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EXHIBIT 10.1
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STOCK PURCHASE AGREEMENT
BY AND AMONG
TELIGENT, INC.
AND
THE PURCHASERS LISTED ON SCHEDULE I HERETO
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Dated as of
November 4, 1999
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This STOCK PURCHASE AGREEMENT is dated as of November 4, 1999 (this
"Agreement"), by and among Teligent, Inc., a Delaware corporation (the
"Company"), and each of the purchasers listed on Schedule I hereto
(individually, a "Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company proposes, subject to the terms and conditions set
forth herein, to issue and sell to the several Purchasers 500,000 Shares of its
7-3/4% Series A Convertible Preferred Stock, liquidation preference $1,000 per
share, par value $0.01 per share (the "Series A Preferred Stock"); and
WHEREAS, the Purchasers desire, subject to the terms and conditions set
forth herein, to purchase such Series A Preferred Stock from the Company;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows.
ARTICLE I
DEFINITIONS
(a) As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For the purposes of this definition and the
definition of "HMTF Purchaser", "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Law" means (a) any United States federal, state, local or
foreign law, statute, rule, regulation, order, writ, injunction, judgment,
decree or permit of any Governmental Authority and (b) any rule or listing
requirement of any applicable national stock exchange or listing requirement of
any national stock exchange or Commission recognized trading market on which
securities issued by the Company or any of the Subsidiaries are listed or
quoted.
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"Business Day" means any day other than a Saturday, a Sunday, the day after
Thanksgiving or a day when banks in The City of New York are authorized by
Applicable Law to be closed.
"Capital Stock" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock and (ii) with respect to any other
Person, any and all partnership or other equity interests of such Person.
"Certificate of Designation" means the Certificate of Designation of the
Powers, Preferences and Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and Restrictions thereof relating to the
Series A Preferred Stock, in the form attached hereto as Exhibit A.
"Commission" means the United States Securities and Exchange Commission.
"Commission Filings" means all reports, registration statements and other
filings filed by the Company with the Commission (and all notes, exhibits and
schedules thereto and documents incorporated by reference therein).
"Common Stock" means the Class A common stock, par value $0.01 per share,
of the Company.
"Contract" means any contract, lease, loan agreement, mortgage, security
agreement, trust indenture, note, bond, or other agreement (whether written or
oral) or instrument.
"Conversion Shares" means the shares of Common Stock issuable upon the
conversion of the Series A Preferred Stock in accordance with the terms of the
Certificate of Designation.
"Equity Documents" means this Agreement, the Registration Rights Agreement,
the Certificate of Designation and the Management Rights Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, and the rules and
regulations of the Commission promulgated thereunder.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
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"Governmental Authority" means (i) any foreign, Federal, state or local
court or governmental or regulatory agency or authority, (ii) any arbitration
board, tribunal or mediator and (iii) any national stock exchange or Commission
recognized trading market on which securities issued by the Company or any of
the Subsidiaries are listed or quoted.
"HMTF" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a Texas corporation.
"HMTF Funds" means both HMTF Equity Fund IV, L.P. and HMTF Private Equity
Fund IV, L.P.
"HMTF Group" means HMTF and its Affiliates and their respective officers,
directors, partners, members, stockholders and employees (and members of their
respective families and trusts for the primary benefit of such family members),
and HMTF Purchaser and its Affiliates.
"HMTF Purchaser" means any one or more of the following: (i) HMTF-IV
Acquisition Corp. (but only for so long as it is controlled by a member of the
HMTF Group), (ii) HM4 Teligent Qualified Fund, LLC (but only for so long as it
is controlled by HMTF Equity Fund IV (1999), L.P. or another member of the HMTF
Group), (iii) HM4 Teligent Private Fund, LLC (but only for so long as it is
controlled by HMTF Private Equity Fund IV (1999), L.P. or another member of the
HMTF Group), (iv) HM PG-IV Teligent, LLC ( but only for so long as it is
controlled by Xxxxx, Muse PG-IV (1999), C.V. or another member of the HMTF
Group), (v) HM 4-SBS Teligent Coinvestors, LLC (but only for so long as it is
controlled by HM 4-SBS (1999) Coinvestors, L.P. or another member of the HMTF
Group), (vi) HM 4-EQ Teligent Coinvestors, LLC (but only for so long as it is
controlled by HM 4-EQ (1999) Coinvestors, L.P. or another member of the HMTF
Group), and (vii) HM NE Teligent, LLC (but only for so long as it is controlled
by HM New Economy, L.P. or another member of the HMTF Group).
"HMTF Shares" means the HMTF Issued Series A Preferred Shares held by
members of the HMTF Group plus the shares of Common Stock issued to and held by
members of the HMTF Group upon conversion of the HMTF Issued Series A Preferred
Shares.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and applicable rules and regulations.
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"Lien" means any mortgage, pledge, lien, security interest, claim,
restriction, charge or encumbrance of any kind.
"Material Adverse Effect" means a material adverse effect on the condition
(financial or otherwise), business, assets or results of operations of the
Company and the Subsidiaries, taken as a whole.
"Microsoft" means Microsoft Corporation, a Washington corporation.
"Olympus Funds" means Olympus Growth Fund III, L.P. and Olympus Executive
Fund, L.P.
"Permitted Transferee" means, with respect to any Purchaser, or any
Permitted Transferee of any Purchaser, (i) any Purchaser Affiliate of such
Purchaser that is not a holder of common stock of the Company on the date hereof
or an affiliate of such holder; and (ii) any person that is a member of the HMTF
Group and any person investing, directly or indirectly, in or in parallel with
any member of the HMTF Group; provided, however, that each Permitted Transferee
must agree in writing pursuant to a Permitted Transferee Agreement, in
accordance with the provisions of Section 6.5, to be bound by the terms, and
subject to the conditions, of this Agreement to the same extent, and in the same
manner, as the transferring Purchaser prior to the transfer of any Shares to
such Permitted Transferee; and provided, further, that the transfer of Shares
from such Purchaser to such Permitted Transferee is in compliance with all
applicable securities laws.
"Person" means any individual, partnership, corporation, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or agency or political subdivision thereof, or other
entity.
"Purchaser Affiliate" means (a) any direct or indirect holder of any equity
interests or securities in any Purchaser (whether limited or general partners,
members, stockholders or otherwise), (b) any Affiliate of any Purchaser or (c)
any director, officer, employee, representative or agent of (i) such Purchaser,
(ii) any Affiliate of such Purchaser or (iii) any holder of equity interests or
securities referred to in clause (a) above.
"Registration Rights Agreement" means the Registration Rights Agreement, to
be dated as of the Closing
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Date, to be entered into by and among the Company and the Purchasers, in the
form attached hereto as Exhibit B.
"Securities Act" means the Securities Act of 1933, and the rules and
regulations of the Commission promulgated thereunder.
"Series A Preferred Stock" has the meaning set forth in the first recital
to this Agreement. The Series A Preferred Stock has the designation, powers,
preferences and rights, and qualifications, limitations and restrictions thereof
set forth in the Certificate of Designation.
"Shares" means the shares of Series A Preferred Stock to be issued and sold
by the Company to the Purchasers pursuant to Section 2.1 hereof.
"subsidiary" means, with respect to any Person (i) a corporation a majority
of whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such Person, by a
subsidiary of such Person, or by such Person and one or more subsidiaries of
such Person, (ii) a partnership in which such Person or a subsidiary of such
Person is, at the date of determination, a general partner of such partnership
and has the power to direct the policies and management of such partnership or
(iii) any other Person (other than a corporation) in which such Person, a
subsidiary of such Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination thereof, has (A) at
least a majority ownership interest or (B) the power to elect or direct the
election of the directors or other governing body of such Person.
"Subsidiary" means a subsidiary of the Company.
"Transactions" means the transactions contemplated by this Agreement.
(b) As used in this Agreement, the following terms shall have the meanings
given thereto in the Sections set forth opposite such terms:
Term Section
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Agreement Preamble
Class B Common Stock 3.2(a)
Class B-Series 1 Common Stock 3.2(a)
Class B-Series 2 Common Stock 3.2(a)
Class B-Series 3 Common Stock 3.2(a)
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Term Section
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Closing 2.2
Closing Date 2.2
Company Preamble
DGCL 3.2(d)
HMTF Director 5.2
HMTF Issued Series A Preferred Shares 5.2
Indemnified Party 8.1(c)
indemnified person 8.1(b)
Indemnifying Party 8.1(c)
Information 3.7
Issuance 2.1
Losses 8.1(b)
Management Rights Agreement 2.2(d)
Notices 8.2
Permitted Transferee Agreement 6.5
Projections 3.7
Purchaser; Purchasers Preamble
Purchase Price 2.1
Share Transfer 6.5
Supplying Purchasers 8.18
ARTICLE II
SALE AND PURCHASE
SECTION 2.1. Agreement to Sell and to Purchase; Purchase Price. On the
Closing Date, and upon the terms and subject to the conditions set forth in this
Agreement, the Company shall issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, shall purchase and accept from the
Company, such number of Shares as is set forth opposite such Purchaser's name on
Schedule I hereto (the "Issuance"), for a purchase price, payable by wire
transfer of immediately available funds to a bank account or bank accounts
designated by the Company described in Section 2.2(a)(i), equal to $1,000 per
Share (the "Purchase Price").
SECTION 2.2. Closing. The closing of the Issuance to each Purchaser (the
"Closing") shall take place on a date to be specified by the Company and such
Purchaser, which shall be no later than the later of (A) the 2nd Business Day
after the date as of which all of the conditions set forth in Article VII hereof
shall have been satisfied as to the purchase by the HMTF Purchaser and the
purchase by the Olympus Funds (or, to the extent permitted, waived by the party
or parties entitled to the benefit
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thereof) and (B) 15 Business Days after the date hereof or at such other time
and date as the parties hereto shall agree in writing (such date and time, the
"Closing Date"), at the offices of Cravath, Swaine & Xxxxx, located at 000
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as the parties
hereto shall agree in writing. At such time as a Purchaser and the Company shall
have satisfied all the conditions set forth in Article VII, if the Company
elects, such Purchaser and the Company shall close separately on such date (it
being understood that the timing of the closing with respect to the HMTF
Purchaser shall be governed solely by the preceding sentence, without giving
effect to the matters therein relating to the Olympus Funds).
At the Closing with respect to each Purchaser:
(a) Such Purchaser shall deliver:
(i) against delivery of a certificate or certificates representing the
Shares being purchased by such Purchaser pursuant to Section 2.1, an amount
equal to the aggregate Purchase Price of such Shares via wire transfer of
immediately available funds to such bank account as the Company shall
designate not later than two Business Days prior to the Closing Date; and
(ii) a copy of the Registration Rights Agreement executed by such
Purchaser.
(b) The Company shall deliver to such Purchaser:
(i) against payment of the Purchase Price therefor, a certificate or
certificates representing the Shares being purchased by such Purchaser
pursuant to Section 2.1, which shall be in definitive form and registered
in the name of such Purchaser or its nominee or designee and in a single
certificate or in such other denominations as such Purchaser shall request
not later than two Business Days prior to the Closing Date;
(ii) an opinion of counsel to the Company, dated the Closing Date,
covering such matters as are customarily covered by such opinions, in form
and substance reasonably acceptable to the Purchasers;
(iii) an officer's certificate of the Company as contemplated by
Section 7.2(g);
(iv) a certificate of the secretary of the Company covering such
matters as are customarily covered by
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such certificates, in form and substance reasonably acceptable to the
Purchasers;
(v) a long-form good standing certificate of the Company issued by the
Secretary of State of the State of Delaware; and
(vi) a copy of the Registration Rights Agreement executed by the
Company.
(c) The Company shall deliver to each Purchaser (or its designee) a
transaction fee equal to 2% of the Purchase Price of the Shares purchased by
such Purchaser, in immediately available funds by wire transfer to an account
designated by such Purchaser at least two Business Days prior to the Closing
Date.
(d) The Company shall deliver to each of the HMTF Funds and the
Olympus Funds a letter in the form of Exhibit C-1 and C-2, respectively,
executed by the Company (the "Management Rights Agreement").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby represents and warrants to each Purchaser on the
date hereof and on and as of the Closing Date as follows:
SECTION 3.1. Organization and Standing. Each of the Company and the
material domestic Subsidiaries is duly incorporated, validly existing and in
good standing under the laws of its state of incorporation and has all requisite
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted and as proposed to be conducted. Each
of the Company and the material domestic Subsidiaries is duly qualified to
transact business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
the nature of its business makes such qualification necessary, except for any
such failures to so qualify or be in good standing that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has delivered to Purchaser true and complete copies of the Company's
Certificate of Incorporation, as amended to date, and By-laws, as in effect on
the date hereof.
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SECTION 3.2. Capital Stock. (a) As of the date of this Agreement, the
authorized Capital Stock of the Company consists solely of (i) 200,000,000
shares of Common Stock, of which 9,685,232 shares are issued and outstanding,
(ii) 65,000,000 shares of Class B common stock, par value $0.01 per share (the
"Class B Common Stock"), consisting of three Series: (A) 30,000,000 shares of
Class B Common Stock designated as Series 0 (xxx "Xxxxx X-Xxxxxx 0 Xxxxxx
Xxxxx"), (X) 25,000,000 shares of Class B Common Stock designated as Series 2
(the "Class B-Series 2 Common Stock") and (C) 10,000,000 shares of Class B
Common Stock designated as Series 3 (the "Class B-Series 3 Common Stock"), of
which 21,436,689 shares of Class B-Series 1 Common Stock, 17,206,210 shares of
Class B-Series 2 Common Stock and 5,783,400 shares of Class B-Series 3 Common
Stock are issued and outstanding, and (iii) 10,000,000 shares of preferred
stock, par value $0.01 per share, of which, prior to the issuance of the Shares
on the Closing Date as contemplated by this Agreement, no shares have been
designated and no shares are issued or outstanding. Each share of Capital Stock
of the Company that will be issued and outstanding immediately following the
Closing, including without limitation the Shares, will be duly authorized and
validly issued and 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) Except as set forth on Schedule 3.2, as of the date of this
Agreement, there are (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, and (ii) no
restrictions upon, or Contracts or understandings of the Company or any
Subsidiary, 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 Conversion Shares have been duly authorized and adequately
reserved in contemplation of the conversion of the Series A Preferred Stock and,
when issued and delivered in accordance with the terms of the Certificate of
Designation, will have been 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 any Applicable Law.
(d) The holders of the Series A Preferred Stock will, upon issuance
thereof, have the rights set forth in
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the Certificate of Designation (subject to the limitations and qualifications
set forth therein and under the General Corporation Law of the State of Delaware
(the "DGCL")).
SECTION 3.3. Authorization; Enforceability. The Company has the power
and authority to execute, deliver and perform its obligations under each of the
Equity Documents, and has taken all action necessary to authorize the execution,
delivery and performance by it of each of such Equity Documents and to
consummate the Issuance. No other corporate or stockholder proceeding on the
part of the Company is necessary for such authorization, execution, delivery and
consummation. The Company has duly executed and delivered this Agreement and, at
the Closing, the Company will have duly executed and delivered each of the other
Equity Documents to be executed and delivered at or prior to Closing. This
Agreement constitutes, and each of the other Equity Documents, when executed and
delivered by the Company, will constitute, a legal, valid and binding obligation
of the Company.
SECTION 3.4. No Violation; Consents. (a) The execution, delivery and
performance by the Company of each of the Equity Documents and the consummation
by the Company of the Issuance do not and will not contravene any Applicable
Law, except for any such contravention that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 3.4(a), the execution, delivery and performance by the
Company of each of the Equity Documents and the consummation of the Issuance (i)
will not (A) violate, result in a breach of or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancelation or acceleration) under any Contract to which the
Company is a party or by which the Company is bound or to which any of its
assets is subject, or (B) result in the creation or imposition of any Lien upon
any of the assets of the Company, except for any such violations, breaches,
defaults or Liens that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect and (ii) will not conflict with or
violate any provision of the certificate of incorporation or bylaws or other
governing documents of the Company.
(b) Except for (i) the filings by the Company, if any, required by the
HSR Act, (ii) applicable filings, if any, required by applicable federal and
state securities laws and (iii) filing of the Certificate of Designation with
the Secretary of State of the State of Delaware, in each case, which shall be
made (or are not required to be made)
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on or prior to the Closing Date, no consent, authorization or order of, or
filing or registration with, any Governmental Authority or other Person is
required to be obtained or made by the Company for the execution, delivery and
performance of this Agreement or the consummation by the Company of the
Issuance, or for the execution, delivery and performance by the Company of the
Registration Rights Agreement, except where the failure to obtain such consents,
authorizations or orders, or make such filings or registrations, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or a material adverse effect on the ability of the Company to
consummate the transactions contemplated hereby.
SECTION 3.5. Commission Filings; Financial Statements. (a) The
Company has filed all reports, registration statements and other filings,
together with any amendments or supplements required to be made with respect
thereto, that it has been required to file with the Commission under the
Securities Act and the Exchange Act. As of the respective dates of their filing
with the Commission, the Commission Filings complied in all material respects
with the applicable provisions of the Securities Act and the Exchange Act and
did 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
made therein, in the light of the circumstances under which they were made, not
misleading.
(b) Each of the historical consolidated financial statements of the
Company (including any related notes or schedules) included in the Commission
Filings was prepared in accordance with GAAP (except as may be disclosed
therein), and complied in all material respects with the rules and regulations
of the Commission. Such financial statements fairly present the consolidated
financial position of the Company and the Subsidiaries as of the dates thereof
and the consolidated results of operations, cash flows and changes in
stockholders' equity for the periods then ended (subject, in the case of the
unaudited interim financial statements, to normal, recurring year-end audit
adjustments). Except as set forth or reflected in the Commission Filings filed
prior to the date hereof, the Company does not have any liabilities or
obligations of any nature (whether accrued, absolute, contingent, unasserted or
otherwise) that individually or in the aggregate would be expected to have a
Material Adverse Effect.
SECTION 3.6. Private Offering. Based, in part, on the Purchasers'
representations in Section 4.2, the offer and sale of the Shares is exempt from
the registration and
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prospectus delivery requirements of the Securities Act. Neither the Company, nor
anyone acting on behalf of it, has offered or sold or will offer or sell any
securities, or has taken or will take any other action (including, without
limitation, any offering of any securities of the Company under circumstances
that would require, under the Securities Act, the integration of such offering
with the offering and sale of the Shares), which would subject the Issuance to
the registration provisions of the Securities Act.
SECTION 3.7. Provided Information. To the knowledge of the Company,
all written information (excluding information of a general economic nature and
financial projections) concerning the Company and the Transactions (the
"Information") that has been or will be prepared by or on behalf of the Company
or any of the Company's authorized representatives and that has been made or
will be made available to the Purchasers or any of their authorized
representatives in connection with the Issuance, when taken as a whole, was or
will be, at the time made available, correct in all material respects and did
not or will not, at the time made available, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances under
which such statements are made. All financial projections concerning the Company
and the Issuance (the "Projections") that have been prepared by or on behalf of
the Company or any of the Company's authorized representatives and that have
been or will be made available to the Purchasers or any of their authorized
representatives in connection with the Issuance have been, and at the time made
available will be, reasonably prepared on a basis reflecting the best currently
available estimates and judgments of the Company's management as to the future
financial performance of the Company and the individual business segments
thereof.
SECTION 3.8. Material Adverse Change. Except as disclosed in the
Commission Filings, since June 30, 1999, there has not been any event,
occurrence or development of a state of circumstances or facts that has had, or
could have reasonably been expected to have, (i) a Material Adverse Effect or
(ii) a material adverse effect on the ability of the Company to perform its
obligations under this Agreement.
SECTION 3.9. Litigation. There are not any (a) outstanding judgments
against or affecting the Company or any of the Subsidiaries, (b) proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of the Subsidiaries or (c) investigations by any Governmental
Authority that are,
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to the knowledge of the Company, pending or threatened against or affecting the
Company or any of the Subsidiaries that (i) in any manner challenge or seek to
prevent, enjoin, alter or materially delay the Issuance or (ii) if resolved
adversely to the Company or any Subsidiary, would have, individually or in the
aggregate, a Material Adverse Effect.
SECTION 3.10. Permits and Licenses. The Company and the Subsidiaries
have obtained all governmental permits, licenses, franchises and authorizations
required for the Company and the Subsidiaries to conduct their respective
businesses as currently conducted, except for those of which the failure to
obtain would not have a Material Adverse Effect.
SECTION 3.11. Intellectual Property, etc. Schedule 3.11 sets forth a
true and complete list of all patents, patent applications, trademarks, trade
names, service marks and registered copyrights and make work rights and
applications therefor, if any, owned by or licensed to the Company. All patents,
patent applications, trademarks, mask works, service marks and copyrights of the
Company have been duly applied for or registered and filed with or issued by
each appropriate governmental entity in the jurisdictions indicated on Schedule
3.11, all necessary affidavits of continuing use have been filed and all
necessary maintenance fees have been paid to continue all such rights in effect.
The Company owns or is licensed or otherwise has the right to use, without
payment to any other person except for fees set forth in Schedule 3.11, all
intellectual property used in or necessary for the Company's business, as
presently conducted and as proposed to be conducted. The Company's ownership
and/or use of intellectual property in its business, as presently conducted and
as proposed to be conducted does not conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancelation or acceleration of any obligation or
result in any loss of a material benefit under or the creation of any Lien in or
upon any of the properties or assets of the Company under, any contract between
the Company and any person or any other intellectual property rights of any
other person, except for any such conflict, violation, default, right of
termination, cancelation, acceleration, loss of material benefit or creation of
any Lien which would not have a Material Adverse Effect.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASERS
Each Purchaser severally as to itself only, and not jointly, hereby
represents and warrants to the Company as of the date hereof and as of the
Closing Date as follows:
SECTION 4.1. Organization; Authorization; Enforceability. Such
Purchaser is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has all requisite power and
authority to own its properties and assets and to carry on its business as it is
now being conducted and as currently proposed to be conducted. Such Purchaser
has the power to execute, deliver and perform its obligations under each of the
Equity Documents to which it is a party and has taken all action necessary to
authorize the execution, delivery and performance by it of such Equity Documents
and to consummate the transactions contemplated hereby and thereby. No other
proceedings on the part of such Purchaser are necessary for such authorization,
execution, delivery and consummation. Such Purchaser has duly executed and
delivered this Agreement and, at the Closing, such Purchaser will have duly
executed and delivered each of the other Equity Documents to be executed and
delivered at or prior to Closing. This Agreement constitutes, and each of the
other Equity Documents to which such Purchaser is a party, when executed and
delivered by such Purchaser, will constitute, a legal, valid and binding
obligation of such Purchaser.
SECTION 4.2. Private Placement. (a) Such Purchaser understands that
(i) the offering and sale of the Shares in the Issuance by the Company is
intended to be exempt from registration under the Securities Act pursuant to
Section 4(2) thereof and (ii) there is no existing public or other market for
the Shares.
(b) Such Purchaser (either alone or together with its advisors) has
sufficient knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of its investment in the Shares
and is capable of bearing the economic risks of such investment.
(c) Such Purchaser is acquiring the Shares to be acquired hereunder
(and will acquire the Conversion Shares) for its own account (or for accounts
over which it exercises investment authority), for investment and not with a
view to
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the public resale or distribution thereof, in violation of any securities law.
(d) Such Purchaser understands that the Shares will be issued in a
transaction exempt from the registration or qualification requirements of the
Securities Act and applicable state securities laws, and that such securities
must be held indefinitely unless a subsequent disposition thereof is registered
or qualified under the Securities Act and such laws or is exempt from such
registration or qualification.
(e) Such Purchaser (A) has been furnished with or has had full access
to all of the information that it considers necessary or appropriate to make an
informed investment decision with respect to the Shares and that it has
requested from the Company, (B) has had an opportunity to discuss with
management of the Company the intended business and financial affairs of the
Company and to obtain information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to it or to which it had access
and (C) can bear the economic risk of (x) an investment in the Shares
indefinitely and (y) a total loss in respect of such investment, has such
knowledge and experience in business and financial matters so as to enable it to
understand and evaluate the risks of and form an investment decision with
respect to its investment in the Shares and to protect its own interest in
connection with such investment.
SECTION 4.3. No Violation; Consents. (a) The execution, delivery and
performance by such Purchaser of each of the Equity Documents to which it is a
party and the consummation of the Transactions do not and will not contravene
any Applicable Law, except for such contraventions as would not, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
the ability of such Purchaser to timely perform its obligations under this
Agreement. The execution, delivery and performance by such Purchaser of each of
the Equity Documents to which it is a party and the consummation of the
Transactions contemplated therein (i) will not (A) violate, result in a breach
of or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancelation or acceleration) under
any Contract to which such Purchaser is party or by which such Purchaser is
bound or to which any of its assets is subject, or (B) result in the creation or
imposition of any Lien upon any of the assets of such Purchaser, except for any
such violations, breaches,
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defaults or Liens that would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the ability of such Purchaser
to timely perform its obligations under this Agreement, and (ii) will not
conflict with or violate any provision of the certificate of incorporation or
bylaws or other governing documents of such Purchaser.
(b) Except for (i) the filings by the Purchaser, if any, required by
the HSR Act, and (ii) applicable filings, if any, with the Commission pursuant
to the Exchange Act, in each case, which shall be made (or are not required to
be made) on or prior to the Closing Date, no consent, authorization or order of,
or filing or registration with, any Governmental Authority or other Person is
required to be obtained or made by such Purchaser for the execution, delivery
and performance of any of the Equity Documents to which it is a party or the
consummation of any of the transactions contemplated therein, except where the
failure to obtain such consents, authorizations or orders, or make such filings
or registrations, would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of such Purchaser to
timely perform its obligations under this Agreement.
SECTION 4.4. No Litigation. There are not any (a) outstanding
judgments against or affecting the Purchaser or any of its subsidiaries, (b)
proceedings pending or, to the knowledge of the Purchaser, threatened against or
affecting the Purchaser or any of its subsidiaries or (c) investigations by any
Governmental Authority that are, to the knowledge of the Purchaser, pending or
threatened against or affecting the Purchaser or any of its subsidiaries that,
in any case, individually or in the aggregate, would reasonably be expected to
have a material adverse effect on the ability of such Purchaser to timely
perform its obligations under this Agreement.
SECTION 4.5. HMTF Purchaser. Each HMTF Purchaser is controlled by a
member of the HMTF Group (excluding the HMTF Purchasers for purposes of this
sentence from the definition of HMTF Group).
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ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.1. Operation of Business. From the date hereof until the
Closing Date, the Company shall, and shall cause each of the Subsidiaries to:
(i) operate its business in all material respects in the ordinary
course and in compliance with Applicable Laws;
(ii) not adopt any amendment to its charter or bylaws or comparable
organizational documents;
(iii) not split, combine or reclassify any shares of the Company's
Capital Stock;
(iv) not declare or pay any dividend or distribution (whether in cash,
stock or property) in respect of its Capital Stock or increase the number
of shares subject to the Company's stock incentive and option plan;
(v) not take any action, or knowingly omit to take any action, that
would, or that would reasonably be expected to, result in (A) any of the
representations and warranties of the Company set forth in Article III
becoming untrue or (B) any of the conditions to the obligations of
Purchaser set forth in Section 7.2 not being satisfied or (C) the
triggering of any of the anti-dilution adjustments contained in the
Certificate of Designation for the Series A Preferred Stock (had such
Certificate been in effect); or
(vi) enter into any agreement or commitment to do any of the
foregoing.
SECTION 5.2. HMTF Director. The Company shall cause to be elected to
the Company's Board of Directors one person designated by the holders of a
majority of the then outstanding HMTF Shares (the "HMTF Director"), for so long
as members of the HMTF Group own any combination of the shares of Series A
Preferred Shares issued to members of the HMTF Group on the Closing Date (the
"HMTF Issued Series A Preferred Shares") and Common Stock issued upon conversion
of HMTF Issued Series A Preferred Shares which, taken together, would represent,
if all HMTF Issued Series A Preferred Shares were converted, an amount of Common
Stock issuable upon conversion of 50% or more of the HMTF Issued Series A
Preferred Shares; provided, however, that the right to designate the HMTF
Director under this Section 5.2 shall be suspended at any time that members of
the HMTF Group own at least 100 shares of Series A Preferred Stock and have the
right to elect a person to the Board of Directors under the
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terms of the Series A Preferred Stock set forth in the Certificate of
Designation. In the event the holders of a majority of the then outstanding HMTF
Shares are entitled under this Section 5.2 to designate the HMTF Director for
election to the Company's Board of Directors and elect to have the Board of
Directors appoint the HMTF Director, they shall so notify the Company in writing
and the Company shall (a) increase the size of the Board of Directors by one and
fill the vacancy created thereby by electing the HMTF Director and (b) in
connection with the meeting of stockholders of the Company next following such
election, nominate such HMTF Director for election as director by the
stockholders and use its commercially reasonable efforts to cause the HMTF
Director to be so elected. If the holders of a majority of the then outstanding
HMTF Shares are entitled under this Section 5.2 to designate the HMTF Director
for election to the Company's Board of Directors and a vacancy shall exist in
the office of a HMTF Director, the holders of a majority of the then outstanding
HMTF Shares shall be entitled to designate a successor and the Board of
Directors shall elect such successor and, in connection with the meeting of
stockholders of the Company next following such election, nominate such
successor for election as director by the stockholders and use its commercially
reasonable efforts to cause the successor to be elected.
SECTION 5.3. Access to Books and Records. (a) The Company shall afford
to each of the Purchasers and the Purchasers' accountants, counsel and
representatives full access during normal business hours throughout the period
prior to the Closing Date (or the earlier termination of this Agreement pursuant
to Section 8.4) to all its properties, books, Contracts, commitments and records
(including, but not limited to, tax returns) and, during such period, shall,
upon request, furnish promptly to each of the Purchasers (i) a copy of each
report, schedule and other document filed or received by any of them pursuant to
the requirements of Federal or state securities laws and (ii) all other
information concerning its business, properties and personnel as the Purchasers
may reasonably request, provided that no investigation or receipt of information
pursuant to this Section 5.3 shall affect any representation or warranty of the
Company or the conditions to the obligations of the Purchasers.
(b) The Company shall supplement the Information and the Projections
from time to time until the Closing Date so that the representations and
warranties in Section 3.7 shall remain correct, but no such supplement shall be
given effect for purposes of determining whether the Company has
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breached any representations or warranties for purposes of Section 7.2 and
Section 8.1.
SECTION 5.4. Agreement to Take Necessary and Desirable Actions. The
Company shall (a) subject to the satisfaction of the conditions set forth in
Section 7.1, execute and deliver the Equity Documents and such other documents,
certificates, agreements and other writings and (b) take such other actions, in
each case, as may be necessary or reasonably requested by any of the Purchasers
in order to consummate or implement the Issuance in accordance with the terms of
this Agreement.
SECTION 5.5. Compliance with Conditions; Commercially Reasonable
Efforts. The Company shall use all commercially reasonable efforts to cause all
conditions precedent to the obligations of the Company and the Purchasers to be
satisfied. Upon the terms and subject to the conditions of this Agreement, the
Company will use all commercially reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things necessary, proper
or advisable consistent with Applicable Law to consummate and make effective in
the most expeditious manner practicable the Issuance in accordance with the
terms of this Agreement.
SECTION 5.6. HSR Act Notification. To the extent required by the HSR
Act, the Company shall, to the extent it has not already done so, (a) use all
commercially reasonable efforts to file or cause to be filed, as promptly as
practicable after the execution and delivery of this Agreement, with the United
States Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
all commercially reasonable efforts to promptly comply with or cause to be
complied with any requests by the United States Federal Trade Commission or the
Antitrust Division of the United States Department of Justice for additional
information concerning such transactions, in each case so that the waiting
period applicable to this Agreement and the transactions contemplated hereby
under the HSR Act shall expire as soon as practicable after the execution and
delivery of this Agreement. The Company agrees to request, and to cooperate with
the Purchasers in requesting, early termination of any applicable waiting period
under the HSR Act.
SECTION 5.7. Consents and Approvals. The Company (a) shall use all
commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and
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approvals of all Governmental Authorities and of all other Persons required in
connection with the execution, delivery and performance of the Equity Documents
or the consummation of the Issuance and (b) shall diligently assist and
cooperate with the Purchasers in preparing and filing all documents required to
be submitted by the Purchasers to any Governmental Authority in connection with
the Issuance (which assistance and cooperation shall include, without
limitation, timely furnishing to the Purchasers all information concerning the
Company and the Subsidiaries that counsel to the Purchasers reasonably
determines is required to be included in such documents or would be helpful in
obtaining any such required consent, waiver, authorization or approval).
SECTION 5.8. Reservation of Shares. The Company shall:
(i) cause to be authorized and reserve and keep available at all times
during which any of the Shares remain outstanding, free from preemptive
rights, out of its treasury stock or authorized but unissued shares of
Capital Stock, or both, solely for the purpose of effecting the conversion
of the Shares pursuant to the terms of the Certificate of Designation,
sufficient shares of Common Stock to provide for the issuance of the
maximum number of shares issuable upon conversion of outstanding Shares;
(ii) issue and cause the transfer agent to deliver such shares of
Common Stock as required upon conversion of the Shares, and take all
actions necessary to ensure that all such shares will, when issued and paid
for pursuant to the conversion of the Shares, be duly and validly issued,
fully paid and nonassessable; and
(iii) if any shares of Common Stock reserved for the purpose of
issuance upon conversion of the Shares require registration with or
approval of any Governmental Authority under any Applicable Law before such
shares may be validly issued or delivered, secure such registration or
approval, as the case may be, and maintain such registration or approval in
effect so long as so required.
SECTION 5.9. Use of Proceeds. The Company shall use the proceeds from
the Issuance for payment of expenses incurred in connection with the
Transactions and for general corporate purposes.
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SECTION 5.10. Filing of Certificate of Designation. Prior to the
Issuance, the Company shall file the Certificate of Designation with the
Secretary of State of the State of Delaware pursuant to Section 151(g) of the
DGCL.
SECTION 5.11. Listing of Shares. The Company shall use all
commercially reasonable efforts to cause the shares of Common Stock issuable
upon conversion of the Shares to be listed or otherwise eligible for trading on
the NASDAQ National Market System or other national securities exchange.
SECTION 5.12. Periodic Information. For so long as the Shares or any
Conversion Shares are outstanding the Company shall file all reports required to
be filed by the Company under Section 13 or 15(d) of the Exchange Act and shall
provide the holders of the Shares and the Conversion Shares and prospective
purchasers of such shares with the information specified in Rule 144A(d) under
the Securities Act.
SECTION 5.13. Legends. So long as applicable, each certificate
representing any portion of the Shares or shares of Common Stock issuable upon
conversion of the Shares shall be stamped or otherwise imprinted with a legend
in the following form (in addition to any legend required under applicable state
securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS.
After the above requirement for a legend is no longer applicable because the
Shares are freely transferable under the Securities Act, the Company shall
remove such legend upon request from a holder of such Shares, if outside counsel
for such holder reasonably determines that the transfer of such Shares is no
longer restricted by the Securities Act and outside counsel for the Company
reasonably concurs in such determination.
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ARTICLE VI
COVENANTS OF THE PURCHASERS
SECTION 6.1. Agreement to Take Necessary and Desirable Actions. Each
Purchaser shall (a) subject to the satisfaction of the conditions set forth in
Section 7.2, execute and deliver each of the Equity Documents to which it is a
party and such other documents, certificates, agreements and other writings and
(b) take such other actions as may be reasonably necessary, desirable or
requested by the Company in order to consummate or implement the Issuance to
such Purchaser in accordance with the terms of this Agreement.
SECTION 6.2. Compliance with Conditions; Commercially Reasonable
Efforts. Each Purchaser will use all commercially reasonable efforts to cause
all of the obligations imposed upon it in this Agreement to be duly complied
with, and to cause all conditions precedent to the obligations of the Company
and the Purchasers to be satisfied. Upon the terms and subject to the conditions
of this Agreement, each Purchaser will use all commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable consistent with applicable law to
consummate and make effective in the most expeditious manner practicable the
Issuance to such Purchaser in accordance with the terms of this Agreement.
SECTION 6.3. HSR Act Notification. To the extent required by the HSR
Act, each Purchaser shall, if it has not already done so, (a) use all
commercially reasonable efforts to file or cause to be filed, as promptly as
practicable after the execution and delivery of this Agreement, with the United
States Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, all reports and other documents required to be filed by
it under the HSR Act concerning the transactions contemplated hereby and (b) use
all commercially reasonable efforts to promptly comply with or cause to be
complied with any requests by the United States Federal Trade Commission or the
Antitrust Division of the United States Department of Justice for additional
information concerning such transactions in each case so that the waiting period
applicable to this Agreement and the transactions contemplated hereby under the
HSR Act shall expire as soon as practicable after the execution and delivery of
this Agreement. Purchaser agrees to request, and to cooperate with the Company
in requesting, early termination of any applicable waiting period under the HSR
Act.
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SECTION 6.4. Consents and Approvals. Each Purchaser (a) shall use all
commercially reasonable efforts to obtain all necessary consents, waivers,
authorizations and approvals of all Governmental Authorities other than as
expressly set forth in Section 6.3 regarding the HSR Act, and of all other
Persons required in connection with the execution, delivery and performance of
this Agreement or the consummation of the Issuance to such Purchaser and (b)
shall diligently assist and cooperate with the Company in preparing and filing
all documents required to be submitted by the Company to any Governmental
Authority in connection with such Transactions (which assistance and cooperation
shall include, without limitation, timely furnishing to the Company all
information concerning such Purchaser that counsel to the Company reasonably
determines is required to be included in such documents or would be helpful in
obtaining any such required consent, waiver, authorization or approval).
SECTION 6.5. Restrictions on Transfer. No Purchaser shall sell,
assign, transfer, pledge, hypothecate, deposit in a voting trust or otherwise
dispose of any portion of the Shares (any such disposition, a "Share Transfer"),
other than (a) to a Permitted Transferee of such Purchaser that has agreed in
writing (each, a "Permitted Transferee Agreement") to be bound by the terms and
provisions of this Section 6.5 to the same extent that the transferring
Purchaser would be bound if it beneficially owned the Shares transferred to such
Permitted Transferee or (b)(i) in any transaction in compliance with Rule 144
under the Securities Act or any successor rule or regulation, (ii) in a
transaction exempt from the registration requirements of the Securities Act or
(iii) pursuant to a registration statement. Each Purchaser shall promptly notify
the Company of any Share Transfer to a Permitted Transferee of such Purchaser,
which notification shall include a Permitted Transferee Agreement executed by
each Permitted Transferee of such Purchaser to whom any Shares have been
transferred.
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING
SECTION 7.1. Conditions to the Company's Obligations. The obligations
of the Company with respect to a Purchaser hereunder required to be performed on
the
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Closing Date shall be subject to the satisfaction or waiver, at or prior to the
Closing, of the following conditions:
(a) The representations and warranties of such Purchaser contained in
this Agreement shall have been true and correct when made and, in addition,
shall be repeated and true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date.
(b) Such Purchaser shall have performed in all material respects all
obligations and agreements, and complied in all material respects with all
covenants contained in this Agreement to be performed and complied with by such
Purchaser at or prior to the Closing Date.
(c) Any applicable waiting period under the HSR Act with respect to
the purchase by such Purchaser shall have expired or been terminated.
SECTION 7.2. Conditions to Each Purchaser's Obligations. The
obligations of a Purchaser hereunder required to be performed on the Closing
Date shall be subject to the satisfaction or waiver, at or prior to the Closing,
of the following conditions:
(a) The representations and warranties of the Company contained in
this Agreement (i) shall have been true and correct when made and (ii) shall be
(A) in the case of representations and warranties that are qualified as to
materiality or Material Adverse Effect, true and correct and (B) in all other
cases, true and correct in all material respects, in the case of clauses (A) and
(B), as of the Closing Date with the same force and effect as though made on and
as of the Closing Date.
(b) The Company shall have performed in all material respects all of
its obligations, agreements and covenants contained in this Agreement to be
performed and complied with at or prior to the Closing Date.
(c) The Company shall have entered into the Registration Rights
Agreement.
(d) The Company shall have filed the Certificate of Designation with
the Secretary of State of the State of Delaware.
(e) Any applicable waiting period under the HSR Act with respect to
the purchase by such Purchaser shall have expired or been terminated.
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(f) With respect to the Closing of the purchase by Microsoft, the
earlier of (x) December 15, 1999, or (y) the expiration or other termination of
the waiting period under the HSR Act with respect to the filing under the HSR
Act by the HMTF Purchaser, shall have occurred prior to or simultaneously with
such Closing; and with respect to the Closing of the purchase by DB, the
purchase by the HMTF Purchaser shall have occurred prior to or simultaneously
with such Closing.
(g) The Company shall have delivered to such Purchaser a certificate
executed by it or on its behalf by a duly authorized representative, dated the
Closing Date, to the effect that each of the conditions specified in paragraph
(a) through (e) of this Section 7.2 has been satisfied.
(h) No provision of any Applicable Law, injunction, order or decree of
any Governmental Entity shall be in effect which has the effect of making the
Transactions illegal or shall otherwise restrain or prohibit the consummation of
the Transactions.
(i) Such Purchaser shall have received an opinion of counsel to the
Company, dated the Closing Date, and addressed to such Purchaser, in form and
substance reasonably acceptable to the Purchaser.
(j) Such Purchaser shall have received certificates representing the
Shares purchased by such Purchaser concurrently with the Company's receipt of
the Purchase Price for such Shares.
(k) with respect to the HMTF Purchaser and the Olympus Funds only, the
Company shall have delivered to the HMTF Purchaser and the Olympus Funds a
Management Rights Agreement executed by the Company and addressed to the HMTF
Funds and the Olympus Growth Fund III, L.P., respectively.
(l) there shall not have occurred (i) any event, circumstance,
condition, fact, effect or other matter which has had or could reasonably be
expected to have a material adverse effect (x) on the business, assets,
financial condition, prospects, or results of operations of the Company and the
Subsidiaries taken as a whole or (y) on the ability of the Company and the
Subsidiaries to perform on a timely basis any material obligation under this
Agreement or to consummate the Issuance contemplated hereby; or (ii) any
material disruption of or material adverse change in financial, banking or
capital market conditions that would
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reasonably be expected to materially impair the Company's ability to obtain
financing on reasonable terms.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Indemnification. (a) All representations, warranties,
covenants and agreements contained in this Agreement shall survive the Closing
for 18 months (except (i) covenants and agreements that are required to be
performed after the Closing Date and (ii) the last sentence of Section 3.2(a),
which shall survive indefinitely). Notwithstanding the foregoing, with respect
to claims asserted pursuant to this Section 8.1 before the expiration of the
applicable representation, warranty, covenant or agreement, such claims shall
survive until the date they are finally adjudicated or otherwise resolved.
(b) The Company agrees to indemnify and hold harmless each Purchaser
and each Purchaser Affiliate (each an "indemnified person"), from and against
(and to reimburse each indemnified person as the same are incurred) any and all
losses (including, but not limited to, impairment of the value of the Shares as
of the date such loss first becomes known, but excluding consequential damages),
claims, damages, liabilities, costs and expenses (collectively, "Losses") to
which any indemnified person may become subject or which any indemnified person
may incur based upon, arising out of, or in connection with (i) a breach of any
representation, warranty or covenant of this Agreement by the Company or (ii)
any claim, litigation, investigation or proceeding brought by or on behalf of
any Person other than the Company relating to the Issuance, and to reimburse
each indemnified person upon demand for any reasonable legal or other reasonable
out of pocket expenses incurred in connection with investigating or defending
any of the foregoing, provided the maximum amount indemnifiable to each
Purchaser (and its successors or assigns) under clause (i) shall not exceed the
purchase price of the Shares purchased by such Purchaser.
(c) If a Person entitled to indemnity hereunder (an "Indemnified
Party") asserts that the Company (the "Indemnifying Party") has become obligated
to the Indemnified Party pursuant to Section 8.1(b), or if any suit, action,
investigation, claim or proceeding is begun, made or instituted as a result of
which the Indemnifying Party may become obligated to the Indemnified Party
hereunder, the Indemnified Party shall notify the
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Indemnifying Party promptly and shall cooperate with the Indemnifying Party, at
the Indemnifying Party's expense, to the extent reasonably necessary for the
resolution of such claim or in the defense of such suit, action or proceedings,
including making available any information, documents and things in the
possession of the Indemnified Party. Notwithstanding the foregoing notice
requirement, the right to indemnification hereunder shall not be affected by any
failure to give, or delay in giving, notice unless, and only to the extent that,
the rights and remedies of the Indemnifying Party shall have been materially
prejudiced as a result of such failure or delay.
(d) In fulfilling its obligations under this Section 8.1, after the
Indemnifying Party has provided each Indemnified Party with a written notice of
its acceptance of liability under this Section 8.1, as between such Indemnified
Party and the Indemnifying Party, the Indemnifying Party shall have the right to
investigate, defend, settle or otherwise handle, with the aforesaid cooperation,
any claim, suit, action or proceeding brought by a third party in such manner as
the Indemnifying Party may in its sole discretion reasonably deem appropriate;
provided, that (i) counsel retained by the Indemnifying Party is reasonably
satisfactory to the Indemnified Party and (ii) the Indemnifying Party will not
consent to any settlement or entry of judgment imposing any obligations on any
other party hereto other than financial obligations for which such party will be
indemnified hereunder, unless such party has consented in writing to such
settlement or judgment (which consent may be given or withheld in its sole
discretion) and (iii) the Indemnifying Party will not consent to any settlement
or entry of judgment unless, in connection therewith, the Indemnifying Party
obtains a full and unconditional release of the Indemnified Party from all
liability with respect to such suit, action, investigation claim or proceeding.
Notwithstanding the Indemnifying Party's election to assume the defense or
investigation of such claim, action or proceeding, the Indemnified Party shall
have the right to employ separate counsel and to participate in the defense or
investigation of such claim, action or proceeding, which participation shall be
at the expense of the Indemnifying Party, if (i) on the advice of counsel to the
Indemnified Party use of counsel of the Indemnifying Party's choice could
reasonably be expected to give rise to a material conflict of interest, (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party within a reasonable
time after notice of the assertion of any such claim or institution of any such
action or proceeding, (iii) if the
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Indemnifying Party shall authorize the Indemnified Party to employ separate
counsel at the Indemnifying Party's expense or (iv) such action shall seek
relief other than monetary damages against the Indemnified Party.
(e) The Company and the Purchasers agree that any payment of Losses
made hereunder will be treated by the parties on their tax returns as an
adjustment to the Purchase Price. If, notwithstanding such treatment by the
parties, a final determination (which shall include the form 870-AD or successor
form) with respect to the Indemnified Party or any of its affiliates causes any
such payment not to be treated as an adjustment to Purchase Price, then the
Indemnifying Party shall indemnify the Indemnified Party for any taxes payable
by the Indemnified Party or any subsidiary by reason of the receipt of such
payment (including any payments under this 8.1(e)), determined at an assumed
marginal tax rate equal to the highest marginal tax rate then in effect for
corporate taxpayers in the relevant jurisdiction.
SECTION 8.2. Notices. All notices, demands, requests, consents,
approvals or other communications (collectively, "Notices") required or
permitted to be given hereunder or which are given with respect to this
Agreement shall be in writing and shall be personally served, delivered by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telegram, telex or facsimile, addressed as set forth below, or to such
other address as such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein shall be deemed given on the next business day
following delivery of such notice to a reputable air courier service.
To the Company:
Teligent, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, XX 00000
Attn: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
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with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
To the Purchasers:
To the address specified below for each Purchaser.
(as to matters relating to the HMTF Group)
To the appropriate member of the HMTF Group
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
1325 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx, L.L.P.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
(as to matters relating to Microsoft Corporation)
Xxx Xxxxxxxxx Xxx
Xxxxxxxx 0/ 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Senior Vice
President and Chief Financial Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
With copies to:
Microsoft Corporation
Xxx Xxxxxxxxx Xxx
Xxxxxx 0X/0000
Xxxxxxx, XX 00000-0000
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Attn: Xxxxxx X. Xxxxxxxx, General Counsel,
Finance and Operations
Telephone:(000) 000-0000
Fax: (000) 000-0000
and
Preston, Gates & Xxxxx, LLP
000 0xx Xxxxxx Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Telephone:(000) 000-0000
Fax: (000) 000-0000
(as to matters relating to Chase Equity Associates, L.P.)
Chase Manhattan Bank
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxx
Telephone:(000) 000-0000
Fax: (000) 000-0000
(as to matters relating to DB Capital Investing, L.P.)
White & Case LLP
0000 0xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Xx.
Telephone:(000) 000-0000
Fax: (000) 000-0000
(as to matters relating to Olympus Growth Fund III, L.P. and Olympus
Executive Fund, L.P. )
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Telephone:(000) 000-0000
Fax: (000) 000-0000
SECTION 8.3. Governing Law. This Agreement shall be governed by,
interpreted under, and construed in accordance with the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
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SECTION 8.4. Termination. (a) This Agreement may be terminated as
between the Company and any Purchaser (i) at any time prior to the Closing Date
by mutual written agreement of the Company and such Purchaser, (ii) if the
Closing shall not have occurred on or prior to December 30, 1999, by either the
Company or such Purchaser, at any time after December 30, 1999, provided that
the right to terminate this Agreement under this Section 8.4(a)(ii) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement was the cause of or resulted in the failure of the Closing to occur on
or before such date, (iii) if any Governmental Authority shall have issued a
nonappealable final order, decree or ruling or taken any other action having the
effect of permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, by either the Company or such
Purchaser, (iv) if either the Company or such Purchaser shall have breached any
of its material obligations under this Agreement, by the non-breaching party, or
(v) if an event described in Section 7.2(l) shall have occurred, by such
Purchaser. Any party desiring to terminate this Agreement pursuant to clauses
8.4(a)(ii), (iii), (iv) or (v) shall promptly give notice of such termination to
the other party.
(b) If this Agreement is terminated as between the Company and a
Purchaser, as permitted by Section 8.4(a), such termination shall be without
liability of any party (or any stockholder, director, officer, partner,
employee, agent, consultant or representative of such party) to any other party
to this Agreement; provided that if such termination shall result from the
willful (a) failure of any party to fulfill a condition to the performance of
the obligations of the other party, (b) failure to perform a covenant of this
Agreement or (c) breach by any party hereto of any representation or warranty
contained herein, such failing or breaching party shall be fully liable for any
and all losses (excluding consequential damages) incurred or suffered by the
other party as a result of such failure or breach. The provisions of Sections
8.2, 8.3, this Section 8.4, Sections 8.5, 8.8, 8.10, 8.11, 8.12, 8.13, 8.14,
8.16, 8.17, 8.18 and 8.20 shall survive any termination hereof pursuant to
Section 8.4(a).
SECTION 8.5. Entire Agreement. As between the Company and each
Purchaser this Agreement and the Equity Documents (including all agreements
entered into pursuant hereto and thereto and all certificates and instruments
delivered pursuant hereto and thereto) constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous
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agreements, representations, understandings, negotiations and discussions
between the parties, whether oral or written, with respect to the subject matter
hereof.
SECTION 8.6. Modifications and Amendments. No amendment, modification
or termination of this Agreement as between the Company and a Purchaser shall be
binding unless executed in writing by the Company and such Purchaser intending
to be bound thereby.
SECTION 8.7. Waivers and Extensions. Any party to this Agreement may
waive any condition, right, breach or default that such party has the right to
waive, provided that such waiver will not be effective against the waiving party
unless it is in writing, is signed by such party, and specifically refers to
this Agreement. Waivers may be made in advance or after the right waived has
arisen or the breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No waiver or extension
of time for performance of any obligations or acts shall be deemed a waiver or
extension of the time for performance of any other obligations or acts.
SECTION 8.8. Titles and Headings. Titles and headings of sections of
this Agreement are for convenience only and shall not affect the construction of
any provision of this Agreement.
SECTION 8.9. Exhibits and Schedules. Each of the exhibits and
schedules referred to herein and attached hereto is an integral part of this
Agreement and is incorporated herein by reference.
SECTION 8.10. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense;
provided, however, that (a) the Company shall pay the filing fee payable in
respect of any HSR filing, and (b) if this Agreement is terminated with respect
to any Purchaser for any reason other than a breach by such Purchaser and other
than a failure of the condition set forth in Section 7.2(l)(ii) to be satisfied,
then (without limiting any party's right to recover damages pursuant to Section
8.4(b)) the Company shall reimburse such Purchaser for such Purchaser's
reasonable out-of-pocket costs and expenses incurred in connection with this
Agreement.
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SECTION 8.11. Press Releases and Public Announcements. All public
announcements or disclosures relating to the Issuance or this Agreement shall be
made only if mutually agreed upon by the Company and the Purchasers, except to
the extent such disclosure is, in the opinion of counsel, required by law or by
regulation of any applicable national stock exchange or Commission recognized
trading market; provided that (a) any such required disclosure shall only be
made, to the extent consistent with law and regulation of any applicable
national stock exchange or Commission recognized trading market, after
consultation with each Purchaser and (b) no such announcement or disclosure
(except as required by law or by regulation of any applicable national stock
exchange or Commission recognized trading market) shall identify any Purchaser
without such Purchaser's prior consent.
SECTION 8.12. Assignment; No Third Party Beneficiaries. This Agreement
and the rights, duties and obligations hereunder may not be assigned or
delegated by the Company without the prior written consent of the Purchasers,
and may not assigned or delegated by any Purchaser without the Company's prior
written consent except that each Purchaser may assign any or all of its rights
and obligations under this Agreement to any one or more of its Affiliates. Any
assignment or delegation of rights, duties or obligations hereunder made by the
Company without the prior written consent of the Purchasers, shall be void and
of no effect. This Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of each of the parties and their respective
successors and permitted assigns. This Agreement is not intended to confer any
rights or benefits on any Persons other than the parties hereto, except as
expressly set forth in Section 5.2, Section 8.1, this Section 8.12 or Section
8.20.
SECTION 8.13. Severability. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible and be valid and enforceable.
SECTION 8.14. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
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SECTION 8.15. Further Assurances. As between the Company and a
Purchaser, each party hereto, upon the request of any other party hereto, shall
do all such further acts and execute, acknowledge and deliver all such further
instruments and documents as may be necessary or desirable to carry out the
transactions contemplated by this Agreement, including, in the case of the
Company, such acts, instruments and documents as may be necessary or desirable
to convey and transfer to each Purchaser the Shares to be purchased by it
hereunder.
SECTION 8.16. Remedies Cumulative. The remedies provided herein shall
be cumulative and shall not preclude the assertion by any party hereto of any
other rights or the seeking of any remedies against the other party hereto.
SECTION 8.17. Several Liability of the Purchasers. Nothing in this
Agreement (including, without limitation, Article VI) shall be construed to
impose on any Purchaser any liability for any action or failure to act of any
other Purchaser, including any breach of this Agreement by any such other
Purchaser.
SECTION 8.18. No Duty to Other Purchasers. Each Purchaser confirms
with each other Purchaser that such Purchaser has conducted its own due
diligence in connection with its investment in the Shares and the other
Purchasers may therefore have information different from, or additional to, the
information possessed by such Purchaser. In addition, although certain of such
other Purchasers (the "Supplying Purchasers") may have shared information
received by them (including information contained in third party reports
prepared for such other Purchasers) with such Purchaser, no representation or
warranty is being made with respect to such information by any Supplying
Purchaser or any such third party. Nothing in this Section 8.18 is meant to
limit any duty, obligation or liability the Company may have to any Purchaser
under this Agreement or otherwise.
SECTION 8.19. Specific Performance. The parties hereto agree that the
remedy at law for any breach of this Agreement may be inadequate, and that as
between the Company and a Purchaser any party by whom this Agreement is
enforceable shall be entitled to specific performance in addition to any other
appropriate relief or remedy. Such party may, in its sole discretion, apply to a
court of competent jurisdiction for specific performance or injunctive or such
other relief as such court may deem just and proper in order to enforce this
Agreement as between the Company and a Purchaser, or prevent any violation
hereof, and, to the extent permitted by applicable as between the
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Company and a Purchaser law, each party waives any objection to the imposition
of such relief.
SECTION 8.20. No Purchaser Affiliate Liability. No Purchaser Affiliate
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
Purchaser) shall be liable for or in respect of this Agreement with the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TELIGENT, INC.,
by /s/ Xxxx Xxxxx
------------------------
Name: Xxxx Xxxxx
Title: Chairman and Chief
Executive Officer
HMTF-IV ACQUISITION CORP.,
by /s/ Xxxx X. Xxxxx
--------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
MICROSOFT CORPORATION,
by /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial Officer
CHASE EQUITY ASSOCIATES, L.P.,
BY: CHASE CAPITAL PARTNERS,
its General Partner
by /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
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DB CAPITAL INVESTORS, L.P.,
BY: DB CAPITAL PARTNERS, L.P.,
its General Partner
By: DB CAPITAL PARTNERS, INC.,
by /s/ Xxxxx Xxxxxx
--------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
OLYMPUS GROWTH FUND III, L.P.,
BY:
By:
by /s/ Xxxxx X. Xxxxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.,
BY:
By:
by /s/ Xxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Managing Member
39
SCHEDULE I
Purchaser Number of Shares
--------- ----------------
HMTF-IV Acquisition Corp. 200,000
Microsoft Corporation 200,000
Chase Equity Associates, L.P. 50,000
DB Capital Investors, L.P. 25,000
Olympus Growth Fund III, L.P. 24,750
Olympus Executive Fund, L.P. 250
