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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
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
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 State
ments. (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
15
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,
16
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).
17
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
18
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
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
19
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
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.
20
SECTION 5.7. Consents and Approvals. The Company
(a) shall use all commercially reasonable efforts to obtain
all necessary consents, waivers, authorizations and 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
21
incurred in connection with the Transactions and for general
corporate purposes.
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.
22
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.
23
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
24
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.
25
(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
26
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
27
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
28
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
29
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
30
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.
31
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
32
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.
33
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.
34
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
35
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.
36
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: Authorized Representative
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
37
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: OGP III, LLC
by /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.,
BY: OEF, L.P., its general partner
By: LJM L.L.C., its general partner
by /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Managing Member
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
