CONFORMED COPY
STOCK EXCHANGE AGREEMENT
by and among
IDT Investments Inc.,
IDT Corporation,
IDT America, Corp.,
IDT Ventures Inc.,
HM4 Teligent Qualified Fund, LLC,
HM4 Teligent Private Fund, LLC,
HM 4-SBS Teligent Coinvestors, LLC,
HM PG-IV Teligent, LLC,
HM 4-EQ Teligent Coinvestors, LLC,
HM4 ICG Qualified Fund, LLC,
HM4 ICG Private Fund, LLC,
HM PG-IV ICG, LLC,
HM 4-SBS ICG Coinvestors, LLC, and
HM 4-EQ ICG Coinvestors, LLC
Dated May 2, 2001
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT, dated as of May 2, 2001 (as the same
may be amended or modified from time to time, this "Agreement"), by and among
IDT Investments Inc., a Nevada corporation (the "Company"), IDT Corporation, a
Delaware corporation ("IDTC"), IDT America Corp., a New Jersey corporation
("IDTA"), IDT Ventures Inc., a Delaware corporation ("IDTV"), HM4 Teligent
Qualified Fund, LLC, a Delaware limited liability company, HM4 Teligent Private
Fund, LLC, a Delaware limited liability company, HM 4-SBS Teligent Coinvestors,
LLC, a Delaware limited liability company, HM PG-IV Teligent, LLC, a Delaware
limited liability company, HM 4-EQ Teligent Coinvestors, LLC, a Delaware limited
liability company (collectively, the "HMTF Teligent Entities") and HM4 ICG
Qualified Fund, LLC, a Delaware limited liability company, HM4 ICG Private Fund,
LLC, a Delaware limited liability company, HM PG-IV ICG, LLC, a Delaware limited
liability company, HM 4-SBS ICG Coinvestors, LLC, a Delaware limited liability
company, and HM 4-EQ ICG Coinvestors, LLC, a Delaware limited liability company
(collectively, the "HMTF ICG Entities" and, together with the HMTF Teligent
Entities, the "HMTF Entities").
WITNESSETH:
WHEREAS, the HMTF Teligent Entities are the beneficial and record
owners of 219,998 shares (the "Teligent Shares") of Series A 7-3/4% Convertible
Preferred Stock due 2014, par value $0.01 per share (the "Teligent Preferred
Stock"), of Teligent, Inc. ("Teligent"), a Delaware corporation;
WHEREAS, the HMTF ICG Entities are the beneficial and record owners
of (a) 23,000 shares (the "ICG Shares") of the 8% Series A-2 Convertible
Preferred Stock, par value $0.01 per share (the "Series A-2 ICG Preferred
Stock"), of ICG Communications, Inc., a Delaware corporation ("ICG"), and (b)
warrants (the "ICG Warrants") to purchase an aggregate of 3,066,667 shares of
common stock, par value $0.01 per share, of ICG (the "ICG Common Stock");
WHEREAS, the HMTF Entities desire to exchange the Teligent Preferred
Stock, in the case of HMTF Teligent Entities, and the ICG Shares and ICG
Warrants, in the case of the HMTF ICG Entities, for 10,007 and 8,188 shares,
respectively, of Series B Convertible Preferred Stock, par value $0.01 per
share, of the Company to be issued pursuant to the Certificate of Designation
substantially in the form attached hereto as Exhibit B (the "Series B Preferred
Stock");
WHEREAS, pursuant to a plan among the parties to this Agreement,
each of IDTC, IDTA and IDTV will transfer to the Company on or prior to the
Closing Date (as defined below), in exchange for an aggregate of 45,488 shares
of Class A Common Stock, par value $0.01 per share, of the Company (the "Class A
Common Stock"), certain assets which the Company desires to acquire and which
are described in Section 5.03 hereof;
WHEREAS, for Federal income tax purposes, it is intended that the
Exchange (as defined below) will qualify as an exchange under the provisions of
section 351(a) of the Code (as defined below);
WHEREAS, the Company desires to acquire all of the interests
currently held by the HMTF Teligent Entities in Teligent and by the HMTF ICG
Entities in ICG; and
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.01 Definitions.
For the purposes of this Agreement, the following terms shall have
the following respective meanings:
"Affiliate" shall mean, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise. For avoidance of any doubt, the limited partners of
the HMTF "funds" - the partnerships in which outside investors are partners, and
that are the ultimate beneficial owners of the HMTF Entities - shall not be
deemed to be "Affiliates" of any HMTF Entity.
"Acquisition" shall have the meaning ascribed to such term in
Section 2.01 hereof.
"Applicable Law" shall mean any foreign, United States federal,
state or local law, statute, rule, regulation, common law, order, writ,
injunction, judgment, decree or permit of any Governmental Entity.
"Asset Transfers" shall have the meaning ascribed to such term in
Section 5.03 hereof.
"Bankruptcy Code" means the Bankruptcy Code of the United States of
America, as amended (11 U.S.C.A. section 101, et seq.), and any rules or
regulations promulgated by any Governmental Entity under such statute.
"Code" shall mean the Internal Revenue Code of 1986, as amended. All
citations to provisions of the Code, or to the Treasury regulations promulgated
thereunder, shall include any amendments thereto and any substitute or successor
provisions thereto.
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"Commission" shall mean the Securities and Exchange Commission or
any other Governmental Entity at the time administering the Securities Act or
the Securities Exchange Act of 1934, as amended.
"Contract" shall mean any contract, lease, indenture, agreement,
commitment, and any other legally binding arrangement, whether oral or in
writing, including any amendment thereto.
"Distribution" shall mean a distribution by the "funds" - i.e. the
partnerships in which outside investors are limited partners and which are the
ultimate beneficial owners of the HMTF Entities - to the partners of such funds,
and shall include any intermediate transfers required to move the assets to the
funds. The parties hereto acknowledge that partners, officers and employees of
the HMTF Entities and their Affiliates may be partners in such funds or
otherwise entitled in the ordinary course of business to participate in a
portion of any such Distribution and that to the extent that any such Persons
receive a portion of any such Distribution, they shall have the same status as
outside investors who receive such Distribution. In addition, a portion of the
funds or assets distributed in a Distribution may be used to pay transaction
fees and expenses.
"DGCL" shall mean the General Corporation Law of the State of
Delaware, in effect as of the date hereof, and any amendments or successor
statutes thereto.
"Encumbrance" shall mean any mortgage, claim, charge, lien, security
interest, easement, right of way, pledge, covenant, restriction or encumbrance
of any nature whatsoever.
"Exchange" shall mean, collectively, the Acquisition and the Asset
Transfers, taken as a whole.
"Final Determination" shall mean a determination as defined in
section 1313(a) of the Code or any other event which finally and conclusively
establishes the amount of any liability for Taxes.
"Governmental Entity" shall mean any court, administrative agency or
commission or other governmental authority or instrumentality, whether domestic
or foreign.
"Person" shall mean an individual, corporation, trust, partnership,
limited liability company, joint venture, unincorporated organization,
Governmental Entity or any agency or political subdivision thereof, or other
entity.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and any similar or successor Federal statute, and the rules and regulations of
the Commission thereunder, all as the same may be in effect at the time.
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"Taxes" shall mean any and all Federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions, levies
and liabilities, including, without limitation, taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, gains, franchise, withholding, payroll, recapture,
employment, excise, unemployment, insurance, social security, business license,
occupation, business organization, stamp, environmental and property taxes,
together with all interest, penalties and additions imposed with respect to such
amounts.
"Tax Return" means any report, return, election, notice, estimate,
declaration, information statement and other forms and documents (including,
without limitation, all amendments thereof and schedules, exhibits and other
attachments thereto) relating to and filed or required to be filed with a taxing
authority in connection with any Taxes (including, without limitation, estimated
Taxes).
SECTION 1.02 Interpretation. (a) When used in this Agreement the
words "include", "includes" and "including" shall be deemed to be followed by
the words "without limitation."
(b) Any terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) When used in this Agreement, the word "or" is not exclusive.
(d) All references to recitals, Articles, Sections, Exhibits and
Schedules shall be deemed references to recitals, Articles, Sections, Exhibits
and Schedules to this Agreement.
(e) This Agreement shall be deemed drafted jointly by all the
parties hereto and shall not be specifically construed against any party hereto
based on any claim that such party or its counsel drafted this Agreement.
ARTICLE II
ACQUISITION OF THE COMPANY STOCK
SECTION 2.01 Acquisition of Acquired Securities. Upon the terms and
subject to the conditions of this Agreement (a) the Company hereby agrees to
issue to the HMTF Teligent Entities, and the HMTF Teligent Entities severally
hereby agree to acquire from the Company, 10,007 shares of Series B Preferred
Stock and (b) the Company hereby agrees to issue to the HMTF ICG Entities, and
the HMTF ICG Entities severally hereby agree to acquire from the Company, 8,188
shares of Series B Preferred Stock (the securities to be issued to the HMTF
Teligent Entities and the HMTF ICG Entities pursuant to this Section 2.01 are
referred to herein collectively as the "Acquired Securities" and the acquisition
of the Acquired Securities by the HMTF Teligent Entities and the HMTF ICG
Entities pursuant to this Section 2.01 in exchange for the Transferred Interests
is referred to herein as the "Acquisition"). The specific number of shares of
Series B Preferred Stock to be acquired by each respective HMTF Entity is set
forth on Schedule 2.01 hereto. The parties are entering into this transaction on
the basis that, as of the date hereof, the total equity value of the Company is
$348,771,000 and the common equity value of the Company is $308,771,000.
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SECTION 2.02 Consideration. In consideration of the issuance of the
Acquired Securities to be issued to it, (a) each of the HMTF Teligent Entities
shall transfer to the Company its Teligent Shares and (b) each of the HMTF ICG
Entities shall transfer to the Company its ICG Shares and the ICG Warrants (the
interests to be transferred by the respective HMTF Entities referred to herein
as the "Transferred Interests").
SECTION 2.03 The Closing. Upon the terms and subject to the
conditions contained in this Agreement, the closing of the Acquisition (the
"Closing") shall take place immediately following the satisfaction or waiver of
the conditions set forth in Articles VI and VII hereof (other than conditions
which, by their nature, are to be satisfied at the Closing, but subject to such
conditions), at 10:00 A.M., Reno, Nevada time, at the offices of Xxxxxxxx and
Wedge, 0000 Xxxx Xxxx, Xxxxx 000, Xxxx, Xxxxxx 00000, or at such other time or
at such other place as shall be mutually agreed upon by the parties hereto. The
date on which the Closing occurs is herein referred to as the "Closing Date."
Any share transfer taxes payable to the State of Nevada as a result of the
Closing taking place there shall be the responsibility of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants and acknowledges to the HMTF
Entities as follows:
SECTION 3.01 Organization, Good Standing and Qualification.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada and has all requisite
corporate or similar power and authority to own, lease and operate its
properties and assets and to carry on its business as currently conducted.
(b) The Company has delivered to the HMTF Entities true and complete
copies of the Articles of Incorporation, as amended to date, and By-laws, as in
effect on the date hereof, of the Company.
SECTION 3.02 Corporate Authority. The Company has all requisite
corporate power and authority and has taken all corporate and shareholder action
necessary in order to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. The Company
has duly executed and delivered this Agreement. This Agreement is a valid and
binding agreement of the Company enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
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SECTION 3.03 Capital Structure. (a) Immediately prior to the
Closing, the authorized capital stock of the Company shall consist of (i)
500,000 shares of Class A Common Stock, $0.01 par value, of which 316,399 shares
will be outstanding, (ii) 200,000 shares of Class B Common Stock, $0.01 par
value ("Class B Common Stock"), of which 10,000 shares will be outstanding,
(iii) 75,000 shares of Series A Preferred Stock, $0.01 par value, ("Series A
Preferred Stock") of which 40,000 shares will be outstanding and (iv) 20,000
shares of Series B Preferred Stock, $0.01 par value, of which no shares will be
outstanding. Immediately prior to the Closing, all of the outstanding shares of
Class A Common Stock, Class B Common Stock and Series A Preferred Stock will
have been duly authorized and will be validly issued, fully paid and
nonassessable. The ownership of Class A Common Stock, the Class B Common Stock
and the Series A Preferred immediately prior to the transactions contemplated
hereby is as set forth on Schedule 3.03(a) hereto. The Acquired Securities have
been duly authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and nonassessable, and the
issuance thereof will not have been subject to any preemptive rights or made in
violation of any Applicable Law.
(b) Immediately prior to the Closing, except for the Series A
Preferred Stock, there will be (i) no outstanding options, warrants, agreements,
conversion rights, exchange rights, preemptive rights or other rights (whether
contingent or not) to subscribe for, purchase or acquire any issued or unissued
shares of capital stock of the Company or any subsidiary of the Company, and
(ii) no restrictions upon, or Contracts or understandings of the Company or any
subsidiary of the Company, or, to the knowledge of the Company, Contracts or
understandings of any other Person with respect to the voting or transfer of any
shares of capital stock of the Company or any subsidiary.
(c) The shares of Class B Common Stock to be issued upon conversion
of the Acquired Securities have been duly authorized and adequately reserved in
contemplation of the conversion of the Series B Preferred Stock and, when issued
and delivered in accordance with the terms of the Certificate of Designation of
the Series B Preferred Stock, will be validly issued, and will be fully paid and
nonassessable, and the issuance thereof will not have been subject to any
preemptive rights or made in violation of Applicable Law which would likely have
a material adverse effect on such issuance.
(d) The holders of the Series B Preferred Stock will, upon the
issuance thereof, have the rights set forth in the Certificate of Designation of
the Series B Preferred Stock (subject to the limitations and qualifications set
forth therein and under the Nevada Revised Statutes).
(e) The issuance of the Series B Preferred Stock contemplated by
this Agreement will not cause any anti-dilution provisions contained in any
outstanding securities of the Company to become applicable to such issuance.
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SECTION 3.04 Actions and Proceedings. As of the date of this
Agreement, there are no actions, suits, claims, proceedings or investigations
pending or, to the knowledge of the Company, threatened against the Company, nor
any outstanding judgments, orders, writs, injunctions or decrees of any
Governmental Entity against the Company that (i) seek to prevent or materially
restrict or delay the consummation of the transactions contemplated hereby or
(ii) would likely have a material adverse effect on the Company and its
subsidiaries taken as a whole or the transactions contemplated by this
Agreement.
SECTION 3.05 No Violation. The execution, delivery and performance
of this Agreement by the Company and the issuance and transfer of the Acquired
Securities by the Company hereunder do not and will not constitute or result in
(i) a breach or violation of, or a default under, the Articles of Incorporation
or By-laws of the Company, (ii) a breach or violation of, or a default under,
the acceleration of any obligations or the creation of an Encumbrance on the
assets of the Company (with or without notice, lapse of time or both) pursuant
to any Contract binding upon the Company or any Applicable Law or (iii) any
change in the rights or obligations of any party under any Contract binding upon
the Company, except, in the case of clause (ii) or (iii) above, for any breach,
violation, default, acceleration, creation or change that, individually or in
the aggregate, would not likely have a material adverse effect on the
transactions contemplated by this Agreement. No provision of any Applicable Law,
injunction, order or decree of any Governmental Entity is in effect that has the
effect of making the transactions contemplated by this Agreement illegal or
would likely have a material adverse effect on the transactions contemplated by
this Agreement.
SECTION 3.06 Consents and Approvals. Assuming the correctness of the
representations by each of the HMTF Entities in Article IV, all authorizations,
consents, approvals, licenses, qualifications or exemptions from, or any
filings, declarations or registrations with, any Governmental Entity or any
other Person required in connection with the execution, delivery or performance
by the Company of this Agreement have been made or obtained and are in full
force and effect as of the date hereof, other than authorizations, consents,
approvals, licenses or qualifications the absence of which would not likely have
a material adverse effect on the transactions contemplated by this Agreement.
The Company is not required to file a notification under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976 in connection with this Agreement.
SECTION 3.07 No Registration of Transferred Interests. The Company
is aware that the Transferred Interests have not been registered under the
Securities Act, that the transfer of the Transferred Interests is intended to be
exempt from registration under the Securities Act and the rules promulgated
thereunder by the Commission, and that the Transferred Interests cannot be
offered, sold, assigned, transferred, or otherwise disposed of unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. The Company is also aware that sales or transfers of
the Transferred Interests are further restricted by state securities laws and
that the certificates for the Transferred Interests will bear appropriate
legends restricting their transfer pursuant to Applicable Laws.
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SECTION 3.08 Suitability of Investment. (a) The Company is an
"accredited investor" within the meaning of Rule 501 of Regulation D of the
Securities Act as presently in effect and is acquiring the Transferred Interests
for the Company's own account, or for the account of another "accredited
investor" that is one of the Company's Affiliates and that can make all of the
representations contained herein, for investment purposes only and not with a
view to the resale or distribution thereof;
(b) The Company will not, directly or indirectly, offer, sell,
transfer, assign, exchange or otherwise dispose of all or any part of the
Transferred Interests, except in accordance with applicable state and Federal
securities laws;
(c) The Company has been given the opportunity to obtain information
and documents relating to Teligent and ICG and to ask questions of and receive
answers from representatives of the HMTF Entities concerning Teligent and ICG
and the investment in the Transferred Interests;
(d) The Company has such knowledge and experience in financial,
business and Tax matters that the Company can, and the Company has, adequately
analyzed the risks of an investment in the Transferred Interests and the Company
has determined the Transferred Interests are a suitable investment for the
Company and that the Company is able at this time, and in the foreseeable
future, to bear the economic risk of a total loss of the Company's investment in
Teligent and ICG; and
(e) The Company is aware that there are substantial risks incident
to an investment in the Transferred Interests.
SECTION 3.09 Information. No information provided by the Company to
the HMTF Entities in connection with this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary to make
such information, in light of the circumstances under which it was given, not
misleading; provided, however, that the Company makes no representation or
warranty with respect to the value of any individual asset of the Company or any
financial statement of the Company. Except as set forth on Schedule 3.09 or as
reflected in the information which is otherwise publicly available, the Company
and its subsidiaries, taken as a whole, do not have any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
that individually or in the aggregate would reasonably be likely to have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE HMTF TELIGENT ENTITIES AND THE HMTF ICG ENTITIES
Each of the HMTF Entities, severally and not jointly, hereby
represents, warrants and acknowledges to the Company as follows:
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SECTION 4.01 Ownership. (a) Each of the HMTF Teligent Entities
represents and warrants that (i) it is a limited liability company duly
organized, validly existing and in good standing under the laws of the state of
Delaware, (ii) it is the beneficial and record holder of the number of shares of
Teligent Preferred Stock as is set forth opposite its name on Schedule 4.01(a)
hereto, (iii) it has the right, power and authority to transfer and deliver such
number of Teligent Shares as provided in this Agreement and (iv) upon delivery
of such number of Teligent Shares, there shall be vested in the Company good and
valid title to such Teligent Shares, free and clear of any Encumbrances other
than imposed or contemplated by (A) the Stock Purchase Agreement dated November
4, 1999 by and among Teligent, HMTF Acquisition Corp. and the other purchasers
listed on Schedule I thereto (the "Teligent Stock Purchase Agreement"), (B) the
terms and conditions set forth in the Certificate of Designation of Teligent
designating the Teligent Preferred Stock, (C) in the event Teligent is subject
to any proceeding under the Bankruptcy Code, the Bankruptcy Code or any
decisions or orders by any Governmental Entity pursuant to the Bankruptcy Code
of which the HMTF Teligent Entities do not have actual knowledge, it being
understood that no inquiry has been made by any such HMTF Entity and (D)
Encumbrances arising pursuant to the Securities Act or applicable state
securities or "Blue Sky" laws.
(b) Each of the HMTF ICG Entities represents and warrants that (i)
it is a limited liability company duly organized, validly existing and in good
standing under the laws of the state of Delaware, (ii) it is the beneficial and
record holder of the number of ICG Shares and the ICG Warrants as is set forth
opposite its name on Schedule 4.01(b) hereto, (iii) it has the right, power and
authority to transfer and deliver such number of ICG Shares and the ICG Warrants
as provided in this Agreement and (iv) upon delivery of such number of ICG
Shares and the ICG Warrants as provided in this Agreement, there shall be vested
in the Company good and valid title to such ICG Shares and the ICG Warrants,
free and clear of any Encumbrances other than as are imposed or contemplated by
(A) the Preferred Stock and Warrant Purchase Agreement, dated as of February 27,
2000 by and between ICG, HMTF Bridge ICG, LLC, and the other Purchasers listed
on Schedule I thereto, as amended (the "ICG Preferred Stock and Warrant Purchase
Agreement"), (B) the terms and conditions set forth in the Certificate of
Designation of ICG designating the Series A-2 ICG Preferred Stock, and (C) the
Bankruptcy Code or any decisions or orders by any Governmental Entity pursuant
to the Bankruptcy Code of which the HMTF ICG Entities do not have actual
knowledge, it being understood that no inquiry has been made by any such HMTF
Entity and (D) Encumbrances arising pursuant to the Securities Act or applicable
state securities or "Blue Sky" laws.
SECTION 4.02 Authority. Each of the HMTF Entities has all requisite
power and authority and has taken all action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. Each of the HMTF Entities has duly executed
and delivered this Agreement. This Agreement is a valid and binding agreement of
such party enforceable against such party in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
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SECTION 4.03 No Other Agreement to Transfer the Transferred
Interests. The HMTF Entities do not have any binding obligation, absolute or
contingent, oral or written, to any other Person to transfer any of the
Transferred Interests (other than the transactions contemplated hereby).
SECTION 4.04 Actions and Proceedings. As of the date of this
Agreement, there are no actions, suits, claims, proceedings or investigations
pending or, to the actual knowledge of the HMTF Entities, threatened against
such party, nor any outstanding judgments, orders, writs, injunctions or decrees
of any Governmental Entity against such party that (i) seek to prevent or
materially restrict or delay the consummation of the transactions contemplated
by this Agreement or (ii) would likely have a material adverse effect on the
transactions contemplated by this Agreement.
SECTION 4.05 No Violation. Except as set forth on Schedule 4.05
hereto, the execution, delivery and performance of this Agreement by the HMTF
Entities does not and will not constitute or result in (i) a breach or violation
of, or a default under, the limited liability company agreement of each such
HMTF Entity, (ii) a breach or violation of, or a default under, the acceleration
of any obligations or the creation of an Encumbrance on the Transferred
Interests (with or without notice, lapse of time or both) pursuant to, any
Contracts binding on such entity or the Transferred Interests or any Applicable
Law or (iii) any change in the rights or obligations of each such entity under
any Contracts binding on such entity except in the case of (ii) or (iii) above,
for any breach, violation, default, acceleration, creation or change that,
individually or in the aggregate, would not likely have a material adverse
effect on the transactions contemplated by this Agreement or the Transferred
Interests. Except as set forth on Schedule 4.05, no provision of any Applicable
Law, injunction, order or decree of any Governmental Entity is in effect that
has the effect of making the transactions contemplated by this Agreement illegal
or would otherwise likely have a material adverse effect on the transactions
contemplated by this Agreement.
SECTION 4.06 Consents and Approvals. Assuming the correctness of the
representations by the Company in Article III, all authorizations, consents,
approvals, licenses, qualifications or exemptions from, or any filings,
declarations or registrations with, any Governmental Entity or any other Person
required in connection with the execution, delivery or performance by the HMTF
Entities of this Agreement have been made or obtained and are in full force and
effect as of the date hereof, other than authorizations, consents, approvals,
licenses or qualifications the absence of which would not likely have a material
adverse effect on the transactions contemplated by this Agreement.
SECTION 4.07 No Registration of Acquired Securities. Each of the
HMTF Entities is aware that the Acquired Securities have not been registered
under the Securities Act, that the offer and issuance of the Acquired Securities
are intended to be exempt from registration under the Securities Act and the
rules promulgated thereunder by the Commission, and that the Acquired Securities
cannot be offered, sold, assigned, transferred, or otherwise disposed of unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Each of the HMTF Entities is also aware that
sales or transfers of the Acquired Securities are further restricted by state
securities laws and that the certificates for the Acquired Securities will bear
appropriate legends restricting their transfer pursuant to Applicable Laws and
this Agreement.
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SECTION 4.08 Teligent Preferred Stock and ICG Common Stock Rights;
Consents and Acknowledgements. All the transferable rights, powers and
privileges that each of the HMTF Teligent Entities and the HMTF ICG Entities
currently enjoys with respect to the Transferred Interests, whether obtained
through Applicable Law, by Contract or otherwise (the "Stock Rights"), will be
transferred to the Company at the Closing, to the fullest extent that such Stock
Rights may be transferred to the Company without violation of Applicable Law or
the documents under which such rights were granted.
SECTION 4.09 Holding Period. As of the date hereof, each of the HMTF
Teligent Entities has held its shares of Teligent Preferred Stock for such
period of time as is set forth opposite such HMTF Teligent Entity's name on
Schedule 4.09 hereto and each of the HMTF ICG Entities has held its ICG Shares
and the ICG Warrants for such period of time as is set forth opposite such HMTF
ICG Entity's name on Schedule 4.09 hereto (such respective periods being
calculated in accordance with the provisions of Rule 144(d) promulgated pursuant
to the Securities Act).
SECTION 4.10 Suitability of Investment. (a) Each HMTF Entity is
acquiring the Acquired Securities for such entity's own account, for investment
purposes only and not with a view to the resale or distribution thereof;
(b) Each HMTF Entity will not, directly or indirectly, offer, sell,
transfer, assign, exchange or otherwise dispose of all or any part of the
Acquired Securities, except in accordance with applicable state and Federal
securities laws and the provisions of this Agreement;
(c) Each HMTF Entity has been given the opportunity to obtain
information and documents relating to the Company and to ask questions of and
receive answers from representatives of the Company concerning the Company and
the investment in the Acquired Securities;
(d) Each HMTF Entity has such knowledge and experience in financial,
business and Tax matters that it can, and it has, adequately analyzed the risks
of an investment in the Acquired Securities and it has determined the Acquired
Securities are a suitable investment for it and that it is able at this time,
and in the foreseeable future, to bear the economic risk of a total loss of its
investment in the Company; and
(e) Each HMTF Entity is aware that there are substantial risks
incident to an investment in the Acquired Securities.
SECTION 4.11 Retention of Acquired Securities. It has no current
plan or intention, or obligation, to transfer, exchange or otherwise dispose of
any of the Acquired Securities other than as provided in Section 7A of the
Certificate of Designation relating thereto.
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SECTION 4.12 Teligent. In the event Teligent is subject to any
proceeding under the Bankruptcy Code, no consent, authorization or filing with
the bankruptcy court would be required under the Bankruptcy Code for the HMTF
Teligent Entities to enter into the Agreement or consummate the transactions
contemplated hereby. The parties hereto agree that any injunction or other order
(other than an injunction or other order issued for failure to obtain a consent
or authorization of the bankruptcy court or make a filing therewith, in each
case, known by each such HMTF Teligent Entity to have been required, with
respect to the transactions contemplated hereby but not excluding an injunction
or other order issued for failure to obtain a consent or authorization required
under the Bankruptcy Code) by any court pursuant to the Bankruptcy Code with
respect to the transactions contemplated by this Agreement and issued after the
date hereof shall not constitute a breach of the representation contained in
this Section 4.12 of this Agreement, but in such event the parties shall make
such appropriate equitable adjustments, which shall include in appropriate
circumstances rescission of the transactions contemplated hereby, as are
necessary to reflect such injunction or order.
SECTION 4.13 ICG. No consent, authorization or filing with the
bankruptcy court is required under the Bankruptcy Code for the HMTF ICG Entities
to enter into the Agreement or consummate the transactions contemplated hereby.
The parties hereto agree that any injunction or other order (other than an
injunction or other order issued for failure to obtain a consent or
authorization of the bankruptcy court or make a filing therewith, in each case,
known by each such HMTF ICG Entity to have been required, with respect to the
transactions contemplated hereby but not excluding an injunction or other order
issued for failure to obtain a consent or authorization required under the
Bankruptcy Code) by any court pursuant to the Bankruptcy Code with respect to
the transactions contemplated by this Agreement and issued after the date hereof
shall not constitute a breach of the representation contained in this Section
4.13 of this Agreement, but in such event the parties shall make such
appropriate equitable adjustments, which shall include in appropriate
circumstances rescission of the transactions contemplated hereby, as are
necessary to reflect such injunction or order. The Company acknowledges that the
HMTF ICG Entities did not file a Proof of Claim in the ICG bankruptcy case.
SECTION 4.14 Tax Treatment. Each of the HMTF Entities and its Tax
Owner (as defined below), and their respective Affiliates, has not taken, and
will not take, and has not failed to take, and will not fail to take, any
action, and has no knowledge of any fact or circumstance relating to the
Acquisition that is unique to such HMTF Entity or Tax Owner and has not been
previously disclosed to the Company, that would be likely to prevent the
Exchange, or any portion thereof, from qualifying as a transfer of property to
the Company governed by Section 351(a) of the Code.
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SECTION 4.15 Status. Each of the HMTF Entities is classified as a
disregarded entity for federal income tax purposes and is directly owned, and
has been directly owned at all times during its existence, by an entity that is
classified as a partnership for federal income tax purposes (each such
partnership referred to herein as a "Tax Owner"). Not more than 49% of any such
partnership is directly or indirectly owned by entities that are treated as
corporations for federal income tax purposes.
SECTION 4.16 Taxes. Each of the HMTF Entities has timely paid or
caused to be paid all Taxes owed by or with respect to it, including Taxes
relating to the Transferred Interests, and has timely filed or caused to be
filed all Tax Returns required to be filed by or with respect to it, including
Tax Returns with respect thereto. All such Tax Returns are accurate and complete
in all material respects. All information set forth on Schedule 5.02 (c) is true
and correct in all material respects.
ARTICLE V
CERTAIN COVENANTS
SECTION 5.01 Confidentiality. (a) Unless otherwise agreed to in
writing by the Company, each of the HMTF Entities will, and will cause its
Affiliates, directors, officers, employees and agents (such Affiliates and other
Persons being collectively referred to as the applicable party's
"Representatives") to, (i) keep all Confidential Information of the Company
confidential and not disclose or reveal any such Confidential Information to any
Person other than those Representatives who are participating in effecting the
transactions contemplated hereby or who otherwise need to know such Confidential
Information, (ii) use such Confidential Information only in connection with
consummating the transactions contemplated hereby and enforcing such party's
rights hereunder, and (iii) not use Confidential Information in any manner
detrimental to the Company. If such party is requested pursuant to, or required
by, Applicable Law or by legal process to disclose any Confidential Information
of the Company, it will provide the Company with prompt notice of such
request(s) so that the Company may seek an appropriate protective order. Such
party's obligations hereunder with respect to Confidential Information that (i)
is disclosed to a third party with the Company's written approval, (ii) is
required to be produced under order of a court of competent jurisdiction or
other similar requirements of a Governmental Entity, or (iii) is required to be
disclosed by Applicable Law, will, subject in the case of clauses (ii) and (iii)
above to such party's compliance with the preceding sentence, cease to the
extent of the disclosure so consented to or required, except to the extent
otherwise provided by the terms of such consent or covered by a protective
order. In the event this Agreement is terminated, each of the HMTF Entities
will, if so requested by the Company, promptly return all of the Confidential
Information of the Company, including all copies, reproductions, summaries,
analyses or extracts thereof or based thereon in the possession of such party or
its Representatives; provided, however, that, upon termination of this
Agreement, such party will not be required to return or cause to be returned
summaries, analyses or extracts prepared by it or its Representatives, but will
destroy (or cause to be destroyed) the same promptly following such termination.
The confidentiality obligations of such party contained in this Section 5.01(a)
shall survive until the one-year anniversary of the Closing or the termination
of this Agreement. Notwithstanding the foregoing, the parties to this Agreement
understand and agree that the HMTF Entities and certain Affiliates are obligated
to make certain public filings pursuant to Sections 13 and 16 of the Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder, and this
Section 5.01 shall not be deemed violated by any such filing.
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(b) For purposes of this Section 5.01, "Confidential Information" of
the Company means all confidential and proprietary information about the Company
(whether oral or written) that is furnished by it or its agents or
representatives to the HMTF Entities or their respective Representatives,
regardless of the manner in which it is furnished. "Confidential Information"
does not include, however, information which (i) has been or in the future is
published or is now or in the future is otherwise in the public domain through
no fault of the HMTF Entities or their respective Representatives, (ii) was
available to the HMTF Entities or their respective Representatives on a
non-confidential basis prior to its disclosure by the disclosing party, (iii)
becomes available to the HMTF Entities or their respective Representatives on a
non-confidential basis from a Person other than the Company or its
representatives or agents who is not otherwise bound by a confidentiality
agreement with the Company or its representatives or agents, or is not otherwise
prohibited from transmitting the information to the HMTF Entities or their
respective Representatives, or (iv) is independently developed by the HMTF
Entities or their respective Representatives through Persons who have not had,
either directly or indirectly, access to or knowledge of such information.
SECTION 5.02 Taxes. (a) The HMTF Entities, the Company, IDTC, IDTA
and IDTV shall (and each HMTF Entity shall cause its Tax Owner to), for all Tax
purposes including all Tax Returns and any Tax controversies (and shall cause
any Affiliate or successor to their assets or businesses to), except as
otherwise agreed to by the parties in writing, take each of the positions set
forth below (and shall not take or permit to be taken any position, action or
inaction that is inconsistent therewith) unless there has been a Final
Determination contrary to such position:
(i) the Exchange will qualify as a transfer of property to the
Company by the HMTF Entities, IDTC, IDTA and IDTV governed by section
351(a) of the Code;
(ii) none of the Acquired Securities will be treated as other
property or money under section 351(b) of the Code;
(iii) no income, gain or loss will be recognized by the HMTF
Entities or their Affiliates, IDTC, IDTA or IDTV upon the Exchange; and
(iv) none of the consideration in the Exchange will be paid or
issued for services.
(b) The HMTF Entities, the Company, IDTC, IDTA and IDTV shall (and
each HMTF Entity shall cause its Tax Owner to) promptly report to each other any
communication from or with the Internal Revenue Service or any other Taxing
authority that relates in any way to the characterization of the Exchange.
Notwithstanding any such communication, except as otherwise agreed to by the
parties in writing, the HMTF Entities, the Company, IDTC, IDTA and IDTV shall
(and each HMTF Entity shall cause its Tax Owner to), and shall cause any
Affiliate or successor to their assets or businesses to, continue to take each
of the positions specified in Section 5.02(a) for all Tax purposes (unless there
has been a Final Determination contrary to such position).
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(c) The HMTF Entities shall (and each HMTF Entity shall cause its
Tax Owner to) provide to the Company such information as is reasonably required
by the Company to file its Tax Returns. Schedule 5.02 (c) provides all
information required pursuant to Treasury Regulation Section 1.351-3(a). In
addition, the parties hereto shall cooperate with respect to all matters
relating to Taxes.
SECTION 5.03 Transfer of Assets. At or prior to the Closing Date,
(i) IDTA will transfer to the Company $10 million in cash, in exchange for 9,098
shares of Class A Common Stock; (ii) IDTC will transfer to the Company $10
million in cash, in exchange for 9,098 shares of Class A Common Stock; and (iii)
IDTV will transfer to the Company 100% of the issued and outstanding capital
stock of Timetel Dutch Holdings BV, in exchange for 27,293 shares of Class A
Common Stock (collectively, the "Asset Transfers"). The Asset Transfers shall be
effected pursuant to agreements and instruments customary for transactions
similar to the Asset Transfers. To the extent necessary, each of the Company and
IDTA, IDTC and TDTV will cause such agreements or instruments of transfer with
respect to the Asset Transfers to be duly executed, filed or registered.
SECTION 5.04 Access to Information.
(a) During the period from the date hereof to the Closing, each of
the HMTF Entities shall (and shall cause its Tax Owner to) afford to
Representatives of the Company reasonable access to all of the books and records
of the HMTF Entities and their Tax Owners relating to the Transferred Interests,
and the HMTF Entities shall (and each HMTF Entity shall cause its Tax Owner to)
furnish promptly to the Company all information concerning the Transferred
Interests as the Company may reasonably request. To the extent that the Company
receives information pursuant to this Section 5.05(a), the Company agrees to
treat such information in accordance with Section 5.01 of this Agreement, it
being understood that for purposes of this Section 5.05(a), all references in
Section 5.01 to the HMTF Entities shall be deemed to be references to the
Company and that all references in such section to the Company shall be deemed
to be references to the HMTF Entities.
(b) During the period from the date hereof to the Closing, each of
the Company, IDTC, IDTA and IDTV shall afford to Representatives of Xxxxx Muse
and the HMTF Entities reasonable access to all of the books and records of the
Company relating to the Acquired Securities and the Asset Transfers, as
applicable, and each of the Company, IDTC, IDTA and IDTV shall furnish promptly
to Xxxxx Muse and the HMTF Entities all information concerning the Transferred
Interests and the Asset Transfers, as applicable, as Xxxxx Muse and the HMTF
Entities may reasonably request.
15
SECTION 5.05 Reasonable Efforts. Upon the terms and subject to the
conditions of this Agreement, each of the parties hereto shall use all
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 under Applicable
Laws to consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable including, but not limited to, using all
reasonable efforts to cause the satisfaction of all conditions to Closing. This
covenant shall not apply to Section 6.01(d).
SECTION 5.06 Further Assurances. From time to time after the
Closing, without additional consideration, each of the parties hereto will (or,
if appropriate, cause their Affiliates to) execute and deliver such further
instruments and take such other action as may be necessary to make effective the
transactions contemplated by this Agreement. If any party to this Agreement
shall following the Closing have in its possession any asset or right which
under this Agreement should have been delivered to the other, such party shall
promptly deliver such asset or right to the other.
SECTION 5.07 Registration Rights. (a) Pursuant to this Section 5.07,
the HMTF ICG Entities shall execute and deliver at the Closing a writing
evidencing the assignment by the HMTF ICG Entities of such entity's rights under
the Registration Rights Agreement dated as of April 7, 2000 between ICG and
certain purchasers (the "ICG Registration Rights Agreement").
(b) Pursuant to this Section 5.07, (i) the HMTF Teligent Entities
shall execute and deliver at the Closing a writing evidencing the assignment by
the HMTF Teligent Entities of each such entity's rights under the Registration
Rights Agreement dated as of December 3, 1999 between Teligent and certain
purchasers (the "Teligent Registration Rights Agreement") and (ii) in the event
Teligent is subject to any proceeding under the Bankruptcy Code, the HMTF
Teligent Entities shall execute and deliver at the Closing a writing evidencing
the assignment to the Company of all the HMTF Teligent Entities' rights under
any proof of claim filed by an HMTF Teligent Entity in connection with the
filing for Chapter 11 bankruptcy protection by Teligent (it being understood
that such HMTF Teligent Entities shall be under no obligation to file any such
claim).
SECTION 5.08 Capitalization of the Company. From the date hereof
until the Closing, the Company shall not make any material changes to the
capital structure of the Company or take any other action that would have caused
an adjustment to the Conversion Price (as defined in the Certificate of
Designation with respect to the Series B Preferred Stock) had the Series B
Preferred Stock been outstanding at the time of such action; provided, however,
that the Company may issue additional securities so long as the securities
issued are exchanged for assets valued for such purpose at the fair market value
thereof (as determined by the Board of Directors of the Company in good faith)
or as otherwise contemplated hereby.
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ARTICLE VI
CONDITIONS TO THE OBLIGATIONS
OF THE COMPANY
SECTION 6.01 Conditions to the Obligations of the Company. The
obligation of the Company to deliver the Acquired Securities to the HMTF
Entities at the Closing against delivery of the Transferred Interests is
absolute, subject to the fulfillment or waiver at or before the Closing of each
of the following conditions, any or all of which may be waived by the Company:
(a) Representations and Warranties. The representations and
warranties of each of the HMTF Entities contained in this Agreement (without
regard to materiality or similar qualifiers contained therein) shall be true and
correct in all material respects at and as of the Closing Date as if made at and
as of such date, except for (a) changes contemplated by this Agreement and (b)
those representations and warranties which address matters only as of a
particular date (without regard to materiality or similar qualifiers contained
therein) (which shall have been true and correct in all material respects as of
such date, subject to clause (a));
(b) Covenants. Each of the HMTF Entities shall have performed in all
material respects all of its obligations and agreements and complied in all
material respects with all of its covenants contained in this Agreement to be
performed and complied with at or prior to the Closing;
(c) Certificate. The Company shall have received a certificate,
dated as of the Closing Date, executed by an executive officer (or similar
person) of each of the HMTF Entities on behalf of such entities and not in his
or her individual capacity and stating that, to the best knowledge of such
executive officer, the conditions set forth in clauses (a) and (b) above have
been satisfied;
(d) Tax Certificate. Each of the HMTF Entities and its respective
Tax Owner shall have delivered to Xxxxx Xxxxxxxxxx LLP an officer's certificate
containing certain representations relating to certain tax matters acceptable to
Xxxxx Xxxxxxxxxx LLP.
(e) Section 9.02 and 9.03 Deliveries. Each of the HMTF Entities
shall have delivered to the Company all of the items contemplated to be
delivered by it pursuant to Sections 9.02 and 9.03;
(f) Injunction. There shall not be in effect any injunction or order
by any Governmental Entity (i) that prohibits or makes illegal any of the
transactions contemplated by this Agreement and (ii) which has been adopted or
issued, or has otherwise become effective, since the date of this Agreement; and
(g) Material Adverse Change. No material adverse change shall have
occurred in the ability of any of the HMTF Entities to perform their respective
obligations under this Agreement.
17
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS
OF THE HMTF ENTITIES
SECTION 7.01 Conditions to the Obligations of each of the HMTF
Entities. The obligation of each of the HMTF Entities to deliver the Transferred
Interests to the Company at the Closing against delivery of the Acquired
Securities is absolute, subject to the fulfillment or waiver at or before the
Closing of each of the following conditions, any or all of which may be waived
by such HMTF Entity:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement (without regard to
materiality or similar qualifiers contained therein) shall be true and correct
in all material respects at and as of the Closing Date as if made at and as of
such date, except for (a) changes contemplated by this Agreement and (b) those
representations and warranties which address matters only as of a particular
date (without regard to materiality or similar qualifiers contained therein)
(which shall have been true and correct in all material respects as of such
date, subject to clause (a));
(b) Covenants. Each of the Company, IDTC, IDTA and IDTV shall have
performed in all material respects all of its obligations and agreements and
complied in all material respects with all of its covenants contained in this
Agreement to be performed and complied with at or prior to the Closing;
(c) Certificate. The HMTF Entities shall have received a
certificate, dated as of the Closing Date, executed by an executive officer of
the Company on behalf of the Company and not in his or her individual capacity
and stating that, to the best knowledge of such executive officer, the
conditions set forth in clauses (a) and (b) above have been satisfied;
(d) Acquired Securities. The Company shall have delivered to the
HMTF Entities the shares of Series B Preferred Stock Acquired Securities to be
delivered by it pursuant to Section 9.01(a) and 9.01(b);
(e) Injunction. There shall be in effect any injunction or order by
any Governmental Entity (i) that prohibits or makes illegal the transactions
contemplated by this Agreement and (ii) which has been adopted or issued, or has
otherwise become effective, since the date of this Agreement;
(f) Material Adverse Change. No material adverse change shall have
occurred in the business or condition of the Company or any of its subsidiaries
taken as a whole or on the ability of the Company or any of its subsidiaries to
perform their respective obligations under this Agreement;
(g) Certificate of Designation. The Company shall have filed with
the Secretary of State of the State of Nevada the Certificate of Designation
(substantially in the form attached as Exhibit B hereto) with respect to the
Series B Preferred Stock; and
18
(h) Legal Opinion. The HMTF Entities shall have received a legal
opinion of Nevada counsel to the Company reasonably acceptable to the HMTF
Entities concerning such matters of Nevada law as are customary in transactions
similar to the transaction contemplated hereby.
ARTICLE VIII
TRANSFER LIMITATIONS
SECTION 8.01 Transfer Limitations; 1933 Act Legend. (a) Until the
earlier of (i) consummation of an underwritten initial public offering with net
proceeds of at least $25 million of the Company's common equity and in
connection with which such common equity shall be listed on the Nasdaq National
Market or the New York Stock Exchange (an "IPO") (and thereafter for so long as
the underwriters of the IPO shall require) and (ii) the second anniversary of
the Closing Date, each of the HMTF Entities agrees not to offer, transfer,
pledge, encumber, contract to do any of the foregoing or otherwise transfer or
dispose of, whether or not for or without consideration, to any Person other
than the Company or any of its Affiliates ("Transfer") any of the Acquired
Securities (and the Class B Common Stock into which such Acquired Securities are
convertible) or any interest therein without the prior written consent of the
Company and any purported Transfer in the absence of such written consent shall
be void for all purposes. Notwithstanding the foregoing, at any time following
the one year anniversary of the Closing Date, any HMTF Entity may Transfer its
Acquired Securities to any of its Affiliates, provided that such Affiliate
agrees in writing with the Company to be bound hereby with the same effect as if
were named herein in lieu of the HMTF Entities (it being understood that
Distributions effected after the second anniversary of the Closing Date shall be
subject to Section 8.01(d) and not this sentence).
(b) Unless Transferred pursuant to an effective registration
statement, each certificate representing Acquired Securities shall bear a legend
substantially in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE (A) HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS
UNLESS SUCH TRANSFER, PLEDGE OR HYPOTHECATION IS PERMITTED
PURSUANT TO RULE 144 UNDER THE ACT OR ANOTHER EXEMPTION
FROM REGISTRATION UNDER THE ACT AND AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY IS DELIVERED TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED AND (B) ARE SUBJECT TO TRANSFER RESTRICTIONS AS
SET FORTH IN THE STOCK EXCHANGE AGREEMENT, DATED MAY 2,
2001 BY AND AMONG THE COMPANY, IDT CORPORATION, IDT
AMERICA CORP., IDT VENTURES INC., HM4 TELIGENT QUALIFIED
FUND, LLC, HM4 TELIGENT PRIVATE FUND, LLC, HM 4-SBS
TELIGENT COINVESTORS, LLC, HM PG-IV TELIGENT, LLC, HM 4-EQ
TELIGENT COINVESTORS, LLC, AND LLC, HM4 ICG QUALIFIED
FUND, LLC, HM4 ICG PRIVATE FUND, LLC, HM PG-IV ICG, LLC,
HM 4-SBS ICG COINVESTORS, LLC, AND HM 4-EQ ICG
COINVESTORS, LLC, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY."
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(c) Except as set forth in Section 8.01(a)(i), no HMTF Entity (in
such capacity, a "Transferor") may sell, assign, dispose of or transfer any
Series B Preferred Stock, Class B Common Stock or the proceeds of any sale,
transfer or disposition of either, to any Affiliate of such HMTF Entity (the
"Affiliate Transferee") unless such Affiliate Transferee shall have executed and
delivered an instrument, in form and substance reasonably satisfactory to the
Company, in which such Affiliate Transferee agrees to be bound by this Agreement
(including without limitation Article XI) as if it were a signatory hereto;
provided, however, that, for the avoidance of any doubt, in the event of a
Distribution, no such instrument shall be required, the transferee shall not be
liable hereunder with respect to the distributed assets as a result of such
Distribution and the distributed assets shall no longer be deemed held by the
transferring HMTF Entity (and no proceeds shall be deemed to have resulted
therefrom) for purposes of Section 11.05).
(d) Notice. In the event that, after the second anniversary of the
Closing Date, any of the HMTF Entities or any Affiliate Transferee (each a
"Transferring Entity"), proposes to transfer or Distribute any of such
Transferring Entity's Series B Preferred Stock or Class B Common Stock to a
non-Affiliate transferee (other than pursuant to Section 8.01(a)(i)), such
Transferring Entity shall give written notice (a "Transfer Notice") to the
Company of such Transferring Entity's intention to transfer or Distribute such
number of shares of Series B Preferred Stock or Class B Common Stock as are set
forth on the Transfer Notice (the "Offered Securities"). Within 15 days after
receipt of a Transfer Notice, the Company shall give a written notice to the
Transferring Entity stating whether it wishes to purchase the Offered Securities
and, if it does, the Company shall also state its initial determination of the
fair market value for the Company and its proposed purchase price for such
Offered Securities based on such fair market value. If the Company (i) states
that it does not wish to purchase the Offered Securities, (ii) fails to give
such notice by the end of such 15-day period, (iii) gives such notice but fails
to include a proposed fair market value and proposed purchase price for the
Offered Securities or (iv) fails to give a Company Purchase Notice in accordance
with Section 8.01(e), the Company will be deemed to have consented to the sale
or Distribution of the Offered Securities and such Transferring Entity shall be
able to freely transfer or Distribute the Offered Securities to a non-Affiliate
transferee for a period of 75 days from such deemed consent. No more than two
Transfer Notices for all the HMTF Entities in the aggregate may be given in any
calendar year.
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(e) Company Notice. If the Company delivers written notice in
compliance with the requirements of Section 8.01(d), for a period of 30 days
after receipt of the Company's Notice, the parties shall negotiate in good faith
to reach a mutually acceptable determination of the fair market value of the
Company and the purchase price of the Offered Securities. On or before the end
of such 30-day period, the Company shall notify the Transferring Entity in
writing of its final determination of the fair market value for the Company and
its final purchase price for all the Offered Securities which notice shall
constitute a binding, written offer irrevocable for 15 days to purchase all the
Offered Securities at that price (the "Company Purchase Notice").
(f) Closing. Within 15 days after delivery of the Company Purchase
Notice, the Transferring Entity shall give the Company written notice as to
whether it accepts the offer stated in the Company Purchase Notice. The offer
stated in the Company Purchase Notice may be accepted or rejected only in full
and not in part. If the Transferring Entity accepts the offer stated in the
Company Purchase Notice, each of the parties shall use its reasonable efforts to
obtain all consents and approvals, including from Governmental Entities, if any,
required to effect the purchase and sale of the Offered Securities at the price
stated therein. Unless the parties failed to receive all required consents and
approvals, the closing of the purchase and sale of the Offered Securities to the
Company pursuant to this Section 8.01 (f) shall take place at such location and
on such date, within 10 days of the date of such Transferring Entity's
acceptance of the Company's offer, subject to an extension if necessary to
comply with any Applicable Law, as shall be agreed by the Transferring Entity
and the Company. At any such closing, (i) the Transferring Entity shall deliver
to the Company certificates representing the Offered Securities being purchased,
registered in the name of the Transferring Entity and duly endorsed in favor of
the Company, free of all Encumbrances other than those resulting solely from the
actions of the Company, against payment of the applicable purchase price by wire
transfer of same day funds, and (ii) the Transferring Entity shall give
customary representations and warranties.
(g) If the Transferring Entity does not accept the offer stated in
the Company Purchase Notice in writing within the 15-day period or prior to the
expiration of such period rejects such offer in writing, the Transferring Entity
may, at its sole option, transfer the Offered Securities to any Person or
Persons (acting individually or as a group) for a purchase price resulting in
proceeds to the Transferring Entity in excess of what would have been receivable
under the offer set forth in the Company Purchase Notice; provided, however,
that such transfer is completed within 75 days from delivery of the Company
Purchase Notice.
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(h) Payment in Common Stock. The Company shall have the right to pay
for the Offered Securities, at its sole option, in shares of Class B Common
Stock of IDTC, with such Class B Common Stock of IDTC to be registered under the
Securities Act not later than 180 days from the date of issuance thereof, and
valued as set forth in Section 7C(d) of the Certificate of Designation with
respect to the Series B Preferred Stock. The Company shall use its commercially
reasonable efforts to cause the registration contemplated by the immediately
preceding sentence to be completed as promptly as practicable. If the Company
elects to make payment in shares of Class B Common Stock of IDTC, the Company
shall pay to the Transferring Entity an additional amount in cash equal to the
applicable purchase price contemplated by subsection (f) above times 11.5 % per
annum compounding daily for the period from the date of issuance of such shares
of Class B Common Stock of IDTC until such registration is completed.
ARTICLE IX
DELIVERIES AT CLOSING
SECTION 9.01 Deliveries by the Company at the Closing. At the
Closing, the Company shall deliver, or shall cause to be delivered:
(a) to the HMTF Teligent Entities a certificate or certificates
representing an aggregate of 10,007 shares of Series B Preferred Stock, each
such certificate issued in such name or names and in such denominations as
specified by the HMTF Teligent Entities; and
(b) to the HMTF ICG Entities a certificate or certificates
representing an aggregate of 8,188 shares of Series B Preferred Stock, each such
certificate issued in such name or names and in such denominations as specified
by the HMTF ICG Entities.
SECTION 9.02 Deliveries by the HMTF Teligent Entities at the
Closing. At the Closing, the HMTF Teligent Entities shall deliver, or shall
cause to be delivered to the Company:
(a) a certificate or certificates representing the Teligent Shares
and a stock power or stock powers, duly executed in blank, sufficient to
transfer the Teligent Shares to the Company;
(b) a writing evidencing the assignment to the Company by the HMTF
Teligent Entities of the HMTF Teligent Entities' rights under the Teligent
Registration Rights Agreement; and
(c) a writing evidencing transfer to the Company by the HMTF
Teligent Entities of the Stock Rights associated with the Teligent Shares to the
fullest extent that such Stock Rights may be transferred to the Company without
violation of Applicable Law or the documents under which such rights were
granted.
22
SECTION 9.03 Deliveries by the HMTF ICG Entities at the Closing. At
the Closing, the HMTF ICG Entities shall deliver, or cause to be delivered to
the Company:
(a) a certificate representing the ICG Shares and a stock power or
stock powers, duly executed in blank, sufficient to transfer the ICG Shares to
the Company;
(b) the ICG Warrants and duly executed instruments of transfer
sufficient to transfer the ICG Warrants to the Company;
(c) a writing evidencing the assignment to the Company by the HMTF
ICG Entities of the HMTF ICG Entities' rights under the ICG Registration Rights
Agreement; and
(d) a writing evidencing transfer to the Company by the HMTF ICG
Entities of the Stock Rights associated with the ICG Shares and the ICG Warrants
to the fullest extent that such Stock Rights may be transferred to the Company
without violation of Applicable Law or the documents under which such rights
were granted.
ARTICLE X
SECTION 10.01 Termination of the Agreement. Anything herein to the
contrary notwithstanding, this Agreement and the transactions contemplated
hereby may be terminated in any of the following ways at any time before the
Closing and in no other manner:
(a) By mutual written consent of the parties to this Agreement, or
(b) By any party to this Agreement, if the Closing has not occurred
on or before 30 days from the date hereof; provided, however, that party seeking
to terminate this Agreement may not terminate this Agreement pursuant to this
Section 10.01(b), if the Closing has not occurred by such date solely as a
result of the failure of such party to perform any of its obligations under this
Agreement.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
SECTION 11.01 Survival. The representations and warranties contained
in this Agreement, and the rights of the parties to seek indemnification with
respect thereto, shall survive the execution and delivery of this Agreement, and
the Closing hereunder, regardless of any investigation made by the parties
hereto or by any Person on their behalf for a period of one year following the
Closing Date, provided that the representations and warranties contained in
Sections 4.11, 4.14, 4.15 and 4.16 hereof, and the right of any Company
Indemnified Party to seek indemnification with respect thereto, shall survive
the Closing and shall terminate and expire thereafter on the lapse of the
applicable statute of limitations (including any extensions thereof) with
respect to the relevant Tax; provided further that all covenants requiring
performance subsequent to the Closing (including without limitation Section 5.02
hereof) shall survive the Closing for so long as such covenants are applicable.
23
SECTION 11.02 Indemnity by the Company. The Company hereby agrees to
indemnify and hold harmless, on an after-Tax basis, each of the HMTF Entities
and their respective directors, officers, partners, managers, members,
employees, Affiliates, successors and assigns (each an "Acquiror Indemnified
Party") from and against:
(a) any and all damages, losses, Taxes, liabilities, claims,
judgments, penalties, costs and expenses (including amounts paid in
investigation or settlement and reasonable attorneys' fees, expert fees and
litigation expenses) direct or indirect, known or unknown, foreseeable or
unforeseeable (collectively, "Losses"), resulting to any Acquiror Indemnified
Party from or in connection with any breach of a representation or warranty
contained in this Agreement, or in any certificate delivered in connection
herewith, of the Company; and
(b) any and all Losses incurred or suffered by any Acquiror
Indemnified Party and based upon, attributable to or resulting from the breach
or nonfulfillment of any agreement, covenant or condition on the part of the
Company or contained in this Agreement.
SECTION 11.03 Indemnity by the HMTF Entities. Each of the HMTF
Entities, severally and not jointly, hereby agrees to indemnify and hold
harmless, on an after-Tax basis, the Company and its directors, officers,
partners, managers, members, employees, Affiliates, successors and assigns (each
a "Company Indemnified Party") from and against:
(a) any and all Losses, resulting to any Company Indemnified Party
from or in connection with any breach of a representation or warranty contained
in this Agreement, or in any certificate delivered in connection herewith, of
such HMTF Entity; and
(b) any and all Losses incurred or suffered by any Company
Indemnified Party and based upon, attributable to or resulting from the breach
or nonfulfillment of any agreement, covenant or condition (other than Section
6.01(d)) on the part of such HMTF Entity contained in this Agreement.
SECTION 11.04 Indemnification Procedures. (a) In the event that
any third-party judicial, administrative or arbitral action, suit, proceeding
(public or private), claim or governmental proceeding (collectively, "Legal
Proceedings") shall be instituted or any third-party claim or demand ("Claim")
shall be asserted by any Person in respect of which payment may be sought under
Article XI hereof, the Company Indemnified Party or Acquiror Indemnified Party,
as the case may be (in either case referred to herein generally as an
"Indemnified Party"), shall promptly cause written notice of the assertion of
any Claim of which it has knowledge which is covered by this indemnity to be
forwarded to the party from whom the Indemnified Person seeks indemnity (the
24
"Indemnifying Party"). The Indemnifying Party shall have the right, at its sole
option and expense, to be represented by counsel of its choice, which counsel
must be reasonably satisfactory to the Indemnified Party, and to assume the
defense of, negotiate, settle or otherwise deal with any Claim which relates to
any Losses indemnified against hereunder. If the Indemnifying Party elects to
assume the defense of, negotiate, settle or otherwise deal with any Claim which
relates to any Losses indemnified against hereunder, the Indemnifying Party
shall within fifteen (15) Business Days of receipt of written notice of the
assertion of a Claim notify the Indemnified Party of its intent to do so. If the
Indemnifying Party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnified against hereunder or
fails to notify the Indemnified Party of its election as herein provided or
contests its obligation to indemnify the Indemnified Party for such Losses under
this Agreement, the Indemnified Party may defend against, negotiate, settle or
otherwise deal with such Claim. In such event, if the Indemnified Party defends
any Claim, then the Indemnifying Party shall reimburse the Indemnified Party for
the reasonable expenses of defending such Claim (including attorneys' fees) upon
submission of periodic bills. If the Indemnifying Party shall assume the defense
of any Claim, the Indemnified Party may participate, at his or its own expense,
in the defense of such Claim; provided, however, that such Indemnified Party
shall be entitled to participate in any such defense with separate counsel at
the expense of the Indemnifying Party if, (i) so requested by the Indemnifying
Party to participate or (ii) in the opinion of counsel to the Indemnifying
Party, a conflict or potential conflict exists between the Indemnified Party and
the Indemnifying Party that would make such separate representation required.
The parties hereto agree to cooperate fully with each other in connection with
the defense, negotiation or settlement of any such Claim. No Indemnified Party
shall have the right, without the Indemnifying Party's prior written consent
(which consent will not be unreasonably withheld or delayed), to settle,
compromise or consent to the entry of any judgment in any Claim in respect of
which indemnification may be sought under Article XI hereof.
(b) The failure of the Indemnified Party to give reasonably prompt
notice of any Claim shall not release, waive or otherwise affect the
Indemnifying Party's obligations with respect thereto except to the extent that
the Indemnifying Party is materially prejudiced as a result of such failure.
SECTION 11.05 Limitation on Liability. (a) The parties hereto
acknowledge that each HMTF Entity's maximum aggregate liability under this
Article XI shall not exceed, and shall be satisfied solely by delivery of, (A)
the shares of Series B Preferred Stock and/or the Class B Common Stock then held
by such HMTF Entity and (B) the proceeds (whether in the form of cash or
securities or otherwise) received upon sale, transfer, exchange or other
disposition of shares of Series B Preferred or Class B Common Stock to the
extent then held by such HMTF Entity (the "Proceeds"); provided, however, that
to the extent that such HMTF Entity no longer holds the assets referred to in
(A) or (B) above but holds other assets, then such other assets shall also be
available to satisfy any such liability under this Article XI; provided further,
however, that in the event referred to in the preceding proviso such HMTF
Entity's maximum aggregate liability under this Article XI shall not exceed the
lesser of (1) the value of such other assets then held and (2) the amount of the
Proceeds, and shall be satisfied solely by delivery of such other assets then
25
held. Under no circumstances shall any HMTF Entity have any liability whatsoever
in respect of any Losses if and to the extent that such HMTF Entity does not
hold assets that are available to satisfy such Losses in accordance with this
Section 11.05. Notwithstanding the immediately preceding sentence, in the event
that (i) a Claim shall have been made against an HMTF Entity under this Article
XI and shall have resulted in the payment by such HMTF Entity of an amount less
than the Losses finally determined to have been caused by such HMTF Entity
because of the operation of this Section 11.05 (i.e., because of the amount of
available assets), and (ii) such HMTF Entity subsequently acquires other assets
or reacquires any assets or any shares of Class B Common Stock or Series B
Preferred Stock, nothing in this Section 11.05 shall preclude the Indemnified
Party from bringing a new Claim for the amount of unsatisfied Losses, subject to
the provisions of this Section 11.05 (i.e., limited to the extent of such new or
reaquired assets or securities).
SECTION 11.06 Exclusive Remedy. Each of the parties hereto agrees
that, from and after the Closing, its sole and exclusive remedies with respect
to any and all claims against any other party relating to the subject matter of
this Agreement shall be pursuant to this Article XI or Section 13.09 hereof.
ARTICLE XII
SECTION 12.01 Registration Rights. (a) Piggyback Rights. Subject to
Section 12.01 (c), if at any time after consummation of an IPO the Company
determines that it shall file a registration statement under the Securities Act
(which, for avoidance of doubt, shall not include the registration statement in
connection with the IPO) for the registration of any class of the Company's
common stock for its own account or for the account of another Person (other
than a registration statement on Form S-4 or S-8 (or successor form) or filed in
connection with an exchange offer or an offering of securities solely to the
Company's existing stockholders), the Company shall each such time promptly give
each HMTF Entity (the "Piggyback Holders") written notice of such determination
setting forth the date on which the Company proposes to file such registration
statement, which date shall be not less than 30 nor more than 60 calendar days
from the date of such notice, and advising each Piggyback Holder of its right to
have its Class B Common Stock included in such registration. Upon the written
request of any Piggyback Holder received by the Company no later than 15
calendar days after the date of the Company's notice (such Piggyback Holder, a
"Participating Stockholder"), the Company shall use its commercially reasonable
efforts to cause to be registered under the Securities Act all of the Class B
Common Stock that such Piggyback Holder has so requested to be registered on the
same terms and conditions as the other securities being registered (the
"Piggyback Registration Right"). If, in the good faith opinion of the managing
underwriter (or, in the case of a non-underwritten offering, in the good faith
opinion of the placement agent, or if there is none, the Company), the total
amount of such securities to be so registered, including the Class B Common
Stock owned by the Piggyback Holders, will exceed the maximum amount of the
Company's securities which can be marketed (i) at a price reasonably related to
the then current market value of such securities or (ii) without otherwise
materially adversely affecting the entire offering, then the Company shall be
entitled to reduce, pro rata, the number of shares of Class B Common Stock owned
by each Piggyback Holder to be so registered based on the ratio that such
Holder's requested shares bears to the total number of shares requested to be
included in such piggyback registration by all Persons other than the Company
who have the contractual right to request that their shares be included in such
registration statement and who have requested that their shares be included.
26
(b) Participating Stockholder Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Article 12 that the Participating Stockholders shall furnish to the Company such
information regarding themselves, the Class B Common Stock held by them, and the
intended method of disposition of such Class B Common Stock as the Company shall
reasonably request and as shall be required in connection with the action to be
taken by the Company.
(c) Reasonable Terms. In connection with any underwritten offering, the
Company shall not be required under this Article 12 to include any Class B
Common Stock owned by any Participating Stockholder other than on the terms of
the underwriting of such offering that have been reasonably agreed upon between
the Company and the underwriters; provided, that, in any such underwriting the
Company and all Participating Stockholders, subject to the other provisions
hereof, shall be treated substantially similarly.
(d) Private Sale. Notwithstanding any other provisions of this Article
XII, the Company shall not be required to register the Class B Common Stock of
any Participating Stockholder if, in the reasonable opinion of counsel to the
Company, the sale or other disposition of such Participating Stockholder's Class
B Common Stock, in the manner proposed by such Participating Stockholder may be
effected without restriction under Rule 144.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Successors and Assigns. This Agreement may not be
assigned by any party without the prior written consent of each other party
hereto and any attempted or purported assignment without such consent shall be
void. Nothing in this Agreement, express or implied, is intended to confer upon
any Person, other than the parties hereto or their respective successors and
permitted assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.
SECTION 13.02 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Delaware without giving effect to conflicts of law
principles of such state. Each of the Company, and the HMTF Entities hereby
submits to the nonexclusive jurisdiction of the Chancery Court, Newcastle
County, Delaware for purposes of all legal proceedings arising out of or
relating to this Agreement and the transactions contemplated hereby. Each of the
Company and the HMTF Entities irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
27
SECTION 13.03 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, and all of
which together shall be deemed to constitute one and the same instrument.
SECTION 13.04 Captions and Headings. The captions and headings used
in this Agreement are for convenience only and are not to be considered in
construing or interpreting this Agreement.
SECTION 13.05 Notices. Unless otherwise provided, any notice or
other communication required or permitted to be given or effected under this
Agreement shall be in writing and shall be deemed effective upon personal or
facsimile delivery to the party to be notified or one business day after deposit
with an internationally recognized overnight courier service, delivery fees
prepaid, or three business days after the deposit with the U.S. mail, return
receipt requested, postage prepaid, and in each case, addressed to the party to
be notified at the following respective addresses, or at such other addresses as
may be designated by written notice; provided that any notice of change of
address shall be deemed effective only upon receipt:
If to the Company, IDTC, IDTA OR IDTV, to such party at:
0000X Xxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
IDT Corporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: President
Fax: (000) 000-0000
and also to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxx
Fax: (000) 000-0000
28
If to the HMTF Entities, to such party at:
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
with a copy to
Xxxxxx & Xxxxxx L.L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx
Fax: 000-000-0000
SECTION 13.06 Amendments and Waivers. The terms of this Agreement
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of all of the parties hereto.
SECTION 13.07 Severability. If one or more provisions of this
Agreement are held to be unenforceable under Applicable Law, such provisions
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
SECTION 13.08 Entire Agreement. This Agreement constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and discussions between them.
SECTION 13.09 Specific Enforcement. The parties hereto agree that
irreparable harm would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
SECTION 13.10 Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 13.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THIS SECTION 13.11 HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH
PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.
29
SECTION 13.12 No Affiliate Liability. Except to the extent that any
such Person shall have executed and delivered an instrument in which such Person
shall have agreed to be bound by this Agreement, no Affiliate of any of the HMTF
Entities shall have any liability or obligation of any nature whatsoever in
connection with or under this Agreement or the transactions contemplated hereby,
and the Company hereby waives and releases all claims of any such liability and
obligation, it being understood that no such Person or entity (other than each
such HMTF Entity) shall be liable for or in respect of this Agreement or the
transactions contemplated hereby.
SECTION 13.13 Several Liability of the HMTF Entities. Nothing in
this Agreement shall be construed to impose on any HMTF Entity any liability for
any action or failure to act of any other HMTF Entity, including the breach of
this Agreement by any such other HMTF Entity; provided, however, that nothing in
this Section 13.13 shall be construed to limit the liability of any HMTF Entity
for a breach of its representations, warranties or covenants hereunder with
respect to any other Person.
[Signatures on the following page.]
30
IN WITNESS WHEREOF, the parties have executed this Stock
Exchange Agreement as of the date first above written.
IDT INVESTMENTS INC.
By: /s/ Xxxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxxx Xxxx
Title: Treasurer and Secretary
IDT CORPORATION
solely for purposes of
Sections 5.02, 5.03, 5.04,
5.05, 5.06 and Article XIII
and acknowledging the
registration rights
contemplated by Section
8.01(h)
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Secretary
IDT AMERICA, CORP.
solely for purposes of Sections 5.02, 5.03, 5.04,
5.05, 5.06 and Article XIII
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Secretary
IDT VENTURES INC.
solely for purposes of Sections 5.02, 5.03, 5.04,
5.05, 5.06 and Article XIII
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Secretary
HM4 TELIGENT QUALIFIED FUND, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM4 TELIGENT PRIVATE FUND, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM 4-SBS TELIGENT COINVESTORS, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM PG-IV TELIGENT, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM 4-EQ TELIGENT COINVESTORS, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM4 ICG QUALIFIED FUND, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM4 ICG PRIVATE FUND, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM PG-IV ICG, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM 4-SBS ICG COINVESTORS, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM 4-EQ ICG COINVESTORS, LLC
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
