			$	632,810			$	1,655,310
Non-cash operating and financing activity:
Accrual of deferred offering costs				$	–0–			$	–0–			$	(212,493	)
Accrued deferred underwriting fees					3,051,240				–0–				3,051,240
Accrued insurance installment loan				$	60,833			$	–0–			$	4,864

 

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•  Level I —

Quoted prices in active markets for identical assets or liabilities.

•  Level 2 —

Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

---

•  Level 3 —

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

---

				For the Three Months Ended September 30, 2007				For the Three Months Ended September 30, 2008				For the Nine Months Ended September 30, 2007				For the Nine Months Ended September 30, 2008
Weighted average number of shares outstanding as used in computation of basic and diluted net income (loss) per share					18,253,794				18,253,794				16,521,006				18,253,794
Effect of diluted securities — warrants					3,745,916				4,783,935				2,947,097				4,347,359
Shares used in computation of pro forma diluted net income (loss) per shares					21,999,710				23,037,729				19,468,103				22,601,153

 

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ANNEX A

AGREEMENT AND PLAN OF MERGER

dated as of September 13, 2008

among

RENAISSANCE ACQUISITION CORP.,

FCI MERGER SUB I, INC.,

FCI MERGER SUB II, LLC,

FIRST COMMUNICATIONS, INC.

and

THE STOCKHOLDERS’ REPRESENTATIVE NAMED HEREIN

A-1

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[THIS PAGE INTENTIONALLY LEFT BLANK]

A-2

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TABLE OF CONTENTS

			Page

I.	DEFINITIONS		A-8
II.	THE MERGERS		A-17
	2.1.	Effective Times of the Mergers	A-17
	2.2.	Closing	A-17
	2.3.	Effects of the Mergers	A-17
	2.4	Governing Documents	A-18
	2.5	Directors and Officers	A-18
III.	CONVERSION OF SECURITIES		A-18
	3.1	Effect on Capital Stock; Merger Consideration	A-18
	3.2	Fractional Shares	A-20
	3.3	Appraisal Rights	A-20
	3.4	Payment of Merger Consideration; Surrender of Certificates	A-21
	3.5	Escrow	A-23
IV.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY		A-23
	4.1	Organization, Qualification, and Corporate Power	A-23
	4.2	Subsidiaries	A-23
	4.3	Capitalization	A-23
	4.4	Validity and Execution; Stockholder Approval	A-24
	4.5	Real and Tangible Personal Properties	A-24
	4.6	No Litigation	A-25
	4.7	Noncontravention	A-25
	4.8	Tax Matters	A-25
	4.9	Financial Statements	A-26
	4.10	Undisclosed Liabilities	A-27
	4.11	Material Contracts	A-27
	4.12	Intellectual Property	A-27
	4.13	Insurance	A-28
	4.14	Employees	A-28
	4.15	Employee Benefits	A-28
	4.16	Environmental Matters	A-30

A-3

---

TABLE OF CONTENTS

(continued)

			Page
	4.17	Compliance with Laws	A-30
	4.18	Accounts Receivable	A-30
	4.19	No Brokers	A-30
	4.20	No Material Changes	A-30
	4.21	Permits and Licenses	A-32
	4.22	Warranties	A-32
	4.23	Major Suppliers and Customers	A-32
	4.24	Related Party Transactions	A-32
	4.25	Prohibited Payments	A-33
	4.26	Books and Records	A-33
	4.27	Proxy Statement	A-33
	4.28	Disclaimer	A-33
V.	REPRESENTATIONS AND WARRANTIES OF PARENT AND THE MERGER SUBS		A-34
	5.1	Organization of Parent and the Merger Subs	A-34
	5.2	Validity and Execution	A-34
	5.3	Noncontravention	A-34
	5.4	No Litigation	A-34
	5.5	No Brokers	A-34
	5.6	Disclosure	A-34
	5.7	SEC Filings	A-34
	5.8	Capitalization	A-35
	5.9	Undisclosed Liabilities	A-36
	5.10	Material Contracts	A-36
	5.11	Intellectual Property	A-36
	5.12	Compliance with Laws	A-36
	5.13	Related Party Transactions	A-36
	5.14	Tax Matters	A-36
	5.15	Business Activities	A-36
	5.16	Title to Property	A-37

A-4

---

TABLE OF CONTENTS

(continued)

			Page
	5.17	Indebtedness	A-37
	5.18	Trust Funds	A-37
	5.19	No Material Changes	A-37
	5.20	Board Approval	A-37
VI.	COVENANTS		A-37
	6.1	Mutual Joint Covenants	A-37
	6.2	Company’s Covenants	A-42
	6.3	Parent Covenants	A-46
	6.4	Proxies and Dissent Rights	A-48
	6.5	Stock Symbol	A-48
	6.6	Further Assurances	A-48
VII.	CONDITIONS TO EACH PARTY’S OBLIGATION TO EFFECT THE MERGER		A-48
	7.1	Parent Stockholder Approval	A-48
	7.2	Parent Common Stock	A-48
	7.3	Effectiveness of Registration Statement	A-48
	7.4	NASDAQ Listing Approval	A-48
	7.5	No Litigation	A-48
	7.6	Hart-Scott-Rodino Act; Governmental Approvals	A-49
	7.7	Board Composition and Parent Officers	A-49
	7.8	Frustration of Closing Conditions	A-49
VIII.	ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND THE MERGER SUB		A-49
	8.1	Representations True	A-49
	8.2	Consents Obtained	A-49
	8.3	Performance of Obligations	A-49
	8.4	Dissenting Stockholders	A-49
	8.5	Receipt of Documents by Parent	A-49
	8.6	No Material Adverse Effect	A-50
	8.7	Credit Agreement Amendment	A-50
	8.8	GCI Merger	A-50

A-5

---

TABLE OF CONTENTS

(continued)

			Page
IX.	CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY		A-50
	9.1	Representations True	A-50
	9.2	Performance of Obligations	A-50
	9.3	Consents Obtained	A-50
	9.4	Merger Consideration	A-50
	9.5	Parent Stockholder Consent	A-50
	9.6	Receipt of Documents	A-51
	9.7	SEC Compliance	A-51
	9.8	No Material Adverse Effect	A-51
X.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES		A-51
	10.1	Nonsurvival of Representations and Warranties	A-51
XI.	TERMINATION		A-51
	11.1	Termination	A-51
	11.2	Effect of Termination	A-52
XII.	MISCELLANEOUS		A-52
	12.1	Applicable Law	A-52
	12.2	Construction; Entire Agreement; Amendment	A-52
	12.3	Assignment	A-52
	12.4	Binding Effect	A-52
	12.5	Interpretation	A-52
	12.6	Waiver	A-52
	12.7	Counterparts	A-52
	12.8	Severability	A-53
	12.9	Notices	A-53
	12.10	Consent to Jurisdiction	A-54
	12.11	WAIVER OF JURY TRIAL	A-54
	12.12	Specific Performance	A-54
	12.13	Expenses	A-54
	12.14	Stockholders’ Representative	A-54

A-6

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is entered into as of this 13th day of September, 2008 by and among RENAISSANCE ACQUISITION CORP., a Delaware corporation (“Parent”), FCI MERGER SUB I, INC., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub I”), FCI MERGER SUB II, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent (“Merger Sub II”, and, together with the Merger Sub I, collectively, the “Merger Subs”), FIRST COMMUNICATIONS, INC., a Delaware corporation (the “Company”) and The Gores Group LLC, solely in its capacity as the exclusive representative of the stockholders of the Company (“Stockholders’ Representative”).

RECITALS:

A.      The parties hereto desire to effect a business combination of Parent and the Company by means of (i) the merger (the “First Merger”) of Merger Sub I with and into the Company, with the Company continuing as the surviving corporation of the First Merger (the “First Merger Surviving Corporation”), and (ii) immediately following the effectiveness of the First Merger, and as part of the same plan of merger and reorganization, the merger (the “Second Merger” and, together with the First Merger, collectively, the “Mergers”) of the First Merger Surviving Corporation with and into Merger Sub II, with Merger Sub II continuing as the surviving entity of the Second Merger (the “Second Merger Surviving Entity”).

B.      The boards of directors of each of the parties hereto (or in the case of Merger Sub II, Parent, as its sole managing member) have determined that this Agreement and the Mergers and such other transactions contemplated hereby (collectively, the “Transactions”) are fair to and in the best interests of their respective stockholders or members, as applicable, and have declared it advisable and approved this Agreement and the Transactions on the terms and conditions set forth in this Agreement.

C.      The holders of a majority of the outstanding shares of the Company’s Series A Preferred Stock have approved this Agreement and the Transactions on the terms and conditions set forth in this Agreement.  The holders of T1 Warrants have delivered irrevocable notices of exercise of their warrant contingent upon the consummation of the Transactions and all the holders of the T2 Warrants and certain of the holders of the T3 Warrants have entered into an exchange agreement for the exercise of their warrants in the form attached hereto as Exhibit A (the “Exchange Agreement”).

D.      Simultaneously with the execution and delivery of this Agreement, the Company shall obtain a voting agreement (the “Voting Agreement”) in the form attached hereto as Exhibit B executed by the holders of at least 75% of Company Common Stock whereby each holder irrevocably agrees to vote all of its voting shares of Company Common Stock (as defined herein) held by it in favor of delisting the Company Common Stock from the Alternative Investment Market on the London Stock Exchange (the “AIM”).

E.      Immediately following and within forty-eight (48) hours of the execution and delivery of this Agreement, the Company shall obtain the affirmative written consent of the holders of at least a majority of Company Common Stock (as defined herein) to approve this Agreement and the First Merger.

F.      The Company, First Global Telecom, Inc., GCI Globalcom Holdings, Inc. (“GCI”) and M. Gavin McCarty, as stockholders’ representative, have entered into an Agreement and Plan of Merger, dated July 18, 2008 (the “GCI Merger Agreement”), pursuant to which the Company has agreed to acquire all of the outstanding capital stock of GCI (the “GCI Acquisition”).

G.      The Company shall effect the consummation of the GCI Acquisition prior to the Mergers.

H.      For United States federal income tax purposes, the parties hereto intend that the Mergers qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder.

A-7

---

NOW, THEREFORE, in exchange for the mutual promises contained herein, and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

I.     DEFINITIONS

“Acquired Companies” means the Company and the Company Subsidiaries.

“Acquisition” means the purchase by the Company or following the Second Merger, the Second Merger Surviving Entity, outside of the ordinary course of business, of another company or any of its assets, securities or business by means of a merger, consolidation, joint venture, exchange offer or purchase or sale of stock or assets.

“Additional Warrant Stock” shall have the meaning set forth in Section 3.1(c)(ii)(2).

“Affiliate” means, with respect to any specified Person: (1) any other Person which, directly or indirectly, owns or controls, is under common ownership or control with, or is owned or controlled by, such specified Person; and (2) any immediate family member of the specified Person.  For these purposes, an immediate family member shall mean a natural Person’s spouse, parents or children.

“Aggregate Consideration” means the total cash amount and other consideration received (which shall be deemed to include amounts paid into escrow) by the target and/or its shareholders upon the consummation of an Acquisition (including payments made in installments), inclusive of cash, securities, notes, consulting agreements and agreements not to compete, plus the total value of liabilities assumed and to the extent such Aggregate Consideration is paid in stock, then the Fair Market Value of such stock.

“Agreement” has the meaning set forth in the preamble.

“AIM” has the meaning set forth in the recitals.

“Businesses” means the business and operations carried out by the Company and the Company Subsidiaries.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required to remain closed.

“Cash Merger Consideration” shall have the meaning set forth in Section 3.1(a)(ii).  

“Certificates” shall have the meaning set forth in Section 3.4(b).  

“Closing” shall have the meaning set forth in Section 2.2.

“Closing Date” shall have the meaning set forth in Section 2.2.

“Closing Form 8-K” shall have the meaning set forth in Section 6.1(g)(ii).  

“Closing Press Release” shall have the meaning set forth in Section 6.1(g)(ii).  

“Closing Price” for each day shall be the last reported sales price regular way on that day or, in case no such reported sale takes place on such day, the reported closing bid price regular way, in either case as reported on a national securities exchange or other public exchange on which the stock is admitted to trading or listed, or if not so listed or admitted to trading, the last quoted bid price or, if not quoted, the average of the high bid and the low asked prices in the over-the-counter market or such other system then in use.

“Closing Stock Payment” shall have the meaning set forth in Section 3.1(a)(iii)(1)(x).

A-8

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“Code” has the meaning set forth in the recitals.

“Common Stock Merger Consideration” shall have the meaning set forth in Section 3.1(a)(iii)(1)(2).

“Company” has the meaning set forth in the preamble.

“Company Audit” shall have the meaning set forth in Section 4.9.

“Company Common Stock” shall have the meaning set forth in Section 3.1.

“Company Financial Statements” shall have the meaning set forth in Section 4.9.

“Company Group” shall have the meaning set forth in Section 6.1(i)(ii).

“Company Preferred Stock” shall have the meaning set forth in Section 3.1.

“Company Stock” shall have the meaning set forth in Section 3.1.

“Company Subsidiaries” means all Subsidiaries of the Company.

“Company’s Knowledge” means the actual knowledge of Ray Hexamer, Joe Morris, Jessica Newman, Rick Buyens, Ryan Wiegner and Frank Lomanno, in each case, after a reasonable investigation and inquiry, only with respect to the period of time each such person was employed by the Company.

“Company Third Party Acquisition” means (I) any sale of 15% or more of the consolidated assets of the Company and its subsidiaries, or 15% or more of the equity or voting securities of the Company or any subsidiary whose assets, individually or in the aggregate, constitute 15% or more of the consolidated assets of the Company (each, a “Material Subsidiary”), (II) any tender offer or exchange offer that, if consummated, would result in a third party beneficially owning 15% or more of the equity or voting securities of the Company or of any Material Subsidiary, (III) a merger, consolidation, business combination, share exchange, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Company or any Material Subsidiary, in each such case in this clause (III) that would result in either (x) a third party beneficially owning 15% or more of any class of equity or voting securities of the Company or any Material Subsidiary, or 15% or more of the consolidated assets of the Company or (y) the stockholders of the Company receiving securities traded in the U.S. on any nationally-recognized exchange or over-the-counter market; “Company Third Party Acquisition” shall not include the GCI Acquisition or any other transaction pursuant to which the Company or a Material Subsidiary is the acquiring party, provided that, except in the case of the GCI Acquisition, such purchase shall not materially impede the consummation of the Acquisition.

“Contract” means with respect to any Person, any agreement, indenture, debt instrument, contract, guarantee, loan, note, mortgage, license, lease, purchase order, delivery order, commitment or other arrangement, understanding or undertaking, whether written or oral, including all amendments, modifications and options thereunder or relating thereto, to which such Person is a party, by which it is bound, or to which any of its assets or properties is subject.

“Credit Agreement” means that certain that certain Amended and Restated Loan and Security Agreement, dated as of March 7, 2008 among the Company and JPMorgan Chase Bank, National Association.

“Debt” means, as at any date of determination thereof (without duplication), all obligations or liabilities (other than intercompany obligations between the Acquired Companies) of the Acquired Companies in respect of: (a) any borrowed money or funded indebtedness or issued in substitution for or exchange for borrowed money or funded indebtedness (including obligations with respect to principal, accrued interest, and any applicable prepayment charges or premiums) including, without limitation, the aggregate principal balance of, and all accrued and unpaid interest on, the loans outstanding under the Credit Agreement as of the Closing Date, together with all other indebtedness, fees, liabilities, obligations, covenants and duties of the Company of every kind, nature and

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description under or in respect of the Credit Agreement; (b) any indebtedness evidenced by any note, bond, debenture or other debt security; (c) capital lease obligations; (d) any indebtedness guaranteed by the Acquired Companies (excluding intercompany debt and letters of credit and guarantees by one Acquired Company of performance obligations of another Acquired Company); (e) any obligations with respect to any interest rate hedging or swap agreements; (f) any obligations for the deferred purchase price of property or services (including, without limitation, deferred purchase price liabilities from past acquisitions); (g) any commitment by which an Acquired Company assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit); (h) any liabilities of an Acquired Company under conditional sale or other title retention agreements; (i) any liabilities of an Acquired Company under or in connection with letters of credit (whether or not drawn), bankers acceptances or similar items; (j) any liabilities with respect to vendor advances or any other advances made to an Acquired Company; (k) any indebtedness or liabilities secured by a Lien on an Acquired Company’s assets; (1) any amounts owed by an Acquired Company to any Person or entity under any noncompetition, consulting or deferred compensation arrangements; and (m) any “success fees” or bonuses, change in control or severance payments arising from or otherwise triggered by the Transactions, and any amounts payable to offset any excise Taxes imposed under Section 4999 of the Code and any related income Taxes.

“Delaware LLC Act” shall have the meaning set forth in Section 2.3(b).

“DGCL” shall have the meaning set forth in Section 2.3(b).

“Disclosing Party” shall have the meaning set forth in Section 6.1(c).  

“Dissenting Shares” shall have the meaning set forth in Section 3.3.

“EBITDA” means for the applicable fiscal quarter, using results taken from the unaudited reviewed financial statements of the Second Merger Surviving Entity, the following calculation:  income before provision for income taxes, plus interest expense, less interest income, plus depreciation and amortization, plus amortization of intangible assets, plus any expenses arising solely from the First Merger and the Second Merger charged to income in such fiscal quarter and any subsequent acquisition or transaction costs expensed in connection with FASB Rule No. 141R charged to income in such fiscal quarter.

“EBITDA Condition” shall have the meaning set forth in Section 3.1(a)(iii)(2).

“EBITDA Escrow Release Date” shall have the meaning set forth in Section 3.5.

“EBITDA Stock” shall have the meaning set forth in Section 3.1(a)(iii)(1)(y).

“EBITDA Target” shall mean $50 million plus the sum of any Target Increases.

“Environmental Laws” shall mean all Laws, including all common law, orders, judgments, and all other provisions having the force or effect of law, concerning occupational health or safety, pollution or the protection of the environment, including any laws governing the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control or cleanup of, or exposure to, any Hazardous Materials.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any corporation or trade or business (whether or not incorporated) which is treated with any of the Acquired Companies as a single employer within the meaning of Section 414 of the Code.

“Escrow Account” shall have the meaning set forth in Section 3.5.

“Escrow Agent” shall have the meaning set forth in Section 3.5.

“Escrow Agreement” shall have the meaning set forth in Section 3.5.

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“Escrowed Stock” shall have the meaning set forth in Section 3.5.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Agent” shall have the meaning set forth in Section 3.4(a).  

“Exchange Agreement” has the meaning set forth in the recitals.

“Exchange Fund” shall have the meaning set forth in Section 3.4(a).  

“Exclusivity Period” shall have the meaning set forth in Section 6.1(i).

“Fair Market Value" means at any date, the average of the daily Closing Prices (as defined below) for such share of stock for the five (5) consecutive Trading Days immediately preceding the date of the closing of the Acquisition or if the stock is not publicly held or so listed or traded, the fair market value per share shall be as determined in good faith by the board of directors of the Second Merger Surviving Entity, whose determination shall be conclusive absent manifest abuse or error, and described in a resolution of the board of directors of the Second Merger Surviving Entity certified by the secretary of the Second Merger Surviving Entity.

“FCC” means the Federal Communications Commission.

“FCC Consents” means the applications, notices, reports, registrations and other filings and/or consents required to be filed with or obtained from the FCC in connection with the consummation of the Transactions.

“First Merger” shall have the meaning set forth in the recitals.

“First Merger Certificate of Merger” shall have the meaning set forth in Section 2.1(a).

“First Merger Effective Time” shall have the meaning set forth in Section 2.1(a).

“First Merger Surviving Corporation” shall have the meaning set forth in the recitals.

“First Merger Surviving Corporation Common Stock” has the meaning set forth in Section 3.1(a)(i).

“GAAP” means generally accepted accounting principles as applied in the United States of America.

“GCI” has the meaning set forth in the recitals.

“GCI Acquisition” shall have the meaning set forth in the recitals.  

“GCI Merger Agreement” shall have the meaning set forth in the recitals.  

“GCI Subsidiaries” means GCI’s two wholly-owned subsidiaries, Globalcom, Inc., an Illinois corporation, and Globalcom Equipment, Inc., a Delaware corporation.

“Governmental Authority” means any federal, state, local or foreign government or any political subdivision thereof or any department, commission, board, bureau, agency, court, panel or other instrumentality of any kind of any of the foregoing.

“Governmental Prohibition” shall have the meaning set forth in Section 7.5.

“Hazardous Material” means any chemical, substance, waste, material, pollutant, or contaminant, the exposure to, presence of, release of, use of, or storage, disposal, treatment or transportation of which may give rise to liability under, is regulated under, or is defined by any Law, including any Environmental Law, including petroleum and petroleum products.

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“Intellectual Property” means any of the following in any jurisdiction throughout the world: (a) patents, patent applications, patent disclosures and inventions, including any provisionals, continuations, divisionals, continuations-in-part, renewals and reissues for any of the foregoing; (b) Internet domain names, trademarks, service marks, trade dress, trade names, logos, slogans and corporate names and registrations and applications for registration thereof together with all of the goodwill associated therewith; (c) copyrights (registered or unregistered) and copyrightable works and registrations and applications for registration thereof; (d) mask works and registrations and applications for registration thereof; (e) software, data, data bases and documentation thereof; (f) trade secrets and other confidential information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial and marketing plans and customer and supplier lists and information); and (g) copies and tangible embodiments thereof (in whatever form or medium).

“Interim Company Financial Statements” shall have the meaning set forth in Section 4.9.

“Law” means all applicable laws of any country or any political subdivision thereof, including, without limitation, all foreign, federal, state and local statutes, regulations, ordinances, codes, orders or decrees or any other laws, common law theories or reported decisions of any court thereof.

“Leased Real Property” shall have the meaning set forth in Section 4.5(a).

“Leases” shall have the meaning set forth in Section 4.5(a).

“Lien” means any charge, claim, right of first refusal, restriction on transfer, mortgage, security deed, deed to secure debt, deed of trust, title defect, mechanic’s lien, judgment lien or other similar lien (except for any lien for Taxes not yet due and payable), pledge, assessment, security interest or other encumbrance.

“Material Adverse Effect” means (x) as to any Person, a material adverse effect on the business, assets, results of operations or financial condition of such Person, and (y) as to any Acquired Company, a material adverse effect on the business, assets, results of operations or financial condition of the Acquired Companies taken as a whole; provided, however, that none of the following shall be deemed, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or would be, a “Material Adverse Effect” with respect to any Person (including any Acquired Company): any facts, changes, developments, events, occurrences, actions, omissions or effects (i) generally affecting (A) the economy, or financial or capital markets, in the United States or elsewhere in the world, to the extent that they do not disproportionately affect such Person in relation to other companies in the industry in which such Person primarily operates or (B) the industry in which such Person operates to the extent that they do not disproportionately affect such Person in relation to other companies in the industry in which such Person primarily operates, or (ii) arising out of, resulting from or attributable to (1) changes (after the date of this Agreement) in Law or in generally accepted accounting principles or in accounting standards or (2) any decline in the market price, or change in trading volume, of the capital stock of such Person or any failure to meet publicly announced revenue or earnings projections or internal projections (it being understood that, without limiting the applicability of the provisions contained in clause (i) or (ii) above, the cause or causes of any such decline, change or failure may be deemed to constitute, in and of itself and themselves, a Material Adverse Effect and may be taken into consideration when determining whether a Material Adverse Effect has occurred).

“Material Contract” means the agreements of the following types to which any Person is a party (which is effective and binding on such Person) or by which any material assets of any Person is bound or are subject:

(a)       Contracts or group of related Contracts which involve commitments to make capital expenditures or which provide for the purchase of assets, goods or services by such Person from any one Person under which the undelivered balance of such goods or services has a purchase price in excess of $300,000 in any consecutive twelve (12) month period after the date hereof or which are not terminable by such Person without a penalty;

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(b)       Contracts or group of related Contracts which provide for the sale of goods or services by such Person and under which the undelivered balance of such goods or services has a sale price in excess of $150,000 in any consecutive twelve (12) month period after the date hereof or which are not terminable by such Person without penalty;

(c)       joint venture agreements, partnership agreements, and limited liability company agreements and each similar type of Contract (however named) involving a sharing of profits, losses, costs or liabilities with any other Person;

(d)       Contracts that involve the material acquisition or disposition, directly or indirectly, by merger, consolidation or acquisition of stock or assets, between such Person and any another Person;

(e)       employment, non-competition, non-solicitation and profit-sharing plan agreements with any officer or director of such Person;

(f)       Contracts which presently limit in any material respect the freedom of any Acquired Company to engage in any business anywhere in the world or compete with any Person;

(g)       Contracts pursuant to which such Person is a lessor or a lessee of any personal or real property (including the Leases), or holds or operates any tangible personal property owned by another Person, except for any such Leases under which the aggregate annual rent or lease payments do not exceed $50,000 or which are terminable by such Person without penalty;

(h)       Contracts not included in subsection (e) providing for severance (including contractual notice of termination or pay in lieu thereof), retention, deferred compensation, change in control or other similar payments;

(i)       Contracts with any stockholder, officer or director of such Person, or any Affiliate of any of the foregoing, or in the case of any individual, any immediate family member of any of the foregoing;

(j)       Contracts with material dealers, distributors or sales representatives;

(k)       Contracts under which such Person has made material advances or loans to any other Person, other than expense re-imbursement done in the Ordinary Course of Business;

(l)       Contracts regarding interconnection and carrier agreements with telecommunication and data service providers;

(m)       Contracts relating to material Debt; or

(n)       any settlement or similar agreements relating to any material litigation to which an Acquired Company was a party.

“Merger Consideration” means the Cash Merger Consideration and the Common Stock Merger Consideration.

“Mergers” shall have the meaning set forth in the recitals.

“Merger Sub I” has the meaning set forth in the preamble.

“Merger Sub II” has the meaning set forth in the preamble.

“Merger Subs” has the meaning set forth in the preamble.

“Most Recent Company Balance Sheet” shall have the meaning set forth in Section 4.9.

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“New Warrant” shall have the meaning set forth in Section 3.1(c)(ii)(1).

“Ordinary Course of Business” means the ordinary course of business of an applicable Person consistent with past custom and practice (including with respect to quantity and frequency).

“Other Filings” shall have the meaning set forth in Section 6.1(e)(i).

“Outside Date” shall have the meaning set forth in Section 11.1(b).

“Owned Intellectual Property” shall have the meaning set forth in Section 4.12.

“Owned Real Property” shall have the meaning set forth in Section 4.5(a).

“Parent” has the meaning set forth in the preamble.

“Parent Common Stock” means the common stock, par value $0.0001 per share, of Parent.

“Parent Group” shall have the meaning set forth in Section 6.1(i)(i).

“Parent Knowledge” means the actual knowledge of Barry Florescue, Mark Seigel and Richard Bloom, in each case after a reasonable investigation and inquiry.

“Parent Preferred Stock” shall have the meaning set forth in Section 5.8(a).

“Parent SEC Documents” shall have the meaning set forth in Section 5.7.

“Parent Stock Options” shall have the meaning set forth in Section 5.8(b).

“Parent Stockholder Approval” shall have the meaning set forth in Section 6.1(e)(i).

“Parent Stockholders’ Meeting” shall have the meaning set forth in Section 4.27.

“Parent Third Party Acquisition” means: (I) any purchase of 15% or more of the consolidated assets of a third party and its subsidiaries, or 15% or more of the equity or voting securities of a third party or a Material Subsidiary (as defined in Company Third Party Acquisition definition) thereof, (II) any tender offer or exchange offer that, if consummated, would result in Parent beneficially owning 15% or more of a third party’s equity or voting securities or any Material Subsidiary thereof, (III) a merger, consolidation, business combination, share exchange, purchase of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving the Parent and any third party, in each such case in this clause (III) that would result in Parent beneficially owning 15% or more of any class of equity or voting securities of such third party or any Material Subsidiary thereof, or 15% or more of the consolidated assets of such third party.

“Parent Warrants” shall have the meaning set forth in Section 5.8(b).

“Permit” means a license, permit or other authorization or registration required by any Governmental Authority or applicable Law to carry out a Business, other than those licenses, permits or other authorizations or registrations the absence of which would not cause a Material Adverse Effect with respect to such Business.

“Permitted Liens” shall mean (a) liens for Taxes not yet due and payable or that are being contested in good faith through appropriate proceedings and for which adequate reserves are reflected in the Company Financial Statements in accordance with GAAP, (b) with respect to any Acquired Company asset, encumbrances, imperfections of title and title defects that will not materially interfere with the use of such asset or materially impair the value thereof, including mechanics’ liens, materialmen’s liens and other inchoate liens, provided that the obligations in respect of which such encumbrances were created are not delinquent, (c) all rights-of-way, licenses, easements, encroachments, covenants, reservations, restrictions, conditions, Leases, tenancies and other

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encumbrances of record that do not materially interfere with the existing use of the Businesses or materially impair the value thereof, provided that the obligations in respect of which such encumbrances are not delinquent, (d) unrecorded easements, Leases, tenancies, license agreements, covenants, rights-of-way and other encumbrances and similar restrictions on the Real Property that do not materially interfere with the existing use thereof, provided that the obligations in respect of which such encumbrances were created are not delinquent, (e) deposits or pledges made in connection with, or to secure payment of, worker’s compensation, unemployment insurance, old age pension programs mandated under applicable laws or other social security regulations, and (f) all zoning, building, subdivision and other statutory or regulatory conditions and restrictions relating to the use of real property.

“Person” means any individual, corporation, proprietorship, joint venture, firm, partnership, trust, limited liability company, association or other entity.

“Plans” shall have the meaning set forth in Section 4.15(a).

“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period ending on the Closing Date.

“Proxy Statement” shall have the meaning set forth in Section 4.27.  

“Real Property” shall have the meaning set forth in Section 4.5(a).  

“Receiving Party” shall have the meaning set forth in Section 6.1(c).  

“Registration Statement” shall have the meaning set forth in Section 4.27.

“Replacement Company Financial Statements” shall have the meaning set forth in Section 6.2(e).

“Company Audit” shall have the meaning set forth in Section 4.9.

“Schedule Update” shall have the meaning set forth in Section 6.2(e).  

“SEC” means the U.S. Securities and Exchange Commission.

“Second Merger” shall have the meaning set forth in the recitals.

“Second Merger Certificate of Merger” shall have the meaning set forth in Section 2.1(b).

“Second Merger Effective Time” shall have the meaning set forth in Section 2.1(b).

“Second Merger Surviving Entity” shall have the meaning set forth in the recitals.

“Securities Act” means the Securities Act of 1933, as amended.

“Signing Form 8-K” shall have the meaning set forth in Section 6.1(g)(i).  

“Signing Press Release” shall have the meaning set forth in Section 6.1(g)(i).  

“State PUC” means any state or local public service or public utilities commission having regulatory authority over the Acquired Companies, in any given jurisdiction.

“State PUC Consents” means the applications, notices, reports, registrations and other filings and/or consents to be filed with or obtained from any State PUC in connection with the consummation of the Transactions or the Credit Agreement.

“Straddle Period” means any taxable period that includes but does not end on the Closing Date.

“Stockholders’ Representative” shall have the meaning set forth in the preamble.

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“Subsidiary” means, with respect to any Person, any other Person of which equity securities or other ownership interests having ordinary power to elect a majority of the board of directors or other persons performing similar functions are at any time directly or indirectly owned or controlled by such Person.

“Target Increase” with respect to any Acquisition is equal to 1/7 of the Aggregate Consideration paid by the Company or the Second Merger Surviving Entity, as applicable, for any Acquisition consummated between the date hereof and June 30, 2011, other than the GCI Acquisition, provided, however, for determining whether the EBITDA Condition has been satisfied for the fiscal quarter during which such Acquisition is consummated the Target Increase shall be 1/7 of such Aggregate Consideration multiplied by a fraction (A) the numerator of which shall be the number of days beginning on the date of the consummation of such Acquisition and ending on the last day of such fiscal quarter and (B) the denominator of which shall be the total number of days in such fiscal quarter.  By way of example, if the Company purchases a target company for $70 million, the Target Increase with respect to such Acquisition shall be $10 million ($70 million divided by 7).  If such Acquisition is consummated on the 30^th day of a 90-day fiscal quarter, the Target Increase for such quarter will be $6.7 million ($10 million multiplied by 2/3) and for all subsequent quarters will be $10 million.

“T1 Warrant” shall mean the warrants to purchase a total of 5,333,333 shares of the Company Common Stock at an exercise price of $0.05 per share and with an expiration date of five years from the date of issuance.

“T2 Warrant” shall mean the warrants to purchase a total of 8,000,000 shares of the Company Common Stock at an exercise price of $7.50 per share and with an expiration date of three years following the redemption of all the Series A Preferred Stock held by the holder of such warrant.

“T3 Warrant” shall mean the warrants to purchase a total of 2,000,000 shares of the Company Common Stock at an exercise price of $7.50 per share and with an expiration date of three years following the redemption of all the Series A Preferred Stock.

“Tax” means any taxes, assessments, fees and other governmental charges imposed by any Governmental Authority, including income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, workers’ compensation, real property, personal property, sales, use, transfer, registration, value added, alternative, or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

“Tax Returns” means any report, return, declaration or other information required to be supplied to any Governmental Authority in connection with Taxes (including any attached schedules thereto and any amendments thereof), including, without limitation, any information return, claim for refund, amended return and declaration of estimated Tax.

“Taxing Authority” means any domestic, foreign, federal, state, county or municipal or other local government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising Tax regulatory authority.

“Trading Day” shall be any day on which the principal national securities exchange on which the stock is admitted to trading or listed is open or, if the stock is not so admitted to trading or so listed, any day except Saturday, Sunday, a legal holiday or any day on which banking institutions in the City of New York are obligated or authorized to close.

“Transactions” shall have the meaning set forth in the recitals.

“Treasury Regulations” means the regulations promulgated under the Code from time to time, as amended.

“Trust Fund” shall have the meaning set forth in Section 5.8.

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“Voting Agreement” has the meaning set forth in the recitals.

“Warrants” shall have the meaning set forth in Section 3.1(a)(iii)(3).

“Warrant Agreement” shall have the meaning set forth in Section 3.1(a)(iii)(3).

“Warrant Condition” shall have the meaning set forth in Section 3.1(a)(iii)(3).

“Warrant Escrow Release Date” shall have the meaning set forth in Section 3.5.

“Warrant Stock” shall have the meaning set forth in Section 3.1(a)(iii).

II.     THE MERGERS

2.1.          Effective Times of the Mergers.

(a)       On the terms and subject to the conditions of this Agreement, the parties hereto shall cause the First Merger to be consummated at the Closing by the filing of a certificate of merger (the “First Merger Certificate of Merger”) in a form mutually acceptable to Parent and the Company with the Secretary of State of Delaware as required by, and executed in accordance with, the relevant provisions of the DGCL.  The

First Merger shall become effective at the time of the filing of the First Certificate of Merger with the Secretary of State of the State of Delaware or at such time thereafter which the parties hereto shall have agreed upon as is provided in the Certificate of Merger (the “First Merger Effective Time”).

(b)       Immediately following the First Merger Effective Time, Parent shall cause the Board of Directors of the First Merger Surviving Corporation to adopt this Agreement and approve the Second Merger (and shall adopt this Agreement and approve the Second Merger as sole shareholder of the Second Merger Surviving Entity).  Immediately following such approval, the parties hereto shall cause the Second Merger to be effected by the filing of a certificate of merger (the “Second Merger Certificate of Merger”) in a form that is mutually acceptable to Parent and the Company with the Secretary of State of Delaware as required by, and executed in accordance with, the relevant provisions of the Delaware LLC Act.  The Second Merger shall become effective at the time of the filing of the Second Certificate of Merger with the Secretary of State of the State of Delaware or at such time thereafter which the parties hereto shall have agreed upon as is provided in the Second Certificate of Merger (the “Second Merger Effective Time”).

2.2.          Closing.  Upon the terms and subject to the conditions of this Agreement, the closing of the Transactions (the “Closing”) will take place remotely via the exchange of documents and signatures on the date that is two (2) Business Days following the satisfaction or waiver of all conditions to the Closing set forth in Articles VII, VIII and IX (such date, the “Closing Date”).

2.3.          Effects of the Mergers.

(a)       Upon the terms and subject to the conditions of this Agreement, at the First Merger Effective Time, Merger Sub I shall be merged with and into the Company and the separate existence of Merger Sub I shall cease and the Company shall continue as the First Merger Surviving Corporation  Upon the terms and subject to the conditions of this Agreement, at the Second Merger Effective Time and as part of the same plan of merger and reorganization, the First Merger Surviving Corporation shall be merged with an into Merger Sub II, the separate corporate existence of the First Merger Surviving Corporation shall cease and Merger Sub II shall continue as the Second Merger Surviving Entity under a name that shall be mutually agreeable to Parent and the Company.

(b)       The First Merger shall have the effects set forth in this Agreement, the First Merger Certificate of Merger and the applicable provisions of the Delaware General Corporation Law (“DGCL”).  The Second Merger shall have the effects set forth in this Agreement, the Second Merger Certificate of Merger and the applicable provisions of the Delaware Limited Liability Company Act (“Delaware LLC Act”).

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2.4.          Governing Documents.  The certificate of incorporation of the Company as in effect immediately prior to the First Merger Effective Time shall be the certificate of incorporation of the First Merger Surviving Corporation.  The initial certificate of formation and limited liability company operating agreement of Merger Sub II shall be the certificate of formation and limited liability company operating agreement of the Second Merger Surviving Entity.

2.5.          Directors and Officers.  The directors and officers of the Company immediately prior to the Effective Time shall be the directors and officers of the First Merger Surviving Corporation as of the First Merger Effective Time.  Merger Sub II shall take all actions necessary so that the directors and officers of the First Merger Surviving Corporation immediately prior to the Second Merger Effective Time shall be the initial directors and officers of the Second Merger Surviving Entity.

III.     CONVERSION OF SECURITIES

3.1.          Effect on Capital Stock; Merger Consideration.  

(a)      First Merger.  At the First Merger Effective Time, by virtue of the First Merger and without any action on the part of the holders of any shares of common stock of the Company, par value $0.001 per share (“Company Common Stock”), Series A Preferred Stock of the Company, par value $0.001 per share (“Company Preferred Stock” and together with the Company Common Stock, the “Company Stock”), or any shares of capital stock of Merger Sub I, said shares shall be converted as follows, and the Merger Consideration to be paid to the holders of Company Stock shall be as follows:

(i)      Capital Stock of the Merger Sub.  Each issued and outstanding share of the capital stock of Merger Sub I shall be converted into and become one fully paid and nonassessable share of common stock, $.001 par value per share, of First Merger Surviving Corporation (“First Merger Surviving Corporation Common Stock”), so that after the First Merger Effective Time, Parent shall be the holder of all of the issued and outstanding shares of the First Merger Surviving Corporation.

(ii)      Company Preferred Stock.  Each issued and outstanding share of Company Preferred Stock shall, by virtue of the First Merger and without any action on the part of the holder thereof, be converted into the right to receive, in cash, an amount equal to the Company Redemption Price as set forth in the Certificate of the Designations, Powers, Preferences and Rights of the Company Preferred Stock (the “Cash Merger Consideration”).

(iii)      Company Common Stock.  Each issued and outstanding share of Company Common Stock (other than any Dissenting Shares) shall, by virtue of the First Merger and without any action on the part of the holder thereof, be converted into the right to receive:

(1)       (x) 0.57361 of a single validly issued, fully paid and nonassessable share of Parent Common Stock (“Closing Stock Payment”), plus

(y) the proportionate share amount of 9,950,000 shares of Parent Common Stock issuable pursuant to Section 3.1(a)(iii)(2) below, if any, which such amount shall be deposited into the Escrow Account pursuant to Section 3.5 hereof (“EBITDA Stock”), plus (z) the proportionate share amount of 8,500,000 shares of Parent Common Stock issuable pursuant to Section 3.1(a)(iii)(3) below, if any, which such amount shall be deposited into the Escrow Account pursuant to Section 3.5 hereof (“Warrant Stock”, which, together with the Closing Stock Payment and EBITDA Stock, shall be referred to collectively, as the “Common Stock Merger Consideration”);

(2)       If, for any fiscal quarter from the date hereof through June 30, 2011, the Second Merger Surviving Entity has an annualized adjusted EBITDA (i.e., the actual quarterly EBITDA multiplied by four (4)) equal to or greater than the EBITDA Target, Parent shall cause the Escrow Agent to release from the Escrow Account, in accordance with this Section

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3.1(a)(iii)(2), Section 3.5 hereof and the Escrow Agreement, 9,950,000 shares of Parent Common Stock (reduced by the number of shares that would have been issuable to holders of Dissenting Shares in respect of such Dissenting Shares if the stockholder holding such Dissenting Shares had not exercised its appraisal rights pursuant to Section 3.3) (the “EBITDA Condition”).  If the EBITDA Condition is satisfied, the holders of Company Common Stock shall be entitled to receive that number of shares of Parent Common Stock equal to (x) 9,950,000 (reduced by the number of shares that would have been issuable to holders of Dissenting Shares in respect of such Dissenting Shares if the stockholder holding such Dissenting Shares had not exercised its appraisal rights pursuant to Section 3.3).  If the EBITDA Condition is not satisfied by June 30, 2011, then Parent and the Stockholders’ Representative shall deliver joint written instructions to the Escrow Agent to release the remaining shares held in Escrow pursuant to the EBITDA Condition to the Company on August 31, 2011 and such securities shall be cancelled in accordance with Section 3.5.

(3)       If Parent shall have the right to redeem the warrants (the “Warrants”) issued pursuant to its Warrant Agreement dated September 19, 2006, by and between Parent and Continental Stock Transfer & Trust Company (the “Warrant Agreement”), Parent shall cause the Escrow Agent to release from the Escrow Account, in accordance with this Section 3.1(a)(iii)(3), Section 3.5 hereof and the Escrow Agreement, 8,500,000 shares of Parent Common Stock (reduced by the number of shares that would have been issuable to holders of Dissenting Shares in respect of such Dissenting Shares if the stockholder holding such Dissenting Shares had not exercised its appraisal rights pursuant to Section 3.3) (the “Warrant Condition”).  Subject to the terms and conditions of the Warrant Agreement, Parent has the right to redeem the Warrants at any time prior to their exercise and at any time after the Warrants become exercisable if the last sale price of the Parent Common Stock has been at least $8.50 per share, on each of twenty (20) trading days within any thirty (30) trading day period ending on January 28, 2011.  For the avoidance of doubt, even if all Warrants are exercised prior to the date the Warrant Condition is satisfied, Parent remains obligated to pay such 8,500,000 shares of Parent Common Stock (other than any shares that would otherwise be payable in respect of the Dissenting Shares) upon satisfaction of the Warrant Condition.  If the Warrant Condition is not satisfied by January 28, 2011, then on or prior to January 31, 2011, Parent and the Stockholders’ Representative shall deliver joint written instructions to the Escrow Agent to release all the shares subject to the Warrant Condition deposited into the Escrow Account to Parent and such securities shall be cancelled in accordance with Section 3.5.

(4)       If either the EBITDA Condition or the Warrant Condition has been met, Parent shall notify the Stockholders’ Representative in writing within five (5) Business Days.

(5)       All such shares of Company Stock (other than any Dissenting Shares (as defined in Section 3.3 hereof)), when so converted, shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such shares shall cease to have any rights with respect thereto, except the right to receive a portion of the Merger Consideration as determined pursuant to the calculation principles set forth in Section 3.1 payable with respect thereto, when and as provided herein upon the surrender of such certificate in accordance with Section 3.3.

(b)      Second Merger.  Upon the terms and subject to the conditions of this Agreement, at the Second Merger Effective Time, by virtue of the Second Merger and without any action on the part of any holder of First Merger Surviving Corporation Common Stock or any holder of membership interests of Merger Sub II (the “Merger Sub Interests”):

(i)      First Merger Surviving Corporation Common Stock.  Each share of First Merger Surviving Corporation Common Stock issued and outstanding immediately prior to the Second Merger Effective Time shall be cancelled and cease to exist and no consideration shall be payable in respect thereof.

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(ii)      Merger Sub II Membership Interests.  The issued and outstanding Merger Sub II Interests (all of which shall be held by Parent) shall remain as the membership interests of the Second Merger Surviving Entity.

(c)      Company Warrants.

(i)      T1 Warrants.  Each of the holders of the T1 Warrants has agreed pursuant to a separate agreement irrevocably to make a cashless exercise of their T1 Warrants, immediately prior to the Closing of the Transactions contingent upon the Closing of the Transactions.  The Company Common Stock shall have a fair market value of $5.00 for purposes of such cashless exercise.  Each such share of Company Common Stock received upon the exercise of the T1 Warrant without any further action on the part of the holder thereof shall be converted into the Merger Consideration pursuant to Section 3.1(a)(iii).  

(ii)      T2 Warrants and T3 Warrants.  Certain holders of the T2 Warrants and T3 Warrants have entered into Exchange Agreements in the form attached hereto as Exhibit A providing for the exchange of their T2 Warrants and T3 Warrants for:

(1)       for each share of Company Common Stock for which such T2 Warrant or T3 Warrant is currently exercisable (A) a warrant in the form attached hereto as Exhibit C (the “New Warrant”), providing that such holder shall have the right to receive a warrant to acquire 0.25 shares of Parent Common Stock exercisable at $9.00 per share expiring on January 28, 2011 for a total number of New Warrants not to exceed 2,500,000 in the aggregate and (B) the right to receive 1/10^th of a share of Parent Common Stock upon the satisfaction of the Warrant Condition for a total number of shares of Parent Common Stock not to exceed 1,000,000 in the aggregate.

(2)       Parent shall deposit into the Escrow Account up to 1,000,000 shares of Parent Common Stock pursuant to Section 3.5 hereof  to satisfy its obligations under (B) above (“Additional Warrant Stock”).  If the Warrant Condition is not satisfied by January 28, 2011, then on January 31, 2011, all the shares of Additional Warrant Stock deposited into the Escrow Account shall be released to Parent and cancelled pursuant to Section 3.5.

(iii)      The Company shall use its reasonable efforts to cause all remaining holders of the T3 Warrants who have not previously exercised their T3 Warrants, to exchange their T3 Warrants on the same terms and conditions as the exchanging holders pursuant to the Exchange Agreement.  To the extent such holders still do not exercise their rights, such T3 Warrants shall remain outstanding in accordance with their terms.

3.2.          Fractional Shares.  No fraction of a share of Parent Common Stock will be issued by virtue of the First Merger, but in lieu thereof Parent shall pay to each holder of shares of Company Common Stock who would otherwise be entitled to a fraction of a share of Parent Common Stock (after aggregating all fractional shares of Parent Common Stock that otherwise would be received by such holder (other than those that would be received pursuant to Section 3.1 hereof)), upon surrender of such holder’s Certificate(s), an amount of cash (rounded to the nearest whole cent), without interest, equal to the product of: (i) such fraction, multiplied by (ii) six dollars ($6.00).

3.3.          Appraisal Rights.  Shares of Company Common Stock outstanding immediately prior to the First Effective Time and held by a holder who has not voted in favor of the Mergers or consented thereto in writing and who has demanded appraisal for such shares in accordance with the DGCL (collectively, the “Dissenting Shares”) shall not be converted into a right to receive Parent Common Stock, unless such holder fails to perfect, withdraws or otherwise loses such holder’s right to appraisal under the DGCL.  If, after the First Merger Effective Time, such holder fails to perfect, withdraws or otherwise loses such holder’s right to appraisal, each such share shall be treated as if it has been converted as of the First Merger Effective Time into a right to receive Parent Common Stock as set forth in Section 3.1(a)(iii)(1).  The Company shall give Parent (i) prompt notice of (A) any demands for appraisal pursuant to the DGCL received by the Company, (B) withdrawals of such demands, and (C) any other instruments served pursuant to the DGCL and received by the Company in connection with such demands and (ii) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal under the DGCL

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prior to the First Merger Effective Time.  The Company shall not, except with the prior written consent of Parent, which shall not be unreasonably withheld, conditioned or delayed, or as otherwise required by any applicable law, make any payment with respect to any such demands for appraisal or offer to settle or settle any such demands and shall not distribute any portion of the Common Stock Merger Consideration to any holder that has not lost its appraisal rights.

3.4.          Payment of Merger Consideration; Surrender of Certificates.

(a)       At or prior to the First Merger Effective Time, Parent shall engage a nationally-recognized financial institution reasonably satisfactory to the Company to act as exchange agent in connection with the Merger (the “Exchange Agent”).  At the First Merger Effective Time, Parent shall deposit with the Exchange Agent, in trust for the benefit of the holders of shares of Company Common Stock immediately prior to the First Merger Effective Time, for exchange in accordance with this Article III, through the Exchange Agent, certificates representing the shares of Parent Common Stock issuable pursuant to the Closing Stock Payment pursuant to Section 3.1(a)(iii)(1)(x) (other than any Dissenting Shares) and for the benefit of the holders of Company Preferred Stock immediately prior to the First Merger Effective Time, for exchange in accordance with Article III, through the Exchange Agent, the Cash Merger Consideration.  In addition, Parent shall make available by depositing with the Exchange Agent, as necessary from time to time after the First Merger Effective Time, cash in an amount sufficient to make the payments in lieu of fractional shares pursuant to Section 3.2 and any dividends or distributions to which holders of shares of Company Common Stock may be entitled pursuant to Section 3.4(c).  All cash and Parent Common Stock deposited with the Exchange Agent shall hereinafter be referred to as the “Exchange Fund.”

(b)       Promptly after the First Merger Effective Time, Parent shall cause the Exchange Agent to mail to each holder of record of a certificate or certificates which immediately prior to the First Merger Effective Time represented outstanding shares of Company Stock (other than any Dissenting Shares) (the “Certificates”), which at the First Merger Effective Time were converted into the right to receive the Merger Consideration pursuant to Section 3.1(a)(ii) or (iii) hereof, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration, cash in lieu of any fractional shares pursuant to Section 3.2 and any dividends or other distributions payable pursuant to Section 3.4(c).  Upon surrender of Certificates for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificates shall be entitled to receive in exchange therefor Cash Merger Consideration to which such holder is entitled pursuant to Section 3.1(a)(ii) and a certificate or certificates representing that number of whole shares of Parent Common Stock (after taking into account all Certificates surrendered by such holder) to which such holder is entitled pursuant to Section 3.1(a)(iii) (which shall be in uncertificated book entry form unless a physical certificate is requested), payment in lieu of fractional shares which such holder is entitled to receive pursuant to Section 3.2 and any dividends or distributions payable pursuant to Section 3.4(c), and the Certificates so surrendered shall forthwith be cancelled.  In the event of a transfer of ownership of Company Common Stock which is not registered in the transfer records of the Company, certificates representing the proper number of shares of Parent Common Stock may be issued to a Person other than the Person in whose name the Certificate so surrendered is registered, if such Certificate shall be properly endorsed or otherwise be in proper form for transfer and the Person requesting such issuance shall pay any transfer or other taxes required by reason of the issuance of shares of Parent Common Stock to a Person other than the registered holder of such Certificate or establish to the satisfaction of Parent that such tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.4(b), each Certificate shall be deemed at any time after the First Merger Effective Time to represent only the right to receive the Merger Consideration pursuant to Section 3.1(a)(iii) hereof (and any amounts to be paid pursuant to Section 3.2 or Section 3.4(c)) upon such surrender.  No interest shall be paid or shall accrue on any amount payable pursuant to Section 3.2 or Section 3.4(c).

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(c)       No dividends or other distributions with respect to Parent Common Stock with a record date after the First Merger Effective Time shall be paid to the holder of any unsurrendered Certificate with respect to the shares of Parent Common Stock represented thereby, and no cash payment in lieu of fractional shares shall be paid to any such holder pursuant to Section 3.2 hereof, until such Certificate has been surrendered in accordance with this Article III.  Subject to applicable Law, following surrender of any such Certificate, there shall be paid to the recordholder thereof, without interest, (i) promptly after such surrender, the number of whole shares of Parent Common Stock issuable in exchange therefor pursuant to this Article III, together with any cash payable in lieu of a fractional share of Parent Common Stock to which such holder is entitled pursuant to Section 3.2 and the amount of dividends or other distributions with a record date after the First Merger Effective Time theretofore paid with respect to such whole shares of Parent Common Stock and (ii) at the appropriate payment date, the amount of dividends or other distributions with a record date after the First Merger Effective Time and a payment date subsequent to such surrender payable with respect to such whole shares of Parent Common Stock, less the amount of any withholding Taxes that may be required thereon.

(d)       All shares of Parent Common Stock, issued upon the surrender for exchange of Certificates in accordance with the terms of this Article III and any cash paid pursuant to Section 3.1(a)(ii), Section 3.2 or Section 3.4(c) and all shares of Parent Common Stock placed into Escrow shall be deemed to have been issued (and paid) in full satisfaction of all rights pertaining to the shares of Company Stock previously represented by such Certificates.  At the First Merger Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books of the First Merger Surviving Corporation of the shares of Company Stock which were outstanding immediately prior to the First Merger Effective Time.  If, after the First Merger Effective Time, Certificates are presented to the First Merger Surviving Corporation or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Article III.

(e)       Any portion of the Exchange Fund (other than any shares of Parent Common Stock held in Escrow) which remains undistributed to the holders of Certificates six months after the First Merger Effective Time shall be delivered to the Second Merger Surviving Entity, upon demand, and any holders of Certificates who have not theretofore complied with this Article III (other than Dissenting Shares) shall thereafter look only to the Surviving Corporation for payment of their claim for the Merger Consideration, any cash in lieu of fractional shares of Parent Common Stock pursuant to Section 3.2 and any dividends or distributions pursuant to Section 3.4(c).

(f)       None of Parent, Merger Subs, the Company or the Exchange Agent or any of their respective directors, officers, employees and agents shall be liable to any Person in respect of any shares of Parent Common Stock (or dividends or distributions with respect thereto), or cash from the Exchange Fund delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.  If any Certificate shall not have been surrendered prior to five years after the First Merger Effective Time, or immediately prior to such earlier date on which any shares of Parent Common Stock, any cash in lieu of fractional shares of Parent Common Stock, or any dividends or distributions with respect to Parent Common Stock issuable in respect of such Certificate would otherwise escheat to or become the property of any Governmental Authority, any such shares, cash, dividends or distributions in respect of such Certificate shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interests of any Person previously entitled thereto.

(g)       The Exchange Agent shall invest any cash included in the Exchange Fund as directed by Parent on a daily basis; provided that no such investment or loss thereon shall affect the amounts payable to former stockholders of the Company after the First Merger Effective Time pursuant to this Article III.  Any interest and other income resulting from such investment shall become a part of the Exchange Fund, and any amounts in excess of the amounts payable pursuant to this Article III shall promptly be paid to Parent.

(h)       Parent and the Exchange Agent shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement to any Person who was a holder of Company Stock immediately prior to the First Merger Effective Time such amounts as Parent or the Exchange Agent may be required to deduct and withhold with respect to the making of such payment under the Code or any other

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provision of federal, state, local or foreign tax law.  To the extent that amounts are so withheld by Parent or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person to whom such consideration would otherwise have been paid.

(i)       In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit (without the posting of a bond) of that fact by the holder thereof, such shares of Parent Common Stock as may be required pursuant to Section 3.4(b), cash for fractional shares pursuant to Section 3.2 and any dividends or distributions payable pursuant to Section 3.4(c); provided, however, that Parent may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificates to deliver an agreement of indemnification in form reasonably satisfactory to Parent, or a bond in such sum as Parent may reasonably direct as indemnity against any claim that may be made against Parent or the Exchange Agent in respect of the Certificates alleged to have been lost, stolen or destroyed.

3.5.          Escrow.  At the Closing, Parent, the Stockholder’s Representative and the escrow agent (“Escrow Agent”) shall enter into an escrow agreement in the form attached hereto as Exhibit D (the “Escrow Agreement”), pursuant to which the EBITDA Stock and Warrant Stock portions of the Common Stock Merger Consideration (other than portions in respect of the Dissenting Shares) and Additional Warrant Stock  (such amount being defined as the “Escrowed Stock”) shall be deposited into escrow (the “Escrow Account”), shall be subject in all events to the provisions of this Agreement and the Escrow Agreement and shall be distributed to the holders of Company Common Stock as follows:  (i) an amount equal to EBITDA Stock of the Escrowed Stock on or prior to the EBITDA Escrow Release Date (as defined below) shall be distributed to the holders of Company Common Stock in the percentages set forth in Schedule 3.1(a)(iii) hereof within 60 days following the end of a fiscal quarter in which the EBITDA Condition has been satisfied (the “EBITDA Escrow Release Date”), and (ii) an amount equal to Warrant Stock of the Escrowed Stock on or prior to the Warrant Escrow Release Date (as defined below) shall be distributed to the holders of Company Common Stock in the percentages set forth in Schedule 3.1(a)(iii) hereof within 30 days following the satisfaction of the Warrant Condition (the “Warrant Escrow Release Date”), all as more specifically set forth in the Escrow Agreement.

IV.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As an inducement to Parent and the Merger Subs to enter into this Agreement, the Company represents and warrants to Parent and the Merger Subs that:

4.1.          Organization, Qualification, and Corporate Power.  Each of the Acquired Companies is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, with full power and authority to conduct its business as owned and conducted on the date hereof and at the Closing.  Each of the Acquired Companies is duly qualified or licensed to do business as a foreign corporation in, and is in good standing in, each jurisdiction in which the nature of its business or its ownership of its properties requires it to be so qualified or licensed, except where the failure to be so qualified or licensed would not have a Material Adverse Effect.  Each of the Acquired Companies has all requisite organizational power and authority and all Permits from Governmental Authorities and from all other Persons that are necessary and/or appropriate to carry on its Business and to own and use the properties owned and used by it, except for such Permits the absence of which would not result in a Material Adverse Effect.

4.2.          Subsidiaries.  Except for the Company Subsidiaries, the Company does not have has any subsidiaries nor does it own any securities issued by any other Person except temporary investments in the ordinary course of business.

4.3.          Capitalization.  The authorized capital stock of each of the Acquired Companies and the number and kind of issued and outstanding shares of each of the Acquired Companies and, other than with respect to the Company Common Stock, the holders of record thereof are set forth on Schedule 4.3 and were validly issued, fully paid and nonassessible and were issued in compliance with all applicable federal and state securities laws and any preemptive rights or rights of first refusal of any Person.  Except as set forth in Schedule 4.3:  (A) to the Company’s

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Knowledge, there are no voting trusts, proxies, or other agreements or understandings with respect to the voting of any shares of capital stock of the Acquired Companies; (B) there does not exist nor is there outstanding any right or security granted to, issued to, or entered into with, any Person to cause the Acquired Companies to issue, grant or sell any shares of capital stock of the Acquired Companies to any Person (including any warrant, stock option, call, preemptive right, convertible or exchangeable obligation, subscription for stock or securities convertible into or exchangeable for stock of the Acquired Companies, or any other similar right, security, instrument or agreement), and there is no commitment or agreement to grant or issue any such right or security; (C) there is no obligation, contingent or otherwise, of the Acquired Companies to:  (1) repurchase, redeem or otherwise acquire any share of the capital stock or other equity interests of the Acquired Companies; or (2) provide funds to, or make any investment in (in the form of a loan, capital contribution or otherwise), or provide any guarantee with respect to the obligations of any other Person (other than the other Acquired Companies); and (D) there are no bonds, debentures, notes or other indebtedness which have the right to vote (or are convertible into, or exchangeable for, securities having the right to vote) on any matters on which the Company’s stockholders are entitled to vote.

4.4.          Validity and Execution; Stockholder Approval.  The Company has the right, power and authority to enter into this Agreement and perform its obligations hereunder.  All necessary corporate action of the Company has been taken to authorize the Company to execute and deliver this Agreement and to consummate the Transactions.  The board of directors (including any required committee or subgroup thereof) and stockholders of the Company have, as of the date of this Agreement, duly approved this Agreement and the Transactions.  This Agreement constitutes the legal, valid and binding obligation of the Company enforceable against it in accordance with its terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application affecting enforcement of creditors’ rights.  The execution, delivery and performance by the Company of this Agreement and all other instruments, agreements, certificates and documents contemplated hereby:  (a) do not, and will not, violate or conflict with any provision of the Company’s certificate of incorporation or bylaws; (b) do not, and will not, violate or constitute a default under any Law or any contract to which any Acquired Company is a party, or by which it or any Company Stock or equity interests in any Acquired Company is bound; and (c) do and will not result in the creation of any Lien, other than Permitted Liens.

4.5.          Real and Tangible Personal Properties.

(a)            Schedule 4.5(a) identifies (i) all of the real property, including all, land, buildings, towers, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto, owned by any of the Acquired Companies (collectively, the “Owned Real Property”); and (ii) all of the real property devised by leases, subleases, licenses, concessions, co-locations and other agreements (written or oral) (collectively, the “Leases”) pursuant to which the Acquired Companies hold any leased real property (collectively, the “Leased Real Property,” and together with the Owned Real Property, the “Real Property”).

(b)            Each Acquired Company (i) has good and marketable indefeasible fee simple title to the Owned Real Property, free and clear of all Liens, except for Permitted Liens, (ii) has not leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof, (iii) has not granted any outstanding options, rights of first offer or rights of first refusal to purchase such Owned Real Property or any portion thereof or interest therein, and (iv) is not a party to any agreement or option to purchase any real property or interest therein.

(c)            Each applicable Acquired Company holds a valid and existing leasehold interest under each of the Leases to which it is a party for the terms set forth therein.  Schedule 4.5(a) contains a true and complete listing of all of the Leases, and the Acquired Companies have made available to Parent a complete and accurate copy of each of the Leases, and in the case of any oral Lease, a written summary of the material terms of such Lease, including all amendments, extensions, renewals and other agreements with respect thereto.  With respect to each of the Leases and except as set forth in Schedule 4.5(c):  (i) the applicable Acquired Company has not subleased, licensed or otherwise granted any Person the right to use or occupy such Leased Real Property or any portion thereof; (ii) such Lease is legal, valid, binding, enforceable against such Acquired Company and in full force and effect, subject to proper authorization and execution of such Lease by the other party thereto and the application of any bankruptcy or other creditor’s rights Laws; (iii) such Acquired Company is not in breach or default under such Lease and no event has occurred or circumstances exist which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, except to the extent such breach or default would not have a Material Adverse Effect; (iv) such Acquired Company has not collaterally assigned or granted any other security interest in such Lease or any interest therein; and (v) there are no Liens or encumbrances on the estate or interest created by such Lease.

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(d)             The Acquired Companies own or have a valid leasehold interest in each of the items of tangible personal property reflected on the Most Recent Balance Sheets, or acquired thereafter (except for assets reflected thereon or acquired thereafter that have been disposed of in the Ordinary Course of Business since the date of the Most Recent Balance Sheets), free and clear of all Liens, except for Permitted Liens, and such tangible personal property constitutes all material equipment, machinery, fixtures, improvements and other tangible personal property used in or necessary for the conduct of each of the Businesses of the Acquired Companies as it is currently conducted by the Acquired Companies.  All of the tangible personal property, equipment, machinery, fixtures, improvements and other tangible assets (whether owned or leased) owned by the Acquired Companies are in good condition and repair (ordinary wear and tear excepted).

4.6.          No Litigation.  Except as set forth on Schedule 4.6, there is no litigation, claim, investigation or proceeding pending, or to the Company’s Knowledge, threatened, against or relating to any Acquired Company or its Business, nor to the Company’s Knowledge is there any reasonable basis for any such litigation, claim, investigation or proceeding.  No Acquired Company is named in any order, judgment, decree, stipulation or consent of or with any court or other Governmental Authority that affects or may affect the Company Stock or the Transactions.

4.7.          Noncontravention.  Except for the FCC Consents and PUC Consents and as set forth on Schedule 4.7, neither the execution and the delivery of this Agreement by the Company, nor the consummation of the Transactions by any of the Acquired Companies, will:  (i) violate any material applicable Law or any injunction, judgment, order, decree, ruling, charge, or other restriction of any Governmental Authority to which any Acquired Company or a Business is subject or any provision of any Acquired Company’s certificate of incorporation, bylaws, or other governing instrument, as amended, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument, or other arrangement to which any Acquired Company is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any capital stock or assets of any Acquired Company).  Except as set forth on Schedule 4.7 and except where failure to meet such requirement would not result in a Material Adverse Effect, no Acquired Company is required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order for the parties to consummate the Transactions.

4.8.          Tax Matters.  Except as set forth on Schedule 4.8:

(a)            All income, franchise and all material other Tax Returns required to have been filed by or with respect to the Acquired Companies have been timely filed (taking into account applicable extensions of time to file) and all such Tax Returns (including information provided therewith or with respect thereto) are true, accurate and complete in all material respects.  All income Taxes and all other Taxes of the Acquired Companies, whether or not shown as due on any Tax Returns, have been timely paid, other than Taxes that are not yet due and payable or that are being contested in good faith by appropriate proceedings (and are so identified on Schedule 4.8) and for which adequate reserves are reflected in the Company Financial Statements in accordance with GAAP.

(b)            Each of the Acquired Companies has complied in all material respects with all applicable Laws, rules and regulations relating to the withholding of Taxes and has duly and timely withheld and paid over to the appropriate Taxing Authorities all amounts required to be so withheld and paid over for all periods under all applicable Laws.  No deficiency for any material amount of Taxes has been assessed with respect to any of the Acquired Companies that has not been abated or paid in full or adequately provided for in the Company Financial Statements.

(c)            There are no Tax claims, audits, examinations, disputes, investigations, administrative or judicial proceedings by any Taxing Authority pending, or threatened in writing, or as to which any of the Acquired Companies has Knowledge in connection with any Taxes due from or with respect to the Acquired Companies, including without limitation, any claim made by a Taxing Authority in a jurisdiction where any of the Acquired Companies does not file a particular Tax Return such that it is or may be subject to taxation by that jurisdiction.

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(d)            There are not currently in force any (i) waivers of any statute of limitations with respect to Taxes or agreements binding upon any of the Acquired Companies for the extension of time for the assessment, reassessment, deficiency or payment of any Tax for any taxable period, and no request for any such waiver or extension is currently pending, (ii) any power of attorney with respect to any Tax matter, or (iii) any Tax allocation or Tax sharing agreement, or any similar agreement pursuant to which any Acquired Company could have an obligation with respect to Taxes of another person or entity following the Closing.

(e)            There are no Liens for Taxes (other than Taxes not yet due and payable or that are being contested in good faith) upon any of the assets of the Acquired Companies.

(f)            None of the Acquired Companies is or has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(g)            None of the Acquired Companies has been the “distributing corporation” or the “controlled corporation” (in each case, within the meaning of Section 355(a)(1) of the Code) with respect to a transaction described in Section 355 or Section 361 of the Code (i) within the three (3)-year period ending as of the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the Transactions.

(h)            None of the Acquired Companies (1) has been a member of any affiliated group filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) or of any affiliated, consolidated, combined, or unitary group, as defined under applicable state, local or foreign Law (other than a group the common parent of which was the Company) or (2) has any liability for the Taxes of any Person (other than the Acquired Companies) under Section 1.1502-6 of the Treasury Regulations (or any predecessor or successor thereof or any similar provision of state, local or foreign Law), as a transferee or successor, by contract, assumption, operation of Law or otherwise.

(i)             None of the Acquired Companies nor any other Person on behalf of the Acquired Companies has (i) agreed to or is required to make any adjustments pursuant to Section 481(a) of the Code or any similar provision of state, local or foreign Law by reason of a change in accounting method and no Taxing Authority has proposed any such adjustment or change in accounting method, or has any application pending with any Taxing Authority requesting permission for any changes in accounting methods, (ii) executed or entered into a closing agreement pursuant to Section 7121 of the Code or any predecessor provision thereof or any similar provision of state, local or foreign Law that would have continuing effect after the Closing, or (iii) been the subject of a Tax ruling that would have continuing effect after the Closing.

(j)             None of the Acquired Companies is a party to any agreement, contract, arrangement or plan that has resulted in, or in connection with the transactions contemplated by this Agreement or the GCI Merger Agreement could result in, the payment of any “excess parachute payment” within the meaning of Section 280G of the Code (or any similar provision of state, local or foreign Tax law, including without limitation, by reason of (i) the execution and delivery of this Agreement or the GCI Merger Agreement or (ii) the consummation of (y) the Transactions or (z) the transactions contemplated by the GCI Merger Agreement).  None of the Acquired Companies has engaged in any reportable transaction as defined in Treasury Regulation Section 1.6011-4(b).

4.9.          Financial Statements.  The Company has previously provided to Parent true and accurate copies of the unaudited consolidated financial statements of the Company as of and for the six (6) month period ended June 30, 2008 (the “Interim Company Financial Statements”) and (b) the balance sheet of the Company as of December 31, 2007 (the “Most Recent Company Balance Sheet”) and the balance sheets of the Company as of December 31, 2006 and December 31, 2005 and the related statements of income and cash flows for the fiscal years then ended, audited and certified by the Company’s Accountants (together with the Interim Financial and including, with respect to the audited balance sheets and related statements of income and cash flows, any notes and schedules thereto, the “Company Financial Statements”).  Except as otherwise indicated in the Company Financial Statements or in Schedule 4.9, the Company Financial Statements (x) have been prepared in accordance with GAAP consistently applied throughout the relevant periods, other than, with respect to the Interim Company Financial Statements, the absence of normal year-end adjustments and the absence of footnotes; and (y) present

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fairly, in all material respects, the financial position, the results of operations and cash flows of the Company as of the dates and for the periods presented therein,provided, however, that as of the date of this Agreement, the Company is completing an audit of its financial statements as of and for the six month period ended December 31, 2007 (the “Company Audit”) and that the Company Audit may result in the restatement of one or more items in the financial statements as of and for the fiscal year ended December 31, 2007.

4.10.          Undisclosed Liabilities.  There are no material liabilities relating to the Acquired Companies, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for Taxes, except for:  (a) liabilities set forth on the face of the Most Recent Balance Sheets, (b) liabilities which have arisen after the date of the Most Recent Balance Sheets in the Ordinary Course of Business, (c) liabilities and obligations not required by GAAP to be reflected on an audited balance sheet, or (d) liabilities and obligations set forth on Schedule 4.10(d).

4.11.          Material Contracts.  The Company has delivered to or otherwise made available to Parent a correct and complete copy of each Material Contract, each of which is listed on Schedule 4.11 hereto.  With respect to each Material Contract:  (a) such Material Contract is legal, valid and binding, enforceable, and in full force and effect, (b) neither the Company nor, to the Company’s Knowledge, any other party to such Material Contract is in material breach or default, and no event has occurred which, with notice or lapse of time, would constitute such a breach or default by any Acquired Company or, to the Company’s Knowledge, any other party to such a Material Contract, or permit termination, material modification, or acceleration under the Material Contract, and (c) the Company has not, and to the Company’s Knowledge, no other party to a Material Contract has repudiated any material provision of any Material Contract.  Schedule 4.11 sets forth a list of the Material Contracts which require the prior consent of or require prior notice to the counterparty to such Material Contract to the consummation of the Transactions.  Notwithstanding anything to the contrary contained herein, Schedule 4.11 shall be updated by the Company prior to the Closing Date to reflect any changes required as a result of the passage of time between the date of this Agreement and the First Merger Effective Time, provided that any such changes shall be consistent and in all respects in accordance with Section 6.2.

4.12.          Intellectual Property.

(a)             Schedule 4.12(a) sets forth a listing of all of the following Intellectual Property:  (i) registered or patented Intellectual Property and all pending applications therefor owned by any Acquired Company; (ii) material unregistered trademarks, material unregistered copyrights and material software and (iii) material licenses with respect to the Intellectual Property owned or used by any Acquired Company.

(b)             The Acquired Companies own and possess all right, title and interest in or have a valid right or license to use the Intellectual Property set forth on Schedule 4.12(a) and all the Intellectual Property that is material to any Business.

(c)             Except for the Permitted Liens, the Intellectual Property owned by any Acquired Company (the “Owned Intellectual Property”) is not subject to any Liens and is not subject to any restrictions or limitations regarding use or disclosure other than pursuant to the written license agreements disclosed on Schedule 4.11.

(d)             None of the material Owned Intellectual Property is expired or has been cancelled or abandoned.  Each Acquired Company has taken all commercially reasonable actions to maintain and protect all of the Company Intellectual Property.

(e)             Except as set forth on Schedule 4.12(e), none of the Acquired Companies has received in the past three (3) years any notice regarding the infringement, misappropriation or other violation by any Acquired Company of any Intellectual Property of any third party (including any demands or unsolicited offers to license any Intellectual Property from any third party) that has not yet been formally and finally resolved.  To the Company’s Knowledge, neither the conduct of the business of any Acquired Company nor sale of any products or provision of any services by any Acquired Company has infringed, misappropriated or otherwise violated, or infringes, misappropriates or otherwise violates, any Intellectual Property of any third party.

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(f)             To the Company’s Knowledge, no third party is infringing, misappropriating or violating, or has infringed, misappropriated or otherwise violated, any of the Company Intellectual Property.  No such claims have been brought or, to the Company’s Knowledge, threatened against any third party by any of the Acquired Companies.

(g)             To the Company’s Knowledge, all current or former employees, consultants, or contractors who have participated in the creation or development of any Intellectual Property owned or purported to be owned by the Company, including the Intellectual Property listed on Schedule 4.12(a), have executed and delivered to such Acquired Company a valid and enforceable agreement (i) providing for the non-disclosure by such current or former employee, consultant, or contractor of any confidential information of such Acquired Company, and (ii) providing for the assignment by such current or former employee, consultant, or contractor to such Acquired Company of any Intellectual Property arising out of such employee’s, consultant’s, or contractor’s employment by, engagement by, or contract with such Acquired Company.

4.13.          Insurance.  The Company has furnished to Parent true and complete copies of all insurance policies and fidelity bonds covering the Acquired Companies or any Business and the employees of any Business, each of which is listed on Schedule 4.13 hereto.  Except as set forth on Schedule 4.13 hereto, there is no claim by any Acquired Company pending under any of such policies or bonds as to which coverage has been questioned, denied or disputed by the underwriters of such policies or bonds.  All premiums payable under all such policies and bonds which are due and payable have been paid and each Acquired Company is otherwise in material compliance with the terms and conditions of all such policies and bonds.  No Acquired Company has received written notice from any underwriter that any such policy of insurance or bond is not in full force and effect.

4.14.          Employees.  Except as disclosed on Schedule 4.14(a), each employee of each Acquired Company is an employee at will and the employment of each employee of each Acquired Company is terminable at will without advance notice.  To the Company’s Knowledge, no officer of any Acquired Company has indicated his or her intent in writing to terminate his or her employment with such Acquired Company.  No Acquired Company is a party to or bound by any collective bargaining agreement, nor has it experienced any strikes, grievances, claims of unfair labor practices, or other collective bargaining disputes.  To the Company’s Knowledge, no organizational effort is presently being made or threatened by or on behalf of any labor union with respect to employees of any Acquired Company.  No Acquired Company has received written notice of any alleged violation of federal, state, or local labor, employment or health and safety Law, rule, order, regulation or ordinance.  Schedule 4.14(b) sets forth:  (i) all present employees (including any leased or temporary employees) and independent contractors of each Acquired Company; (ii) each employee’s or independent contractor’s current rate of compensation; and (iii) each such employee’s accrued vacation, if applicable.  Schedule 4.14(c) sets forth a list of all employment agreements containing any severance payments.  Except as set forth on Schedule 4.14(d), there are no unpaid wages, bonuses or commissions owed to any employees or independent contractors (other than those not yet due and that have been accrued in the financial books and records of the Company).  Except as set forth on Schedule 4.14(e) there are no written or oral employment agreements with any of the employees.  

4.15.       Employee Benefits.

(a)            Schedule 4.15 contains a list of (i) each “employee benefit plan,” as defined in Section 3(3) of ERISA, (ii) all other pension, retirement, supplemental retirement, equity, equity incentive, severance, change in control, bonus, incentive, retention and deferred compensation plans, programs and arrangements and (iii) all other material plans, programs or arrangements (including vacation, death benefit and fringe benefit plans, programs or arrangements) maintained, contributed to, or required to be contributed to, by any of the Acquired Companies or any ERISA Affiliate for the benefit of any employee, former employee, director, officer or independent contractor of any of the Acquired Companies or under which any of the Acquired Companies or any ERISA Affiliate has any liability with respect to any employee, former employee, director, officer or independent contractor of any of the Acquired Companies (the “Plans”).  The Company has made available to Parent true, complete and correct copies of (i) the current document constituting each Plan, each current summary plan description and each summary of material modifications, if any (or, if a written Plan document does not exist, a written summary of the terms of such Plan), (ii) the most recent annual report on Form 5500 (with all applicable attachments) filed with respect to each Plan (if any such report was required) and (iii) any related trust agreements, investment management contracts, custodial agreements and insurance contracts, as applicable, with respect to each Plan.

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(b)            Except as set forth on Schedule 4.15(b):

(i)            none of the Plans is (A) a “multiemployer plan” (as defined in Sections 3(37) or 4001(a)(3) of ERISA), (B) a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA), (C) a “multiple employer plan” to which Section 413(c) of the Code applies, or (D) subject to Title IV of ERISA or Sections 412 or 430 of the Code;

(ii)            none of the Acquired Companies (A) has incurred, or as the result of an ERISA Affiliate will incur, any liability under Title IV of ERISA or Sections 412 or 430 of the Code or (B) is subject to any Lien under ERISA or the Code, and to the Company’s Knowledge, there is no basis for the imposition of any such Lien;

(iii)            each Plan (and its related trust, insurance contract or other funding vehicle, if any) has been maintained, operated and administered in all material respects in compliance with (A) its terms, (B) the terms, if applicable, of any related funding instrument, and (C) all applicable Laws;

(iv)            with respect to each Plan that is intended to be tax-qualified under Section 401(a) of the Code, the Acquired Companies have received a favorable determination letter or opinion letter (which has been made available to Parent) from the Internal Revenue Service that each such Plan is so qualified in form and the related trust is exempt from taxation under Section 501(a) of the Code, and no such determination letter or opinion letter has been revoked (nor, to the Company’s Knowledge, has revocation been threatened), and to the Company’s Knowledge, no event has occurred since the date of the most recent determination letter or application therefore relating to any such Plan or trust (including any amendment to, or failure to amend, any such Plan) that could reasonably be expected to adversely affect the qualification of any such Plan or the exemption of any such trust;

(v)            the Acquired Companies and each ERISA Affiliate have, with respect to each “group health plan” (as such term is defined in Section 5000(b)(1) of the Code) that is maintained by any such entity, (A) complied in all material respects with the applicable requirements of Section 4980B of the Code and the regulations thereunder and all similar state Laws, as applicable, and (B) complied with the applicable provisions of the Health Insurance Portability and Accountability Act of 1996 and the regulations issued thereunder;

(vi)            all contributions, premiums or payments under or with respect to each Plan (A) have been made within the time periods prescribed by ERISA, the Code and all other applicable Laws and (B) which are due on or before the Closing Date have been paid;

(vii)            neither the execution and delivery of this Agreement nor the consummation of the Transactions, will:  (A) result in any payment (including, without limitation, severance, unemployment compensation, “parachute payments” (as such term is defined in Section 280G of the Code) or otherwise) becoming due to any director, officer or any employee of the Acquired Companies under any Plan or otherwise (except for payments due under arrangements that become effective on or after the date hereof between any such director, officer or employee and Parent or any of the Merger Subs); (B) increase the amount payable, or trigger any funding (through a grantor trust or otherwise), pursuant to any Plan; or (C) result in any acceleration of the time of payment or vesting of any compensation or benefits;

(viii)            none of the Plans provide, nor do any of the Acquired Companies or any ERISA Affiliate have an obligation to provide (whether through a promise or guarantee or through a policy or otherwise), any post-employment medical benefits or any other post-employment welfare benefits to any employee, former employee, director, officer or independent contractor of any of the Acquired Companies, except as required by applicable Law (including Section 4980B of the Code or applicable state Laws);

(ix)            with respect to each Plan or other arrangement (including employment agreements) to which any of the Acquired Companies is a party that constitutes a “nonqualified deferred compensation plan” subject to Section 409A of the Code, each such nonqualified deferred compensation plan has been maintained and operated in good faith compliance with the requirements of Sections 409A of the Code and the applicable Internal Revenue Service guidance issued thereunder; and

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(x)            the Acquired Companies have, for purposes of each Plan, correctly classified all individuals performing services for each such Acquired Company as common law employees, independent contractors or agents, as applicable.

4.16.       Environmental Matters.  Except as set forth in Schedule 4.16, with respect to the Acquired Companies:

(a)           There is and has been no generation, treatment, storage, release, disposal or transport of, or exposure to any Hazardous Material at, on, under, or from any of the Real Property or by or relating to any Acquired Companies except in material compliance with all applicable Environmental Laws;

(b)           The Acquired Companies have complied with and are in compliance with all applicable Environmental Laws.  No Acquired Company has received any written notice, order or other communication from any Governmental Authority or other Person claiming that the Acquired Companies are, or may be, liable under, or violated any, Environmental Laws, including any liability or violation relating to any personal injury or property damage or any other costs or expenses or damages or liabilities arising from any release, treatment, storage or disposal transport of, or exposure to, any Hazardous Material;

(c)           The Acquired Companies have not owned or operated any property or facility upon which, to or from there has been a release of any Hazardous Material and to the Company’s Knowledge, none of the Real Property has had a release of any Hazardous Material, in each case as would give rise to any current or future liabilities under Environmental Laws;

(d)             The Acquired Companies have not assumed or undertaken or provided an indemnity with respect to any liability of any other Person relating to Environmental Laws or Hazardous Materials;

(e)             None of the Acquired Companies, nor, to the Company’s Knowledge, any predecessor or affiliate for which any Acquired Company would have liability, has any liability, contingent or otherwise, with respect to the presence or alleged presence of Hazardous Materials in any product or item or at or upon any property or facility; and

(f)             The Company has furnished to Parent all environmental audits, assessment and reports and all other documents materially bearing on environmental, health or safety liabilities, in each case relating to the Acquired Companies or any affiliates or predecessors, including any of their current or prior properties, facilities or operations, to the extent such documents are in the possession or under the reasonable control of the Acquired Companies.

4.17.        Compliance with Laws.  The Acquired Companies have complied with all applicable material Laws and orders of all Governmental Authorities (including, without limitation, Laws and orders relating to Taxes, employee benefits and the environment, the Acquired Companies’ compliance with which, however, is governed exclusively by Sections 4.8, 4.15 and 4.16, respectively) and no Acquired Company is in material default under or in violation of any such applicable Laws and orders of all Governmental Authorities.

4.18.        Accounts Receivable.  All accounts receivable shown on the Company Financial Statements and all such receivables arising after the date of the Most Recent Company Balance Sheets and now held by the Company are valid obligations arising from sales actually made or services actually performed in the Ordinary Course of Business and, to the Company’s Knowledge, were not and are not subject to any off-set, defense or counterclaim (other than customary bad debt reserves for uncollectible accounts receivable).

4.19.        No Brokers.  None of the Acquired Companies has retained any broker or finder pursuant to any contract or arrangement in connection with the Merger under which such broker or finder could be entitled to a fee or commission from the Company or Parent.

4.20.        No Material Changes.  Except as otherwise disclosed on Schedule 4.20, since December 31, 2007:

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(a)             the Acquired Companies have not issued any stock or equity interests, notes or other corporate securities or granted any options, warrants or rights calling for the issue thereof;

(b)             the Acquired Companies have not entered into any contract or agreement other than in the Ordinary Course of Business;

(c)             there has been no theft, damage, destruction or other casualty loss to or forfeiture of any portion of the property or assets of the Acquired Companies, after giving effect to payments under applicable insurance policies, which has had a Material Adverse Effect;

(d)             there has been no increase in, or plan or commitment to increase, the compensation payable or to become payable to any of the Acquired Companies’ officers or employees other than:  (i) increases in the Ordinary Course of Business to non-officer employees; or (ii) increases required by employment contracts disclosed to Parent and listed on Schedule 4.20 nor any increases in benefits provided under any employee benefit plan or arrangement (including, without limitation, any severance policies or practices), and the Acquired Companies have not amended nor terminated any existing employee benefit plan or arrangement or adopted any new employee benefit plan or arrangement;

(e)             there has been no guarantee or any indebtedness incurred or committed to by the Acquired Companies, (i) other than guarantees or indebtedness incurred or committed to in the Ordinary Course of Business under existing credit facilities as set forth on Schedule 4.11or (iii) other than indebtedness in an aggregate amount not exceeding $500,000 and none of the Acquired Companies has canceled any debt owed to it or released any claim possessed by it other than in the Ordinary Course of Business;

(f)             the Acquired Companies have undertaken no capital expenditures or commitments to make capital expenditures, other than capital expenditures or commitments in the Ordinary Course of Business or that have been otherwise disclosed to and approved by, solely with respect to the period beginning on the date of this Agreement and ending on the Closing Date, Parent;

(g)             the Acquired Companies have not entered into or amended any employment, consulting or similar agreement, or any agreement with any labor union or association representing any employee or any material employee benefit plan or arrangement;

(h)             the Acquired Companies have not acquired, nor disposed, nor encumbered (nor has any Acquired Company agreed to acquire, dispose or encumber) any substantial assets or property, real or personal, of an Acquired Company other than in the Ordinary Course of Business, or delivered or paid any dividend on or made any other distribution in respect of its capital stock;

(i)             there has not been any material change in the accounting policies or practices of an Acquired Company, including practices with respect to the payment of accounts payable or the collection of accounts receivable;

(j)             the Acquired Companies have not permitted or allowed any of their assets or properties (real, personal or mixed, tangible or intangible) to become subject to any Liens, other than Permitted Liens;

(k)             the Acquired Companies did not file any amended Tax Return, settle any Tax claim or assessment, enter into any closing agreement with respect to Taxes, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to any Acquired Company or take any similar action if the effect was to increase the Tax liability of any Acquired Company after the Closing Date; and

(l)             the Acquired Companies have not agreed or offered, in writing or otherwise, to take any of the actions referred to in clauses (a) through (k) above.

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4.21.       Permits and Licenses.  The Acquired Companies hold all Permits (each of which is in full force and effect) necessary for the lawful ownership of the Acquired Companies’ assets or the operation of the Businesses as presently conducted, and no other Permits are necessary for the lawful ownership of the Acquired Companies’ assets or the operation of the Businesses as presently conducted by the Acquired Companies.  The Acquired Companies have heretofore conducted the Businesses in compliance in all material respects with the requirements of such Permits, and the Acquired Companies have not received written notice of any default or violation in respect of or under any of such Permits.  No Permit is subject to any requirement or condition that is not generally imposed on a similar license or permit.  The Acquired Companies have not received written notice of termination, revocation or modification of any material Permit and are not delinquent in the filing of any material reports or in the payment of any Taxes or fees with respect to such Permits.  Schedule 4.21 contains a true, accurate and complete list of any Permits which require a third party’s consent for the consummation of the Transactions.  No event has occurred which permits the revocation or termination of any of Permit or the imposition of any restriction thereon, or that would prevent any Permit from being renewed on a routine basis or in the ordinary course.

4.22.       Warranties.  The Acquired Companies do not provide guaranties, warranties or indemnities with respect to the performance or integrity of any of the services sold by the Acquired Companies, except for those written standard warranties that are included in the copies of the Material Contracts that have been previously made available to Parent and similar warranties included in non-Material Contracts that are included in the copies of non-Material Contracts that have previously been made available to Parent.  

4.23.       Major Suppliers and Customers.

(a)           Except as set forth on Schedule 4.23(a), to the Company’s Knowledge, no Acquired Company has received written notice that any supplier that in the Acquired Company’s most recently concluded fiscal year accounted for more than $300,000 of supplies purchased annually by the Acquired Company in the conduct of the Businesses or any sole supplier will not sell raw materials, supplies, merchandise and other goods and services to the Acquired Company or to any buyer of a Business within the one (1) year period after the date of this Agreement on terms and conditions substantially similar to those used in its current sales to the Acquired Company, subject only to price increases and/or market conditions, unless comparable supplies, merchandise or other goods are readily available from other sources on comparable terms and conditions.

(b)           Except as set forth on Schedule 4.23(b), to the Company’s Knowledge, no Acquired Company has received written notice from any customer that in the Acquired Company’s most recently concluded fiscal year accounted for $300,000 or greater of the annual sales of a Business or any single contract with total payments in excess of $500,000 terminating its business relations with the Acquired Company within the one (1) year period after the date of this Agreement.

(c)           Except as set forth on Schedule 4.23(c), to the Company’s Knowledge, no Acquired Company has received written notice that any distributors, sales representatives, sales agents, or other third party sellers that in an Acquired Company’s most recently concluded fiscal year accounted for more than $50,000 of monthly new sales of a Business, will not sell or market the products or services of a Business within the one (1) year period after the date of this Agreement on terms and conditions substantially similar to those used in the current sales and distribution contracts of the Acquired Company.

4.24.       Related Party Transactions. Except as set forth on Schedule 4.24:

(a)             there is no Debt between any Acquired Company and any officer, director or employee of any Former Company Stockholder or its Affiliates;

(b)             no Former Company Stockholder owns, in whole or in part, or provides or causes to be provided, and no Affiliate, officer, director or employee of any Former Company Stockholder owns, in whole or in part, or provides or causes to be provided, to any Acquired Company, any material assets, services or facilities of the Acquired Company; and

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(c)             no Acquired Company beneficially owns, directly or indirectly, any investment in or issued by a Former Company Stockholder or such officer, director, employee or Affiliate of a Former Company Stockholder or the Company (other than in another Subsidiary of the Company).

4.25.       Prohibited Payments.  No Acquired Company or any director, officer, employee, or to the Company’s Knowledge, any agent or other Person acting for or on behalf of any Acquired Company has (a) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (b) made any unlawful payments to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, (c) made any other unlawful payment, (d) other than rebates made to customers in the Ordinary Course of Business, made any bribe, rebate, payoff, influence payment, kickback or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business, (ii) to obtain favorable treatment for business secured or (iii) to obtain special concessions or for special concessions already obtained, for or in respect of any Acquired Company or any of its Affiliates or (e) established or maintained any fund or asset that has not been recorded in the books and records of such Acquired Company and which is required to be so recorded under GAAP.

4.26.          Books and Records.  The books of account, minute books, stock record books, and other records of the Company, all of which have been made available to Parent, are complete and correct and have been maintained in accordance with sound business practices.  The minute books of the Company contain accurate and complete records of all meetings held of, and corporate action taken by, the stockholders, the boards of directors and committees of the boards of directors, of the Company, and no meetings of any such stockholders, board of directors or committees of boards of directors have been held for which minutes have not been prepared and are not contained in such minute books.  At the Closing, all of those books and records will be in the possession of the Company.

4.27.          Proxy Statement.  The information to be supplied in writing by the Company for inclusion in Parent’s prospectus/proxy statement (such prospectus/proxy statement as amended or supplemented is referred to herein as the “Proxy Statement”), which shall be included in Parent’s Registration Statement on Form S-4 (the “Registration Statement”) shall not at the time the Proxy Statement is first mailed, at the time of the meeting of Parent’s stockholders to consider the approval of this Agreement (the “Parent Stockholders’ Meeting”) and at the time of the filing with the SEC, 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 the Closing, any event relating to any Acquired Company or its officers or directors should be discovered by the Company which should be set forth in a supplement to the Proxy Statement, the Company shall promptly inform Parent.  Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information supplied by Parent or any Person other than the Company which is contained in the Proxy Statement.

4.28.          Disclaimer.  Parent and Merger Subs acknowledge and agree that they are entering into and consummating this Agreement and the Transactions without, and are not relying upon, any representation or warranty, express or implied, at Law or in equity, by the Company or any Former Company Stockholder or any of their respective representatives, except as expressly set forth in this Agreement (and subject to such limitations and qualifications as are expressly contained herein and the disclosure schedules hereto).  In furtherance of the foregoing, and not in limitation thereof, Parent and Merger Subs acknowledge and agree that except for the representations and warranties contained in this Agreement, none of the Company or any Former Company Stockholder, any of their respective representatives or any other Person has made any express or implied representation or warranty on behalf of the Company or any Former Company Stockholder or any of their respective representatives, and Parent and Merger Subs hereby waive any and all other representations and warranties, whether express or implied (by statute, common law or otherwise).  Parent and Merger Subs acknowledge and agree that any financial projection or forecast delivered to Parent and Merger Subs with respect to the revenues or profitability that may arise from the Acquired Companies and the Business after the Closing Date, shall not in and of itself form the basis of any claim against the Company, any Former Company Stockholder or any of their respective representatives.  With respect to any projection or forecast delivered by or on behalf of the Company to Parent and Merger Subs, Parent and Merger Subs acknowledge and agree that (w) there are uncertainties inherent in attempting to make such projections and forecasts, (x) the accuracy and correctness of such projections and forecasts may be affected by information that may become available through discovery or otherwise after the date of such projections and forecasts, (y) such projections and forecasts have not been independently verified, reflect various assumptions

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and may not prove to be correct, and (z) they are familiar with each of the foregoing.  The preceding notwithstanding, nothing in this Section 4.30 shall be deemed to limit or affect in any way any of the representations or warranties expressly made by the Acquired Companies under this Agreement.

V.     REPRESENTATIONS AND WARRANTIES OF PARENT AND THE MERGER SUBS

As an inducement to the Company to enter into this Agreement, Parent and the Merger Subs jointly and severally represent and warrant to the Company as follows:

5.1.          Organization of Parent and the Merger Subs.  Each of Parent and Merger Sub I is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware and has all requisite corporate power and lawful authority to enter into this Agreement and to perform its obligations hereunder.  Merger Sub II is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware and has all requisite limited liability company power and lawful authority to enter into this Agreement and to perform its obligations hereunder.

5.2.          Validity and Execution.  Each of Parent, Merger Sub I and Merger Sub II has the full corporate or limited liability company power and authority to enter into this Agreement and to perform its obligations hereunder.  All necessary corporate or limited liability company action of each of Parent, Merger Sub I and Merger Sub II has been taken to authorize each of Parent, Merger Sub I and Merger Sub II to execute and deliver this Agreement, and this Agreement constitutes the valid and binding obligation of each of Parent, Merger Sub I and Merger Sub II enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws of general application affecting enforcement of creditors’ rights.

5.3.          Noncontravention.  Neither the execution and the delivery of this Agreement by Parent or the Merger Subs, nor the consummation of the Transactions, will:  (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any applicable Law or any injunction, judgment, order, decree, ruling change or other restriction of any Governmental Authority to which Parent and/or either Merger Sub is subject or any provision of the certificate of incorporation or bylaws of Parent and/or Merger Sub I, the certificate of formation or limited liability company agreement of Merger Sub II, or any other governing instrument, as amended, or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any Person the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Parent and/or either Merger Sub is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any security interest upon any of its assets).  Except as set forth on Schedule 5.3, neither Parent nor any Merger Sub needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order for the parties to consummate the Transactions.

5.4.          No Litigation.  There is no litigation or proceeding pending, or to Parent’s Knowledge, threatened to which Parent or either Merger Sub is subject that is material to Parent’s or the Merger Sub’s ability to perform its obligations under this Agreement, or that is reasonably likely to prevent, restrict or materially delay the performance of the Transactions.

5.5.          No Brokers.  Other than Jefferies & Company, Inc., neither Parent nor either Merger Sub has retained any broker or finder pursuant to any contract or arrangement in connection with the Merger under which such broker or finder could be entitled to a fee or a commission from the Company.

5.6.          Disclosure.  No representation or warranty made by Parent, Merger Sub I or Merger Sub II in this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which made, not misleading.

5.7.          SEC Filings.  Parent has filed and furnished all required reports, schedules, forms, prospectuses and registration, proxy and other statements required to be filed or furnished by it with or to the SEC since May 24, 2006 (collectively, and in each case including all schedules thereto and documents incorporated by reference therein, the “Parent SEC Documents”). As of their respective effective dates (in the case of Parent SEC Documents that are

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registration statements filed pursuant to the requirements of the Securities Act) and as of the respective dates of the last amendment filed with the SEC (in the case of all other Parent SEC Documents), the Parent SEC Documents complied in all material respects with the requirements of the Exchange Act and the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder, each as in effect on the applicable date referred to above, applicable to such Parent SEC Documents, and none of the Parent SEC Documents as of such respective dates contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Parent maintains effective disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act and such disclosure controls and procedures are designed to ensure that all material information concerning Parent is made known on a timely basis to the individuals responsible for the preparation of Parent’s filings with the SEC and other public disclosure documents.

5.8.          Capitalization.

(a)             As of the date of this Agreement, the authorized capital stock of Parent consists of 72,000,000 shares of Parent Common Stock and 1,000,000 shares of preferred stock, par value $0.0001 per share (the “Parent Preferred Stock”), of which 21,840,000 shares of Parent Common Stock and no shares of the Parent Preferred Stock are issued and outstanding, all of which are validly issued, fully paid and nonassessable.

(b)             Except as described in the Parent SEC Documents, (i) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the exercise of outstanding options to purchase Parent Common Stock or Parent Preferred Stock granted to employees of Parent or other parties (the “Parent Stock Options”) and there are no outstanding Parent Stock Options; (ii) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the exercise of outstanding warrants to purchase Parent Common Stock or Parent Preferred Stock (the “Parent Warrants”) and there are no outstanding Parent Warrants; and (iii) no shares of Parent Common Stock or Parent Preferred Stock are reserved for issuance upon the conversion of the Parent Preferred Stock or any outstanding convertible notes, debentures or securities. All shares of Parent Common Stock and Parent Preferred Stock subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All outstanding shares of Parent Common Stock and all outstanding Parent Warrants have been issued and granted in compliance with all applicable securities laws.  

(c)             The shares of Parent Common Stock to be issued by Parent pursuant to this Agreement have been duly reserved for issuance by Parent from Parent’s authorized but unissued shares of Parent Common Stock or treasury shares and, upon issuance in accordance with the terms of this Agreement, will be duly authorized and validly issued and such shares of Parent Common Stock will be fully paid and nonassessable.

(d)             Except as contemplated by this Agreement or the Parent SEC Documents, there are no registrations rights, and there is no voting trust, proxy, rights plan, agreement to repurchase or redeem, anti-takeover plan or other agreements or understandings to which Parent is a party or by which Parent is bound with respect to any equity security of any class of Parent.

(e)             Except as provided for in this Agreement and except as set forth in Schedule 5.8(e), as a result of the consummation of the Transactions, no shares of capital stock, warrants, options or other securities of Parent are issuable and no rights in connection with any shares, warrants, options or other securities of Parent accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).

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5.9.          Undisclosed Liabilities.  Other than expenses incurred in connection with the negotiation and consummation of the Transactions, there are no material liabilities relating to Parent or Merger Sub, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for Taxes, except as otherwise disclosed in Parent SEC Documents.

5.10.        Material Contracts.  Except as set forth on Schedule 5.10, there are no Material Contracts of Parent, other than those that are exhibits to the Parent SEC Documents.  With respect to each Material Contract:  (a) such Material Contract is legal, valid and binding, enforceable, and in full force and effect, (b) neither Parent nor, to Parent’s Knowledge, is any other party to such Material Contract is in material breach or default, and no event has occurred which, with notice or lapse of time, would constitute such a breach or default by Parent or, to the Parent’s Knowledge, any other party to such a Material Contract, or permit termination, material modification, or acceleration under the Material Contract, and (c) Parent has not, and to the Parent’s Knowledge, no other party to a Material Contract has repudiated any material provision of any Material Contract.

5.11.        Intellectual Property.  Parent does not own, license or otherwise have any material right, title or interest in any Intellectual Property.

5.12.        Compliance with Laws.  Parent has complied with all applicable material Laws and Parent is not in material default under or in violation of any such applicable Laws.

5.13.        Related Party Transactions.  Except as set forth in the parent SEC Documents filed prior to the date of this Agreement, (a) there is no Debt between Parent and any officer, director, employee or stockholder of Parent and (b) to Parent’s Knowledge, none of such individuals provides or causes to be provided, to Parent, any material assets, services or facilities that will be material to the combined companies following the Transaction.

5.14.        Tax Matters.  Except as set forth on Schedule 5.14:

(a)             all income, franchise and all material other Tax Returns required to have been filed by or with respect to Parent have been timely filed (taking into account applicable extensions of time to file) and all such Tax Returns (including information provided therewith or with respect thereto) are true, accurate and complete in all material respects;

(b)             all income Taxes and all other Taxes of Parent, whether or not shown as due on any Tax Returns, have been timely paid, other than Taxes that are not yet due and payable or that are being contested in good faith by appropriate proceedings (and are so identified on Schedule 5.14);

(c)             there is no action, suit, investigation, audit, claim or assessment pending or proposed or threatened in writing with respect to Taxes of Parent;

(d)             Parent has not waived or requested to waive any statute of limitations in respect of Taxes which waiver is currently in effect; and

(e)             Parent has complied in all material respects with all applicable Laws, rules and regulations relating to the withholding of Taxes and has duly and timely withheld and paid over to the appropriate Taxing Authorities all amounts required to be so withheld and paid over for all periods under all applicable Laws.

5.15.       Business Activities.  Since its organization, Parent has not conducted any business activities other than activities directed toward the accomplishment of a business combination. Except as set forth in Parent’s Certificate of Incorporation, there is no agreement, commitment, judgment, injunction, order or decree binding upon Parent or to which Parent is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of Parent, any acquisition of property by Parent or the conduct of business by Parent as currently conducted other than such effects as would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

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5.16.       Title to Property.  Parent does not own or lease any real property or personal property.  Except as set forth on Schedule 5.16, there are no options or other contracts under which Parent has a right or obligation to acquire or lease any interest in real property or personal property.

5.17.       Indebtedness.  Except as set forth on Schedule 5.17, Parent has no Debt.

5.18.       Trust Funds.  As of the date hereof and at the Closing Date, Parent has and will have no less than $104,147,820 invested in United States Government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940 in a trust account administered by Continental Stock Transfer & Trust Company (the “Trust Fund”), less such amounts, if any, as Parent is required to pay (i) to stockholders who elect to have their shares converted to cash in accordance with the provisions of Parent’s Certificate of Incorporation and By-Laws, (ii) deferred underwriters’ compensation in connection with Parent’s initial public offering and (iii) third parties (e.g., professionals) who have rendered services to Parent in connection with its efforts to effect a business combination, including the Mergers.

5.19.       No Material Changes.  

(a)             No conditions, circumstances or facts exist, and since June 30, 2008, there have not been any events, occurrences, changes, developments or circumstances, which would have a Parent Material Adverse Effect.

(b)             Parent and the Merger Subs have not since June 30, 2008 and prior to the date of this Agreement taken any action of the type referred to in Section 6.3(b) except in the Ordinary Course of Business

5.20.       Board Approval.  The board of directors of Parent has, as of the date of this Agreement, unanimously (i) declared the advisability of and approved the Merger in accordance with the terms and conditions of this Agreement, (ii) determined that the Merger is in the best interests of the stockholders of Parent, and (iii) determined that the fair market value of Company is equal to at least 80% of Parent’s net assets.

VI.     COVENANTS

6.1.         Mutual Joint Covenants.

(a)           FCC Applications; State PUC Applications.

(i)            Within five (5) Business Days after the date hereof, the parties hereto shall commence preparing the necessary applications (including any notices, reports, registrations and other filings) with the FCC seeking the FCC Consents set forth on Schedule 6.1(a)(i), and such submissions shall be filed with the applicable authorities as soon as reasonably practicable thereafter (but in no event later than thirty (30) days after the date hereof).  Each party shall provide the other party with all information necessary for the preparation of such applications on a timely basis, including those portions of such applications which are required to be completed by each party.

(ii)            Within five (5) Business Days after the date hereof, the parties hereto shall commence preparing the necessary applications (including any notices, reports, registrations and other filings) with the State PUCs seeking the State PUC Consents set forth on Schedule 6.1(a)(ii), and such submissions shall be filed with the applicable authorities as soon as reasonably practicable (but in no event later than thirty (30) days after the date hereof).  Each party shall provide the other parties with all information necessary for the preparation of such applications on a timely basis, including those portions of such applications which are required to be completed by the first party.  In addition, the parties hereto shall cooperate to make any notice or ownership filings required in connection with this matter on a timely basis and to assist in the process of obtaining approvals for the Transactions from the FCC and State PUCs (including any related approvals required in connection with the financing contemplated by the Credit Agreement).

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(iii)            Subject to the terms and conditions of this Agreement, each of the parties hereto shall use its reasonable best efforts to prosecute the FCC applications and the State PUC applications in good faith and with due diligence before the FCC and the State PUCs and in connection therewith shall take such actions as may be necessary or reasonably required in connection with the FCC applications and the State PUC applications, including furnishing to the FCC and the State PUCs any documents, materials, or other information requested by the FCC and the State PUCs in order to obtain the FCC Consents and the State PUC Consents as expeditiously as practicable.  In addition, to the extent practicable, the parties hereto shall use their reasonable best efforts to (i) promptly notify the other parties of any material communication to that party from the FCC, any State PUC or any other party with respect to the FCC applications or the State PUC applications, as applicable, (ii) permit a representative of the other parties reasonably acceptable to the first party to attend and participate in substantive meetings (telephonic or otherwise) with the FCC or any State PUC and (iii) permit the other party to review in advance, as reasonable, any proposed written communication to the FCC or any State PUC.  No party hereto shall, without the written consent of the other parties, knowingly take, or fail to take, any action if the intent or reasonably anticipated consequence of such action or failure to act is, or would be, to cause or materially increase the probability of the FCC or any State PUC not to grant approval of any FCC application or of any State PUC application or materially delay either such approval, to the material detriment of the other parties.  In the event there are any petitions for reconsideration, appeals or similar filings made seeking to overturn the grant of the FCC Consent or grant of any of the State PUC Consents, or if the FCC or a State PUC seeks to reconsider such grant on its own motion, then the parties shall use their reasonable best efforts to defend the applicable grants against such actions.  The filing fees and the Company’s costs and expenses associated with obtaining any such State PUC or FCC Consents (including the Company’s attorneys’ fees) shall be paid by the Company.  Parent shall be responsible for payment of its own attorneys’ fees and related costs and expenses associated with obtaining any such State PUC or FCC Consents.

(b)           Tax Matters; Books and Records.

(i)            The Parent shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Acquired Companies that are required to be filed after the Closing Date (taking into account applicable extensions) including, without limitation, the final federal income Tax Return of the consolidated group that includes the Acquired Companies for the taxable period including the Closing Date.  To the extent that such Tax Returns relate to a Pre-Closing Tax Period, Parent shall prepare such Tax Returns consistently with the past practice and custom of the Acquired Companies in filing their Tax Returns unless a different treatment of any item is required by an intervening change in Law.  

(ii)            All tax-sharing agreements or similar agreements with respect to or involving the Acquired Companies shall be terminated as of the Closing Date and, after the Closing Date, the Acquired Companies shall not be bound thereby or have any liability thereunder.

(iii)            On or prior to the Closing Date, the boards of directors of each of Parent, Merger Sub, and the Company shall adopt this Agreement as a “Plan of Reorganization” within the meaning of Treasury Regulation Section 1.368-3(a).

(iv)            On or prior to the Closing, the Stockholders' Representative shall deliver to Parent a properly executed statement in a form reasonably acceptable to Parent for purposes of permitting Parent not to withhold tax as provided for under the Treasury regulations promulgated under Section 1445 of the Code (it being understood and agreed by the parties that the failure to provide such statement shall result in the Parent and/or the Merger Subs withholding (or causing to be withheld) under Section 1445 of the Code).

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(c)            Confidentiality.  From the date hereof until the First Merger Effective Time, the parties hereto, their respective members, directors, officers, employees, agents and representatives (collectively, the “Receiving Party”) shall use reasonable good faith efforts to hold in confidence, and shall not use for their own benefit, any and all proprietary and non-public documents and information concerning the other parties (the “Disclosing Party”), as may be furnished to the Receiving Party by or on behalf of the Disclosing Party or otherwise obtained in connection with the Transactions and that are marked with a “confidential” or similar legend or that should be reasonably understood to be confidential, except that:  (i) the Receiving Party may disclose such documents and information to any Governmental Authority reviewing the Transactions, including in any filing with the SEC such as the Proxy Statement and Registration Statement or otherwise as may be required by applicable Law or the rules of any stock exchange; (ii) the Receiving Party may disclose such documents and information to its respective affiliates; (iii) the Receiving Party may disclose such documents and information to its accountants, attorneys, investment bankers, and permitted assignees and to other individuals or entities, with a genuine need to know of such existence, for reasons including preparation for the consummation of the Transactions, on the condition that such disclosure is effected on a confidential basis; and (iv) the Receiving Party may disclose (A) such information that was, at the time of disclosure, in the public domain, (B) such information that has been disclosed by the Disclosing Party or any of its affiliates to others without any obligation of confidentiality or such information became part of the public domain by publication or otherwise without a breach of the provisions of this Agreement, (C) such information that was known by the Receiving Party at the time of disclosure without any obligation of confidentiality and (D) such information that was disclosed to the Receiving Party by a third party without breach of any obligation of confidentiality.  If the Transactions shall not be consummated, the Receiving Party shall maintain such confidence, and all documents and information provided to the Receiving Party by or on behalf of the Disclosing Party (and all copies thereof or any documents, spreadsheets, analyses, etc. prepared on the basis of such documents or information) shall promptly be returned to the Disclosing Party by the Receiving Party.

(d)            Efforts.  Subject to the terms and conditions herein provided, the Parent and the Company agree to, and the Company shall cause the other Acquired Companies to, use their commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective as promptly as practicable the Transactions, including, but not limited to (i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article XI to be satisfied, (ii) the obtaining of all necessary actions, waivers, consents, approvals, orders and authorizations from Governmental Authorities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Authorities, (iii) the obtaining of all consents, approvals or waivers from third parties required as a result of the Transactions, (iv) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Transactions, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Authority vacated or reversed and (v) the execution or delivery of any additional instruments reasonably necessary to consummate the Transactions, and to fully carry out the purposes of, this Agreement.  In furtherance, and not in limitation of the foregoing, the Parent agrees to use its reasonable good faith efforts to obtain the Parent Stockholder Approval and the conversion of less than 20% of the Parent Common Stock.

(e)            Preparation of SEC Documents; Parent Stockholders’ Meeting.

(i)            As promptly as practicable after the execution of this Agreement, Parent will prepare and file the Proxy Statement and Registration Statement with the SEC.  In connection with the Proxy Statement and Registration Statement, the Company shall deliver to Parent requisite annual audited financial statements and interim unaudited financial statements which meet the applicable requirements of Regulation S-X promulgated by the SEC for inclusion in the Proxy Statement and Registration Statement and (ii) provide information reasonably required to prepare the disclosures relating to the Businesses.  The Company and its counsel shall be given a reasonable opportunity to review and comment on the Proxy Statement and Registration Statement prior to filing with the SEC.  Parent will respond to any comments of the SEC and Parent will use

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its reasonable best efforts to obtain an order of effectiveness from the SEC and to mail the Proxy Statement to its stockholders at the earliest practicable time. As promptly as practicable after the execution of this Agreement, the Company and Parent will prepare and file any other filings required under the Securities Act or any other federal, foreign or Blue Sky laws relating to the Transactions (collectively, the “Other Filings”). Each party will notify the other party promptly upon the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff or any other governmental officials for amendments or supplements to the Proxy Statement, the Registration Statement or any Other Filing or for additional information and will supply the other party with copies of all correspondence between such party or any of its representatives, on the one hand, and the SEC, or its staff or other government officials, on the other hand, with respect to the Proxy Statement, the Registration Statement, the Merger or any Other Filing. The Proxy Statement, the Registration Statement and the Other Filings will comply in all material respects with all applicable requirements of Law and the rules and regulations promulgated thereunder.  Whenever any event occurs which is required to be set forth in an amendment or supplement to the Proxy Statement, the Registration Statement or any Other Filing, the Company or Parent, as the case may be, will promptly inform the other party of such occurrence and cooperate in filing with the SEC or its staff or any other government officials, and/or mailing to stockholders of the Company and Parent, such amendment or supplement.  The Proxy Statement will be sent to the stockholders of Parent as described in Section 6.1(e)(ii) for the purpose of soliciting proxies from holders of Parent Common Stock to vote at the Parent Stockholders’ Meeting in favor of: (i) the adoption of this Agreement and the approval of the First Merger (“Parent Stockholder Approval”); (ii) the issuance and sale of shares of Parent Common Stock to the extent that such issuance requires stockholder approval; (iii) the amendment to Parent’s charter to, among other things, increase the number of authorized shares; (iv) the adoption of an equity incentive plan; and (v) such other matters as Parent deems reasonably necessary or appropriate in connection with the consummation of the Transactions.

(ii)            As soon as practicable following effectiveness of the Registration Statement by the SEC, Parent shall distribute the Proxy Statement to the holders of Parent Common Stock and, pursuant thereto, shall call the Parent Stockholders’ Meeting in accordance with the DGCL and, subject to the other provisions of this Agreement, solicit proxies from such holders to vote in favor of the adoption of this Agreement and the approval of the First Merger and the other matters presented to the stockholders of Parent for approval or adoption at the Parent Stockholders’ Meeting, including, without limitation, the matters described Section 6.1(e)(i).

(iii)            Parent shall comply with all applicable provisions of and rules under the Securities Act, Exchange Act and all applicable provisions of the DGCL in the preparation, filing and distribution of the Proxy Statement and Registration Statement, the solicitation of proxies thereunder, and the calling and holding of the Parent Stockholders’ Meeting. Without limiting the foregoing, Parent shall ensure that the Proxy Statement does not, as of the date on which it is distributed to the holders of Parent Common Stock, and as of the date of the Parent Stockholders’ Meeting, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (provided that Parent shall not be responsible for the accuracy or completeness of any information relating to the Company or any other information furnished in writing by the Company explicitly for inclusion in the Proxy Statement).

(iv)            Parent, acting through its board of directors, shall include in the Proxy Statement the recommendation of its board of directors (and any committee thereof) that the holders of Parent Common Stock vote in favor of the adoption of this Agreement and the approval of the First Merger.

(v)            The Company agrees to provide, and will cause its directors, officers and employees to provide, all cooperation reasonably necessary in connection with obtaining the approval of the First Merger by Parent’s stockholders.

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(f)            HSR Act.  If required pursuant to the HSR Act, as promptly as practicable after the date of this Agreement, Parent and the Company shall each prepare and file the notification required of it thereunder in connection with the Transactions and shall promptly and in good faith respond to all information requested of it by the Federal Trade Commission and Department of Justice in connection with such notification and otherwise cooperate in good faith with each other and such Governmental Authorities. Parent and the Company shall (a) promptly inform the other of any communication to or from the Federal Trade Commission, the Department of Justice or any other Governmental Authority regarding the Transactions, (b) give the other prompt notice of the commencement of any action, suit, litigation, arbitration, proceeding or investigation by or before any Governmental Authority with respect to such transactions and (c) keep the other reasonably informed as to the status of any such action, suit, litigation, arbitration, proceeding or investigation. Filing fees with respect to the notifications required under the HSR Act shall be divided equally between the Company and Parent.

(g)            Other Actions.  

(i)            As promptly as practicable after execution of this Agreement and in any event within four (4) Business Days, Parent will prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement (the “Signing Form 8-K”), which the Company may review and comment upon prior to filing. Any language included in the Signing Form 8-K that reflects the Company’s comments, as well as any text as to which the Company has not commented upon after being given a reasonable opportunity to comment, shall be deemed to have been approved by the Company and may henceforth be used by Parent in other filings made by it with the SEC and in other documents distributed by Parent in connection with the Transactions without further review or consent of the Company. Promptly after the execution of this Agreement, Parent and the Company shall also issue a mutually agreeable joint press release announcing the execution of this Agreement (the “Signing Press Release”).

(ii)            At least five (5) days prior to the Closing Date, Parent shall prepare together with the Company a draft Form 8-K announcing the Closing, together with, or incorporating by reference, the financial statements prepared by the Company and its accountant, and such other information that may be required to be disclosed with respect to the Merger in any report or form to be filed with the SEC (the “Closing Form 8-K”), which shall be in a form reasonably acceptable to the Company. Prior to Closing, Parent and the Company shall prepare a mutually agreeable joint press release announcing the consummation of the Mergers hereunder (the “Closing Press Release”). Concurrently with the Closing, Parent shall issue the Closing Press Release. Concurrently with the Closing, or as soon as practicable thereafter and in any event within four (4) Business Days, Parent shall file the Closing Form 8-K with the Commission.

(h)            Required Information.  In connection with the preparation of the Signing Form 8-K, the Signing Press Release, the Registration Statement, the Proxy Statement, the Closing Form 8-K and the Closing Press Release, or any other statement, filing, notice or application made by or on behalf of Parent and/or the Company to any Governmental Authority or other third party in connection with the Transactions, and for such other reasonable purposes, the Company and Parent each shall, upon request by the other, furnish the other with all information concerning themselves, their respective directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with the Merger. Each party warrants and represents to the other party that all such information shall be true and correct in all material respects and shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

(i)            No Shop; Non-Solicit.

(i)            From and after the date hereof until the earlier of the (x) termination of this Agreement in accordance with its terms or (y) consummation of this Agreement and the Transactions (“Exclusivity Period”): (A) Parent shall not, and shall cause its stockholders, officers, directors, affiliates, representatives and advisors (collectively, with Parent, the “Parent

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Group”) not to enter into any written agreement with any other person or entity (whether or not such written agreement is absolute, contingent or conditional) regarding a Parent Third Party Acquisition other than the transactions contemplated by this Agreement, (B) Parent shall not and shall cause the other members of the Parent Group not to solicit, offer, initiate, knowingly encourage, conduct or engage in any discussions, investigations or negotiations or enter into any agreement with any other person or entity (whether or not such agreement or understanding is absolute, revocable, contingent or conditional) regarding a Parent Third Party Acquisition and (C) Parent agrees that during the Exclusivity Period it shall promptly, after obtaining knowledge thereof, advise the Company of any inquiry or proposal regarding a Parent Third Party Acquisition that is received by any member of the Parent Group, including the terms of the proposal and the identity of the inquirer or offeror; and

(ii)            During the Exclusivity Period: (A) the Company shall not, and shall cause its stockholders, officers, directors, affiliates, representatives and advisors (collectively, with the Company, the “Company Group”) not to enter into any written agreement with any other person or entity (whether or not such written agreement is absolute, contingent or conditional) regarding a Company Third Party Acquisition other than the transactions contemplated by this Agreement; (B) the Company shall not and shall cause the other members of the Company Group not to solicit, offer, initiate, knowingly encourage, conduct or engage in any discussions, investigations or negotiations or enter into any agreement or understanding with any other person or entity (whether or not such agreement or understanding is absolute, revocable, contingent or conditional) regarding a Company Third Party Acquisition, other than the transactions contemplated in this Agreement; and (C) the Company agrees that during the Exclusivity Period it shall promptly, after obtaining knowledge thereof, advise the Parent of any inquiry or proposal regarding a Company Third Party Acquisition that is received by any member of the Company Group, including the terms of the proposal and the identity of the inquirer or offeror.

6.2.          Company’s Covenants.

(a)             Access to Information.  Prior to the Closing, the Company shall (i) give Parent, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records of the Acquired Companies relating to the Acquired Companies and the Businesses, (ii) furnish to Parent, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to the Acquired Companies and the Businesses as such Persons may reasonably request, and (iii) instruct the employees, counsel and financial advisors of the Company to cooperate with Parent in its investigation of the Acquired Companies and the Businesses; provided, however, that any investigation pursuant to this section shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of the Acquired Companies.  Any information provided under this Section 6.2(a) shall be deemed confidential information for purposes of Section 6.1(c).  The Company hereby appoints Parent as its authorized representative to access the offices, properties, auditors, books and records of GCI and agrees to use commercially reasonable efforts to assist Parent in obtaining information relating to GCI and the GCI Subsidiaries.

(b)             Restrictions.  Prior to the Closing, except as required by Law, as contemplated by the GCI Merger Agreement or with the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed), (i) the Company shall, and shall cause each Acquired Company to (A) conduct the Businesses only in the Ordinary Course of Business, in substantially the manner in which the Businesses and operations have been previously conducted during the period covered by the Company Financial Statements and consistently with those practices, policies, customs and usages which were in effect from time to time throughout that period and (B) upon request, report periodically to Parent concerning the status of the business, operations, and finances of the Acquired Companies, and (ii) the Company shall not, and shall not permit any Acquired Company to:

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(A)     make, amend or rescind any election relating to Taxes, settle any litigation, audit or controversy relating to Taxes in excess of amounts reserved therefor in the Financial Statements, file any amended Tax Return or claim for refund, change any method of accounting or make any other change in its accounting or Tax policies or procedures, agree to an extension of any statute of limitations related to any Tax, enter into a closing agreement related to any Tax, or surrender any right to claim a Tax refund, except as required by applicable Law or GAAP;

(B)      enter into any new line of business;

(C)      fail to pay any Taxes when they become due and payable, other than Taxes being contested in good faith through appropriate proceedings and for which adequate reserves are reflected in the Company Financial Statements in accordance with GAAP;

(D)      issue any additional shares of capital stock (other than shares of Company Stock issued in connection with existing warrants or upon exercise of outstanding options by persons who are stockholders of the Company as of the date of this Agreement) or any options, warrants or other rights to purchase, or securities convertible into or exchangeable for, shares of stock in the Company;   

(E)      declare, set aside or pay any dividends or other distribution in respect of any Company Stock;

(F)      split, combine or reclassify any shares of its capital stock;

(G)      amend or propose to amend its certificate of incorporation or bylaws;

(H)      adopt a plan or effect any complete or partial liquidation or adopt resolutions providing for or authorizing such liquidation or adopt a plan of or effect any dissolution, merger, consolidation, restructuring, recapitalization or reorganization;

(I)      (1) create, incur, assume, forgive or make any changes to the terms or collateral of any debt or receivables (other than trade payables and receivables in the Ordinary Course of Business consistent in type and amount with prior practice), or any employee or officer loans or advances, except incurrences that constitute a refinancing of existing obligations on terms that are no less favorable to the Acquired Company than the existing terms; (2) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, indirectly, contingently or otherwise) for the obligations of any Person except to the extent permitted by the Credit Agreement; (3) make any capital expenditures other than in accordance with the Acquired Company’s budgeted capital expenditures and to the extent permitted by the Credit Agreement; (4) make any loans, advances or capital contributions to, or investments in, any other Person (other than customary travel, relocation or business advances to employees consistent with past practices); (5) acquire stock or assets of, or merge or consolidate with, any other Person; (6) incur any material liability or obligation (absolute, accrued, contingent or otherwise) other than trade payables except to the extent permitted by the Credit Agreement; (7) sell, transfer, mortgage, pledge, lease, encumber or otherwise dispose of, or agree to sell, transfer, mortgage, pledge, lease, encumber or otherwise dispose of, any assets or properties (real, personal or mixed, tangible or intangible) other than inventory held for sale or the disposition and replacement of obsolete personal property in the Ordinary Course of Business, or to secure debt permitted under subclause (1) of this clause (I) or (8) incur any indebtedness other than under existing credit facilities as set forth on Schedule 4.11 or other Ordinary Course of Business indebtedness except to the extent permitted by the Credit Agreement;

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(J)      (1) increase the wages, salaries, bonus, compensation or other benefits of any of its officers or employees (other than non-material increases granted to retain employees, other than officers, who have been offered employment by another Person) or enter into, establish, amend or terminate any Plan or other employment, consulting, retention, change in control, collective bargaining, bonus or incentive compensation, profit sharing, health, welfare, stock option, equity, pension, retirement, vacation, severance, termination, deferred compensation or other compensation or benefit plan, policy, agreement, trust, fund or other arrangement with, for or in respect of any officer, director or employee other than as required by applicable Law or pursuant to the terms of agreements in effect on the date of this Agreement or in the Ordinary Course of Business with employees (other than officers) of such Acquired Company, (2) hire any employees except in the Ordinary Course of Business or (3) fail to make contributions to any Plan in accordance with the terms thereof or with past practice;

(K)      (1) commence or settle any litigation or other proceedings with any Governmental Authority or other Person in excess of amounts reserved for such litigation on the Most Recent Balance Sheet or excess of $2 million, (2) make, amend or rescind any election relating to Taxes, settle any litigation, audit or controversy relating to Taxes in excess of amounts reserved therefor in the Financial Statements, file any amended Tax Return or claim for refund, change any method of accounting or make any other change in its accounting or Tax policies or procedures, agree to an extension of any statute of limitations related to any Tax, enter into a closing agreement related to any Tax, or surrender any right to claim a Tax refund, except as required by applicable Law or GAAP or (3) waive the benefits of, agree to modify in any manner, terminate, release any Person from or knowingly fail to enforce any material confidentiality or similar agreement to which an Acquired Company is a party or of which an Acquired Company is a beneficiary outside the Ordinary Course of Business;

(L)      (1) enter into or amend any contract or agreement with any Affiliate of the Company or (2) unless such actions would not reasonably be expected to have a Material Adverse Effect on the Company, enter into any agreement or group of related agreements which would be considered a Material Contract, modify, amend or terminate any Material Contract, or waive, release or assign any rights or claims thereunder, or enter into any agreement that if entered into prior to the date hereof would be a Material Contract;

(M)      knowingly or intentionally take any action that results or is reasonably likely to result in any of the representations and warranties of the Company hereunder being untrue in any material respect or any condition in Article VII, VIII and IX not to be satisfied;

(N)      take or omit to take any action, the taking or omission of which could reasonably be expected to have a Material Adverse Effect; or

(O)      agree to do, or take any action in furtherance of, any of the foregoing.

Nothing in this Section 6.2(b) shall be interpreted as prohibiting or restricting the Company in any way from complying with the terms and conditions of any Material Contracts as such exist as of the date hereof.

(c)            Maintenance of Insurance.  The Company shall use reasonable efforts to continue to carry its existing insurance upon substantially similar terms with substantially similar coverage.

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(d)            Notification of Certain Matters.

(i)            The Company shall give prompt notice to Parent if any of the following occur after the date of this Agreement: (A) there has been a material failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, (B) receipt of any notice or other communication in writing from any third party alleging that the consent of such third party is or may be required in connection with the Transactions, (C) receipt of any notice or other written communication from any Governmental Authority which relates to the consummation of the Transactions, (D) the occurrence of an event which could reasonably be expected to have a Material Adverse Effect, or (E) the commencement or threat, in writing, of any litigation against any Acquired Companies which relates to the consummation of the Transactions.

(ii)            Parent shall give prompt notice to the Company if any of the following occur after the date of this Agreement: (A) there has been a material failure of Parent to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder, (B) receipt of any notice or other communication in writing from any third party alleging that the consent of such third party is or may be required in connection with the Transactions, (C) receipt of any notice or other written communication from any Governmental Authority which relates to the consummation of the Transactions, (D) the occurrence of an event which could reasonably be expected to have a Material Adverse Effect, or (E) the commencement or threat, in writing, of any litigation against Parent which relates to the consummation of the Transactions.

(e)            Update of Schedules.  From time to time prior to the Closing, subject to the reasonable approval of Parent, the Acquired Companies shall be entitled to update, amend or supplement the disclosure schedules attached hereto (each, a “Schedule Update”) (x) to reflect the GCI Acquisition or (y) to the extent information contained therein, which was true, complete and accurate as of the date of this Agreement, becomes untrue, incomplete or inaccurate after the date of this Agreement as a result of occurrences after the date of this Agreement but prior to the Closing (provided that such occurrences do not constitute or were not caused by a violation by an Acquired Company of Section 6.2(b)), by delivering such Schedule Update to the Buyer; provided further, that any such Schedule Update delivered to Parent shall be deemed to be amended unless Parent provides written notice to the Company within ten (10) Business Days after delivery to Parent of such Schedule Update that such Schedule Update is not reasonably satisfactory to Parent.  Parent shall not be obligated to approve any change or changes to the disclosure schedules attached hereto made pursuant to subsection (x) above that materially differs from the final schedules to the GCI Merger Agreement, to the Company’s material detriment, or pursuant to subsection (y) above that would have, or that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Acquired Companies following the Closing.  Any such Schedule Update, to the extent practicable, shall be marked to show changes from the disclosure schedules attached hereto, as updated by any prior Schedule Updates.  If the Company delivers to Parent one or more Schedule Updates, all references in this Agreement to the disclosure schedules attached hereto shall thereafter mean the disclosure schedules attached hereto as updated by each such Schedule Update to the extent such Schedule Updates have been consented to by Parent. Notwithstanding anything in this section to the contrary, upon completion of the Company Audit, the Company shall have the right to deliver a replacement version of the financial statements as of and for the fiscal year ended December 31, 2007 delivered on the date of this Agreement (the “Replacement Company Financial Statements”); unless Parent terminates this Agreement pursuant to Section 11.1(h), the disclosure schedules attached hereto, shall be deemed to be amended by the Replacement Company Financial Statements.

(f)             Sarbanes-Oxley Act Compliant.  The Acquired Companies shall use their reasonable good faith efforts to become complaint with all applicable provisions of and rules under the Securities Act, Exchange Act, and Sarbanes-Oxley Act of 2002 within the time frame and waiver periods permitted by the SEC with respect to all its SEC filings and system of internal accounting controls.

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(g)             No Claim Against Trust Fund.  Notwithstanding anything else in this Agreement, the Company acknowledges that it has read Parent’s final prospectus dated January 29, 2007 and understands that Parent has established the Trust Fund for the benefit of Parent’s public stockholders and that, subject to the limited exceptions described therein, Parent may disburse monies from the Trust Fund only (a) to Parent’s public stockholders in the event they elect to convert their shares into cash in accordance with Parent’s certificate of incorporation and/or the liquidation of Parent or (b) to Parent after it consummates a business combination.  The Company further acknowledges that, if the Transactions, or, upon termination of this Agreement, another business combination, are not consummated by January 29, 2009, Parent shall be obligated to return to its stockholders the amounts being held in the Trust Fund.  Accordingly, the Company, for itself and each of its subsidiaries, affiliated entities, directors, officers, employees, stockholders, representatives, advisors and all other associates and affiliates, hereby waive all rights, title, interest or claim of any kind against Parent to collect from the Trust Fund any monies that may be owed to them by Parent for any reason whatsoever, including but not limited to a breach of this Agreement by Parent or any negotiations, agreements or understandings with Parent (whether in the past, present or future), and shall not seek recourse against the Trust Fund at any time for any reason whatsoever. This paragraph shall survive this Agreement and shall not expire and may not be altered in any way without the express written consent of Parent.

(h)             AIM Delisting.  The Company shall use reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of the AIM to enable the delisting by the Company of the Company Common Stock.

6.3.          Parent Covenants.

(a)             Access to Information.  Prior to the Closing, Parent shall (i) give the Company, its counsel, financial advisors, auditors and other authorized representatives reasonable access to the offices, properties, books and records of Parent, (ii) furnish to the Company, its counsel, financial advisors, auditors and other authorized representatives such financial and operating data and other information relating to Parent as such Persons may reasonably request, and (iii) instruct the employees, counsel and financial advisors of Parent to cooperate with the Company in its investigation of Parent; provided, however, that any investigation pursuant to this section shall be conducted in such manner as not to interfere unreasonably with the conduct of the business of Parent.  Any information provided under this Section 6.3(a) shall be deemed confidential information for purposes of Section 6.1(c).  

(b)             Restrictions.  Prior to the Closing, except as required by Law or with the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed), (i) Parent shall conduct its business and operations only in the Ordinary Course of Business, in substantially the manner in which its business and operations have been previously conducted during the period covered by the Parent Financial Statements and consistently with those practices, policies, customs and usages which were in effect from time to time throughout that period, and (ii) Parent shall not (A) make or change any election, change an annual accounting period, adopt or change any material accounting principle, method or practice, file any amended Tax Return, settle any Tax claim or assessment, enter into any closing agreement with respect to Taxes, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to Parent or take any similar action if the effect would be to increase Parent’s Tax liability after the Closing Date, (B) enter into any new line of business, (C) fail to pay any Taxes when they become due and payable, other than Taxes being contested in good faith, (D) issue any additional shares of capital stock (other than shares of Parent Common Stock or Parent Preferred Stock issued in connection with existing warrants or upon exercise of outstanding options by persons who are stockholders of Parent as of the date of this Agreement) or any options, warrants or other rights to purchase, or securities convertible into or exchangeable for, shares of stock in Parent, (E) declare, set aside or pay any dividends or other distribution in respect of any shares of its capital stock, (F) split, combine or reclassify any shares of its capital stock, (G) knowingly or intentionally take any action that results or is reasonably likely to result in any of the representations and warranties of Parent hereunder being untrue in any material respect or any condition in Article VII, VIII and IX not to be satisfied, (H) take or omit to take any action, the taking or omission of which could reasonably be expected to have a

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Material Adverse Effect, or (I) agree to do, or take any action in furtherance of, any of the foregoing.  Nothing in this Section 6.3(b) shall be interpreted as prohibiting or restricting Parent in any way from complying with the terms and conditions of any Material Contracts as such exist as of the date hereof.

(c)             Registration of Shares.  Parent shall file as soon as possible after the Closing, and use its best efforts to become effective within 12 months after the Closing Date, a registration statement under the Securities Act with respect to shares of Parent Common Stock issued pursuant to this Agreement prior to the expiration of such 12-month period, including EBITDA Stock issued pursuant to Section 3.1(c)(ii) and Warrant Stock issued pursuant to Section 3.1(c)(iii), to those stockholders of the Company who are listed on Schedule 6.3(c).

(d)           Director and Officer Liability.  Parent shall cause the Surviving Corporation, and the Surviving Corporation hereby agrees, to do the following:

(i)            For six (6) years after the First Merger Effective Time, the Surviving Corporation shall indemnify and hold harmless each present and former officer, director, employee and representative of the Company and Parent in respect of acts and omissions occurring prior to the First Merger Effective Time to the fullest extent permitted by the DGCL or any other Law or provided under the Company’s or Parent’s certificate of incorporation and bylaws, as applicable, in effect immediately prior to the First Merger Effective Time; provided that such indemnification shall be subject to any limitation imposed by such certificate of incorporation or bylaws (as in effect immediately prior to the First Merger Effective Time) or from time to time by Law.

(ii)            For six (6) years after the First Merger Effective Time, the Surviving Corporation shall provide each present and former officer, director, employee and representative of the Company and Parent with “tail” insurance in respect of acts or omissions occurring prior to the First Merger Effective Time covering each such Person currently covered by the Company’s officers’ and directors’ liability insurance policy on terms with respect to coverage and amount not materially less favorable than those of such policy in effect on the date hereof.  Without limiting the generality of the foregoing (and not withstanding any other provision of this Agreement), prior to the First Merger Effective Time, and with the prior consent of Parent, Company and Parent shall be entitled to obtain prepaid insurance policies providing for the coverage contemplated by this Section 6.3(d).  If such prepaid policies are obtained prior to the First Merger Effective Time, Parent shall not cancel such policies or permit such policies to be cancelled.

(iii)            The certificate of formation and the operating agreement of the Second Merger Surviving Entity shall include provisions for exculpation of director and officer liability and indemnification on the same basis as set forth in the Company’s and Parent’s certificate of incorporation and bylaws, as applicable, in effect immediately prior to the First Merger Effective Time.  For six (6) years after the First Merger Effective Time, the Surviving Corporation shall maintain in effect the provisions in its certificate of incorporation and bylaws providing for indemnification of such persons with respect to the facts or circumstances occurring at or prior to the First Merger Effective Time to the fullest extent permitted from time to time under the DGCL, which provisions shall not be amended except as required by changes in Law or except to make changes permitted by Law that would enlarge the scope of such persons’ indemnification rights thereunder.

(iv)            The provisions of this Section 6.3(d) (x) are intended to be for the benefit of, and will be enforceable by, each indemnified party, his or her heirs and his or her representatives and (y) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such Person may have by contract or otherwise.  It is the intention of the parties to constitute the Company as trustee for the indemnified parties of the rights and benefits of this Section 6.3(d) and the Company agrees to accept such trust and to hold the rights and benefits of this Section 6.3(d) in trust for and on behalf of the indemnified parties.  The obligations of Parent and the Surviving Corporation under this Section 6.3(d) shall not be terminated or

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modified in such a manner as to adversely affect the rights of any indemnified party to whom this Section 6.3(d) applies unless (x) such termination or modification is required by applicable Law or (y) the affected indemnified party shall have consented in writing to such termination or modification.

(e)            Prior to the Effective Time, Parent shall (i) adopt an equity incentive plan in form and substance reasonably satisfactory to the Company, (ii) reserve 3,000,000 shares of Parent Common Stock for issuance pursuant to such equity incentive plan and (iii) contingent upon the approval of such equity incentive plan by the holders of Parent Common Stock, approve each of the option grants set forth on Schedule 6.3(e).

6.4.          Proxies and Dissent Rights.  Parent shall advise the Company, as reasonably requested, and on a daily basis on each of the last seven (7) Business Days prior to the Parent Stockholders meeting, as to the aggregate tally of proxies and votes received in respect of such special meeting and the number of shares of Parent Common Stock for which notices of conversion have been delivered to Parent.

6.5.          Stock Symbol.  As of and after the First Merger Effective Time, Parent shall (i) change the name of Parent to “First Communications, Inc.” and (ii) cause the symbol under which the Parent Common Stock and any warrants to purchase Parent Common Stock are traded on the NASDAQ to change to a symbol as determined by the Company that, if available, is reasonably representative of the corporate name or business of the Company.

6.6.          Further Assurances.  The parties shall execute such further documents, and perform such further acts, as may be necessary to effect the Merger on the terms herein contained, and to otherwise comply with the terms of this Agreement and consummate the Transactions.

VII.     CONDITIONS TO EACH PARTY’S OBLIGATION TO EFFECT THE MERGER

The respective obligations of each party to this Agreement to effect the Mergers shall be subject to the satisfaction prior to the Closing Date of the following conditions:

7.1.          Parent Stockholder Approval.  The Parent Stockholder Approval shall have been obtained by Parent in accordance with the DGCL and Parent’s certificate of incorporation. An executed copy of an amendment to Parent’s certificate of incorporation shall have been filed with the Secretary of State of the State of Delaware to be effective as of the Closing.  The Trust Fund containing at least $81,000,000 shall have been disbursed to Parent.

7.2.          Parent Common Stock.  Holders of twenty percent (20%) or more of the shares of Parent Common Stock issued in Parent’s initial public offering of securities and outstanding immediately before the Closing shall not have exercised their rights to convert their shares into a pro rata share of the Trust Fund in accordance with Parent’s certificate of incorporation.

7.3.          Effectiveness of Registration Statement.  The SEC shall have declared the Registration Statement effective and no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued by the SEC and no proceeding for that purpose shall have been initiated or, to the knowledge of Parent or the Company, threatened by the SEC.

7.4.          NASDAQ Listing Approval.  The shares of Parent Common Stock to be issued in the Merger shall have been approved for listing on the NASDAQ Stock Market, subject to official notice of issuance.

7.5.          No Litigation.  No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law, rule, injunction, judgment, order, decree, ruling or charge (whether temporary, preliminary or permanent) that is in effect and (a) restrains, enjoins or otherwise prohibits or challenges the validity or legality of the Transactions, (b) limits or otherwise adversely affects the right of Parent to own and control the Acquired Companies, or to operate all or any material portion of either the business or the assets of the Acquired Companies or any material portion of the business or the assets of Parent or (c) compels Parent or any of its Affiliates to dispose of all or any material portion of either the Business or the assets of any Acquired Company

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(each, a “Governmental Prohibition”), and no Person shall have instituted or overtly threatened any action, suit or proceeding that would be reasonably expected to, result in any Governmental Prohibition.

7.6.          Hart-Scott-Rodino Act; Governmental Approvals.  All applicable waiting periods (and any extension thereof) under the HSR Act shall have expired or otherwise been terminated and all notices, reports, registrations and other filings with, and all consents, approvals and authorizations set forth on Schedule 6.1(a)(i) or Schedule 6.1(a)(ii) shall have been made or obtained, as the case may be.

7.7.          Board Composition and Parent Officers.  The stockholders of Parent shall have voted to elect to Parent's board of directors the individuals named on Schedule 7.7 in the classes set forth opposite their names, effective immediately after the Closing, and Parent shall have appointed the individuals named on Schedule 7.7 to the offices set forth opposite their names, effective immediately after the Closing.

7.8.          Frustration of Closing Conditions.  None of the Company, Parent or the Merger Sub may rely on the failure of any condition set forth in Articles VII, VIII or IX, as the case may be, to be satisfied if such failure was caused by such party’s breach of Section 6.1(d) or any other provision of this Agreement.

VIII.     ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND THE MERGER SUB

The obligations of Parent and Merger Sub to effect the Mergers are subject to satisfaction of the following conditions at or prior to the date indicated (any of which may be waived in whole or in part by Parent in writing):

8.1.          Representations True.  The Company’s representations and warranties set forth in this Agreement and the exhibits and schedules attached hereto and any certificates delivered pursuant to this Agreement shall be true and correct in all material respects (except representations which, as written, are already qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects) as of the date hereof and, except to the extent such representations and warranties speak as of an earlier date, as of the First Merger Effective Time as if made at the First Merger Effective Time.

8.2.          Consents Obtained.  All necessary third party approvals or consents shall have been obtained from all foreign, local, state and federal departments and agencies, from all other commissions, boards, agencies and from any other Person or entity whose approval or consent is necessary to consummate the Transactions including, without limitation, the approval of the Company’s board of directors and stockholders, State PUC Consents and FCC Consents.

8.3.          Performance of Obligations.  The Company shall have performed in all material respects all obligations, covenants and agreements undertaken by the Company in this Agreement and shall have complied in all material respects with all terms and conditions applicable to it under this Agreement to be performed and complied with on or before the Closing Date.

8.4.          Dissenting Stockholders.  Stockholders holding not more than ten percent (10%) of the outstanding shares of Company Common Stock shall have exercised or shall have continuing rights to exercise dissenters’ rights under the DGCL with respect to the transactions contemplated by this Agreement.

8.5.          Receipt of Documents by Parent.  Parent shall have received:

(a)             a certificate, dated the Closing Date, signed by the President and Secretary of the Company, certifying as to the fulfillment of the matters contained in Sections 8.1, 8.2 and 8.3;

(b)             certified copies of resolutions duly adopted by the board of directors and stockholders of the Company approving this Agreement and the Transactions;

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(c)             certificates of good standing dated within five Business Days of the Closing Date certifying the due incorporation or formation, good standing and continued corporate existence of each of the Acquired Companies issued by the jurisdiction of incorporation of such Acquired Company and by each jurisdiction where such Acquired Company is required to qualify to do business as a foreign corporation; and

(d)             the Escrow Agreement attached hereto as Exhibit D, executed by the Stockholders’ Representative and the Escrow Agent.

8.6.          No Material Adverse Effect.  Since the date of this Agreement there shall not have been any occurrence, event, change, effect or development that, individually or in the aggregate, has had or is reasonably expected to have a Material Adverse Effect on the Company.

8.7.          Credit Agreement Amendment.  The Company shall have obtained an amendment to the JPMorgan Credit Agreement waiving the change of control provision.

8.8.          GCI Merger.  The Company shall have consummated the GCI Acquisition substantially on the terms and conditions set forth in the GCI Merger Agreement.

IX.     CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY

The obligation of the Company to effect the Merger is subject to satisfaction of the following conditions at or prior to the date indicated (any of which may be waived in whole or in part by the Company in writing):

9.1.          Representations True.  Parent and the Merger Subs’ representations and warranties set forth in this Agreement and the exhibits and schedules attached hereto and any certificates delivered pursuant to this Agreement shall be true and correct in all material respects (except representations which, as written, are already qualified by materiality or Material Adverse Effect, in which case such representations and warranties shall be true and correct in all respects) as of the date hereof and, except to the extent such representations and warranties speak as of an earlier date, as of the First Merger Effective Time as if made at the First Merger Effective Time.

9.2.          Performance of Obligations.  Parent and each Merger Sub shall have duly performed in all material respects all obligations, covenants and agreements undertaken by them in this Agreement and shall have complied in all material respects with all the terms and conditions applicable to them under this Agreement to be performed or complied with on or before the Closing Date.

9.3.          Consents Obtained.  All necessary third party approvals or consents, assuming the Acquired Companies’ compliance with Section 6.2 with respect to those third party consents that are the subject of such section, shall have been obtained from all foreign, local, state and federal departments and agencies, from all other commissions, boards, agencies and from any other Person or entity whose approval or consent is necessary to consummate the Transactions including, without limitation, the approval of the board of directors of each of Parent and the Merger Subs, State PUC Consents and FCC Consents.

9.4.          Merger Consideration.  Parent shall have confirmed that it is prepared to deposit the Merger Consideration with the Exchange Agent and the Escrow Agent, as applicable.

9.5.          Parent Stockholder Consent.  Parent shall have received approval from the stockholders of Parent in a manner consistent with Parent’s final prospectus dated January 29, 2007 and delivered such approval to the Company; provided, however, if Parent fails to obtain such stockholder approval and all of the other foregoing conditions in Sections 7.3-7.6 and 8.1-8.8 shall have been satisfied, then Parent shall pay the Company all of its excess working capital funds available outside of the Trust Fund which remain after Parent’s expenses are paid or accrued for and reasonable liquidation reserves are established.

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9.6.          Receipt of Documents.  The Company shall have received:

(a)             a certificate, dated the Closing Date, signed by the President and Secretary of each of Parent and each Merger Sub certifying as to the fulfillment of the matters contained in Sections 9.1, 9.2, 9.3, 9.4, 9.5, 9.7 and 9.8;

(b)             certified copies of resolutions duly adopted by the board of directors of each of Parent and each Merger Sub approving this Agreement and the Transactions; and

(c)             the Escrow Agreement duly executed by the Parent and the Escrow Agent.

9.7.          SEC Compliance.  Immediately prior to the Closing, Parent shall be in compliance with the reporting requirements under the Exchange Act.

9.8.          No Material Adverse Effect.  Since the date of this Agreement there shall not have been any occurrence, event, change, effect or development that, individually or in the aggregate, has had or is reasonably expected to have a Material Adverse Effect on Parent.

X.     SURVIVAL OF REPRESENTATIONS AND WARRANTIES

10.1.        Nonsurvival of Representations and Warranties.  None of the representations and warranties in this Agreement or in any certificate or instruments delivered pursuant to this Agreement shall survive the Closing.  This Section 10.1 shall not limit any covenant or agreement of the parties which by its terms contemplates performance after the Closing.

XI.     TERMINATION

11.1.        Termination.  This Agreement may be terminated at any time prior to Closing, as follows:

(a)             By mutual written consent of Parent and the Company;

(b)             By either Parent or the Company, if the Transactions shall not have been consummated on or before January 29, 2009 (the “Outside Date”);

(c)             By either Parent or the Company, if a Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order, in each case which has become final and non-appealable, and which permanently restrains, enjoins or otherwise prohibits the Transactions;

(d)             By either Parent or the Company, if within forty-eight (48) hours of the execution and delivery of this Agreement, the Company does not obtain the affirmative written consent of a majority of the stockholders of the Company approving this Agreement and the Transactions;

(e)             By either Parent or the Company, if, at the Parent Stockholders’ Meeting (including any adjournments thereof), this Agreement and the Transactions shall fail to be approved and adopted by the affirmative vote of the holders of Parent Common Stock required under Parent’s certificate of incorporation, or the holders of 20% or more of the number of shares of Parent Common Stock issued in Parent’s initial public offering and outstanding as of the record date of the Parent Stockholders’ Meeting exercise their rights to convert the shares of Parent Common Stock held by them into cash in accordance with Parent’s certificate of incorporation;

(f)             By Parent, if it is not in material breach of its obligations under this Agreement and if (i) at any time any of the representations and warranties of the Company herein become untrue or inaccurate such that Section 8.1 would not be satisfied (treating such time as if it were the Closing Date for purposes of this Section 11.1(f)); or (ii) there has been a breach on the part of the Company of any of its covenants or agreements contained in this Agreement such that Section 8.3 would not be satisfied (treating such time as if it were the Closing Date for purposes of this Section 11.1(f)), and, in both cases (i) and (ii), such breach has not been cured within thirty (30) days after written notice to the Company, if curable; or

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(g)            By the Company, if it is not in material breach of its obligations under this Agreement, and if (i) at any time any of the representations and warranties of Parent herein become untrue or inaccurate such that Section 9.1 would not be satisfied (treating such time as if it were the Closing Date for purposes of this Section 11.1(g)); or (ii) there has been a breach on the part of Parent of any of its covenants or agreements contained in this Agreement such that Section 9.2 would not be satisfied (treating such time as if it were the Closing Date for purposes of this Section 11.1(g)), and, in both cases (i) and (ii), such breach has not been cured within thirty (30) days after written notice to Parent, if curable.

(h)            By Parent within forty-eight (48) hours of the delivery by the Company to Parent of Replacement Company Financial Statements, if such Replacement Company Financial Statements contain restated items that adversely affect the Company’s financial results as of and for the fiscal year ended December 31, 2007.

11.2.       Effect of Termination.  If this Agreement is terminated as permitted by Section 11.1, this Agreement shall have no further force and effect, except that the provisions of Sections 6.1(c), 6.2(g), 12.1, 12.2, 12.5, 12.8, 12.9, 12.10, 12.11, 12.12, 12.13 and this Section 11.2 shall survive any such termination and except for any breach by a party of its obligations hereunder prior to the time of such termination.

XII.     MISCELLANEOUS

12.1.          Applicable Law.  This Agreement shall be construed and enforced in accordance with the internal, substantive laws of the State of Delaware.

12.2.          Construction; Entire Agreement; Amendment.  The captions preceding the Articles and Sections in this Agreement have been inserted for convenience only and shall not be used to modify, expand or construe any of the provisions of this Agreement.  This Agreement, which includes the exhibits and schedules hereto and the other documents, agreements and instruments executed and delivered pursuant to or in connection with this Agreement, constitutes the entire Agreement between the parties hereto with respect to the subject matter contained herein, and it supersedes all prior and contemporaneous agreements, representations and understandings of the parties, express or implied, oral or written.  This Agreement may not be amended or modified in any way except in a writing signed by each of the parties hereto and except as provided in Section 6.2(e).

12.3.          Assignment.  The rights and obligations of a party under this Agreement shall not be assignable by such party without prior, express written consent of all other parties.

12.4.          Binding Effect.  This Agreement shall be binding upon, and inure to the benefit of, the legal representatives, heirs, successors and permitted assigns of the respective parties.

12.5.          Interpretation.  Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context requires.

12.6.          Waiver.  Any provision of this Agreement may be waived in writing at any time by the party which is entitled to the benefit of such provision.  Neither any failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or any of the documents referred to in this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of such right, power or privilege shall preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.

12.7.          Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same Agreement, and shall become effective when one or more counterparts have been signed by each of the parties to this Agreement.  Electronic or facsimile signatures shall be deemed to be original signatures.

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12.8.          Severability.  The parties agree that if any part, term, or provision of this Agreement shall be found illegal and unenforceable by any court of law, the remaining provisions shall be severable, valid, and enforceable in accordance with their terms.

12.9.          Notices.  Notice from a party to another party hereto relating to this Agreement shall be deemed effective if made in writing and delivered to the recipient’s address or facsimile number set forth below by any of the following means:  (i) hand delivery, (ii) registered or certified mail, postage prepaid, with return receipt requested, (iii) Federal Express, Airborne Express, or like overnight courier service, or (iv) facsimile showing the date of transmission thereon and followed by regular mail delivery of a copy thereof.  Notice made in accordance with this Section 12.9 shall be deemed delivered on receipt if delivered by hand or transmission if sent by facsimile on the third Business Day after mailing if mailed by registered or certified mail, or the next Business Day after deposit with an overnight courier service if delivered for next day delivery.

(a)           If to the Company or the Stockholders’ Representative prior to the Closing, as follows:

First Communications, Inc.
3340 West Market Street
Akron, Ohio 44333
Attn:  Joseph Morris

Fax: (330) 835-2330

With a copy to:

Bingham McCutchen LLP
One Federal Street
Boston, MA 02110
Attn:  John J. Concannon III, Esq.

Fax:  (617) 951-8736

(b)           If to Parent or the Merger Sub or following the Closing, the Company, as follows:

Renaissance Acquisition Corp.
50 East Sample Road
Pompano Beach, Florida
Attn:  Barry W. Florescue

Fax: (954) 784-0534

and

Renaissance Acquisition Corp.

15652 Woodvale Road
Encino, California 91436
Attn:  Richard Bloom
Fax: (818) 995-7191  

With a copy to:

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036
Attn:  Charles I. Weissman, Esq.

Fax: (212) 698-3599

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(c)           If to the Stockholders’ Representative following the Closing, as follows:

The Gores Group LLC

10877 Wilshire Boulevard

18^th Floor

Los Angeles, California 90024

Attn: Scott Honour
Fax:  (310) 209-3310

Any party may, from time to time, by written notice to the other party, designate a different address, which shall be substituted for the one specified above for such party.

12.10.          Consent to Jurisdiction.  The parties hereto each hereby irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in New Castle County, Delaware for the purposes of any suit, action or other proceeding arising out of or based upon this Agreement or the subject matter hereto brought by any other party hereto.  Each party also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court.  Each party hereto, to the extent permitted by applicable Law, hereby waives and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding brought in such courts, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.  Any party may make service on any other party by sending or delivering a copy of the process to the party to be served at the address and in the manner provided for the giving of notices in Section 12.9 above.  Nothing in this Section 12.10, however, shall affect the right of any party to serve legal process in any other manner permitted by law or at equity.  Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

12.11.          WAIVER OF JURY TRIAL.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER DOCUMENTS AND AGREEMENTS DELIVERED IN CONNECTION HEREWITH, THE TRANSACTIONS OR THE ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.

12.12.          Specific Performance.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, the parties further agree that each party shall be entitled to an injunction or restraining order to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other right or remedy to which such party may be entitled under this Agreement, at law or in equity.

12.13.          Expenses.  Except as otherwise provided in this Agreement, whether or not the Closing takes place, each party shall bear its respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the Transactions, including all fees and expenses of representatives, counsel, accountants, brokers and finders.

12.14.          Stockholders’ Representative.  Subject to the penultimate sentence of this Section 12.14, the Stockholders’ Representative shall serve as the exclusive agent of the Former Company Stockholders and the holders of T2 Warrants and T3 Warrants for all purposes of this Agreement and the transactions contemplated hereby.  Without limiting the generality of the foregoing, the Stockholders’ Representative shall be authorized (a) to execute all certificates, documents and agreements on behalf of and in the name of any of the Former Company Stockholders and the holders of T2 Warrants and T3 Warrants necessary to effectuate the transactions contemplated hereby, and (b) to negotiate, execute and deliver all amendments, modifications and waivers to this Agreement or any other agreement, document or instrument contemplated by this Agreement.  The Stockholders’ Representative also shall be exclusively authorized to take all actions on behalf of the Former Company Stockholders and holders of T2 Warrants and T3 Warrants in connection with any claims made under this Agreement or in respect of the Transactions contemplated hereby, to bring, prosecute, defend or settle such claims, and to make and receive

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payments in respect of such claims on behalf of the Former Company Stockholders and holders of T2 Warrants and T3 Warrants, and no Former Company Stockholder or holders of T2 Warrants and T3 Warrants shall take any such action without the Stockholders’ Representative’s prior written approval.  The Stockholders’ Representative is serving in the capacity as exclusive agent of the Former Company Stockholders and holders of T2 Warrants and T3 Warrants hereunder solely for purposes of administrative convenience.  The Stockholders’ Representative shall not be liable to any Person for any act done or omitted hereunder as the Stockholders’ Representative while acting in good faith, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith.  The holders of shares of Company Stock outstanding immediately prior to the First Effective Time shall indemnify the Stockholders’ Representative and hold it harmless against any loss, liability or expense incurred without gross negligence or bad faith on the part of the Stockholders’ Representative and arising out of or in connection with the acceptance or administration of its duties hereunder.  The person serving as Stockholders’ Representative may resign or be replaced from time to time by the holders of a majority in interest of the Escrowed Stock held in the Escrow Account upon not less than ten (10) days’ prior written notice to Parent and with Parent’s written consent, which shall not be unreasonably withheld, conditioned or delayed.

[Signatures Appear on the Following Page]

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IN WITNESS WHEREOF, the parties have duly executed this Agreement and Plan of Merger on the date first above written.

PARENT:

RENAISSANCE ACQUISITION CORP

	By:	/s/ Barry W. Florescue
		Name:  Barry W. Florescue
		Title:  Chairman and Chief Executive Officer

MERGER SUB I:

FCI MERGER SUB I, INC.

	By:	/s/ Barry W. Florescue
		Name:  Barry W. Florescue
		Title:  President

MERGER SUB II:

FCI MERGER SUB II, LLC

	By:	RENAISSANCE ACQUISITION CORP.,
		as Sole Member

	By:	/s/ Barry W. Florescue
		Name:  Barry W. Florescue
		Title:  Chairman and Chief Executive Officer

THE COMPANY:

FIRST COMMUNICATIONS, INC.

	By:	/s/ Joseph R. Morris
		Name: Joseph R. Morris
		Title: Chief Operating Officer

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STOCKHOLDERS’ REPRESENTATIVE:

THE GORES GROUP, LLC

	By:	/s/ Steven G. Eisner
		Name: Steven G. Eisner
		Title: Vice President

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Index of Schedules

Schedule 4.3	Capitalization
Schedule 4.5	Real Property
Schedule 4.6	Litigation
Schedule 4.7	Noncontravention
Schedule 4.8	Taxes
Schedule 4.9	Financial Statements
Schedule 4.10	Undisclosed Liabilities
Schedule 4.11	Material Contracts
Schedule 4.12	Intellectual Property
Schedule 4.13	Insurance
Schedule 4.14	Employees
Schedule 4.15	Employee Benefits
Schedule 4.16	Environmental Matters
Schedule 4.20	Material Changes
Schedule 4.21	Permits and Licenses
Schedule 4.23	Major Suppliers and Customers
Schedule 4.24	Related Party Transactions
Schedule 6.1	FCC and State PUC Consents
Schedule 6.3(c)	Registration of Shares
Schedule 6.3(e)	Proposed Initial Option Grants Under New Incentive Plan
Schedule 7.7	Directors and Officers

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ANNEX A-1

AMENDMENT NO. 1 TO

AGREEMENT AND PLAN OF MERGER

THIS AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”), is made and entered into this 22nd day of December, 2008 by and among RENAISSANCE ACQUISITION CORP., a Delaware corporation (“Parent”), FCI MERGER SUB I, INC., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub I”), FCI MERGER SUB II, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent (“Merger Sub II”, and, together with the Merger Sub I, collectively, the “Merger Subs”), FIRST COMMUNICATIONS, INC., a Delaware corporation (the “Company”) and The Gores Group LLC, solely in its capacity as the exclusive representative of the stockholders of the Company (“Stockholders’ Representative”).  Except as otherwise set forth herein, capitalized terms used herein shall have the meanings set forth in the Agreement and Plan of Merger by and among the parties hereto, dated as of September 13, 2008 (the “Agreement”).

WHEREAS, the Agreement provides that, upon consummation of the First Merger, each issued and outstanding share of Company Common Stock (other than any Dissenting Shares) would, by virtue of the First Merger, be converted into the right to receive (x) 0.57361 of a single validly issued, fully paid and nonassessable share of Parent Common Stock (“Closing Stock Payment”), plus (y) the proportionate share amount of 9,950,000 shares of Parent Common Stock issuable pursuant to Section 3.1(a)(iii)(2) of the Agreement, if any, which such amount shall be deposited into the Escrow Account pursuant to Section 3.5 of the Agreement (“EBITDA Stock”) plus certain additional shares of Parent Common Stock;

WHEREAS, pursuant to the Agreement, 9,950,000 shares of Parent Common Stock constituting the EBITDA Stock would be released from escrow to the former stockholders of the Company upon the occurrence of the EBITDA Condition which, pursuant to the terms of the EBITDA Condition, would be required to have occurred on or before June 30, 2011;

WHEREAS, the parties have determined to (i) decrease the Closing Stock Payment from 0.57361 of a share of Parent Common Stock to 0.44932 of a share of Parent Common Stock, (ii) increase the number of shares of EBITDA Stock from 9,950,000 shares of Parent Common Stock to 13,950,000 shares and (iii) extend the period by which the EBITDA Condition must occur until December 31, 2011;

WHEREAS, RAC Partners, LLC (“Parent Founder”) has agreed that 2,000,000 shares of Parent Common Stock currently in escrow pursuant to the Stock Escrow Agreement, dated as of February 1, 2007, among Parent, Parent Founder, Barry W. Florescue, Logan D. Delany, Jr., Stanley Kreitman, Charles Miersch, Morton Farber and Continental Stock Transfer and Trust Company shall be retained in the escrow account established thereunder to be released upon the occurrence of the EBITDA Condition in accordance with the Amended and Restated Stock Escrow Agreement attached hereto as Exhibit E.

WHEREAS, the Board of Directors of the Company have approved this Amendment and the other transactions contemplated hereby upon the terms and subject to the conditions set forth in this Amendment;

WHEREAS, immediately following and within forty-eight (48) hours of the execution and delivery of this Amendment, the Company shall obtain the affirmative written consent of the holders of at least a majority of Company Common Stock to approve this Amendment; and

WHEREAS, the board of directors of Parent and Merger Sub I and the sole member of Merger Sub II have approved this Amendment upon the terms and subject to the conditions set forth in this Amendment.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the parties agree as set forth below.

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ARTICLE I

AMENDMENTS TO AGREEMENT AND PLAN OF MERGER

(a)

Amendments.  

(i)

The following definitions shall be added to Article I of the Agreement:

“Parent Founder Escrow Agreement” shall mean the Amended and Restated Stock Escrow Agreement substantially in the form attached hereto as Exhibit E.

“Parent Founder” shall mean RAC Partners LLC, a Delaware limited liability company.

(ii)

Section 3.1(a)(iii)(1) and (2) shall be amended and restated to read in their entirety as follows:

(1)

(x) 0.44932 of a single validly issued, fully paid and nonassessable share of Parent Common Stock (“Closing Stock Payment”), plus (y) the proportionate share amount of 13,950,000 shares of Parent Common Stock issuable pursuant to Section 3.1(a)(iii)(2) below, if any, which such amount shall be deposited into the Escrow Account pursuant to Section 3.5 hereof (“EBITDA Stock”), plus (z) the proportionate share amount of 8,500,000 shares of Parent Common Stock issuable pursuant to Section 3.1(a)(iii)(3) below, if any, which such amount shall be deposited into the Escrow Account pursuant to Section 3.5 hereof (“Warrant Stock”, which, together with the Closing Stock Payment and EBITDA Stock, shall be referred to collectively, as the “Common Stock Merger Consideration”);

(2)

If, for any fiscal quarter from the date hereof through December 31, 2011, the Second Merger Surviving Entity has an annualized adjusted EBITDA (i.e., the actual quarterly EBITDA multiplied by four (4)) equal to or greater than the EBITDA Target, Parent shall cause the Escrow Agent to release from the Escrow Account, in accordance with this Section 3.1(a)(iii)(2), Section 3.5 hereof and the Escrow Agreement, 13,950,000 shares of Parent Common Stock (reduced by the number of shares that would have been issuable to holders of Dissenting Shares in respect of such Dissenting Shares if the stockholder holding such Dissenting Shares had not exercised its appraisal rights pursuant to Section 3.3) (the “EBITDA Condition”).  If the EBITDA Condition is satisfied, the holders of Company Common Stock shall be entitled to receive that number of shares of Parent Common Stock equal to 13,950,000 (reduced by the number of shares that would have been issuable to holders of Dissenting Shares in respect of such Dissenting Shares if the stockholder holding such Dissenting Shares had not exercised its appraisal rights pursuant to Section 3.3).  If the EBITDA Condition is not satisfied by December 31, 2011, then Parent and the Stockholders’ Representative shall deliver joint written instructions to the Escrow Agent to release the remaining shares held in Escrow pursuant to the EBITDA Condition to the Company on February 28, 2012 and such securities shall be cancelled in accordance with Section 3.5.

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(iii)

The following Section 6.1(j) shall be added to the Agreement:

(j)

Parent and the Stockholders’ Representative hereby agree that, within five (5) Business Days of the satisfaction of the EBITDA Condition, they shall deliver an EBITDA Condition Instruction to the escrow agent under the Parent Founder Escrow Agreement as provided in Section 3.2 thereof.

(iv)

The following Section 9.6(d) shall be added to the Agreement:

(d)

the Parent Founder Escrow Agreement, executed by the Parent Founder and each of the other parties thereto.

ARTICLE II

GENERAL PROVISIONS

2.1

Reference to and Effect on the Agreement.  This Amendment modifies the Agreement to the extent set forth herein, is hereby incorporated by reference into the Agreement and is made a part thereof.  Except as specifically amended by this Amendment, the Agreement shall remain in full force and effect and is hereby ratified and confirmed.

2.2

Applicable Law.  This Amendment shall be construed and enforced in accordance with the internal, substantive laws of the State of Delaware.

2.3

Counterparts.  This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties to this Amendment.  Electronic or facsimile signatures shall be deemed to be original signatures.

2.4

Construction; Entire Agreement; Amendment.  The captions preceding the Articles and Sections in this Amendment have been inserted for convenience only and shall not be used to modify, expand or construe any of the provisions of this Amendment.  The Agreement, which includes the exhibits and schedules hereto and the other documents, agreements and instruments executed and delivered pursuant to or in connection with this Agreement, when combined with the Agreement and the exhibit thereto, constitutes the entire Agreement between the parties hereto with respect to the subject matter contained herein, and it supersedes all prior and contemporaneous agreements, representations and understandings of the parties, express or implied, oral or written.  

2.5

Further Assurances.  The parties shall execute such further documents, and perform such further acts, as may be necessary to effect the terms of this Amendment.

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IN WITNESS WHEREOF, the parties have duly executed this Agreement and Plan of Merger on the date first above written.

PARENT:

RENAISSANCE ACQUISITION CORP.

By:

/s/ Barry W. Florescue

Name:  Barry W. Florescue

Title:  Chairman and Chief Executive Officer

MERGER SUB I:

FCI MERGER SUB I, INC.

By:

/s/ Barry W. Florescue

Name:  Barry W. Florescue

Title:  President

MERGER SUB II:

FCI MERGER SUB II, LLC

BY:

RENAISSANCE ACQUISITION CORP.,

as Sole Member

By:

/s/ Barry W. Florescue

Name: Barry W. Florescue

Title: Chairman and Chief Executive Officer

THE COMPANY:

FIRST COMMUNICATIONS, INC.

By:

/s/ Joseph R. Morris

Name:  Joseph R. Morris

Title:  Chief Financial Officer

STOCKHOLDERS’ REPRESENTATIVE:

THE GORES GROUP, LLC

By:

/s/ Scott Honour

Name: Scott Honour

Title:

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EXHIBIT E

AMENDED AND RESTATED STOCK ESCROW AGREEMENT

AMENDED AND RESTATED STOCK ESCROW AGREEMENT, dated as of January ___, 2009 ("Agreement"), by and among FIRST COMMUNICATIONS, INC., formerly known as Renaissance Acquisition Corp., a Delaware corporation ("Parent"), RAC Partners LLC (“Founder”), Barry W. Florescue, Logan D. Delany, Jr., Stanley Kreitman, Charles Miersch, and Morton Farber (collectively with the Founder, "Initial Stockholders"), THE GORES GROUP LLC, a [Delaware] limited liability company (the “Stockholders’ Representative”) and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation ("Escrow Agent").

WHEREAS, Parent, FCI Merger Sub I, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub I”), FCI Merger Sub II, a Delaware limited liability company and a wholly-owned subsidiary of Parent (“Merger Sub II”), First Communications Inc., a Delaware corporation (the “Company”), and the Stockholders’ Representative have entered into an Agreement and Plan of Merger dated as of September 13, 2008 (as amended, the “Merger Agreement”), a copy of which is attached hereto as Exhibit A, pursuant to which, among other things, (i) Merger Sub I is merging with and into the Company, and the surviving company is then merging with and into Merger Sub II, with Merger Sub II surviving, and (ii) certain stock issuances are to be made to the Company Securityholders (as defined below).

WHEREAS, Parent, the Initial Stockholders, and the Escrow Agent are parties to an escrow agreement, dated as of February 1, 2007 (the “Original Stock Escrow Agreement”), pursuant to which Founder and the Initial Stockholders delivered to the Escrow Agent for deposit into an escrow account established thereunder, certificates representing shares of common stock, par value $0.0001 per share, of Parent (“Parent Common Stock”) in the respective amounts set forth opposite the names of Founder and the Initial Stockholders on Exhibit A attached hereto (the “Escrow Shares”).

WHEREAS, the Merger Agreement requires, among other things, that, at the closing thereunder (the “Closing”), pursuant to this Agreement, certificates representing 2,000,000 shares of Parent Common Stock held by Founder (the “Contingent Escrow Shares”) continue to be held by the Escrow Agent for deposit in the Escrow Account (as defined below).  All of the Contingent Escrow Shares are included in the Escrow Shares currently held in escrow pursuant to the Original Stock Escrow Agreement.

WHEREAS, in order to effect certain of the transactions contemplated by the Merger Agreement, Parent, Founder, the Initial Stockholders and the Escrow Agent wish to amend and restate the Original Escrow Agreement and that the Stockholders’ Representative become a party thereto, and the Stockholders’ Representative wishes to become a party thereto.

IT IS AGREED:

1.

Appointment of Escrow Agent. The Company and the Initial Stockholders hereby ratify the appointment of, and the Stockholders’ Representative hereby agrees to appoint, the Escrow Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such terms.

2.

Deposit of Escrow Shares. Each of the Initial Stockholders has delivered to the Escrow Agent certificates representing his respective Escrow Shares, to be held and disbursed subject to the terms and conditions of this Agreement. Each Initial Stockholder acknowledges that the certificate representing his Escrow Shares is legended to reflect the deposit of such Escrow Shares under this Agreement.

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3.

Disbursement of the Escrow Shares.

3.1

The Escrow Agent shall hold the Escrow Shares until the first anniversary of the date hereof (the period from the date hereof until such date, "Initial Escrow Period"), on which date it shall, upon written instructions from each Initial Stockholder, disburse to Founder all of its Escrow Shares other than the Contingent Escrow Shares and each other Initial Stockholder its Escrow Shares (and any applicable stock power).

3.2

The Escrow Agent shall hold the Contingent Escrow Shares until the date on which the Escrow Agent receives a notice executed by each of Parent, Founder and the Stockholders’ Representative that the EBITDA Condition described in Section 3.1(a)(iii)(2) of the Merger Agreement has occurred (the “EBITDA Condition Instruction”), at which time the Escrow Agent shall disburse to Founder all of the Contingent Escrow Shares; provided, that if the EBITDA Condition Instruction is met prior to the end of the Initial Escrow Period, the Contingent Escrow Shares shall be disbursed to the Founder as soon as practicable after the Initial Escrow Period.

3.3

If by March 15, 2012 (the period beginning on the date hereof through such date, the “Escrow Period”), the Escrow Agent has not received an EBITDA Condition Instruction, the Escrow Agent shall upon written instructions from Parent release all of the Contingent Escrow Shares to Parent.

3.4

Notwithstanding the foregoing, if the Escrow Agent is notified by Parent pursuant to Section 6.7 hereof that Parent is being liquidated at any time during the Initial Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Shares

3.5

If, during the Escrow Period, Parent subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the stockholders of such entity having the right to exchange their shares of Common Stock for cash, securities or other property, then the Escrow Agent will, upon receipt of a certificate, executed by the Chief Executive Officer of Parent, in form reasonably acceptable to the Escrow Agent, that such transaction is then being consummated, release the Escrow Shares to the Initial Stockholders upon consummation of the transaction so that they can similarly participate. The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this Section 3.

4.

Rights of Initial Stockholders in Escrow Shares.

4.1

Voting Rights as a Stockholder. The Initial Stockholders shall retain all of their rights as stockholders of Parent during the Escrow Period, including, without limitation, the right to vote such shares.

4.2

Dividends and Other Distributions in Respect of the Escrow Shares.  During the Escrow Period, all dividends payable in cash with respect to the Escrow Shares shall be paid to the Initial Stockholders, but all dividends payable in stock or other non-cash property ("Non-Cash Dividends") shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term "Escrow Shares" shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

4.3

Restrictions on Transfer. During the Escrow Period, no sale, transfer or other disposition may be made of any or all of the Escrow Shares except (i) by gift to a member of Initial Stockholder's immediate family or to a trust, the beneficiary of which is an Initial Stockholder or a member of an Initial Stockholder's immediate family, (ii) by virtue of the laws of descent and distribution upon death of any Initial Stockholder, or (iii) pursuant to a qualified domestic relations order; provided, however, that such permissive transfers may be implemented only upon the respective transferee's written agreement to be bound by the terms and conditions of this Agreement and of the Insider Letter signed by the Initial Stockholder transferring the Escrow Shares.

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5.

Concerning the Escrow Agent.

5.1

Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

5.2

Indemnification. The Escrow Agent shall be indemnified and held harmless by Parent from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Shares held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Shares or it may deposit the Escrow Shares with the clerk of any appropriate court or it may retain the Escrow Shares pending receipt of a final, non-appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Shares are to be disbursed and delivered. The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

5.3

Compensation. The Escrow Agent shall be entitled to reasonable compensation from Parent for all services rendered by it hereunder. The Escrow Agent shall also be entitled to reimbursement from Parent for all expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all counsel, advisors' and agents' fees and disbursements and all taxes or other governmental charges.

5.4

Further Assurances. From time to time on and after the date hereof, Parent and the Initial Stockholders shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

5.5

Resignation. The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by Parent, the Escrow Shares held hereunder. If no new escrow agent is so appointed within the 60 day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares with any court it reasonably deems appropriate.

5.6

Discharge of Escrow Agent. The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested in writing at any time by the other parties hereto, jointly, provided, however, that such resignation shall become effective only upon acceptance of appointment by a successor escrow agent as provided in Section 5.5.

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5.7

Liability. Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

6.

Miscellaneous.

6.1

Governing Law. This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.

6.2

Intentionally Omitted.

6.3

Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by each party hereto.

6.4

Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.

6.5

Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns.

6.6

Notices. Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if mailed, two days after the date of mailing, as follows:

If to Parent, to:

First Communications, Inc.

3340 West Market Street

Akron, Ohio 44333

Attn:  Joseph Morris

Fax: (330) 835-2330

With a copy to:

Bingham McCutchen LLP

One Federal Street

Boston, MA 02110

Attn:  John J. Concannon III, Esq.

Fax:  (617) 951-8736

If to Parent Founder, to:

RAC Partners LLC

50 E. Sample Road, Suite 400

Pompano Beach, Florida 33064

Attn: Barry W. Florescue, CEO

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with a copy to:

Dechert LLP

1095 Avenue of the Americas

New York, New York 10036

Attn: Charles I. Weissman, Esq.

If to another Initial Stockholder, to his address set forth in Exhibit A.

If to the Stockholders’ Representative

The Gores Group LLC

10877 Wilshire Boulevard

18th Floor

Los Angeles, California 90024

Attn: Scott Honour
Fax:  (310) 209-3310

If to the Escrow Agent, to:

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Chairman

The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for giving notice.

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WITNESS the execution of this Agreement as of the date first above written.

FIRST COMMUNICATIONS, INC.

By:

___________________________

Name:

Title:   

INITIAL STOCKHOLDERS:

RAC PARTNERS LLC

By:

___________________________

Name: Barry W. Florescue

Title:   Managing Member

_________________________________

Barry W. Florescue

_________________________________

Logan D. Delany, Jr.

_________________________________

Stanley Kreitman

_________________________________

Charles Miersch

_________________________________

Morton Farber

STOCKHOLDERS’ REPRESENTATIVE

THE GORES GROUP, LLC

By:

___________________________

Name:

Title:

CONTINENTAL STOCK TRANSFER

& TRUST COMPANY

By:

___________________________

Name:

Title:

Signature page to Stock Escrow Agreement

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EXHIBIT A

Name and Address of Initial Stockholder	Number of Shares
RAC Partners LLC	3,574,800
Barry W. Florescue	30,000
Logan D. Delany, Jr.	30,000
Stanley Kreitman	30,000
Charles Miersch	117,600
Morton Farber	117,600

Signature page to Stock Escrow Agreement

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ANNEX A-2

AMENDMENT NO. 2 TO

AGREEMENT AND PLAN OF MERGER

THIS AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER (this “Amendment”), is made and entered into this 31st day of December, 2008 by and among RENAISSANCE ACQUISITION CORP., a Delaware corporation (“Parent”), FCI MERGER SUB I, INC., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub I”), FCI MERGER SUB II, LLC, a Delaware limited liability company and wholly owned subsidiary of Parent (“Merger Sub II”, and, together with the Merger Sub I, collectively, the “Merger Subs”), FIRST COMMUNICATIONS, INC., a Delaware corporation (the “Company”) and The Gores Group LLC, solely in its capacity as the exclusive representative of the stockholders of the Company (“Stockholders’ Representative”).  Except as otherwise set forth herein, capitalized terms used herein shall have the meanings set forth in the Agreement and Plan of Merger by and among the parties hereto, dated as of September 13, 2008, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of December 22, 2008 (collectively, the “Agreement”).

WHEREAS, the Agreement provides that Parent shall prepare and file a Registration Statement on Form S-4 registering the issuance of shares of Parent Common Stock pursuant to the Agreement;

WHEREAS, the parties have determined that Parent should instead prepare and file a registration statement pursuant to the requirements of the Securities Act to register the resale of such shares of Parent Common Stock by the recipients thereof;

WHEREAS, the Board of Directors of the Company have approved this Amendment and the other transactions contemplated hereby upon the terms and subject to the conditions set forth in this Amendment; and

WHEREAS, the board of directors of Parent and Merger Sub I and the sole member of Merger Sub II have approved this Amendment upon the terms and subject to the conditions set forth in this Amendment.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, the parties agree as set forth below.

ARTICLE I

AMENDMENTS TO AGREEMENT AND PLAN OF MERGER

(a)

Amendments.  

(i)

The Agreement shall be revised to strike all references to the defined term “Registration Statement” in Article I and Sections 6.1(c) and 6.1(e).

(ii)

The following definitions in Article I of the Agreement shall be revised to read as follows:

“Parent Stockholders’ Meeting” shall mean the meeting of Parent’s stockholders to consider the approval of this Agreement.

“Proxy Statement” shall mean Parent’s proxy statement prepared for distribution to its stockholders in connection with the Parent Stockholders’ Meeting.

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(iii)

The first sentence of Section 4.27 of the Agreement shall be amended and restated to read in its entirety as follows:

The information to be supplied in writing by the Company for inclusion in the Proxy Statement shall not, at the time the Proxy Statement is first mailed, at the time of the Parent Stockholders’ Meeting and at the time of the filing with the SEC, 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.

(iv)

Section 6.1(e)(ii) of the Agreement shall be amended and restated to read in its entirety as follows:

(iii)

As soon as practicable following notification to Parent by the SEC that it has no further comments to the Proxy Statement, Parent shall distribute the Proxy Statement to the holders of Parent Common Stock and, pursuant thereto, shall call the Parent Stockholders’ Meeting in accordance with the DGCL and, subject to the other provisions of this Agreement, solicit proxies from such holders to vote in favor of the adoption of this Agreement and the approval of the First Merger and the other matters presented to the stockholders of Parent for approval or adoption at the Parent Stockholders’ Meeting, including, without limitation, the matters described in Section 6.1(e)(i).

(v)

Section 6.3(c) of the Agreement shall be amended and restated in its entirety as follows:

(c)

Registration of Shares.  Parent shall file as soon as possible after the Closing, and use its best efforts to become effective within 12 months after the Closing Date, a registration statement under the Securities Act registering the resale of the shares of Parent Common Stock issued pursuant to this Agreement, including EBITDA Stock and Warrant Stock issued pursuant to Section 3.1(a)(iii), shares of Parent Common Stock issuable upon exercise of the New Warrants and the Additional Warrant Stock issued pursuant to Section 3.1(c)(ii).

(vi)

Section 7.3 of the Agreement shall be amended and restated in its entirety as follows:

7.3.

Intentionally omitted.

ARTICLE II

GENERAL PROVISIONS

2.1

Reference to and Effect on the Agreement.  This Amendment modifies the Agreement to the extent set forth herein, is hereby incorporated by reference into the Agreement and is made a part thereof.  Except as specifically amended by this Amendment, the Agreement shall remain in full force and effect and is hereby ratified and confirmed.

2.2

Applicable Law.  This Amendment shall be construed and enforced in accordance with the internal, substantive laws of the State of Delaware.

2.3

Counterparts.  This Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties to this Amendment.  Electronic or facsimile signatures shall be deemed to be original signatures.

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2.4

Construction; Entire Agreement; Amendment.  The captions preceding the Articles and Sections in this Amendment have been inserted for convenience only and shall not be used to modify, expand or construe any of the provisions of this Amendment.  The Agreement, which includes the exhibits and schedules hereto and the other documents, agreements and instruments executed and delivered pursuant to or in connection with this Agreement, when combined with the Agreement and the exhibit thereto, constitutes the entire Agreement between the parties hereto with respect to the subject matter contained herein, and it supersedes all prior and contemporaneous agreements, representations and understandings of the parties, express or implied, oral or written.  

2.5

Further Assurances.  The parties shall execute such further documents, and perform such further acts, as may be necessary to effect the terms of this Amendment.

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IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 2 to the Agreement and Plan of Merger on the date first above written.

PARENT:

RENAISSANCE ACQUISITION CORP

By:

/s/ Barry W. Florescue

Name:  Barry W. Florescue

Title:  Chairman and Chief Executive Officer

MERGER SUB I:

FCI MERGER SUB I, INC.

By:

/s/ Barry W. Florescue

Name:  Barry W. Florescue

Title:  President

MERGER SUB II:

FCI MERGER SUB II, LLC

BY:

RENAISSANCE ACQUISITION CORP.,

as Sole Member

By:

/s/ Barry W. Florescue

Name: Barry W. Florescue

Title: Chairman and Chief Executive Officer

THE COMPANY:

FIRST COMMUNICATIONS, INC.

By:

/s/ Raymond Hexamer

Name: Raymond Hexamer

Title: Chief Executive Officer

STOCKHOLDERS’ REPRESENTATIVE:

THE GORES GROUP, LLC

By:

/s/ Mark Stone

Name: Mark Stone

Title:

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ANNEX B

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

RENAISSANCE ACQUISITION CORP.

[now known as First Communications, Inc.]

RENAISSANCE ACQUISITION CORP., a corporation existing under the laws of the State of Delaware (the "Corporation"), by its Chief Executive Officer, hereby certifies as follows:

1.      The name of the Corporation is “Renaissance Acquisition Corp.”

2.      The Corporation's original Certificate of Incorporation was filed in the office of the Secretary of State of Delaware on April 17, 2006, the Certificate of Amendment of Certificate of Incorporation of the Corporation was filed in the office of the Secretary of State of Delaware on May 16, 2006, an additional Certificate of Amendment of Certificate of Incorporation of the Corporation was filed in the office of the Secretary of State of Delaware on July 11, 2006, and an Amended and Restated Certificate of Incorporation was filed in the office of the Secretary of State of Delaware on January 29, 2007.

3.      This Amended and Restated Certificate of Incorporation restates, integrates and amends the original Certificate of Incorporation as amended by the Certificate of Amendment of Certificate of Incorporation.

4.      This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the applicable provisions of Sections 242 and 245 of the Delaware General Corporation Law by the directors and stockholders of the Corporation.

5.      The text of the Certificate of Incorporation of the Corporation is hereby amended and restated to read in full as follows:

FIRST.   Name. The name of this corporation is FIRST COMMUNICATIONS, INC. (the "Corporation").

SECOND.   Registered Office and Agent. The address of the Corporation's registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, State of Delaware 19808. The name of the Corporation's registered agent at such address is Corporation Service Company.

THIRD.  Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law, as amended from time to time (the "DGCL").

FOURTH.   Capital Stock.

Section 4.1.      Authorized Shares. The total number of shares of stock which the Corporation shall have authority to issue is 201,000,000, 200,000,000 of which shall be shares of Common Stock with a par value of $.0001 per share and 1,000,000 of which shall be shares of Preferred Stock with a par value of $.0001 per share.

Section 4.2.      Common Stock. Except as otherwise required by law or as otherwise provided in the terms of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, the holders of the Common Stock shall exclusively possess all voting power, and each share of Common Stock shall have one vote.

Section 4.3.      Preferred Stock. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly authorized to provide for the issue of all or any of the remaining shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designations, preferences, and relative, participating, optional, or other rights and such qualifications,

B-1

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limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is expressly authorized to increase or decrease the number of shares of any series of Preferred Stock subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding and not above the number of authorized shares of Preferred Stock. In case the number of shares of any series of Preferred Stock shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. In all cases, the foregoing provisions of this Section 4.3 shall be subject to any other applicable provisions contained herein.

FIFTH.   Elimination of Certain Liability of Directors. No director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of a fiduciary duty as a director; provided, however, that to the extent required by the provisions of Section 102(b)(7) of the DGCL or any successor statute, or any other laws of the State of Delaware, this provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, (iv) for any transaction from which the director derived an improper personal benefit, or (v) for any act or omission occurring prior to the date when this Article Fifth becomes effective. If the DGCL hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended DGCL. Any repeal or modification of this Article Fifth by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing as of the time of such repeal or modification.

SIXTH.   Indemnification.

Section 6.1.      Right to Indemnification. Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit, proceeding or alternative dispute resolution procedure, whether (a) civil, criminal, administrative, investigative or otherwise, (b) formal or informal or (c) to the fullest extent permitted by Section 145(b) of the DGCL, as it may be amended from time to time, by or in the right of the Corporation (collectively, a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, manager, officer, partner, trustee, employee or agent of another foreign or domestic corporation or of a foreign or domestic limited liability company, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as such a director, officer, employee or agent of the Corporation or in any other capacity while serving as such other director, manager, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the Corporation against all judgments, penalties and fines incurred or paid, and against all expenses (including attorneys' fees) and settlement amounts actually and reasonably incurred or paid, in connection with any such proceeding, except in relation to matters as to which the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. Until such time as there has been a final judgment to the contrary, a person shall be presumed to be entitled to be indemnified under this Section 6.1. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, either rebut such presumption or create a presumption that (a) the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Corporation, (b) with respect to any criminal action or proceeding, the person had reasonable cause to believe that the person's conduct was unlawful or (c) the person was not successful on the merits or otherwise in defense of the proceeding or of any claim, issue or matter therein. If the DGCL is hereafter amended to provide for indemnification rights broader than those provided by this Section 6.1, then the persons referred to in this Section 6.1 shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the DGCL as so amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader  indemnification rights than permitted prior to such amendment).

B-2

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Section 6.2.      Determination of Entitlement to Indemnification. A determination as to whether a person who is a director or officer of the Corporation at the time of the determination is entitled to be indemnified and held harmless under Section 6.1 shall be made (a) by a majority vote of the directors who are not parties to such proceeding, even though less than a quorum, (b) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (d) by the stockholders. A determination as to whether a person who is not a director or officer of the Corporation at the time of the determination is entitled to be indemnified and held harmless under Section 6.1 shall be made by or as directed by the Board of Directors of the Corporation.

Section 6.3.      Mandatory Advancement of Expenses. The right to indemnification conferred in this Article Sixth shall include the right to require the Corporation to pay the expenses (including attorneys' fees) actually and reasonably incurred in defending any such proceeding in advance of its final disposition; provided, however, that an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer of the Corporation (but not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall be finally determined that such indemnitee is not entitled to be indemnified for such expenses under Section 6.1 or otherwise.

Section 6.4.      Non−Exclusivity of Rights. The right to indemnification and the advancement of expenses conferred in this Article Sixth shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, any provision of this Amended and Restated Certificate of Incorporation or of any bylaw, agreement, or insurance policy or arrangement, or any vote of stockholders or disinterested directors, or otherwise. The Board of Directors is expressly authorized to adopt and enter into indemnification agreements with, and obtain insurance for, directors and officers.

Section 6.5.      Effect of Amendment. Neither any amendment, repeal, or modification of this Article Sixth, nor the adoption or amendment of any other provision of this Amended and Restated Certificate of Incorporation or the bylaws of the Corporation inconsistent with this Article Sixth, shall adversely affect any right or protection provided hereby with respect to any act or omission occurring prior to the date when such amendment, repeal, modification, or adoption became effective.

SEVENTH.   Stockholder Action. Any action required or permitted to be taken by stockholders pursuant to this Amended and Restated Certificate of Incorporation or under applicable law may be effected only at a duly called annual or special meeting of stockholders and with a vote thereat, and may not be effected by consent in writing. Except as otherwise required by law and subject to the rights of any series of Preferred Stock, special meetings of the stockholders of the Corporation may be called by the Board of Directors pursuant to a resolution approved by a majority of the members of the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer or the President and shall be called by the President or the Secretary upon the written request of the holders of a majority of the outstanding shares of Common Stock of the Corporation.

EIGHTH.   Miscellaneous. The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation and for the purpose of creating, defining, limiting and regulating powers of the Corporation and its directors and stockholders:

Section 8.1.      Classification, Election and Term of Office of Directors.  

(a)       The Board of Directors shall consist of such number of directors as is determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of Directors; provided, however, that in no event shall the number of directors be less than one nor more than fifteen.

(b)       The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The Board of Directors shall designate the initial class of each director currently serving. At the first annual meeting of stockholders following the initial classification of the Board of Directors, the term of office of the initial Class I directors shall expire and successors to the initial Class I directors shall be elected for a three-year term. At the second annual meeting of stockholders

B-3

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following such initial classification, the term of office of the initial Class II directors shall expire and successors to the initial Class II directors shall be elected for a three-year term. At the third annual meeting of stockholders following such initial classification, the term of office of the initial Class III directors shall expire and successors to the initial Class III directors shall be elected for a three-year term. At each succeeding annual meeting of shareholders thereafter, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify. Any vacancy on the Board of Directors for any reason, and any directorships resulting from any increase in the number of directors of the Board of Directors, may be filled by a majority of the Board of Directors then in office, although less than a quorum, and any directors so chosen shall hold office until the next election of the class for which such directors shall have been chosen and until their successors shall be elected and qualified. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Amended and Restated Certificate of Incorporation applicable thereto, such directors so elected shall not be divided into classes pursuant to this Article Eighth, Section 8.1., and the number of such directors shall not be counted in determining the maximum number of directors permitted under the provisions of Article Eighth, Section 8.1, in each case unless expressly provided by such terms.

Section 8.2.      Manner of Election of Directors. Elections of directors need not be by written ballot unless the bylaws of the Corporation shall so provide.   

Section 8.3.      Severability. In the event any provision (or portion thereof) of this Amended and Restated Certificate of Incorporation shall be found to be invalid, prohibited, or unenforceable for any reason, the remaining provisions (or portions thereof) of this Amended and Restated Certificate of Incorporation shall be deemed to remain in full force and effect, and shall be construed as if such invalid, prohibited, or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of the Corporation and its stockholders that each such remaining provision (or portion thereof) of this Amended and Restated Certificate of  Incorporation remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders, notwithstanding any such finding.

Section 8.4.      Reservation of Right to Amend Certificate of Incorporation. Except as otherwise set forth in this Amended and Restated Certificate of Incorporation, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute or herein, and all rights conferred upon stockholders herein are granted subject to this reservation.

[Signature Page Follows]

B-4

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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated

Certificate of Incorporation to be signed by Barry W. Florescue, Chairman of the Board of Directors and Chief Executive Officer, as of the day of                    .

		By:	Barry W. Florescue
		Title:	Chairman of the Board of Directors
			and Chief Executive Officer

Signature Page to Amended and Restated Certificate of Incorporation

B-5

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ANNEX C

RENAISSANCE ACQUISITION CORP.

2008 EQUITY INCENTIVE PLAN

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Table of Contents

1.	Purpose	C-3
2.	Definitions	C-3
3.	Term of the Plan	C-6
4.	Stock Subject to the Plan	C-6
5.	Administration	C-6
6.	Authorization of Grants	C-7
7.	Specific Terms of Awards	C-7
8.	Adjustment Provisions	C-11
9.	Change of Control	C-13
10.	Settlement of Awards	C-14
11.	Reservation of Stock	C-16
12.	Limitation of Rights in Stock; No Special Service Rights	C-16
13.	Unfunded Status of Plan	C-16
14.	Nonexclusivity of the Plan	C-16
15.	Termination and Amendment of the Plan	C-16
16.	Notices and Other Communications	C-17
17.	Governing Law	C-17

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